yoo_8k-ex1019.htm


    EXHIBIT
10.19

     

    AGREEMENT
BETWEEN

    FEDERAL
PRISON INDUSTRIES, INC.

    AND

    IX
ENERGY, INC.

     

    Solar
Panel Manufacture

     

    THIS AGREEMENT is entered into this
19th
day in June, 2008, by and between Federal Prison Industries, Inc., with
principal offices located at 320 First Street NW, Building 400, 6th
Floor, Washington, DC 20534, (hereinafter referred to as "FPI" or trade name
"UNICOR") and IX Energy, Inc., with principal offices located at 419 Lafayette
Street, 6th
Floor, New York, NY 10003 (hereinafter referred to as "IX").

     

    WHEREAS,
IX desires to obtain the assembly and production of solar panels and the
fabrication and assembly of frames and other support assemblies, which panels
shall be sold to various Federal civilian and military government customers of
IX and UNICOR; and

     

    WHEREAS,
UNICOR has established the capability and capacity to assemble and produce solar
panels and desires to provide such production work to IX for the sale of solar
panels to Federal civilian and military government customers of IX and
UNICOR;

     

    WHEREAS,
UNICOR and IX desire to enter into an Agreement whereby UNICOR will establish
one or more dedicated production line(s) and provide assembly and production of
solar panels to IX and other related work as specified herein;

     

    WHEREAS,
both parties agree to conduct the program in an effort to seek to repatriate
jobs to the maximum extent possible that otherwise would be performed offshore,
and to concentrate on the creation of work experiences and environments for
inmates that will provide training and meaningful job opportunities upon release
into society.

     

    NOW
THEREFORE, UNICOR and IX, in consideration of the promises and covenants
contained herein, and for other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, agree as follows:

     

    1.
Work in
Support of Solar
Panel Assembly.
Production and
Other Related Work

     

    1.1 Solar Panels.
During the term of this Agreement, UNICOR shall provide work in connection with
the assembly and production of solar panels, including, but not limited to,
receiving and inspecting incoming materials; performing quality control
inspections on materials received from IX or other vendors and suppliers, and
recording such data; documenting materials and quantities received; soldering,
framing, wiring and assembling; packaging; inspecting and performing quality
control inspections on finished products and recording such data; shipping
completed items; and on-going related warranty and repair, upgrade and
replacement work as specified and instructed by IX; and other related work to
support the assembly and production of solar panels on an as-agreed upon and
as-needed basis by the parties (hereinafter referred to as the
"Services").


     

     

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    


     

    1.2 Location of Assembly and
Production of Solar Panels. UNICOR shall
provide the work to assembly and produce the solar panels and other related work
through the use of inmate workers (hereinafter referred to as "inmates") at the
UNICOR factory in Otisville, New York and other UNICOR factories that UNICOR may
deem appropriate, and non-inmate employees (hereinafter referred to as "Staff")
who shall provide supervisory and administrative support as well as security for
the operations.

     

    1.3 Location of Fabrication of Framing and
Support Structures. UNICOR shall provide the work to fabricate and
assemble the frames and other support assemblies for the solar panels at the
UNICOR factory at FCI Pekin or other UNICOR factories that UNICOR may deem
appropriate.

     

    1.4 Insurance. IX shall maintain
insurance coverage for all supplies and materials that it supplies to UNICOR and
that are used in fulfilling this agreement as well as any other liability
insurance necessary for IX to fulfill this agreement. To the degree that any
supplies, materials and work cannot be insured by IX because the supplies,
materials or work do not belong to or are not the product of IX, IX shall not be
held liable for any acts, omissions, product omission, product defects or any
other conduct or actions of FPI's Staff or Inmates in connection with the
assembly and production of-solar panels and the fabrication and assembly of
frames and other support assemblies or any warranty work related
thereto.

     

    1.5 Design Changes. Any design or
production change(s) must be reviewed and approved by both parties and UNICOR or
IX shall provide supporting documentation to implement the
change(s).

     

    1.6 Evaluation. UNICOR shall
conduct an assessment of the work involved in supporting the assembly,
and production of solar panels and related work at times that are
convenient to both parties to evaluate customer satisfaction and ensure that the
projects are manufactured, packed and shipped as required, and that warranty
work and services are performed in accordance with warranty work for UNICOR's
Department of Defense electronics products and services or comparable standards
of the Underwriters Laboratories.

