Document:

ex10_6.htm

EXHIBIT 10.6

 

 

 

August 3, 2009

Dr. Surajiet Khanna

Chairman

BARD, LLC

1167 Bridge Street

Philadelphia, PA 19124

 

SUBJECT:    Algae Oil Pilot System Project Milestone Breakdown and Proposal for

                        Phase 1 Services

Dear Dr. Khanna:

 

Tetra Tech EC, Inc. (TtEC) appreciates the opportunity to submit this Project Milestone Breakdown and a Proposal for Phase 1 Services for BARD LLC's (BARD) Algae Oil Pilot System. TtEC is very pleased to be considered a part of BARD's team for this project.

Pursuant to your request, this document serves two purposes. The first is that TtEC has provided a suggested Phased approach for the design and setup of the Algae Oil Pilot System. As you will see, TtEC has provided descriptions of work that we believe to be appropriate for each Phase and an approximate cost and schedule associated with those Phases.

The second purpose for this document is to present our Proposal to execute Phase 1 (Project Start-up) of BARD's Algae Oil Pilot System. The discussion provided below presents the tasks we will perform as part of Phase 1 and our firm fixed price and schedule for performing this work. If acceptable, TtEC asks that BARD signs the authorization to proceed found as Attachment A to this document and TtEC's Terms and Conditions provided as Attachment B of this document.

In summary, this Proposal provides a detailed Scope of Work, Schedule, and Cost for Phase 1 of the project and a more general discussion on anticipated future Phases needed to complete the project.

 

Proposed Overall Project Approach

 

The recommended overall approach to the project envisions one contractor being responsible for the engineering/design, equipment procurement, and installation/setup related to the pilot system including civil site work, electrical, and balance of plant and process equipment. The project would be completed in five primary Phases: 1) Project Start-Up; 2) Preliminary Design; 3) Pre-Final Design; 4) Final Design; and 5) System Setup/Installation and Start-Up Phase.

As the design and functionality of the project is evolving, TtEC believes it is in BARD's best interests to perform the work required to design and setup the pilot process system on a fixed price basis per discrete Phase of work. This will help control costs because it will result in more definitive estimates of the remaining project Phases. It will also provide BARD and its investors

 

 

Bucks Town Corporate Campus, 820 Town Center Drive, Suite 100, Langhorne, PA 19047-1748

Tel 215.702.4000 Fax 215.702.4045

www.tteci.com

  

  

 

Dr. Surajiet Khanna 

August 3, 2009 

Page 2

every opportunity to participate and provide direction in the execution of the project as it develops. At the end of each Phase, TtEC will submit a summary of activities completed and an outline of tasks for the upcoming Phase. Following BARD's review and concurrence of the upcoming Phase's Scope, Schedule, and Cost, and receipt of full payment TtEC will proceed with that Phase.

The work that would need to be performed under each of these Phases is presented in the following paragraphs.

PROJECT MILESTONE BREAKDOWN Phase 1 - Project Start-Up

 

To initiate the BARD Algae Oil Pilot System Project, TtEC will host a Kick-Off Meeting with BARD and TtEC staff. At this meeting, BARD will provide TtEC with the various reference and design documents that have previously been prepared by BARD and all other sources. This would include technical specifications, equipment cut sheets, design drawings, and other such items. Following the meeting, TtEC will complete the other tasks in Phase 1.

1. The full list of the tasks included in Phase 1 is as follows:

 

■ Kick-Off Meeting

o   Includes TtEC Project Manger and Project Engineer, and BARD representatives as they see fit. Meeting to be held at TtEC's Langhorne, PA office and anticipated to last approximately 4 hours 

■ Due Diligence of BARD Documents

o   Review hard copy and electronic documents that BARD provides 

■ Site Visit for TtEC design team

o  TtEC Project Manger, Project Engineer, Mechanical Engineer and Electrical Engineer will visit site to determine best way to lay out the Pilot System. TtEC anticipates needing 4 hours on-site to take pictures and notes of the area where the Pilot System will be built 

■ Develop Design Criteria Document (DCD)

o   Include process/flow related items at this point 

■ Develop Preliminary Process Flow Diagrams

o  TtEC will prepare one or two diagrams using AutoCAD showing the anticipated major pieces of process equipment and vessels 

■ Develop Preliminary Mass Balance

o  TtEC will develop preliminary Mass Balance for the system including process vessels 

