Climate Controlled Containers, Inc. — 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. Ken Broussard President Climate Controlled Containers, Inc. P.O. Box 667 Groves, TX 776 19 Ref. No. 08-0206 Dear Mr. Broussard: This responds to your letter concerning the applicability of the Hazardous Materials Regulations (HMR; 49 CFR Parts 171 -1 80) to a cargo container that includes an independent and automatic cooling and heating system powered by two rechargeable, non-spillable, lead-acid electric storage batteries. The container would either be placed into a unit load device (ULD) or secured to a pallet for loading into the cargo compartment of an aircraft. It is your understanding that such a cargo container containing regulated hazardous materials operating in flight as part of a process is subject to the HMR and may also be subject to operations and certification standards required by the Federal Aviation Administration (FAA). Your understanding of the HMR requirements is correct. The HMR except hazardous materials required aboard an aircraft in accordance with applicable airworthiness requirements (e.g., fuel, batteries) and operating regulations (e.g., supplemental crew oxygen, oxygen generators, emergency egress systems). The cargo container you describe does not fall into either category. The non-spillable batteries used to power the cargo container are excepted from the requirements of the HMR under the conditions specified in $ 173.1 59(d). However, the pressurized, non- flammable and non-toxic refrigerant (R134) used in the cooling system is fully subject to the requirements of the HNIR, including marking and labeling of the cargo container, shipping papers (including certification), and emergency response information. I suggest that you contact the FAA for other applicable requirements. I trust this adequately addresses your concerns. Please contact us if we can be of further assistance. Hattie L. Mitchell Chief, Regulatory Review and Reinvention Office of Hazardous Materials Standards#

Page 2Stevens $175,8 Exceptions 08-0206 KEN BROUSSARD 4099632137 08(079)#

Page 3The Revolutionary Cold Chain Management Solution HAlN OF CUSTODY ASSllRANCE LF-POWERED FOR LIP TO 100 HOURS NEED FOR REFRIGERATEDRiEEFER TRUCKS NEED FOR WALK-IN OR DRIVE-IN /OR STORE MULTIPLE FFERENT TEMPERATURES TECHNOLOGY#

Page 49Wn rate+ *Controlled • Con tainers. 1-888- ICE BOX 1 Features •Preciso temperature control 1 8°F (1°6) in ambien temperatures o 49F (20°C) 1o 110 E (43°01 • Multiple Units allow multiple payload temperatures on one truci a unts are stackable three high and lockable with truck door style 2 point cam latche o Accepis durable aluminumor standard 48 x 40" GMA pallets * Can run on ACiline power or internal battenes o tasily handled with forklift- 6-way access from door and and both sides e Environmentally frendly, No dry ice contamination,, No hazmal CO2 or exhaust emissions, Nos truck engine Idle regured •Optional Postion Tracking & Temperature Logging and Reporting via Internet subscription. • Ship and drop loads during of hours with tewer traffic issues. Main Specifications Internal Temperature Set Point 39 F(4 0°C) = 1 8°F (1.0°C) In ambient conditions of 4°F(-20°C) 16 M0°F(43°C) Max operating temp 120°5 (49 C) ambienta Dimensions External 8125 H 47.5 W 88L (including latches), Internal 54 Hx 41.5 W : 52 D Cara Capaclos 60, f (178 r0), 3000 Jos Emply welobe (850lb with ful bartery set Powet Inpu: 116 VAC 150-60 Hz) at 10A o 230 VAG (50 60H2) a1 5A, Hold Tre Anteral batter 100 hours n 90°F (32°C) ambient with wide contral bandwoth ac : 381 (12°0) or 90 hours with narrow bandwidin or s 8% (1°C). Protacted unose US. Patone No. 0231341 Oite Patent Pending An Bighie Roderveo Climate Controlled ContainerS.com P.O. Box 667. Groves, Texas 71619 • 1-888-ICE BOX 1 (1-888-423-2691) • www.ClimateControlledContainers.com#