     

    


    
      
        
           


        

        
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    1.7 Personnel.. 
Subject to Bureau of Prisons policy, UNICOR will select a workforce of inmates
from the prison population at the site of the factory(ies) where the assembly,
production, and fabrications will occur. IX may bring its personnel to the
factory(ies), subject to the rules and policies of the Bureau of Prisons for
such admissions, for the purposes of communicating with the line managers and
inspecting and evaluating the assembly, production and fabrications and quality
control,

     

    2. Sales
Programs.
The parties agree that there shall be two separate and distinct sales and
marketing programs for the sales of the solar panels, frames and support
assemblies.

     

    2.1 Program
One. Under Program One, UNICOR shall assemble and produce solar panels
and fabricate and assemble frames and other support assemblies (the "Products").
IX shall actively market to and solicit customers, prepare customer proposals,
and aid customers in obtaining project financing. Under Program One

     

    2.1.1 IX
will notify UNICOR of all solar panel opportunities for the Federal government
prior to bidding or proposing on those projects. UNICOR has the sole authority
to decide whether to pursue, or contract for, any Federal job. If UNICOR decides
not to pursue or contract for a Federal job, IX may notify another manufacturer
of the proposed project.

     

    2.1.2 IX
shall accept Federal government orders and purchase the products from UNICOR in
fulfillment of the orders. IX shall invoice the customers and shall make payment
to UNICOR within five (5) days after payment is received from the
customer.

     

    2.1.3
Pricing.
Pricing shall be $0.55 per watt for panel fabrication plus the price of the
photovoltaic cells shall also be added to the price of the unit. Pricing shall
be subject to quarterly review of actual costs in comparison to the original
costing parameters, with adjustments and the mutual agreement by both parties.
Pricing does not include delivery.

     

    2.1.4
Submission
of Purchase
Orders. IX shall submit Advance Purchase Orders and forecasts and Final
Delivery Orders in writing to the UNICOR Program Manager for each job requested
in support of the solar panels. All Purchase Orders shall be consistent with the
customer delivery order and include at a minimum the exact quantity of solar
panels ordered by IX, the applicable billable rate, customer contract number,
customer delivery order number and due date.

     

    


    
      
        
           


        

        
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    2.1.5
Invoicing and
Payment
Terms. Upon
shipping of finished products for
delivery to a location specified by the customer for each order, the UNICOR
factory issuing the product shall also forward to IX certain invoicing
documents consisting of a copy of the order number, a Packaging List by the
order numbers, a Bill of Lading, and an invoice. A copy of the order number and
other invoicing documents shall also be forwarded to IX. The copy of the order
number generated by UNICOR may serve as IX's invoice to the government customer.
UNICOR shall render an invoice every thirty days for services rendered to IX'S
designated Contract Administrator, at IX for all items produced and costs
incurred under this Agreement, via email to an address provided by IX, with
payment due in full within five (5) days after payment is received from the
customer. UNICOR shall invoice IX quantities consistent with the applicable
government purchase order. Also, within five (5) days of receipt by IX of any
prepayment received from Federal customers on goods provided pursuant to this
agreement, IX will also forward to UNICOR its fair portion of the advance or
prepayment on those items produced or costs incurred. And further, within five
(5) days of receipt by IX of any termination costs paid by Federal customers on
goods or services provided pursuant to this agreement, IX will also forward to
UNICOR its fair portion of the termination costs received. IX shall use its best
efforts to receive payment from customers.

     

    2.1.6
Payment. Payment to UNICOR
shall be made by check or electronic fund transfer to the following address:
Federal Prison Industries, P.O. Box 11890, Lexington, KY
40578-1890.

     

    2.1.7
Disputes. If a dispute
exists concerning an item included in the invoice, IX shall notify UNICOR within
ten (10) business days of the date of receiving an invoice or a dispute notice
from the customer, whichever is later, that a dispute exists concerning the
item. Penalties for failure to meet delivery dates will be a negotiated item.
Pursuant to 31 USC 3711, 31 CFR 900-904, FPI is required to report the status of
open accounts to outside credit agencies. An assessment of interest, penalties,
and administrative costs is required on any debt in excess of 30 days. Debts in
excess of 180 days shall be turned over to the U.S. Treasury for
collection/offset. Unless otherwise specified, all charges are exclusive of
taxes.