■ Prepare Outline for Phase 2

o  TtEC will prepare a Letter type document outlining the various pertinent items for Phase 2 of this project. This includes:

■ Scope of Work for Phase 2

■ Schedule of Work for Phase 2

■ Estimated Cost of Phase 2

 

 

 

 

Dr. Surajiet Khanna 

August 3, 2009 

Page 3

 

The Deliverables associated with Phase 1 are the following:

 

• DCD for BARD approval

 

•   Summary of TtEC's proposed Phase 2 tasks including schedule and price to execute Phase 2

 

• Preliminary Process Flow Diagrams in electronic and hard copy format

 

o  TtEC will use AutoCAD to develop the sheets and provide PDF copies to BARD for their review. Three hard copy print outs on 11"x17" paper will be provided

 

• Preliminary Mass Balance

 

o TtEC will match the Mass Balance to the Process Flow Diagram

 

•  Summary of work completed during Phase 1

TtEC budgets $30,000 for this Phase and will execute the work in 20 business days from Notice to Proceed.

 

Phase 1 - Project Start-Up.....................................................................................................................$30,000 (firm fixed price)

Shown below is the general outline of the tasks that are recommended to be performed in the subsequent Phases to complete design and set-up of the Algae Oil Pilot System. The descriptions of these Phases will be expanded upon in greater detail as each prior Phase of the project is completed.

Phase 2 - Preliminary Design

Following the successful completion of Phase 1 of this project and with BARD's concurrence of the Scope of Phase 2, TtEC anticipates the following activities:

 

• Receive comments from BARD and finalize Process Flow Diagrams

• Receive comments from BARD and finalize Mass Balance

• Develop Preliminary (approximately 60%) Design

 

The Preliminary Design would be developed by TtEC in connection with BARD and the applicable significant equipment suppliers and will follow the strict guidelines and procedures established by TtEC for the preparation of its design projects. The Preliminary Design will consist of the following components:

Design Criteria Document: This document outlines the design inputs, codes, standards and other such related basis needed for a successful design package. The DCD developed in Phase 1 will be developed further in Phase 2 to include civil, structural, electrical and other such disciplines.

Calculations: Calculations will be prepared for major components and piping based on drawings.

 

 

 

 

Dr. Surajiet Khanna 

August 3, 2009 

Page 4

 

Drawings: TtEC will produce design drawings for the Pilot System. During the project, a complete design package will be prepared to allow development of a system installation. The drawings will include, as necessary, civil, structural, electrical, mechanical, process and architectural disciplines.

 

Control Strategy: TtEC will work with BARD to determine the level of instrumentation and control strategy necessary to be used for the Pilot System. This will include data acquisition and collection requirements, level of automation and anticipated manpower requirements to operate the facility. Following this, an appropriate pilot system Control Strategy and Equipment List will be developed. It should be noted that the goal of the pilot system is to obtain sufficient data for BARD to make a determination on the viability of a full-scale process facility. As such, the control strategy for the pilot system will be developed to gather this type of data, and will not be the type of system that would be designed for a full-scale process facility.

 

• Identification of required permits and completion of permit applications if necessary.

At the end of Phase 2, TtEC will submit its Preliminary Design Package (updated DCD, Drawings, and Specifications) to BARD for review. TtEC will also submit an outline for Phase 3 with associated estimated schedule and cost.

Phase 3 - Pre-Final Design

Following the successful completion of Phase 2 of this project and with BARD's concurrence of the Scope of Phase 3, TtEC anticipates the following activities:

 

• Receive comments from BARD

 

• Develop Pre-Final Design (90%)

During this Phase, the design will be advanced from 60% to 90% and most outstanding issues will be resolved.

Phase 4 - Final Design

Following submission of the Pre-Final Design, TtEC will meet with BARD for a review meeting. Based on the comments provided by BARD on the Pre-Final Design, TtEC will prepare a Final Design and provide pricing for the Pilot System set-up/installation. This cost package would identify the major system components and major completion milestones that relate to the project schedule and anticipated level of quality for the facility.

Upon BARD's approval of the final design and the price for system installation and setup, it is expected for BARD to issue a Notice to Proceed for System Set-up/Installation and Startup Phase of the Project.

Following approval of the Final Design, TtEC will prepare Request for Proposals/Quotations that include Vendor Statements of Work and Price Forms. These Bid Packages will be released to the identified potential suppliers of equipment and installation services for this project.