Page 5U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration JUN 26 2007 1200 New Jersey Avc . S E Wash~nglon DC 20530 Mr. Marshall S. Filler Obadal, Filler, MacLeod & Klein, P.L.C. 117 North Henry Street Alexandria, VA 22314-2903 Ref. No. 07-0051 Dear Mr. Filler: This responds to your letter dated January 16, 2007, concerning the applicability of the Hazardous Materials Regulations (HMR; 49 CFR Parts 171-180) to a cargo container that includes an independent and automatic cooling system powered by a rechargeable lithium-ion battery. The cargo container, identified as the Kelvinbox Tracking Environmental Deviation System (T.E.D.S.), is loaded into the cargo compartment of an aircraft. It is yoilr understanding of 5 175.8(a) (2) of the HMR that such a cargo container (LD3) containing regulated hazardous materials operating in flight as part of a process would be excepted from the HMR as "hazardous materials required aboard an aircraft in accordance with the applicable airworthiness requirements and operating regulations. " Your understanding is not correct. The HMR except hazardous materials required aboard an aircraft in accordance with applicable airworthiness requirements (e.g., fuel, batteries) and operating regulations (e.g., suppiemental crew oxygen, oxygen generators, emergency egress systems). The T.E.D.S. unit you describe does not appear to fall into either category. As such, the lithium- equivalent content of the lithium-ion battery (42 grams) used to power the T.E.D.S. cargo container would indicate that it is fully regulated under the HMR. See 49 CFR 173.185. In addition, the gross weight of the lithium-ion battery (41.3 kg) would indicate that it is forbidden on passenger-carrying and cargc-carrying aircraft. See Column i9B) of the "iithium battery" entry in the 5 172.131 Hazardous Materials Table and 5 172.102, Special Frovisicn Ai00.#

Page 6we are also aware that the T.E.D.S. cargo containers may be subject to operations and certification standards required by the Federal Aviation Administration. You may suggest that your client apply for a special permit as provided in 5 107.105 of the HMR. The Special Permits office may be reached at (202) 366-4535. I trust this adequately addresses your concerns. Please contact us if we can be of further assistance. Hattie L. Mitchell Chief, Regulatory Review and Reinvention Office of Hazardous Materials Standards#

Page 7Marshall S. Filler Admitted in the Dishict of Columbia and Virginia Obadal, Filler, MacLeod & Klein, P.L.C. CiceQ-bons 117 North Henry Street, Alexandria VA 22314-2903 Telephone 703.299.0784 Facsimile 703.299.0254 www.potornac-1aw.com 07; 005 1 Electronic Mail mf@potomac-1aw.corn Telephone Extension 114 January 16, 2007 VIA E-MAIL TO: John J. Hickey Director, Aircraft Certification Service (AIR-1) Federal Aviation Administration 800 Independence Avenue, SW Washington, DC 20591-0004 Robert A. Richard Acting Associate Administrator for Hazardous Materials Safety (PHH-1) Department of Transportation 400 Seventh Street, SW Washington, DC 20590-0001 James J. Ballough Director, Flight Standards Service (AFS-1) Federal Aviation Administration 800 Independence Avenue, SW Washington, DC 20591 -0004 Re: Refrigerated Cargo Container Dear Sirs: We represent Tednologies, Inc. We are writing to request Federal Aviation Administration (FAA) and Pipeline and Hazardous Materials Safety Administration (PHMSA) concurrence in the following plan for obtaining approval of a cargo container. that includes an independent and automatic coolirlg system powered by a rechargeable lithium-ion battery. Once FAA approval has been obtained, we believe the unit would be excepted from the Hazardous Materials Regulations (HMR) as required equipment pursuant to 49 CFR 5 178.8(a)(2).' Background The unit, presently identified as the Kelvinbox Tracking Environmental Deviation System (T.E.D.S.), is essentially an LD3 cargo container. Its purpose is to transport temperature sensitive goods as freight aboard passenger and cargo aircraft. ' Which provides, in part, that: (a) Operator equipment. This subchapter does not apply 1- (2) Hazardous materials required aboard an aircraft in accordance with the a ~ ~ l i c a b l e airworthiness requirements and operatinq reaulations. Items of replacement for such materials must be transported in accordance with paragraph (a)(3) of this section. (Emphasis added)#

