Document:

Exhibit 10.15

 

REGISTRATION
RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”),
dated July 11, 2006, among Nova Oil, Inc., a Nevada corporation (the “Company”),
and the purchasers identified on the signature pages attached hereto (each, a “Purchaser”
and collectively, the “Purchasers”).

This Agreement is made pursuant to the Securities
Purchase Agreement, dated as of the date hereof among the Company and the
Purchasers (the “Purchase
Agreement”).

NOW, THEREFORE, IN CONSIDERATION of the mutual
covenants contained in this Agreement, and for other good and valuable
consideration the receipt and adequacy of which are hereby acknowledged, the
Company and the Purchasers agree as follows:

1.             Definitions.
Capitalized terms used and not otherwise defined herein that are defined in the
Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement.  References to filing a
document with the Commission shall mean to file such document with the
Commission via the Commission’s Electronic Data Gathering, Analysis and
Reporting, or EDGAR, system.  As used in
this Agreement, the following terms shall have the respective meanings set
forth in this Section 1:

“Effective Date”
means the date that the Registration Statement filed pursuant to Section 2(a)
is first declared effective by the Commission.

“Effectiveness Date”
means the earlier of: (i) the 120th day following the Filing Date and (ii) the
fifth Trading Day following the date on which the Company is notified by the
Commission that the initial Registration Statement will not be reviewed or is
no longer subject to further review and comments. “Effectiveness
Date” shall also have the meaning specified in Section 2(b).

“Effectiveness Period”
shall have the meaning set forth in Section 2(a).

“Exchange Act”
means the Securities Exchange Act of 1934, as amended.

“Filing Date”
means: (a) with respect to the initial Closing Date pursuant to Section 2(a),
the 45th day following the Closing Date, and (b) if for any reason the
Commission does not permit all of the Registrable Securities to be included in
the Registration Statement filed pursuant to Section 2(a), the 45th day
following the date on which the Commission shall indicate as being the first
date or time that such filing may be made.

“Holder” or “Holders” means the holder or holders, as the case may be,
from time to time of Registrable Securities.

“Indemnified Party”
shall have the meaning set forth in Section 5(c).

“Indemnifying Party”
shall have the meaning set forth in Section 5(c).

“Losses” shall
have the meaning set forth in Section 5(a).

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

“Prospectus”
means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a prospectus filed as part of an effective registration statement in reliance
upon Rule 430A or 430B promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by a Registration
Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.

“Registrable Securities”
means the Shares issued pursuant to the Purchase Agreement and the Warrant
Shares, together with any securities issued or issuable upon any stock split,
dividend or other distribution, recapitalization or similar event, or any
conversion price adjustment with respect thereto.

“Registration Statement”
means each of the following: (i) the initial registration statement which is
required to register the resale of the Registrable Securities pursuant to
Section 2(a), and (ii) each additional registration statement, if any,
contemplated by Section 2(b), and including, in each case, the Prospectus,
amendments and supplements to each such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference in
such registration statement.

“Rule 144” means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such Rule.

“Rule 415” means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such Rule.

“Rule 424” means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such Rule.

“Securities Act”
means the Securities Act of 1933, as amended.

“Shares” shall
have the meaning set forth in the Purchase Agreement.

“Warrant Shares”
shall have the meaning set forth in the Purchase Agreement.

2.             Registration.

(a)           On
or prior to each Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the resale of all Registrable
Securities not already

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covered by an existing and effective Registration
Statement for an offering to be made on a continuous or delayed basis pursuant
to Rule 415.  The Company shall use its
best efforts to cause the Registration Statement to be declared effective under
the Securities Act as soon as possible but, in any event, no later than the
Effectiveness Date, and shall use its best efforts to keep the Registration
Statement continuously effective under the Securities Act until the earliest of
(i) the date when all Registrable Securities covered by the Registration
Statement have been sold, (ii) the date when all registrable Securities
covered by the Registration Statement may be sold without volume restrictions
pursuant to Rule 144(k), as determined by counsel to the Company pursuant to a
written opinion letter to such effect, upon actual receipt by the Holders of a
notice from the Company stating that the Company will deliver certificates
without restrictive legends upon surrender by the Holders of the existing
certificates along with appropriate seller’s and broker’s representation
letters, or (iii) with respect to subsequent Holders only, the date two years
after the date that the Registration Statement is declared effective by the
Commission (the “Effectiveness Period”).

(b)           If
for any reason the Commission does not permit all of the Registrable Securities
to be included in the Registration Statement filed pursuant to Section 2(a),
then the Company shall prepare and file as soon as possible after the date on
which the Commission shall indicate as being the first date or time that such
filing may be made, but in any event by the 45th day following such date, an additional
Registration Statement covering the resale of all Registrable Securities not
already covered by an existing and effective Registration Statement for an
offering to be made on a continuous or delayed basis pursuant to Rule 415.  The Company shall use its best efforts to cause
each such Registration Statement to be declared effective under the Securities
Act as soon as possible but, in any event, no later than the 120th day following the date on which the Company
becomes aware that such Registration Statement is required to be filed under
this Agreement (each such 120th day, the “Effectiveness Date”
for such Registration Statement), and shall use its best efforts to keep such
Registration Statement continuously effective under the Securities Act during
the Effectiveness Period.