 

 

 

 

Dr. Surajiet Khanna 

August 3, 2009 

Page 5

 

Generally, the following balance of plant bid packages are developed and issued for bid by

 

TtEC:

 

o     Balance of Plant Tanks

o     Process Pump(s)

o     Mechanical Installation

o     Electrical/Control System Installation

o     Concrete Installation, if required

 

Phase 5 - System Setup/Installation and Start-Up Phase

It is assumed that TtEC would provide services for the setup and installation of the pilot system. TtEC will be on-site and oversee all aspects of installation including, but not limited to, coordination of subcontractor activities, interaction with local government representatives (as necessary), start-up operation and equipment checkout.

MILESTONE BREAKDOWN PRICING AND SCHEDULE (Phases 2 through 5)

Tetra Tech estimates that the engineering Phases of this project (Phases 2 to 4) will cost between $75,000 and $125,000 and take between 8 and 12 weeks to complete. Tetra Tech anticipates that Phase 5 of this project will cost between $150,000 and $250,000 including equipment purchases and take between 12 and 16 weeks to complete. The cost and schedule estimates are based on our experience with similar projects and are meant to be a guide or reference to the scale of the effort required to perform the requisite services.

In summary, TtEC has extensive experience in the design engineering process, procurement of equipment and materials, and system installation; and has well-documented procedures to ensure that the engineering, procurement and installation of a pilot system is accurate, compliant and complete. This is an essential philosophy when designing, installing, operating and maintaining a safe and productive system, while minimizing risks and liabilities to TtEC and our clients. TtEC looks forward to further discussing the partnership between TtEC and BARD for engineering, procurement and installation of your Pilot System as well as any other projects which BARD would like TtEC to provide assistance.

If you are in acceptance of this Proposal for Phase 1 activities please sign the attached Authorization to Proceed, Terms and Conditions and provide payment for Phase 1 of the project.

Please do not hesitate to contact either Jonathan Dziekan at (215) 702-4023 or me at (215) 702- 4001 with any questions.

 

Sincerely

 

 

,/s/Jeffrey Otto, PE

Jeffrey Otto, PE

 

	
cc:     Jonathan Dziekan

          Dave DiCesare

  

  

 

Dr. Surajiet Khanna 

August 3, 2009 

Page 6

ATTACHMENT A

Authorization to Proceed

Signatures below indicate TtEC has authorization to proceed with Phase 1 of this project. The cost associated with this scope is $30,000.

 

 

 

	 Tetra Tech EC, Inc.	 	 	 BARD, LLC	 
	 	 	 	 	 
	 	 	 	 	 
		 8/3/09	 	 	 
	Signature	Date	 	Signature	 Date
	 	 	 	 	 
	 	 	 	 	 
	Jeffrey Otto,        Langhorne Operations	 	 	 	 
	Printed Name	 	 	 Printed Name	 

 

 

  

  

 

Dr. Surajiet Khanna 

August 3, 2009 

Page 7

 

ATTACHMENT B

 

 

 

TERMS AND CONDITIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

TETRA TECH EC, INC. 

TERMS AND CONDITIONS 

ENVIRONMENTAL REMEDIATION AND RELATED SERVICES

1.       DEFINITIONS AND CONTRACT FORMATION.

 

	
(a)  

	
"Client" shall mean the person or entity identified in the Tetra Tech EC, Inc. "TtEC" Proposal for whom Services are to be performed.

 

	
(b)  

	
"TtEC" shall mean the Tetra Tech EC, Inc..

 

	
(c)  

	
"Client Order" shall mean the purchase order, request, authorization or other notification, and additions or modifications thereto whereby Client indicates its desire that TtEC furnish Services.

 

	
(d)  

	
"TtEC Proposal" shall mean these terms and conditions and the letter, proposal, quotation, or other notification, including any response to the Client Order, wherein TtEC offers to furnish Services.

 

	
(e)  

	
"Services" shall mean the Services of TtEC personnel described in the TtEC Proposal or Client Order and any other Services as may be added to, or performed in connection with, the Contract provided, however, that TtEC shall have no responsibility as a generator, operator, transporter, disposer or arranger of the transportation and/or disposal of Hazardous Substances as defined in Article 7 below.

 

	
(f)  

	
"Contract" shall mean these Terms and Conditions and the TtEC Proposal, and shall include, only to the extent not inconsistent with any aspect of the TtEC Proposal and these Terms and Conditions, the provisions of the Client Order. Upon execution by Client or commencement of Services at Client's request, TtEC's Proposal and these Terms and Conditions shall constitute a binding Contract and govern exclusively any Services provided.

