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28 September 2004 <br /> AGE-NC Project No. 95-0103 <br /> Page 2 of 3 <br /> as a service to our Client (Chapin Brothers, Inc.), AGE purchased the system, thus saving <br /> you the burden of providing the up-front costs and allowing you to obtain reimbursement for <br /> monthly charges. AGE purchased this system with the expectation of profiting from the <br /> rental and/or lease of the equipment. And, with the profit comes the acceptance of liability <br /> (and warranty) of the system. The expectation of a profit is not considered"greedy"as you <br /> indicate in your letter;any implication of greed is without merit. Without the expectation of <br /> profit,AGE would have not purchased the system and would have required Chapin Brothers, <br /> Inc. to provide payment in full upon delivery of the system to the site. <br /> Additionally, unlike many other consultants in our field, AGE is intimately involved in the <br /> design, engineering and assembly of most of the remediation systems that we operate and, <br /> therefore, includes our participation in our valuation of the systems. <br /> 4. AGE is aware that there was a distinct"policy" shift within the USTCF in late 2003 from <br /> reimbursement of"rental" costs to the preference for outright purchase of the remediation <br /> systems. Between September 2003 and January 2004, AGE personnel had several <br /> conversations with USTCF representatives regarding the "rental vs. purchase" issue. As a <br /> result of our conversations with USTCF representatives,you have not been invoiced for the <br /> "rental" of the remediation system since February 2004. AGE has allowed you to continue <br /> use of our ground water extraction system at your site with no compensation(approximately <br /> 7 months). Furthermore,AGE has continued to perform work at your site without receiving <br /> payment for some invoices over a year old. <br /> 5. Based upon the fact that AGE has received a total of$44,800 of rental costs for the ground <br /> water remediation system from Chapin Brothers,Inc.and that the USTCF is denying you any <br /> further reimbursement of rental costs,we are willing to waive the outstanding"rental"costs <br /> (9 months @$3,200/month)upon immediate payment of the remaining costs owed to AGE, <br /> which is$64,520.39 to date. Furthermore,AGE is willing to allow Chapin Brothers,Inc. an <br /> additional 6 months of no-cost rental of our remediation system at your site(for a total of 14 <br /> months of"free"rental).As an alternative to the 6-month no-cost rental option,AGE would <br /> be willing to sell the entire system to you(and provide a bill-of-sale) for a nominal cost of <br /> $5,000 (we recommend discussing these options with the USTCF). Since it is our <br /> understanding that you have already received reimbursement from the USTCF, we would <br /> like to receive payment within 10 days of receipt of this letter. <br /> If these terms outlined in Item 5 above are not satisfactory to Chapin Brothers,Inc.,AGE will make <br /> arrangements to immediately remove our ground water extraction remediation system from the <br /> subject property and will suspend any additional work until payment is received in full. <br /> Advanced GeoEnvironmental,Inc. <br />