(c)           If:
(i) a Registration Statement is not filed on or prior to its Filing Date, or
(ii) a Registration Statement is not declared effective by the Commission on or
prior to its required Effectiveness Date, or (iii) after its Effective Date,
such Registration Statement ceases for any reason to be effective and available
to the Holders as to all Registrable Securities to which it is required to cover
at any time prior to the expiration of its Effectiveness Period for an
aggregate of more than 30 consecutive days in any 365 consecutive day period,
(any such failure or breach being referred to as an “Event,” and for purposes of
clauses (i) or (ii) the date on which such Event occurs, or for purposes of
clause (iii) the date which such 30 consecutive day is exceeded, being referred
to as “Event Date”),
then, in addition to any other rights available to the Holders: (x) on such
Event Date the Company shall pay to each Holder an amount in cash, as
liquidated damages and not as a penalty, equal to 1.0% of the aggregate
purchase price paid by such Holder pursuant to the Purchase Agreement; and (y)
on each monthly anniversary of each such Event Date thereof (if the applicable
Event shall not have been cured by such date) until the applicable Event is
cured, the Company shall pay to each Holder an amount in cash, as liquidated
damages and not as a penalty, equal to 1.0% of the aggregate purchase price
paid by such Holder pursuant to the Purchase Agreement, provided,
that (i) the maximum amount of liquidated damages payable by the Company
to such Holder pursuant to this Agreement shall not exceed 10.0% of

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the aggregate purchase price paid by such Holder
pursuant to the Purchase Agreement and (ii) all periods shall be tolled,
with respect to a Holder, by the number of days in excess of five (5) during
which such Holder fails to provide the Company with information regarding such
Holder which was requested by the Company in writing in order to effect the
registration of such Holder’s Registrable Securities.  It shall be a condition precedent to the
obligations of the Company to pay any liquidated damages pursuant to this
Section 2 with respect to the Registrable Securities of any Holder that such
Holder shall furnish to the Company such information regarding itself and the
Registrable Securities held by it as contemplated by the preceding sentence.  If the Company fails to pay any liquidated
damages pursuant to this Section in full within seven days after the date
payable, the Company will pay interest thereon at a rate of 8% per annum (or
such lesser maximum amount that is permitted to be paid by applicable law) to
the Holder, accruing daily from the date such liquidated damages are due until
such amounts, plus all such interest thereon, are paid in full.  The liquidated damages pursuant to the terms
hereof shall apply on a pro rata basis for any portion of a month prior to the
cure of an Event and shall be paid on the fifth day after the cure thereof.

(d)           Each
Holder shall comply with the prospectus delivery requirements of the Securities
Act in connection with the offer or sale of any Registrable Securities pursuant
to the Registration Statement.

3.             Registration
Procedures

In connection with the Company’s registration
obligations hereunder, the Company shall:

(a)           Not
less than four Trading Days prior to the filing of a Registration Statement or
any related Prospectus or any amendment or supplement thereto, the Company shall
furnish to the Holders copies of all such documents proposed to be filed which
documents (other than those incorporated by reference) will be subject to the
review of such Holders.  The Company
shall not file a Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holders of a majority of the
Registrable Securities shall reasonably object in good faith.

(b)           (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep such Registration Statement
continuously effective as to the applicable Registrable Securities for its
Effectiveness Period and prepare and file with the Commission such additional
Registration Statements in order to register for resale under the Securities
Act all of the Registrable Securities; (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement or “issuer free
writing prospectus” (as defined by Rule 405 promulgated by the Commission
pursuant to the Securities Act) so that such Prospectus does not contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein, and as so supplemented or amended to be filed pursuant to
Rule 424; (iii) respond as promptly as reasonably possible to any comments
received from the Commission with respect to each Registration Statement or any
amendment thereto and, as promptly as reasonably possible provide the Holders
true and complete copies of all correspondence from and to the Commission
relating to such Registration Statement that pertains to the Holders as Selling
Stockholders but not any comments that would result in the disclosure

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to the Holders of material and non-public information
concerning the Company; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
Registration Statements and the disposition of all Registrable Securities
covered by each Registration Statement.

(c)           Notify
the Holders as promptly as reasonably possible (i)(A) when a Registration
Statement, Prospectus, any Prospectus supplement or post-effective amendment to
a Registration Statement is proposed to be filed; (B) when the Commission
notifies the Company whether there will be a “review” of such Registration
Statement and whenever the Commission comments in writing on such Registration
Statement (the Company shall provide true and complete copies thereof and all
written responses thereto to each of the Holders that pertain to the Holders as
a Selling Stockholder or to the Plan of Distribution, but not information which
the Company believes would constitute material and non-public information); and
(C) with respect to each Registration Statement or any post-effective
amendment, when the same has become effective; (ii) of any request by the
Commission or any other Federal or state governmental authority for amendments
or supplements to a Registration Statement or Prospectus or for additional
information that pertains to the Holders as Selling Stockholders or the Plan of
Distribution; (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of a Registration Statement covering any or all of
the Registrable Securities or the initiation of any Proceedings for that
purpose, including pursuant to Section 8A of the Securities Act; (iv) of
the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of
any Proceeding for such purpose; and (v) of the occurrence of any event or
passage of time that makes the financial statements included in a Registration
Statement ineligible for inclusion therein or any statement made in such
Registration Statement or Prospectus or any document incorporated or deemed to
be incorporated therein by reference untrue in any material respect or that
requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or the
Prospectus, as the case may be, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.

(d)           Use
its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
of (i) any order suspending the effectiveness of a Registration Statement, or
(ii) any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.

(e)           Furnish
to each Holder, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto and all exhibits to the
extent requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the
Commission; provided, that the Company shall have no obligation to provide any
document pursuant to this clause that is available on the EDGAR system.

(f)            Promptly
deliver to each Holder, without charge, as many copies of each Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request. The Company hereby
consents to

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the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.

(g)           Prior
to any public offering of Registrable Securities, use its best efforts to
register or qualify or cooperate with the selling Holders in connection with
the registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of those jurisdictions within the United States set
forth on Schedule 3(g) hereto and that may be reasonably requested by the
Holders of Registrable Securities and to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness
Period and to do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Registrable Securities
covered by the Registration Statements; provided, that
the Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or subject the Company to any
material tax in any such jurisdiction where it is not then so subject.

(h)           Cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a
transferee pursuant to the Registration Statements, which certificates shall be
free, to the extent permitted by the Purchase Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any such Holders may request.

(i)            Upon
the occurrence of any event contemplated by Section 3(c)(v), as promptly as
reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the affected Registration Statements or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, no Registration Statement nor any Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.

(j)            The
Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by such
Holder and any Affiliate thereof.