2. COMPENSATION. Unless otherwise specified in the TtEC Proposal, TtEC shall be compensated as follows: (a) Client shall pay TtEC at TtEC's customary rates applicable to the personnel and for the time actually engaged in supplying Services. Such rates are subject to adjustment periodically; (b) Client shall also reimburse TtEC at cost plus fifteen percent (15%) for its expenses, including travel, living, and incidental expenses allowed to personnel while engaged in performance of Services away from TtEC's offices, cost of reproduction, telegraph and telephone, and other out-of-pocket expenses as may be necessary in performing Services. Subcontractors, consultants, etc. will be billed at cost plus fifteen (15%). Use of computer, word processing equipment, and other equipment, if required, will be invoiced at TtEC's customary rates. Should nonexempt personnel be required to work overtime, such personnel will receive overtime compensation, the premium portion of which will also be billed to Client at TtEC's cost. TtEC's invoices are rendered monthly and are payable upon receipt. Interest at the rate of two percent (2%) over prevailing prime rate shall be charged on a monthly basis on any amounts not paid within thirty (30) days of invoice submittal. TtEC may terminate its services if any invoice is unpaid for ninety (90) days; (c) TtEC, its officers, employees, or consultants may be asked or required to appear as a witness or deponent, to furnish information or data through interrogatories, or otherwise be compelled to participate in, administrative or judicial proceedings arising in connection with a Client's project. In that event and notwithstanding expiration or termination or this Contract, Client shall compensate TtEC in accordance with (a) and (b) above and reimburse TtEC for reasonable legal expenses incurred in connection therewith, provided, however, that the provisions of Article 5, below, shall govern in the event TtEC is found to be at fault.

 

3. CONFIDENTIALITY, ACCESS TO SITE, USE OF FACILITIES AND INFORMATION. Client shall provide TtEC with access to facilities and information conducive to the efficient and accurate provision of Services, including such maps, drawings, and records as are needed for the proper conduct of the Services, and shall indicate the reliability of all information provided. TtEC will maintain in confidence and return to Client any information designated by Client as confidential.

 

4. INSURANCE. (a) During the course of performance of the Services, TtEC will maintain the following insurance coverages:

 

TYPE OF COVERAGE                                                                                               AMOUNT OF COVERAGE

 

Workers' Compensation/Employers Liability                                                                       Statutory/$1,000,000

 

Commercial General Liability/Excess Liability                                                                     $1,000,000/$4,000,000

 

Contractors Pollution Liability                                                                                                                 $1,000,000

 

Automobile Public Liability and Property Damage, including coverage for                                     $1,000,000

all hired or non-owned automotive equipment used in connection with 

the insured's operations.

 

(b) If required, TtEC shall deliver to Client, Certificates evidencing that the above coverages are in effect and will not be canceled or materially changed without thirty (30) days written notice; (c) Additional Coverages: If desired, TtEC, will on a cost-reimbursable basis, endeavor to procure other desired insurance coverages if commercially available and applicable to the work being performed.

 

 

	
Tetra Tech EC, Inc. 

Proprietary Information

Project Initiation/Operations Procedure PO-3, Attachment 3

	
 Page 1 of 3 

Version Date 03/24/05

  

  

  

5. INDEMNIFICATION. TtEC shall indemnify and save harmless Client from claims, actions and judgments arising out of bodily injury, death or damage to property of third parties to the extent caused by the negligence of TtEC, provided, however, that "Hazardous Substance Claims" as defined in Article 7, below, shall be governed by that Article.

 

6. WARRANTY OF SERVICES. TtEC warrants that TtEC and its employees shall, in performing Services hereunder, exercise the degree of skill, care and diligence consistent with customarily accepted good practices and procedures at the time and location and for the type of Services performed. Should TtEC fail to perform to those standards, it shall (a) without cost to Client, reperform and correct any substandard Services; and (b) reimburse Client for Client's direct damages or otherwise correct faulty construction, to the extent resulting from such substandard Services. Services involving such activities as the prediction of ecological or health impacts, clean-up criteria, extent or degree of contamination or dispersion, air or water movement, geologic and hydrogeologic conditions, extent of appropriate investigation, scheduling, and cost estimating are highly sensitive to changes in regulatory and scientific criteria, methodologies and interpretations thereof and require the balance of diverse, often conflicting, Client business, economic, legal and other priorities. Client acknowledges these conditions and accepts the risk that, although TtEC may perform to the above standards, the Client's goals or desires may nevertheless not be realized. TtEC makes no other warranties, express or implied, with respect to its performance under this Contract. TtEC's liability hereunder, including any for damage to or loss of Client property, shall in no event extend beyond one year after completion of the Services in question or exceed the amount specified in Article 8 below.