Page 8Messrs. Hickey, Ballough and Richard Re: Refrigerated Cargo Container January 16,2007 Page 2 A prime application of this technology is the shipment of pharmaceuticals which are extremely susceptible to heat during loading and unloading of aircraft, and therefore difficult to transport as air cargo. We have also received a great deal of interest from those involved in delivering perishable goods to remote locations, primarily within the state of Alaska. While the T.E.D.S. container is covered by FAA Technical Standard Order (TSO) TSO- C90c, titled "Cargo Pallets, Nets, and Containers," the integrated cooling system is not. We have learned in recent conversations with FAA personnel that the Aircraft Certification Service (AIR) and Flight Standards Service (AFS) have been reviewing this matter. Our understanding is that the issues being discussed relate primarily to the manner of obtaining a design approval and how maintenance would be performed on the units. Kelvinbox T.E.D.S. Description The container is a rigid and insulated structure designed to meet the requirements of FAA TSO-C9Oc. In this regard, it is similar to many containers approved through this TSO. The distinctive feature is the integrated autonomous cooling system. Unlike "passive" cooling of containerized cargo using dry ice, gel packs or other cooling media, the container is "active" in that it monitors and maintains a pre-determined temperature using a traditional mechanically operated refrigerant cooling system. Power for the cooling and monitoring system is provided by a rechargeable lithium-ion battery. This battery is only charged on the ground by plugging a cord into a conventional electrical outlet; the process will not take place while the container is on- board the aircraft. The design includes protective circuitry - a "fuse" to prevent a rapid discharge (external load) and cell to cell "fuses" to cut off an internal (battery) short. Certification and UN Testing History Initial steps toward certification under TSO-C9Oc were taken through ASW-190 (TSO application SP8352SC-Q). That application is dormant and will be withdrawn in the near future as we finalize the design and manufacturing details. Because exclusive production of the container will occur in Alaska, the application under TSO-C9Oc will be submitted to the Anchorage, Alaska ACO and the manufacturing quality system will be under the jurisdiction of the Wichita MIDO. In addition to operational testing of the air conditioning module itself, the following tests have been successfully completed on the container assembly and documented accordingly:#

Page 9Messrs. Hickey, Ballough and Richard Re: Refrigerated Cargo Container January 16,2007 Page 3 Temperature variation Temperature and altitude Ultimate load Rapid decompression Electromagnetic err~issions Crash safety impulse Operational shock Burning rate The lithium-ion battery has passed all required testing pursuant to United Nationsllnternational Civil Aviation Organization HAZMAT requirements. Proposed Plan Design approval issues: We propose that Notice 81 50.4, titled "Non-TSO Function(s) Integrated into TSO Articles," (Notice), be used to evaluate the design of the integrated cooling system as further described below. This would be accomplished during the Technical Standard Order Authorization (TSOA) application process under TSO-C9Oc and the criteria set forth in the Notice. There is no aircraft to ULD interface other than the usual aircraft restraint or locking device. Based on the criteria set forth in paragraph 4 of the Notice (see below), we believe that all pertinent design issues can be resolved through the above process and without the necessity for a Supplemental Type Certificate (STC). Operations and maintenance issues: $Operational issues would be addressed as outlined in Advisory Circular (AC) 120-85 titled "Air Cargo Operations." Specifically, each operator would be responsible for ensuring that the carriage of these containers was authorized in accordance with its Weight and Balance and/or Cargo Loading Manuals. Since the TSOA process requires an applicant to provide instructions for maintaining the units and other pertinent continued airworthiness information, that issue can also be resolved within the proposed framework. Hazardous Materials Regulations Once FAA approval has been granted, the lithium-ion battery would then be excepted from the Hazardous Materials Regulations (HMR) as "required equipment" under 49 CFR § 1 75.8(a)(2).2 - See supra note 1 .#

Page 10Messrs. Hickey, Ballough and Richard Re: Refrigerated Cargo Container January 16, 2007 Page 4 As noted in the preamble to the final rule titled "Prohibition of Oxygen Generators as Cargo in Passenger Aircraft" by the predecessor agency to PHMSA, the Research and Special Programs Administration (RSPA): "RSPA does not regulate, and the HMR do not apply to, components of the aircraft itse~f."~ Approval of Non-TSO Functions Although the project has thus far resulted in some confusion among ASW-190 staff about how the container should be approved, Notice 8150.4~ sets forth the pertinent guidance. Specifically, paragraph 4, titled "Policy" provides as follows: a. Definition of a Non-TSO Function. A non-TSO function is one that is not covered by a TSO-approved minimum performance standard (MPS), does not support or affect the hostinq article's TSO function(s), and could technicallv be implemented outside of the TSO article. A manufacturer may choose to integrate a non-TSO function into a TSO article to support a foreign airspace requirement; minimize the amount of line replaceable units and interconnect wiring systems in an aircraft installation; address a specific customer/industrv need; or for product differentiation. Non-TSO function(s) mav be included and acce~ted on a noninterference basis, as part of a manufacturer's TSO submittal, and a TSO authorization issued for the article, if the manufacturer demonstrates that it meets all of the following conditions: (1) The hostinq article is eliqible for TSO authorization and meets the applicable TSO performance requirements, per FAA Order 81 50.1 0, Paragraph 17a(l) and 17a(2); (2) There is no a ~ ~ l i c a b l e TSO for the non-TSO function; (3) The added non-TSO function does not affect or interfere with the hostinq TSO article's required MPS or violate any limitations imposed bv the hostinq TSO; and, (4) The hosting TSO article's environmental qualification, hardware and software design assurance levels adequately support the non-TSO function. (Emphasis added) The non-TSO cooling function should therefore be accepted as part of the TSO submittal because it meets this definition and satisfies the stated conditions: It is not addressed in the relevant TSO; its presence has no impact on the TSO-C9Oc performance standard; and the container, or "ho.sting article," meets the standard. The ' 61 FR 68952, December 30, 1996. The Order is dated September 29, 2006, with a cancellation date of September 29, 2007.#