(k)           As
long as any Holder owns Registrable Securities, the Company shall timely file
(or obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to Section 13(a) or 15(d) of the Exchange Act.  As long as any Holder owns Registrable
Securities, if the Company is not required to file reports pursuant to Section
13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the Holders and
make publicly available in accordance with Rule 144(c) promulgated under the
Securities Act annual and quarterly financial statements, together with a
discussion and analysis of such financial statements in form and substance
similar to those that would otherwise be required to be included in reports
required by Section 13(a) or 15(d) of the Exchange Act, as well as any other
information required thereby, in the time period that such filings would have
been required to have been made under the Exchange Act. The Company will take
such further action as any Holder may reasonably request, all to the extent
required from

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time to time to
enable such Person to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by Rule 144
promulgated under the Securities Act.

(l)            If
shares of Common Stock are listed on a national securities exchange or a
quotation system of a national securities association, the Company shall cause
the Registrable Securities to be listed on the same national securities
exchange or national securities association, as applicable.

4.             Registration
Expenses. All fees and expenses incident to the Company’s performance of
its obligations under this Agreement (excluding any underwriting discounts and
selling commissions) shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a Registration Statement.  The fees and expenses referred to in the
foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (A) with respect
to filings required to be made with the Trading Market on which the Common
Stock is then listed for trading, and (B) in compliance with applicable state
securities or Blue Sky laws), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of
printing prospectuses if the printing of prospectuses is reasonably requested
by the holders of a majority of the Registrable Securities included in the
Registration Statement), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company and of counsel for the
holders selected by the holders of a majority of the Registrable Securities
(not to exceed $40,000 in the aggregate inclusive of fees and expenses paid
pursuant to Section 5.1 of the Purchase Agreement), (v) Securities Act
liability insurance, if the Company so desires such insurance, and (vi) fees
and expenses of all other Persons retained by the Company in connection with
the consummation of the transactions contemplated by this Agreement. In
addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated
by this Agreement (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder.

5.             Indemnification.

(a)           Indemnification
by the Company. The Company shall, notwithstanding any termination of this
Agreement, indemnify and hold harmless each Holder, the officers, directors,
agents, investment advisors, partners, members, shareholders, trustees and
employees of each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, agents, trustees and employees of each such
controlling Person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable costs of preparation and reasonable attorneys’
fees) and expenses (collectively, “Losses”),
as incurred, arising out of or relating to any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or any issuer free writing prospectus or
arising out of or relating to any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements

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therein (in the case of any Prospectus or form of
prospectus or supplement thereto or any issuer free writing prospectus, in
light of the circumstances under which they were made) not misleading, except
to the extent, but only to the extent, that (1) such untrue statements or
omissions are based solely upon information regarding such Holder or its
intended method of distribution furnished in writing to the Company by such
Holder expressly for use therein, or (2) in the case of an occurrence of an
event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of
an outdated or defective Prospectus after such Holder has received actual
notice in writing that the Prospectus is outdated or defective and prior to the
receipt by such Holder of an Advice or an amended or supplemented Prospectus.  The Company shall notify the Holders promptly
of the institution, threat or assertion of any Proceeding of which the Company
is aware in connection with the transactions contemplated by this Agreement.

(b)           Indemnification
by Holders. Each Holder shall, notwithstanding any termination of this
Agreement, severally and not jointly, indemnify and hold harmless the Company,
its directors, officers, agents and employees, each Person who controls the
Company (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from
and against all Losses, as incurred, arising solely out of or based solely upon
any untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or any form of prospectus, or in any amendment or
supplement thereto, or arising solely out of or based solely upon any omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading to the extent, but only to the extent that,
(1) such untrue statements or omissions are based solely upon information
regarding such Holder or its intended method of distribution furnished in
writing to the Company by such Holder expressly for use therein, or (2) in the
case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v),
the use by such Holder of an outdated or defective Prospectus after such Holder
has received actual notice in writing that the Prospectus is outdated or
defective and prior to the receipt by such Holder of an Advice or an amended or
supplemented Prospectus.  In no event
shall the liability of any selling Holder hereunder be greater in amount than
the dollar amount of the net proceeds received by such Holder upon the sale of
the Registrable Securities giving rise to such indemnification obligation.

(c)           Conduct
of Indemnification Proceedings.  If
any Proceeding shall be brought or asserted against any Person entitled to
indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.

An Indemnified Party shall have the right to employ
separate counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party or Parties unless: (1) the Indemnifying Party

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has agreed in writing to pay such fees and expenses;
(2) the Indemnifying Party shall have failed promptly to assume the defense of
such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party shall have been
advised by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in
which case, if such Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense thereof and such counsel shall be at the expense of the
Indemnifying Party), provided, that
the Indemnifying Party shall not be liable for the fees and expenses of more
than one separate firm of attorneys at any time for all Indemnified Parties (in
addition to any local counsel).  The
Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be
unreasonably withheld.  No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, effect
any settlement of any pending Proceeding in respect of which any Indemnified
Party is a party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of such Proceeding and does not contain any admission of wrongdoing by such
Indemnified Party.

All fees and expenses of the Indemnified Party
(including reasonable fees and expenses to the extent incurred in connection
with investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within fifteen Trading Days of written notice thereof to the
Indemnifying Party (regardless of whether it is ultimately determined that an
Indemnified Party is not entitled to indemnification hereunder; provided, that
the Indemnifying Party may require such Indemnified Party to undertake to
reimburse all such fees and expenses to the extent it is finally judicially
determined that such Indemnified Party is not entitled to indemnification
hereunder).

(d)           Contribution.
If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party on the one hand and Indemnified Party on the other
hand in connection with the actions, statements or omissions that resulted in
such Losses as well as any other relevant equitable considerations.  The relative fault of such Indemnifying Party
and Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact, has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission.  The
amount paid or payable by a party as a result of any Losses shall be deemed to
include, subject to the limitations set forth in Section 5(c), any reasonable
attorneys’ or other reasonable fees or expenses incurred by such party in
connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms.

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The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall
be required to contribute, in the aggregate, any amount in excess of the amount
by which the proceeds actually received by such Holder from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.

The indemnity and contribution agreements contained in
this Section are in addition to any other liability that the Indemnifying
Parties may have to the Indemnified Parties.

6.             Miscellaneous

(a)           Remedies.
In the event of a breach by the Company or by a Holder, of any of their
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.  The Company and each Holder agree that
monetary damages would not provide adequate compensation for any losses
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.