 

7. HAZARDOUS SUBSTANCE CLAIMS. (a) In the event that TtEC's negligence is found, by final judicial determination, to have caused a Hazardous Substance Claim as defined below, TtEC shall reimburse Client for its costs and liabilities incurred under this Article 7, to the extent caused by TtEC, in an amount not to exceed that specified in Article 8 below; (b) "Hazardous Substance Claim" shall mean any and all claims, losses, costs, expenses, judgments, damages, and liabilities of any form or nature including but not limited to any for personal or emotional injury, death or damage to property arising out of or in connection with any actual, threatened or feared release, discharge or exposure to any toxic or hazardous waste, substance, material, or vapor, including without limitation, PCB's, petroleum, hydrocarbons, asbestos, mixed, radioactive or nuclear wastes and any other substance designated as hazardous or toxic under CERCLA, TSCA, RCRA or other statute or regulation ("Hazardous Substances"); (c) Except as provided in a. above and to the fullest extent provided in Article 9 below (i) Client shall indemnify and hold harmless TtEC, its officers, directors, employees, agents, and representatives from and against any and all Hazardous Substance Claims; and (ii) Client shall defend any claim, action, or proceeding which may be brought against TtEC, its officers, directors, employees, agents, and representatives ("Defendants") arising out of or in connection with any Hazardous Substance Claim and shall bear all fees and expenses of attorneys and costs any Defendant incurs in the defense thereof.

 

8. TtEC LIABILITY. Except for TtEC's duty to indemnify Client as provided in Article 5 above, TtEC's total aggregate liability in connection with or arising out of the Contract or Services, including without limitation any under Articles 6 and 7 above, shall in no event exceed the total amount of compensation paid to TtEC hereunder up to a maximum amount of $250,000.

 

9. CONSEQUENTIAL DAMAGES AND OTHER LIABILITIES. TtEC and its employees shall in no event be liable for any special, indirect or consequential damages, including specifically but without limitation, any based on loss of profits or revenue, loss of or interference, whether or not by third parties, with full or partial use of any equipment, facility or property, including real property, cost of replacement power, energy or product, delay in or failure to perform or to obtain permits or approvals, cost of capital, loss of goodwill, claims of customers, fines or penalties assessed against client or similar damages. These terms provide allocations of risk and reward consistent with the nature and extent of the Services and to that end include (i) protections against, and limitations on, liability of TtEC and (ii) specific remedies of Client which shall be its sole and exclusive remedies. The allocations, including without limitation those set forth above and under Articles 6, 7, 8 and 13, shall survive this contract and apply to the fullest extent allowed by law irrespective of whether liability of TtEC is claimed, or found, to be based in contract, tort or otherwise (including negligence, warranty, indemnity and strict liability) and Client hereby waives all rights of recovery and assumes all risks beyond those explicitly allocated to TtEC herein.

 

10. SITE CONTRACTORS. For the benefit of Client and TtEC, Client agrees that it will cause provisions acceptable to TtEC governing insurance and indemnity to be inserted in each of Client's agreements for remediation or other construction or site services or work related to the Services.

 

11. DELAYS. Neither party shall be considered in default in the performance of its obligations hereunder to the extent that the performance of such obligations is prevented or delayed by any cause which is beyond the reasonable control of the affected party, and the time for performance of either party hereunder shall in such event be extended for a period equal to any time lost as a result thereof, and an equitable adjustment shall be made to TtEC's compensation.

 

12. THIRD PARTY INTERESTS. This Contract and the Services and Work Product produced hereunder are solely for the benefit of Client and are not intended to be for the benefit, or to be construed as creating rights in favor, of any third party. If Client is not the ultimate beneficiary of the Services or TtEC's work product is used in such a way as to create or induce any reliance by any third party, Client represents and warrants (i) that it shall bind its clients and/or such third parties to limitations on and protections against liability "protective provisions" commensurate with those afforded TtEC hereunder and that such protective provisions will, in fact, inure to the benefit of TtEC, and/or (ii) that Client has the power to act on behalf of its clients and/or such third parties and does hereby bind such parties to these protective provisions.