     

    2.2 Program Two. Under
Program Two, IX may act as the sales agent for UNICOR. UNICOR may identify
potential customers and refer the customers' names and other identifying
information to IX. UNICOR and IX may work together to prepare customer proposals
and to aid customers in obtaining project financing. Under Program
Two

     

    2.2.1
UNICOR shall sell the Products directly to the customers. Upon receiving payment
from the customers, UNICOR shall pay IX a Service Fee as set forth
below:

     

     

    


    
      
        
           


        

        
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    2.2.2
Pricing. Unicor shall pay
IX a Service Fee equal to 25% of the net earnings per project. Large scale
projects over 5 megawatts would be negotiated on a project-by-project
basis.

     

    2.2.3
Payment
Terms.
Unicor shall make payment due in full within five (5) days after payment is
received from the customer.

     

    2.2.4
Payment. Payment to IX
shall be made by check or electronic fund transfer to an address to be
provided.

     

    2.2.5
Documents. Under Program
Two, Unicor shall provide IX with a copy of all purchase orders, order
confirmations, invoices, and other purchase documents so that IX may accurately
track all orders placed, confirmed, and shipped pursuant to this Program Two,
when applicable.

     

    3.
Term
of Agreement
and Termination

     

    3.1 Term of Agreement. This Agreement
shall be for a term of five years, commencing on the Effective Date (which shall
be defined as the date the first shipment of assembled units is received IX or
to a designated government customer).

     

    3.2 Warranty
Work.
FPI shall perform warranty, replacement, upgrade and repair work for IX and its
commercial and Government customers during the term of the warranties and
contractual obligations of the sales and supply contracts and agreements, as
specified in Section of this Agreement entitled Manufacturer's
Warranty.

     

    3.3 Termination of Agreement. This Agreement
may be terminated prior to the production of the required number of solar panels
as follows:

     

    3.3.1 By
written agreement by both parties to terminate this agreement, to be effective
sixty (60) days after said agreement to terminate or as otherwise agreed. IX
shall be responsible for payment of all solar panels pursuant to the terms set
forth above produced during the period following notice of termination. IX shall
be responsible for payment of all inmate work performed during the period
following notice of termination and shall pay any other related costs incurred
pursuant to this Agreement, following notice of termination. The parties agree
to work together in good faith to determine the amount of any remaining
inventory and to sell the remaining inventory and apply the proceeds of said
sale to the cost of the inmate work as set forth in the preceding
sentence.

     

    


    
      
        
           


        

        
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    3.3.2 By
written 180-day prior notification by either party sent return receipt to the
other party. UNICOR, however, may terminate earlier if one of the following
conditions apply: (i) if UNICOR is directed to terminate by the Attorney
General; (ii) if required by order of a U.S. Court; (iii) if required by
Executive Order; or (iv) if required by Act of Congress. IX shall be responsible
for payment of all inmate work performed during the period following notice of
termination and shall pay any other related costs incurred pursuant to this
Agreement, following notice of termination. If termination occurs, UNICOR will
complete any IX work in process or offset the cost to complete any IX work in
process located in UNICOR facilities at the time of termination.

     

    3.3.3
Either party may terminate this agreement upon the occurrence of a default or a
material breach by the other party subject to and as provided in Section
6.

     

    3.3.4 IX
may terminate this Agreement in the event that the Government terminates any
purchase order or other contract for solar panels for convenience or
default.

     

    3.4 Machinery,
Tooling and
Equipment.
Unless otherwise agreed to in advance in writing, UNICOR shall be responsible
for the acquisition, installation and operation of all machinery, tooling and
equipment necessary for the production of the solar panels as specified in
Appendix A of this Agreement. IX shall use its best efforts to obtain favorable
pricing for UNICOR of the machinery, tooling and equipment from the
manufacturers and suppliers.

     

    3.5 Return of
Property.
Upon the expiration of this Agreement, each party shall return any equipment,
machinery, tools, documents, information and any other property provided and
owned by the other party

     

    
       
4. Non-Exclusive
Nature of Agreement.

    

     

    4.1 Both
parties agree that this is not an exclusive agreement between UNICOR and IX to
provide the items described herein. However, UNICOR agrees that it will offer IX
the nonexclusive right to negotiate a contract to sell and market to U.S.
government customers, any and all solar panels and related products assembled
and manufactured under this agreement, and will maintain an on-going capability
to perform warranty work during the term of any such warranty. UNICOR retains
the right to subcontract with other companies and to sell the solar panels
directly to Federal agencies. However, UNICOR agrees not to use any design
specifications provided by IX when subcontracting with other companies or when
selling directly to Federal agencies.