(b)           Compliance.
Each Holder covenants and agrees that it will comply with the prospectus
delivery requirements of the Securities Act as applicable to it in connection
with sales of Registrable Securities pursuant to the Registration Statement.

(c)           Discontinued
Disposition.  Each Holder agrees by
its acquisition of such Registrable Securities that, upon receipt of a notice
from the Company of the occurrence of any event of the kind described in
Section 3(c), such Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until such Holder’s
receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement or until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus may be resumed, and,
in either case, has received copies of any additional or supplemental filings
that are incorporated or deemed to be incorporated by reference in such
Prospectus or Registration Statement. The Company may provide appropriate stop
orders to enforce the provisions of this paragraph.

(d)           Notices.
Any and all notices or other communications or deliveries required or permitted
to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section prior to 5:00 p.m. (Central time) on a Business Day, (ii) the
Business Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
Agreement later than 5:00 p.m. (Central time) on any date and earlier than
11:59 p.m. (Central time) on such date, (iii) the Business Day following the
date of mailing, if sent by nationally recognized overnight courier service, or
(iv) upon actual receipt by the party to whom such

 10
 

 

notice is required to be given. The address for such
notices and communications shall be as follows:

If to the Company:                                                                                             Nova
Oil, Inc.

The Riviana Building

2777 Allen Parkway, Suite 800

Houston, Texas 77019

Tel: (713) 869-6682

Fax: (713) 868-1267

Attention: President and Chief Operating Officer

with a copy to:                                                                                                                 Baker
& McKenzie LLP 

2300 Trammell Crow Center

2001 Ross Avenue

Dallas, Texas 75201

Tel: (214) 978-3095

Fax: (214) 978-3099

Attention: Roger W. Bivans, Esq.

If to a Purchaser:                                                                                                      To
the address set forth under such Purchaser’s name on the signature pages
hereof;

If to a registered
Holder:                                                               To
the address of such Holder as it appears in the stock transfer books of the
Company;

or such other address as may be designated in writing
hereafter, in the same manner, by such Person.

(e)           Successors
and Assigns. This Agreement shall inure to the benefit of and be binding
upon the successors and permitted assigns of each of the parties and shall
inure to the benefit of each Holder.  The
Company may not assign its rights or obligations hereunder without the prior
written consent of each Holder. Each Holder may assign their respective rights
hereunder in the manner and to the Persons as permitted under the Purchase
Agreement.

(f)            Execution
and Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and, all of
which taken together shall constitute one and the same Agreement. In the event
that any signature is delivered by facsimile transmission, such signature shall
create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

(g)           Governing
Law. ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF THAT WOULD APPLY ANY OTHER LAW.  Each
party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective

 11
 

 

Affiliates, employees or agents) may be commenced in
the state and federal courts sitting in the City of New York, Borough of
Manhattan (the “New York Courts”).  Each party hereto hereby irrevocably submits
to the non-exclusive jurisdiction of the New York Courts for the adjudication
of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the
enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any such New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum.  Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such Proceeding
by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by
law.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

(h)           Cumulative
Remedies. The remedies provided herein are cumulative and not exclusive of
any remedies provided by law.

(i)            Severability.
If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be hereafter declared invalid, illegal, void or unenforceable.

(j)            Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

[SIGNATURE PAGES ON NEXT PAGE]

 12
 

 

IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first
written above.

 

	
  

  	
  NOVA OIL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Kenneth T. Hern

  
	
   

  	
   

  	
  Chairman and Chief Executive Officer

  

 

[SIGNATURE
PAGES FOR PURCHASERS ON NEXT PAGE]

 13
 

 

IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first
written above.

	
  

  	
  PURCHASER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [

  	
  ]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
  

  	
  Address for
  Notice:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Facsimile No:

  	
   

  
	
   

  	
  Attention:

  	
   

  

 

	
  

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Facsimile No:

  	
   

  
	
   

  	
  Attention:

  	
   

  

 

 14Exhibit 10.16

	
  

  	
   

  	
  Purchase order

  

 

	
  600 Dewey Boulevard

  	
   

  	
  kgriffith@biosourcefuels.com

  	
   

  	
  Purchase Order No:

  	
   

  	
  BSA-SENECA-006 

  
	
  Suite B

  	
   

  	
  Facsimile:    406-494-6645

  	
   

  	
   

  	
   

  	
   

  
	
  Butte, Montana 59701

  	
   

  	
  Telephone:    406-494-6644

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mueller Field Operations

  	
   

  	
  Order
  Date:

  	
   

  	
  July 10th, 2006

  
	
  1600 W Phelps

  	
   

  	
  Payment
  Terms:

  	
   

  	
  Wire Transfer

  
	
  Springfield, MO 65801

  	
   

  	
   

  	
   

  	
  25% with order

  
	
   

  	
   

  	
   

  	
   

  	
  25% with shop
  drawings

  
	
  FAX:      417-575-9890

  	
   

  	
   

  	
   

  	
  Monthly Payments
  thereafter

  
	
  Phone:   800-654-8265

  	
   

  	
  F.O.B.
  Point:

  	
   

  	
  Jobsite in
  Illinois

  
	
  Attn:       Steve
  Biggers

  	
   

  	
  Freight
  Terms:

  	
   

  	
  Included in
  pricing

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ship To:

  	
   

  	
   

  	
   

  	
  Invoice To:

  
	
  BIOSOURCE AMERICA, INC

  	
   

  	
   

  	
   

  	
  BIOSOURCE FUELS, LLC

  
	
  614 Shipyard Road 

  	
   

  	
   

  	
   

  	
  600 Dewey Boulevard

  
	
  Seneca, Illinois 61360 

  	
   

  	
   

  	
   

  	
  Suite B

  
	
   

  	
   

  	
   

  	
   

  	
  Butte, Montana 59701

  
	
  Phone: 406-494-6644

  	
   

  	
   

  	
   

  	
  Phone: 406-494-6644

  
	
  Attn:       Dick
  Talley

  	
   

  	
   

  	
   

  	
  Attn: Accounts Payable

  

 

	
  Tax ID:

  	
   

  	
   

  	
   

  	
  Ship via:

  	
   

  	
   

  	
   

  	
  Required Ship Date:

  	
   

  	
   

  	
   

  
	
  Item

  	
   

  	
  Quantity

  	
   

  	
  Part No.