 

13. CHANGES AND TERMINATION. This Contract shall not be modified except by written agreement signed by both parties. Client shall have the right to make changes within the general scope of Services upon execution of a mutually accepted change order. Client shall also have the right to terminate this Contract prior to completion of the Services, after reasonable notice to TtEC in writing, in which event Client shall pay TtEC all amounts due TtEC hereunder up to the effective date of termination, plus TtEC's reasonable costs incurred after such date in terminating the Services. In the event that Client alleges breach on behalf of TtEC, Client shall afford TtEC in 30 days written notice to cure any alleged deficiency prior to termination. Recognizing that termination prior to completion may involve risks and exposures both as to cost of work and third party claims, Client shall in such event indemnify, protect and defend TtEC from claims arising out of any incomplete aspect of the Services.

 

 

	
Tetra Tech EC, Inc. 

Proprietary Information

Project Initiation/Operations Procedure PO-3, Attachment 3

	
 Page 2 of 3 

Version Date 03/24/05

 

 

 

 

14. GOVERNING LAW, PRECEDENCE AND DIVISIBILITY. Unless specified otherwise in Client orders, this Agreement shall be governed by the laws of the State of New Jersey excluding choice of law rules which direct application of the laws of another jurisdiction. The provisions of the TtEC Proposal and these Terms and Conditions shall govern exclusively any Services furnished by TtEC and shall prevail over and render void any inconsistent or conflicting provision of the Client Order. If any term, condition, provision or portion of this Contract is declared void or unenforceable, or limited in its application or effect, such event shall not affect any other provision or portion hereof. All other provisions and unaffected portions thereof shall remain fully enforceable and an adjustment in the compensation or other provisions shall be made with the purpose of equitably effecting the intent of the Contract to the maximum extent allowed by law.

 

15. ENTIRE AGREEMENT. This Contract contains the entire agreement between the parties as to the Services rendered hereunder. All previous or contemporaneous agreements, representations, warranties, promises, and conditions relating to the subject matter of this Contract are superseded by this Contract.

 

 

 

 

	
Tetra Tech EC, Inc. 

Proprietary Information

Project Initiation/Operations Procedure PO-3, Attachment 3

	
 Page 3 of 3 

Version Date 03/24/05

 

  

  

 

Assignment of Contract

 

FOR VALUE RECEIVED, Biofuel Advance Research & Development, LLC (BARD). (“Assignor”) hereby assigns and otherwise transfers (“assigns”) to Bard Holding, INC. (“Assignee”) all rights, title and interest held by Assignor in and to the contract described as follows:

 

Contract dated August 3rd, 2009, between Tetra Tech EC, INC. and Biofuel Advance Research & Development, LLC (BARD). and concerning for the engineering/ design, equipment procurement, and installation/setup related to the pilot system including civil site work, electrical, and balance of plant and process equipment.

Assignor warrants and represents that said contract is in full force and effect and is fully assignable.  Assignor further warrants that it has the full right and authority to transfer said contract and that contract rights herein transferred are free of lien, encumbrance or adverse claim.  Said contract has not been modified and remains on the terms contained therein.

Assignee hereby assumes and agrees to perform all remaining and obligations of Assignor under the contract and agrees to indemnify and hold Assignor harmless from any claim or demand resulting from non-performance by Assignee.  Assignee shall be entitled to all monies remaining to be paid under the contract, which rights are also assigned hereunder.

This Assignment shall become effective as of the date last executed and shall be binding upon and inure to the benefit of the parties, their successors and assigns.

 

 

	 	 	 	 
	

Dated: ___12/01/2009______

	
 

	/s/Surajit Khanna	 
	 	 	Surajit Khanna, Managing Member	 
	 	 	
Biofuel Advance Research & Development (BARD), LLC Assignor

	 
	 	 	 	 
	 	 	 	 
	 	 	/s/Howard L. Bobb	 
	
Dated: ___12/01/2009______

	 	Howard L. Bobb, President	 
	 	 	
Bard Holding, Inc. Assigneeex10_7.htm

EXHIBIT 10.7

 

	
 

TECHNO-COMMERCIAL AGREEMENT

 

 

 

BETWEEN

 

 

 

 

TECH-START AUTOMATION CONSULTING (INDIA) PVT.LTD

Sri Sampada HiTech, Plot No. 2 & 4 

Flat No. 302, Kavuri Hills, Madhapur 

HYDERABAD - 500 081 (India)

 

AND

 

 

 

CHEMICAL CONSTRUCTION INTERNATIONAL (P) LTD.