     

     

    


    
      
        
           


        

        
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5. Representations.
Warranties
and Limitations
of Liability.

    

     

    
       
5.1 Each
of the parties represents and warrants to the other as
follows

    

     

    5.1.1 it
has all requisite power and authority (corporate and otherwise) to enter into
this Agreement and has duly authorized by all necessary action the execution and
delivery hereof by the officer or individual whose name is signed on its behalf
below; and

     

    5.1.2 the
execution and delivery of this Agreement and the performance of its obligations
hereunder do not and will not conflict with or result in a breach of or a
default under its respective organization instruments or any agreement,
instrument, order, law or regulation applicable to it or by which it may be
bound, and

     

    5.1.3
this Agreement has been duly and validly executed and delivered by it and
constitutes its valid and legally binding obligation, enforceable in accordance
with its terms.

     

    5.2
UNICOR's
Representations
and Warranties

     

    5.2.1
UNICOR Represents and warrants that, with the exception of institutional
emergencies and other unforeseen circumstances associated with management of a
prison, that

     

    5.2.1.1
UNICOR will make available the work force necessary to meet the requirements of
IX; and

     

    5.2.1.2
UNICOR shall be responsible for freight charges to the end customer from the
factory location and for any miscellaneous packaging material (strapping, shrink
wrap, etc.) used to ship the final items to the customer. UNICOR shall ship all
items in accordance with requirements stated in the contract and/or purchase
order, and applicable rules and regulations that govern labeling and disclosure
of country of origin; and

     

    5.2.1.3
UNICOR may utilize the materials provided by IX to offset material and
manufacturing defects to ensure the quantity ordered by IX is manufactured as
specified and ordered; and

     

    5.2.1.4
UNICOR shall obtain from IX or other sources all parts and components to produce
the solar panels according to the most recent specifications and standards of
the Department of Defense, Underwriters Laboratories, or ISO worldwide as
appropriate for each order. UNICOR shall be responsible for conforming its
production methods and operations to meet the standards, and shall bear the
costs of testing of compliance with the applicable standards; and

    


    
      
        
           


        

        
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    5.2.1.5
Upon request, UNICOR shall submit a weekly inventory of materials and work in
progress to IX including parts components, work in progress and finished panels.
UNICOR shall also provide on-line access to its management tracking system on
its customer support webpage; and

     

    5.2.1.6
UNICOR shall first deliver twenty (20) preproduction solar panels for
inspection, testing and acceptance by IX within ninety days of the execution of
this agreement. Upon acceptance by IX, UNICOR shall deliver a second one hundred
(100) solar panels for approval, followed by a third one thousand (1,000) solar
panels and a fourth three thousand (3,000) solar panels, followed by five
thousand (5,000) solar panels, all of which shall be delivered for testing and
acceptance within one hundred twenty (120) days from initial receipt by UNICOR
of materials. Thereafter, UNICOR shall deliver ten thousand (10,000) solar
panels each month so long as materials to make the solar panels are received by
UNICOR at least ten (10) days prior to the month due to customer.

     

    
       
5.3   
IX's Representations and
Warranties

    

     

    5.3.1 IX
Represents and warrants that

     

    5.3.1.1 
It shall provide UNICOR, at prices mutually agreed to by the parties, with all
the supplies and materials, including the solar cells, from IX approved sources
necessary to complete the work to fabricate and assemble the panels to the most
recent specifications, unless UNICOR obtains the supplies at a more competitive
price from another source; and

     

    5.3.1.2
It shall supply UNICOR, if needed, the most recent specifications, contract
modifications, any follow-up needed on requests for contract modifications
(e.g., determining if a requested modification is warranted), and any other
supplemental information needed to complete the solar panels under this
Agreement; and

     

    5.3.1.3
It shall provide to UNICOR on a monthly basis sales forecasts and summaries of
the status of efforts to obtain Federal customers; and

     

    5.3.1.4
It agrees to conduct inspections and acceptances of solar panels, at times
agreeable to UNICOR and IX, at FCI Otisville; and