  	
   

  	
  Description

  	
   

  	
  Unit

  	
   

  	
  Unit Price

  	
   

  	
  Total

  	
   

  
	
  1

  	
   

  	
  1

  	
   

  	
   

  	
   

  	
  Process Equipment Quote SB063006

  	
   

  	
  Lump Sum

  	
   

  	
  $

  	
  4,324,627.00

  	
   

  	
  $

  	
  4,324,627.00

  	
   

  
	
  2

  	
   

  	
  1

  	
   

  	
   

  	
   

  	
  [*]Quote SB070606

  	
   

  	
  Lump Sum

  	
   

  	
  $

  	
  1,299,327.00

  	
   

  	
  $

  	
  1,299,327.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  TOTAL OF PURCHASE ORDER

  	
   

  	
   

  	
   

  	
  $

  	
  5,623,954.00

  	
   

  

 

*       Portions
omitted pursuant to a request for confidential treatment and filed separately
with the Securities and Exchange Commission.

WITH THIS PURCHASE ORDER, THE
BUYER HAS ACCEPTED THE SELLER’S ATTACHED TERMS AND CONDITIONS.

	
  /s/ Dick Talley

  	
   

  	
   

  
	
   

  	
   

  	
  7/10/06

  
	
  Dick Talley

  	
   

  	
   Date

  
	
  President - COO 

  	
   

  	
   

  
	
  Biosource America,
  Inc

  	
   

  	
   

  

 

 

 

	
  June 30, 2006

  	
  

  
	
   

  
	
  Mr. Dick Talley

  
	
  BIOSOURCE FUELS

  
	
  600 Dewey Boulevard, Suite B

  
	
  Butte, MT 59701

  
	
   

  
	
  Quotation
  Number SB063006

  

Mr.
Talley,

Mueller
Field Operations, Inc. is pleased to submit our quotation for process and
distillation area vessels as necessary to support three (3) 60 MMGPY biodiesel
plants to be located in Illinois and Oklahoma.

Our
proposal assumes the equipment quoted is identical to your previous order for
the Anamax and Scott Petroleum facilities and includes the high shear agitators
required for the Series 200 reactors.

	
  Drawings:

  	
  Due to the priority assigned to the Anamax and Scott
  Petroleum project, please allow approximately 2-6 weeks for the preparation
  and submittal of shop drawings for approval prior to fabrication. To
  facilitate the orderly delivery of equipment to the jobsite, we propose to
  prepare the drawings in a sequence identical to the one employed on the
  Anamax project.

  
	
   

  	
   

  
	
   

  	
  Our proposal has
  significantly reduced the engineering hours for all vessels as we anticipate
  the drawings will only require minor title block changes.

  
	
   

  	
   

  
	
   

  	
  Allow 2 weeks for final
  engineering and release to production

  
	
   

  	
   

  
	
  Shipping Schedule:

  	
  The Series 200, 300, 400
  & 700 series vessels will be ready for shipment by 11/13/2006. The
  balance of all equipment included in this quotation will ship no later than
  12/18/2006.

  
	
   

  	
   

  
	
  Terms:

  	
  Wire Transfer

  25% down with order and
  prior to issuance of engineering or purchase of major material.

  25% due upon submittal of approval drawings.

  Monthly progress payments
  thereafter.

  
	
   

  	
   

  
	
  Taxes:

  	
  The above quoted prices do
  not include sales, use, state, local, or any other taxes, unless specifically
  itemized in the quotation.

  
	
   

  	
   

  
	
   

  	
  Sales Tax: If the transaction will be tax-exempt,
  please provide the name of the ship-to state and your sales-tax exemption
  certificate for that state.

  

 

MUELLER
FIELD OPERATIONS, INC.

PO
BOX 6263 / 1600 W PHELPS / SPRINGFIELD MO 65801 / TEL: 800-654-8265 / FAX:
417-575-9890

Quotation #SB35622, Revision 3

 

 

	
  Corrosion Disclaimer:

  	
  Paul Mueller Company is
  not responsible for corrosion or suitability for use of any material in any
  particular application. The corrosion resistance and suitability for use of a
  material is dependent on operating environment and conditions, cleaning
  practices, and many other factors beyond the control of the equipment
  fabricator. The user of the equipment bears total responsibility for
  corrosion or suitability for use of all materials in their particular
  application.

  
	
   

  	
   

  
	
  FOB:

  	
  Jobsites in Illinois and
  Oklahoma.

  
	
   

  	
   

  
	
  Freight:

  	
  Freight cost is included.
  Unloading is by others.

  
	
   

  	
   

  
	
  Note:

  	
  Due to base price and
  material surcharge increases now being levied by all stainless steel mills,
  the above total price includes current material prices. We are offering you
  firm pricing on labor and material contingent upon order placement and down
  payment receipt by July 7, 2006 and release to order major materials by July
  28, 2006. Additional details can be provided at your request.

  

 

 

SCOPE OF SUPPLY

	
  Quantity

  	
   

  	
  Tag No.

  	
   

  	
  Description

  	
   

  	
  Capacity

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

*       Portions
omitted pursuant to a request for confidential treatment and filed separately
with the Securities and Exchange Commission.

 

PRICING & ORDER ACCEPTANCE

	
  SENECA:

  	
   

  	
  $

  	
  4,324,627.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  4,324,627.00

  	
   

  

 

The above pricing is based upon equipment for all three
facilities being ordered at the same time.

Order Acceptance

I hereby order the goods described, in
accordance with the above described Mueller Field Operations, Inc. proposal and
additional terms and conditions of sale attached herein.