Page 11Messrs. Hickey, Ballough and Richard Re: Refrigerated Cargo Container January 16,2007 Page 5 final stated condition is inapplicable because there is no design interface between the cooling system and the container structure other than structural support. FAA Engineering Review The same paragraph in the Notice also provides guidance for an engineering evaluation: d. ACO Evaluation Criteria. If, followina earlv coordination between the ACO and the manufacturer, it is determined that the non-TSO function is of a simple nature where the performance is easilv understandable, ACO review of the manufacturer's declared performance requirements should simply become part of the normal TSO data application evaluation. However, the ACO should require a concurrent Type Certificate (TC) or Supplemental Type Certificate (STC) project evaluation if it is determined that the added non-TSO function(s): (Emphasis added.) (1) Is complex and difficult to review and fully understand without a concurrent installation evall-lation; (2) Has a high degree of system flight deck to pilot interface; (3) Are of a simple nature individually but combined in such a way or in sufficient quantities to meet the criteria of 4d(l); or (4) Incorporates new or novel technology. The non-TSO cooling function is of basic design. It is not complex individually or when combined with other such containers, it has no flight crew interface, and it is a not new or novel technology. In fact, a similar version of the most technologically advanced aspect of container, the lithium-ion battery, is currently .approved to power the emergency lighting system on the Airbus A380 air~raft.~ Concerns identified in granting that approval are largely inapplicable in our situation. Specifically, the risks associated with overcharging will not apply because the container is not recharged on the aircraft; reduced capacity that results from over-discharging would only result in reduced cooling capacity; and the battery does not utilize flammable liquid electrolyte. Since there will be no unique interface with the airplane, evidence that an STC is not necessary can be found in paragraph 315 of AC 120-85, which states, in part, that: As appropriate to the type design, the specification of which ULDs are corrlpatible with the particular airplane should be identified in the airplane See, "Special Conditions: Airbus Model A380-800 Airplane, Lithium-Ion Battery Installation," docket No. NM352; Special Conditions No. 25-339-SC.#

Page 12Messrs. Hickey, Ballough and Richard Re: Refrigerated Cargo Container January 16,2007 Page 6 weight and balance or carqo loading document. This is the primary means for ensurinq the proper ULDs are used in the operation of the airplane. (Emphasis added) As such, installation of the container would be governed by the Weight and Balance Manual and/or Cargo Loading Manual of the aircraft on which it is loaded. Finally, Notice 8150.4, Appendix 2, paragraph 5 specifically states that: Q: Is a deviation request (reference 14 CFR 521.609) required when a manufacturer incorporates a non-TSO function in a TSO article? A: No. The addition of a non-TSO function is not considered a deviation to the hosting TSO article. In fact, the policy of this Notice requires the manufacturer to demonstrate to the TSOA-issuing ACO that the non-TSO function in no way impacts the required performance of the hosting TSO article. In summary, we propose that the FAA evaluate the design of the T.E.D.S. container under TSOA-C9Oc (as supplemented by Notice 8150.4) without the necessity of an STC. We will work closely with the FAA during the TSOA process to ensure that appropriate continuing airworthiness information is provided. Further, becar~se the equipment would be carried in accordance with the airworthiness, operations and maintenance rules, we submit that it would be excepted from the HMR under 49 CFR § 175.8(a)(2). We hope this letter explains the article and clarifies the issues related to the anticipated application under TSO-C9Oc with the Anchorage ACO. Please let me know if you have any questions or require further information. Sincerely, Marshall S. Filler cc: Dave Cann (AFS-300) Dave Hempe (AIR-1 00) Ali Bahrami, Manager, Transport Airplane Directorate (ANM-100) Gregory J. Holt, Manager, Anchorage ACO (ACE-1 15N) Margaret Kline, Manager, Wichita MIDO (ACE-1 15W)#