     

    5.3.1.5
It agrees to reimburse UNICOR for any shipping costs incurred.

     

    


    
      
        
           


        

        
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    5.4 Manufacturer's
Warranty. UNICOR warrants
that the solar panels it assembles and manufactures shall be free of defects in
materials and workmanship under normal applications, use and service conditions,
and that the solar panels shall perform at least as rated capacity when shipped
from UNICOR's factory. UNICOR shall also warrant that its solar panels shall
retain at least ninety percent (90%) of rated capacity after ten years of
service and eighty percent (80%) after twenty-five years of service. UNICOR
will, at its option, either repair or replace the product, or refund the
purchase price, if the product becomes inoperable due to a defect in material or
workmanship. This warranty does not apply to any panels that in UNICOR's
judgment has been subject to misuse, neglect, or accident or which has been
damaged through abuse, alteration, improper installation or application, or
negligence in use, storage, transportation or handling, or repaired by anyone
other than UNICOR. The warranty does not cover any transportation costs for
return of module or other reshipment or any repaired or replaced panels, or cost
associated with installation, removal or reinstallation of panel. This warranty
shall not apply if the IX specifications or any materials IX provides are
determined to be the cause of a defect or the defect resulted from an act of
God.

     

    5.5 Consequential
Damages. Except for
parties' obligations contained in section 3.3 neither party shall have any
liability to the other party with respect to its obligations under this
agreement for consequential, exemplary, or incidental damages even if either
party has been advised of the possibility of such damages.

     

    
       
6.    
Default.

    

     

    6.1 An
event of default shall occur hereunder (i) if IX fails to pay any sum when due
after thirty (30) days past due; (ii) if either party fails to perform or
observe any material covenant or agreement to be performed or observed herein;
or (iii) either party becomes insolvent, bankrupt or unable to pay its debts as
such become due or files any debtor proceedings or shall take or have taken
against them (unless dismissed or stayed within 90 days of filing) in any court
pursuant to any statute either of the United States or any state a petition in
bankruptcy or insolvency or for reorganization or for the appointment of a
receiver or trustee of all or a portion of its property or makes an assignment
for the benefit of creditors, or petitions for or enters into such an
arrangement. For purposes of this Agreement, a material covenant shall be
defined as one stated in this Agreement, the breach of which would likely cause
the other party to suffer material harm to its business or reputation. The
defaulting party shall have thirty (30) days from receipt of prior written
notice specifying the default to cure such default. In the event that the
default is not cured within such thirty (30) day period, the non- defaulting
party shall have the right to immediately terminate this Agreement.

     

    
       
7.    
Proprietary
Rights
and Confidentiality.

       

    

    


    
      
        
           


        

        
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    7.1 Definition and Uses. The term
"Confidential Information" shall mean any information disclosed by one party to
the other in connection with this Agreement which is in written, graphic,
machine readable, other tangible or oral form. Without limitation, Confidential
Information includes all business plans, trade secrets, computer software,
financial information, designs, the Data and customer and dealer lists. Each
party agrees that it will safeguard such information by using the same degree of
care and discretion that it uses to prevent disclosure of its own information
that it regards as confidential, but in no event less than reasonable care. Any
Confidential Information shall be used solely for the purposes set forth in this
Agreement and shall only be disclosed to those employees having a need for
access to such information in order to effectuate the purposes of this Agreement
and who have been informed of the confidentiality provisions contained herein.
Confidential information disclosed by either party to the other shall be
identified as such at the time of disclosure, and a summary shall be attached to
the non-disclosure agreement currently in place and shall be incorporated by
reference into this Agreement.

     

    7.2 In
the event that either party desires to disclose the other party's Confidential
Information to third party consultants or agents solely to effectuate the
purposes of this Agreement, that party shall obtain written permission from the
disclosing party and executed non-disclosure agreements from each such
consultant or agent which contains provisions that are comparable to the ones
contained in this Section. Both parties recognize that, as a public agency,
UNICOR may be required to provide information to the media or general public
without prior written notice to, or approval by, IX. Both parties agree to the
extent possible to provide notice to the other party prior to releasing such
information. Any media release about operations will be jointly coordinated.
Both parties agree to respect the other parties' interests in communicating with
the media.