	
   

  	
  BIOSOURCE AMERICA, INC

  	
   

  
	
   

  	
  (Name of
  Purchaser)

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Dick Talley

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DICK TALLEY

  	
   

  
	
   

  	
  (Printed Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PRESIDENT &
  COO

  	
   

  
	
   

  	
  (Title)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  7-10-06

  	
   

  	
  BSA - SENECA -
  006

  	
   

  
	
   

  	
  (Date)

  	
   

  	
  (Purchase Order
  Number)

  	
   

  

 

 

Mr. Steve Biggers 

Regional Sales Manager 

Processing
Systems & Equipment

Attachments:        Additional
Terms and Conditions of Sale (PDF)

SB063006

We
do more than “tanks”...We provide Processing Solutions; offering integrated
systems, modular fabrication, field construction, plant maintenance and repair,
and complete turnkey project execution.

MUELLER IS YOUR FULL SERVICE PROVIDER.

 

 

	
  July 6, 2006

  	
  

  
	
   

  
	
  Mr. Dick Talley

  
	
  BIOSOURCE FUELS

  
	
  600 Dewey Boulevard, Suite B

  
	
  Butte, MT 59701

  
	
   

  
	
  Quotation
  Number SB070606

  

Mr.
Talley,

Mueller Field Operations, Inc. is pleased to submit our quotation for
process and distillation area heat exchangers as necessary to support three (3)
60 MMGPY biodiesel plants to be located in Illinois and Oklahoma.

Our proposal assumes the equipment quoted is identical to your previous
order for the Anamax and Scott Petroleum facilities.

	
  Drawings:

  	
  Due to the priority
  assigned to the Anamax and Scott Petroleum project, please allow
  approximately 2-6 weeks for the preparation and submittal of shop drawings
  for approval prior to fabrication. To facilitate the orderly delivery of
  equipment to the jobsite, we propose to prepare the drawings in a sequence
  identical to the one employed on the Anamax project.

  
	
   

  	
   

  
	
   

  	
  Our proposal has
  significantly reduced the engineering hours for all heat exchangers as we
  anticipate the drawings will only require minor title block changes.

  
	
   

  	
   

  
	
   

  	
  Allow 2 weeks for final
  engineering and release to production. 

  
	
   

  	
   

  
	
  Shipping Schedule:

  	
  The heat exchangers
  included in this quotation will ship no later than 12/18/2006.

  
	
   

  	
   

  
	
  Terms:

  	
  Wire Transfer

  25% down with order
  and prior to issuance of engineering or purchase of major material.

  25% due upon submittal of approval drawings.

  Monthly progress payments thereafter.

  
	
   

  	
   

  
	
  Taxes:

  	
  The above quoted prices do
  not include sales, use, state, local, or any other taxes, unless specifically
  itemized in the quotation.

  
	
   

  	
   

  
	
   

  	
  Sales Tax: If the transaction will be tax-exempt,
  please provide the name of the ship-to state and your sales-tax exemption certificate
  for that state.

  

 

MUELLER
FIELD OPERATIONS, INC.

PO
BOX 6263 / 1600 W PHELPS / SPRINGFIELD MO 65801 / TEL: 800-654-8265 / FAX:
417-575-9890

Quotation #SB070606

 

 

	
  Corrosion Disclaimer:

  	
  Paul Mueller Company is
  not responsible for corrosion or suitability for use of any material in any
  particular application. The corrosion resistance and suitability for use of a
  material is dependent on operating environment and conditions, cleaning
  practices, and many other factors beyond the control of the equipment
  fabricator. The user of the equipment bears total responsibility for
  corrosion or suitability for use of all materials in their particular
  application.

  
	
   

  	
   

  
	
  FOB:

  	
  Jobsites in Illinois and
  Oklahoma.

  
	
   

  	
   

  
	
  Freight:

  	
  Freight cost is included.
  Unloading is by others.

  
	
   

  	
   

  
	
  Note:

  	
  Due to base price and
  material surcharge increases now being levied by all stainless steel mills,
  the above total price includes current material prices. We are offering you
  firm pricing on labor and material contingent upon order placement and down
  payment receipt by July 13, 2006 and release to order major materials by
  August 3, 2006. Additional details can be provided at your request.

  

 

 

SCOPE OF
SUPPLY, PER PLANT

	
  Quantity

  	
   

  	
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  Description

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  [*]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

*       Portions
omitted pursuant to a request for confidential treatment and filed separately
with the Securities and Exchange Commission.

 

PRICING & ORDER
ACCEPTANCE

 

	
  SENECA:

  	
   

  	
  $

  	
  1,299,327.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  1,299,327.00

  	
   

  

 

The above pricing is based upon equipment for all
three facilities being ordered at the same time.

Order Acceptance

I hereby order the goods
described, in accordance with the above described Mueller Field Operations,
Inc. proposal and additional terms and conditions of sale attached herein.

	
   

  	
  BIOSOURCE AMERICA, INC

  	
   

  
	
   

  	
  (Name of
  Purchaser)

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Dick Talley

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DICK TALLEY

  	
   

  
	
   

  	
  (Printed Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PRESIDENT &
  COO

  	
   

  
	
   

  	
  (Title)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  7-10-06

  	
   

  	
  BSA - SENECA -
  006

  	
   

  
	
   

  	
  (Date)

  	
   

  	
  (Purchase Order
  Number)

  	
   

  

 

 

Mr. Steve Biggers 

Regional Sales Manager 

Processing
Systems & Equipment

Attachments:        Additional
Terms and Conditions of Sale (PDF) 

SB070606

We
do more than “tanks”...We provide Processing Solutions; offering integrated
systems, modular fabrication, field construction, plant maintenance and repair,
and complete turnkey project execution.

MUELLER
IS YOUR FULL SERVICE PROVIDER.

 

MUELLER

Field Operations Additional Terms and Conditions of Sale

1.      PURCHASE AND SALE. The goods shall be sold in accordance with
the terms and conditions on the face hereof and the following terms and
conditions, which shall constitute the entire Agreement of the parties with
respect to the sale of goods.

2.      ACCEPTANCE. This sale of goods is conditioned upon
Purchaser’s acceptance of the terms and conditions herein contained. Seller
hereby expressly rejects any and all terms in any purchase order or other
document of Purchaser which are in addition to, different from, or inconsistent
with these terms and conditions. If this is a Quotation, it is an offer to
sell, subject to final approval by Seller. The offer may be withdrawn at any
time prior to receiving Purchaser’s acceptance, and the offer shall expire automatically
if not accepted within thirty (30) days from the date on the face hereof.

