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MOA.16 Some of the items listed involve proprietary processes.
The projected prices in schedule 1 include the cost of time and
engineering to specify the details of the equipment, to design
the assembly, modifications, and installations of the equipment,
and to do debugging on the production process to make sure the
equipment worked properly. Some of the equipment was supposedly
to be created by ERG.17
On or about December 20, 1989, ERG and NPI entered into a
“Plant Equipment & Facilities Purchase Agreement”. Under this
agreement, in exchange for $483,098, NPI agreed to purchase,
deliver, install, and place into operation as a “turnkey
operation” the items listed on schedule 1 of the MOA, which was
incorporated into the agreement. On or about December 29, 1989,
ERG issued check No. 20498 to NPI for $483,098.
On August 8, 1990, Burton, as president of ERG, executed a
document entitled “Certification That Plant
Equipment/Facilitization Items Are in Place and Operational”.
By this document, Burton certified to Hercules that the equipment
listed on schedule 1 of the MOA was in place and operational at
ERG, or would be by December 31, 1990.
16ERG’s chief engineer, Bryan Leyda, testified that he
created the prices on schedule 1 with the help of an associate
engineer.
17Mr. Leyda testified: “There’s no way that you can buy
this kind of * * * [equipment] off the shelf. You might buy
pieces, but not the entire piece of equipment.”
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