     

    7.3 Both
parties agree that to the best of their knowledge the privacy rights and
obligations of IX for its. Federal income tax returns, Commerce Department
surveys and reports shall not be diminished or circumvented by section
7.1.

     

    7.4 Exceptions.
Confidential Information does not include any information which at the time of
disclosure is generally known by the public through no fault of the receiving
party, was in the receiving party's possession before receipt from the
disclosing party, was independently developed by the receiving party, was
disclosed under operation of law or is rightfully received by receiving party
from a third party without a duty of confidentiality. Notwithstanding the
termination or expiration of this Agreement, the parties shall continue to be
obligated to protect the confidentiality of any information provided hereunder
for a period of three (3) years after the termination or expiration of this
Agreement.

     

    


    
      
        
           


        

        
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    8.     
Trademarks and Promotional
Materials.

     

    8.1 A
party may not use the registered trademarks, service marks, logos, name or any
other proprietary designations of the other party without that party's prior
written consent, and shall submit to the other party for prior approval any
proposed advertising or promotional materials using such trademarks, service
marks, logos or name. Neither party will issue any publicity, advertisement,
promotion or other promotional statements concerning the subject matter of the
Agreement without the prior written consent of the other party. However, both
parties agree that the terms and conditions of this Agreement may be disclosed
to a bank or other financial institution or potential investor by IX for the
sole purpose of obtaining equity or debt financing, or line of commercial
credit. The parties agree that the country of origin disclosures shall be made
for solar panels made by UNICOR.

     

    9.     
Taxes.

     

    9.1 IX
shall be responsible for any applicable taxes for its operations, including but
not limited to applicable business or sales taxes and/or employment taxes,
social security taxes or unemployment insurance for its employees. IX shall not
be responsible for any tax liabilities incurred by UNICOR as an assembler,
manufacturer, and fabricator of solar panels and framing and support
structures.

     

    10.    
Alternative Dispute
Resolution.

     

    10.1 The
parties to this Agreement agree to attempt in good faith to resolve any
conflicts, disputes, or claims arising out of this Agreement by negotiation
between senior executives or officials. All disputes and claims, arising under
or related to this agreement shall be decided by the Chief of Procurement for
Federal Prison Industries. If applicable, parties agree to consider the
utilization of Alternative Dispute Resolution (ADR) procedures in situations
concerning disputes between the parties.

     

    11.   
Relationship of the
Parties.

     

    11.1 This
Agreement does not constitute a joint venture, partnership, consortium or any
other form of business arrangement or organization. UNICOR shall undertake
performing its obligations pursuant to this Agreement as an independent
contractor. Nothing contained herein or done pursuant to this Agreement shall
make UNICOR or its agents or employees the legal representative, agent or
employee of IX for any purpose whatsoever. It is expressly agreed and understood
that the benefits available to certain employees of IX, such as Health
Insurance, Disability Benefits, Pensions and Annuities, Death Benefits, Savings
Plans and others shall not be available to UNICOR staff or its workers. IX shall
perform its obligations pursuant to this Agreement as an independent contractor.
Nothing contained herein or done pursuant to this Agreement shall make IX or its
agents or employees the legal representative, agent or employee of UNICOR for
any purpose whatsoever. It is expressly agreed and understood that the benefits
available to certain employees of UNICOR such as Health Insurance, Disability
Benefits, Pensions and Annuities, Death Benefits, Savings Plans and others shall
not be available to IX employees. Each of the parties shall be responsible for
paying their employees' salaries and benefits. Any injuries sustained by an
inmate during the course of this Agreement shall be handled pursuant to the
Inmate Accident Compensation Act, 28 CFR 301.

    


     

    


    
      
        
           


        

        
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    12.   
Assignment.

     

    12.1
Neither party shall assign or subcontract to any other party all or any part of
this Agreement, its obligations hereunder, or any other interest herein or any
rights hereunder without the other party's prior written consent which consent
shall not be unreasonably withheld.

     

    13.    
Product
Liability.

     

    13.1
Except as may be otherwise provided for in this Agreement, IX agrees to protect,
defend, and hold harmless UNICOR or any employees or agents thereof, for any
product liability claim relating to the products in which work is being
performed if the item is made within the specifications provided by
IX

     

    14.    
Federal Law
to Apply.

     

    14.1 This
agreement will have been made, executed and delivered and will be governed and
construed for all purposes in accordance with the laws of the Federal Government
of the United States of America without giving effect to conflict of laws
provisions.