3.      CREDIT APPROVAL. Payment must be made in full prior to the
commencement of any product preparation or fabrication unless alternative
payment arrangements are included within the Sales Order and subsequently
approved by Seller’s Credit Department. All alternative payment arrangements
contained in any Sales Order are strictly contigent upon final approval by
Seller’s Credit Department. Upon Purchaser’s acceptance of any Sales Order
containing alternative payment terms, Seller’s Credit Department shall have
thirty (30) days in which to accept or reject the Sales Order in its sole
discretion based on the creditworthiness of Purchaser. An evaluation of
creditworthiness shall include, but not be limited to, a review of Seller’s
records of Purchaser’s payment history. Any such Sales Order not accepted
within the thirty (30) day period shall be conclusively deemed rejected. For
alternative payment terms, Seller may require Purchaser to execute Seller’s
form of security agreement.

4.      PAYMENT. Purchaser shall make payments in accordance
with the payment arrangements approved by Seller’s Credit Department. If Seller
delays shipment as requested by Purchaser under paragraph 6 hereof, Purchaser
shall pay the full purchase price (or the final installment) within thirty (30)
days after the goods have been completed, and, in addition, shall pay a
reasonable storage charge as determined by the Seller. Any balance not paid
when due shall draw interest at the rate of 1.5% per month (18% A.P.R.) on the
average daily balance until paid or the highest rate allowed by applicable law,
whichever is less. Notwithstanding anything to the contrary in paragraph 16
hereof, the parties agree that Seller may bring suit to collect any unpaid
balance due from Purchaser (or submit such claim to arbitration in Seller’s
sole discretion), and Purchaser shall pay all attorney fees and court costs incurred
by Seller in connection with the suit to collect such unpaid balance. The
parties agree that any such suit brought by Seller shall not be stayed by virtue
of any arbitration proceeding between the parties, shall proceed to judgment by
the Court, and that all of Purchaser’s defenses, avoidances and counterclaims
(other than the defense of payment) which it might have shall be submitted to
arbitration as provided in paragraph 16. All payments shall be made in currency
of the United States.

5.      SPECIFICATIONS. If Seller submits any drawings or other
specifications to Purchaser for approval, and Purchaser does not approve or
disapprove of them within the time specified by Seller, Seller shall have the
right to ship the goods at a later date and charge a higher purchase price, as
reasonably necessitated by Purchaser’s delay.

6.      SHIPMENT. So long as Purchaser is not in default,
Seller shall ship the goods upon their completion, except that, subject to
paragraph 4 hereof, Seller shall delay shipment as requested by Purchaser in
writing. Since the goods are to be manufactured to special order, the shipment
date designated on the face hereof is estimated and not guaranteed; Seller may
ship the goods within a reasonable period either before or after the designated
shipment date. Unless otherwise provided on the face hereof, Seller may ship
the goods by any mode, and in full or partial shipments. Seller shall not be liable
for any failure or delay to manufacture or ship the goods due to causes beyond
its control, including without limitation, acts of God, wars, terrorism,
sabotage, casualties, accidents, labor disputes or shortages, governmental
laws, ordinances, rules or regulations (such as priorities, requisitions,
allocations and price adjustment restrictions), or an inability to obtain
material, equipment or transportation.

7.      TITLE, RISK OF LOSS. Unless otherwise provided on the face hereof,
the goods shall be shipped F.O.B. Seller’s plant, and title to the goods and
all risks of loss with respect to the goods shall transfer to the Purchaser
after they have been placed in the possession of a carrier, which carrier may
include Mueller Transportation, Inc. If Seller agrees to ship the goods F.O.B.
destination, Purchaser shall bear all risks of loss with respect to the goods
upon their tender to Purchaser at the point of destination.

8.      INSPECTION. Purchaser shall inspect the goods at the time
and place of delivery and Purchaser agrees that such occasion shall constitute
a reasonable opportunity for its full inspection. The parties agree that
Purchaser’s failure to reject the goods within three (3) business days shall
constitute acceptance of the goods. After Purchaser inspects and accepts the
goods, Purchaser shall, except as provided in paragraph 10 hereof, be deemed to
have acknowledged that the goods comply with all specifications,
representations and warranties of Seller, and to have waived any claim or cause
of action against Seller with respect to the goods. Purchaser is encouraged to
visit Seller’s plant prior to shipment to inspect and, when possible, witness
testing of the goods. If return of the goods is impractical Purchaser may be
required to inspect the goods at Seller’s plant prior to shipment, which shall
be deemed to be a reasonable opportunity to inspect and, upon satisfactory
completion, shall constitute Purchaser’s acceptance of the goods.

9.      TAXES AND DUTIES. In addition to the purchase price, Purchaser
shall pay all sales, use and excise taxes, tariffs, duties and other charges
imposed by any country, state, locality or other political subdivision in
connection with the sale of the goods. For tax purposes, title to the goods
shall pass from Seller to Purchaser upon being loaded for shipment, whether by
common carrier, or Purchaser’s own trucks, or otherwise.

10.    WARRANTIES. Seller warrants to Purchaser that the goods
are free of defects in material and workmanship. THIS WARRANTY IS EXCLUSIVE AND
IN LIEU OF ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, OR OTHER WARRANTY, WHETHER EXPRESSED OR IMPLIED, EXCEPT THE WARRANTY
OF TITLE AND AGAINST PATENT INFRINGEMENT. If the goods do not conform to this
warranty within one (1) year from the date of original shipment (or from the
earlier date of completion if Seller delays shipment as requested by Purchaser
under paragraph 6 hereof), Seller, at its election and expense, shall repair or
replace the goods, or refund the purchase price for such goods, but only after
receiving written notification of any defects, and substantiation that the
goods have been stored, installed, maintained and operated in accordance with
Seller’s recommendations and standard industry practice. Purchaser shall not
return goods claimed to be defective except at the direction of the Seller. All
charges for transporting such goods to Seller shall be prepaid by Purchaser,
and Seller shall return such goods to Purchaser freight collect.

