Southwest Electronic Energy Corp. — Hazardous Materials Safety Interpretation

Page 1U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 1200 New Jersey Ave.. S E Washington. DC 20590 Mr. Randy Tanner Traffic Manager Southwest Electronic Energy Corp. 1270 1 Royal Drive P.O. Box 848 Stafford, Texas 77497-0848 Ref. No. 08-0 1 12 Dear Mr. Tanner: This responds to your April 21,2008 letter requesting clarification of requirements applicable to shipping lithium battery packs by aircraft under the Hazardous Materials Regulations (HMR; 49 CFR Parts 1 71 - 180.) Specifically, you ask if you may ship these battery packs in UN specification packaging in accordance with the HMR and. International Air Transport Association (IATA) requirements. The IATA requirements are industry guidelines and are not recognized by the HMR. Therefore, our response is fiamed in terms of the requirements of the HMR and the International Civil Aviation Organization (ICAO) Technical Instructions (TI). In your letter, you state that your overseas customers need to send lithium battery packs (UN 309.0, Lithium batteries, 9, PG 11) back to your facility in the United States for recycling or additional evaluation. Your customers request shipment by air. You believe that you may ship these lithium batteries if they are packaged in UN specification packaging for Class 9 materials. You ask if there any other regulatory issues that need to be addressed. In accordance with the provisions of the HMR, you may ship these lithium battery packs as Class 9 material, provided they meet the requirements of 5 173.1 85(a) including UN specification packagings, and the applicable Special Provisions in 5 172.102 in the HMR. However, you should also be aware that the ICAO published an addendum/corrigendum applicable to the 2007-2008 ICAO Technical Instructions effective August 1,2007. The addendum added a new Special Provision 154 to the entry for Lithium Batteries, UN 3090; Lithium Batteries in equipment, UN3091; and Lithium Batteries packed with equipment, UN3091. Special Provision 154 states, Lithium batteries, identified by the manufacturer as#

Page 2being defective for safety reasons, or that have been damaged, that have the potential of producing a dangerous evolution of heat, fire or short circuit are forbidden for transport (e.g. those being returned to the manufacturer for safety reasons). It would be incumbent upon the offeror of the material to ensure compliance with this special provision. I hope this answers your inquiry. Sincerely, Susan Gorsky dq Acting chief, Standards Development Office of Hazardous Materials Standards#

Page 3- - . - SOUTHWEST ELECTRONIC ENERGY GROUP April 2 1,2008 Dear Mr. Mazullo, Our overseas customers need to send lithium battery packs (UN3090, Lithium Batteries, 9, PG 11) back to our facility for two reasons: (a) for purposes of recycling (b) for evaluation when the customer thinks the battery pack is nonconforming (NCM) Our customers request all transportation be carried out via air, not ocean. Using 49CFR and IATA regulations we believe we can correctly ship these lithium batteries ifthey are packaged in " U N specified packaging following class 9 regulations (49CFR 62 IATA). If our customers inform us that there are no safety issues with the batteries, are there any other regulatory issues to be addressed? On the packs coming back for evaluation, neither we nor our customer will know what, if anything is wrong with the battery packs until they are evaluated at our facility. Are there any regulatory constraints that would prevent us fiom shipping these packs for evaluation back to SWE via air? Thank you for your assistance in clarifjring these'questions. clarifications, please do not hesitate to contact me at 281-240-4000. If you have any questions or need Randy ~ a n n e r Traffic Manager Southwest Electronic Energy Corp 1 2 7 0 1 R O Y A L D R I V E P.O. BOX 848 WWW.SWE.COM S T A F F O R D , T E X A S 77497-0848#