     

    15.   
Notice.

     

    15.1
Unless otherwise provided herein, any notice, tender, or delivery to be given
hereunder by or to UNICOR and IX, shall be effected in writing and be sent by a
nationally recognized overnight delivery service to such party at the address
shown below or such address as a party may designate by notice as provided
herein:

     

    


    
      
        
           


        

        
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              To:

            	
              IX
      Energy, Inc.

               

              X
      Energy, Inc.

              711
      Third Avenue

              Suite
      1505

              New
      York, NY 10017

              Attn:
      Mr. Steven Hoffman Phone No. (212) 476-0906

               

            	
              To:

            	
              UNICOR

               

              Federal
      Prison Industries Inc. 320 First Street, NW

              Building
      400, 6th Floor

              Washington,
      DC 20534

              Attn:
      Mr. Chuck Darrin

              Phone
      No. (202) 305-3734

            


    

     

    16.   
Rights to
Inventions.

    


    16.1
Inventions arising out of this Agreement that are solely conceived or reduced to
practice by one of the parties hereto shall remain the property of the
originating party. Inventions arising out of this Agreement that are jointly
reduced to practice by the parties hereto shall, at a minimum, be owned jointly
by the parties with each having an undivided one-half interest therein. However,
the parties may agree to have further negotiations in order to establish
ownership rights that are different from the above. This understanding is
subject to the rights of the U.S. Government, if any.

     

    17.    
Entire
Agreement
and Modifications.

     

    17.1 Upon
acceptance of this Agreement by both parties, this Agreement shall be binding
upon and inure to the benefit of the parties, shall constitute the entire
agreement between the parties and shall supersede all other oral or written
agreements or understandings between the parties concerning the subject of this
Agreement. THIS AGREEMENT MAY NOT BE MODIFIED, CHANGED OR AMENDED EXCEPT BY A
WRITTEN AMENDMENT SIGNED BY AN AUTHORIZED REPRESENTATIVE OF EACH
PARTY.

     

    18.   
Waiver.

     

    18.1 No
action taken by either party shall be deemed to constitute a waiver of
compliance with any representation, warranty or covenant contained in this
Agreement unless such waiver is in writing and signed by a senior executive of
the waiving party. The waiver by a party of a breach of any provision of this
Agreement will not operate or be construed as a waiver of any subsequent
breach.

     

    19.   
Severability.

     

    19.1 If
any provision of this Agreement is for any reason held invalid, illegal,
void or
unenforceable, all other provisions of this Agreement will remain in full force
and effect and the invalid, illegal, void or unenforceable provision
shall be replaced by a mutually acceptable valid, legal and enforceable
provision that is closest to the original intention of the parties.

     

    


    


    
      
        
           


        

        
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    20.   
Headings.

     

    20.1 The
headings to the various sections of this Agreement are for convenience and ease
of reference only and do not define, limit, augment, or describe the scope,
content, or intent of this Agreement or any part or parts of this
Agreement.

     

    21.   
Two Counterparts. One Agreement.

     

    21.1 This
Agreement may be executed simultaneously in two (2) or more counterparts, each
of which shall be deemed an original, but all of which shall constitute one and
the same instrument.

     

    22.   
Survival of
Obligations.

     

    THE
PROVISIONS OF SECTIONS 3.2, 3.3, 3.5, 4.1, 5.4, 5.5, 7, 9, 10,11, 13, 14 and 16
SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.

     

    


    
      
        
           


        

        
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    IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first written above.

     

    
      	
              FEDERAL
      PRISON INDUSTRIES, INC.

              (UNICOR)

               

              By:  /s/ Brad
      Beus                    
      

              Name:  Brad
      Beus

              Title:  General
      Manager

              Date:  June
      20, 2008

               

              By:  /s/ Lisabeth L.
      Day        
      

              Name:  Lisabeth
      L. Day

              Title:  Procurement
      Chief

              Date:  6/20/08

            	
              IX
      ENERGY, INC.

              (IX)

              By:  /s/ Steven
      Hoffman                
      

              Name:  Steven
      Hoffman

              Title:  Chief
      Executive Officer

              Date:  June
      19, 2008

            


    

     

    


     

     

     

     

     

     

     

     

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