If
Seller determines that it is impractical to have the goods returned, Seller may
elect (i) to repair the goods at Purchaser’s facility, using independent
contractors or Seller’s own personnel, (ii) to pay Purchaser a reasonable
allowance for repairs, but not exceeding the amount which Seller would have
paid for its own employees, or (iii) refund the purchase price for such goods.
During the course of repairs, Purchaser, without charge, shall fully cooperate
with, and make the goods and its facilities available to, Seller and Seller’s
agents and employees.

THIS
WARRANTY IS EXCLUSIVE. THE SOLE AND EXCLUSIVE OBLIGATION OF SELLER SHALL BE, AT
ITS ELECTION, TO REPAIR, REPLACE, OR REFUND THE PURCHASE PRICE OF DEFECTIVE
GOODS IN THE MANNER AND FOR THE PERIOD PROVIDED ABOVE. SELLER SHALL NOT HAVE
ANY OTHER OBLIGATION WITH RESPECT TO THE GOODS, WHETHER BASED ON CONTRACT,
NEGLIGENCE, STRICT LIABILITY, TORT OR OTHERWISE. THIS WARRANTY DOES NOT EXTEND
TO PRODUCTS NOT OF SELLER’S MANUFACTURE; AS TO SUCH PRODUCTS, SELLER CONVEYS TO
PURCHASER THE WARRANTY, IF ANY, OF SELLER’S SUPPLIER.

ORAL
STATEMENTS BY SELLER’S EMPLOYEES OR REPRESENTATIVES DO NOT CONSTITUTE
WARRANTIES, shall not be relied upon by Purchaser, and are not part of the
contract for sale. NO OTHER WARRANTIES are given beyond those set forth in this
document.

11.    LIMITATION OF LIABILITY. Purchaser’s exclusive remedy for claims
arising hereunder shall be for damages. Seller shall not under any
circumstances be liable for special or consequential damages, such as, but not
limited to, damage or loss of other property or equipment, loss of profits or
revenue, costs of capital, or claims by Purchaser’s customers. The remedies of
the Purchaser set forth herein are exclusive, and the liability of the Seller
with respect to the goods, or anything done in connection therewith, or from
the manufacture, sale, delivery, resale, installation or use of any of the
goods sold hereunder, whether arising out of contract, negligence, strict
liability, tort, or under any warranty, or otherwise, shall not exceed the
price of the goods upon which such liability is based.

SELLER
SHALL NOT BE LIABLE FOR CORROSION OR SUITABILITY OF USE OF ANY MATERIAL IN ANY
PARTICULAR APPLICATION, CORROSION RESISTANCE AND SUITABILITY FOR USE OF ANY
MATERIAL IS DEPENDENT UPON OPERATING ENVIRONMENT AND CONDITIONS, CLEANING
AGENTS AND PRACTICES, AND MANY OTHER FACTORS BEYOND THE CONTROL OF SELLER.
PURCHASER BEARS ALL RESPONSIBILITY AND RISK FOR CORROSION OR SUITABILITY FOR
USE OF ALL MATERIALS IN THEIR PARTICULAR APPLICATION.

12.    CLEANLINESS. Unless otherwise provided on the face hereof,
Seller’s obligation is to provide completed equipment to the shipping carrier
in broom-clean condition. PRIOR TO PLACING THE EQUIPMENT INTO SERVICE, THE
EQUIPMENT MAY REQUIRE CLEANING to remove road film, adhesive film from the
protective sheeting, abrasives dust, or other residues resulting from the
manufacturing process and shipment.

13.    CANCELLATION. Purchaser shall not have any right to cancel
this Agreement without Seller’s prior written consent, and without paying
Seller a cancellation charge equal to total selling price less the estimated
direct labor and materials not expended less the salvage value of materials
already purchased.

14.    REMEDIES. If Purchaser fails to make required payments
in a timely manner, or breaches any of the other terms or conditions hereof or
any other agreement with Seller, Seller shall have the right to terminate this
Agreement and withhold further shipments on this or any other order. The
remedies provided herein shall be cumulative and in addition to any other
remedies allowed by law or in equity. The failure of Seller to exercise any
remedy shall not constitute a waiver of the right to exercise that, or any other
remedy; and no waiver of any breach of any provision herein shall operate as a
waiver of any other breach of the same or any other provision.

15.    APPLICABLE LAW. This Agreement shall be governed by the laws
of the State of Missouri, without reference to its choice of law provisions.
Purchaser hereby consents to personal jurisdiction of the state and federal
courts located in Springfield, Missouri, and agrees that any suit shall be
brought solely in such courts. In the event of a suit between the parties, THE
PARTIES EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY.

16.    ARBITRATION. Except as provided in paragraph 4 hereof, any
dispute, controversy or claim arising out of or relating to this Agreement or
any purchase order issued by Purchaser and accepted by Seller hereunder
(including, but not limited to, any dispute relating to the existence,
interpretation, breach or termination hereof or thereof) that cannot be
resolved by the parties involved, within ninety (90) days of notification by
either party of the dispute, shall be resolved by binding arbitration
administered by, and in accordance with the Arbitration Rules of the American
Arbitration Association. The award of the arbitrator(s) may be entered by any
court having jurisdiction thereof. The costs of the arbitration shall be shared
equally by the parties, and each party shall bear its own attorney fees and expenses.
Any arbitration proceeding shall be conducted exclusively in Springfield,
Missouri.

17.    MISCELLANEOUS. This Agreement is intended by the parties as
a complete and exclusive statement of the terms of their agreement. No course
of prior dealings between the parties and no usage of trade shall be relevant
to supplement or explain any term used herein, and no modification shall be
binding on Seller unless made in a writing signed by Seller. No claim or right
arising out of a breach of this Agreement can be discharged in whole or in part
by a waiver or renunciation of the claim or right unless the waiver or
renunciation is supported by separate consideration and is in a writing signed
by Seller. Purchaser shall not assign its rights or delegate its duties under
this Agreement. Facsimile and E-mail signatures of the parties shall constitute
original signatures for all purposes. The invalidity of any portion of this
Agreement shall not affect the validity of any remaining portions thereof.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH
MAY BE ENFORCED BY THE PARTIES.

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