205 Kusal Bazar, 32-33, Nehru Place 

New Delhi-110 019 (India)

 

 

for

 

 

BIOFUEL ADVANCE RESEARCH & DEVELOPMENT 

 

4000 TPD SOYBEAN EXTRACTION PLANT

 

14 August 2007

 

 

  

  

1

  

 

Table of Contents

 

	PARTIES	 
	RECITALS	 
	 1.	Definitions	5
	 	1.1.	Site	5
	 	1.2. 	Plant	5
	 	1.3.	Contract coming in to Force	5
	 	1.4. 	Site Project Manager	5
	 	1.5. 	Machinery and Equipment	5
	 	1.6.	Consignee	5
	 	 	 	 
	 2.	 	Scope of Supply and Service	6
	 3.	 	Payments	7
	 4.	 	Inspection	7
	 5.	 	CCI's Responsibilities 	8
	 6.	 	Performance Guarantees	9
	 7.	 	BUYER's Responsibilities	10
	 8.	 	Warranty 	10
	 9.	 	Maintenance Contract	11
	 10.	 	Transferability of the Contract 	11
	 11.	 	Penalty for Delay 	11
	 12.	 	Force Majeure 	11
	 13.	 	Arbitration  	11
	 14.	 	General Provisions 	12
	 	 
	ANNEXURE-A	15
	 	 
	 	EQUIPMENT LIST  	15
	 	SECTION-I   	16
	 	 	PREPARATORY SECTION. 	16
	 	SECTION-II 	22
	 	 	EXTRA CTION SECTION   	22
	 	SECTION-III 	24
	 	 	MEAL DESOL VENTIS1NG AND TOASTING SECTION 	24
	 	SECTION-IV  .  	26
	 	 	DISTILLA TION SECTION	26
	 	SECTION-V 	29
	 	 	ABSORBER SECTION   	29
	 	SECTION-VI   	31
	 	 	PUMPS   	31
	 	SECTION-VII   	34
	 	 	PIPING AND INSTRUMENTA TION 	34
	 	SECTION-VIII 	36
	 	 	PLC A UTOMA TIC CONTROL SYSTEM  	36
	 	 	FIELD INSTRUMENTS   	36
	 	SECTION-IX   	38
	 	 	ELECTRIFICATION & LIGHTING  	38
	 	 	BA TTERY LIMITS FOR THE EXTRACTION PLANT 	39

 

 

Techno-Commercial Agreement BARD 4000 TPD Extraction Plant Status: Confidential

 

  

2

  

 

	ANNEXURE-B  	40
	 	 
	 	ENGINEERING SERVICES   	40
	 	 	 
	ANNEXURE-C  	43
	 	 
	 	TECFTNICAL PERFORMANCE GUARANTEE	43
	 	 	 
	ANNEXURE - D  	49
	 	 
	 	BUYER SCOPE OF SUPPLY 	49
	 	 	 
	ANNEXURE-E   	51
	 	 
	 	SUPERVISORY SERVICES 	51

 

Techno-Commercial Agreement BARD 4000 TPD Extraction Plant Status: Confidential

 

  

3

  

 

AGREEMENT

 

PARTIES

This AGREEMENT is made and signed on this day 14 August, 2007 between:

M/s. CHEMICAL CONSTRUCTION INTERNATIONAL (P) LIMITED, a

company incorporated under the companies act of 1956, having its registered office at 205, Kusal Bazar, 32-33, Nehru Place, New Delhi - 110 019, India, represented by Mr. O.P. Nambiar, Executive Director of M/s. CHEMICAL CONSTRUCTION INTERNATIONAL (P) LIMITED, which expression shall unless repugnant to the context, mean and include its successors and permitted assignees, herein after called as the CCI.

and

M/s. TECH-START AUTOMATION CONSULTING (INDIA) PVT.LTD a

company incorporated under the companies act of 1956, having its Registered Office at Sri Sampada HiTech, Plot No. 2 & 4, Flat No. 302, Kavuri Hills, Madhapur, Hyderabad - 500 081, Andhra Pradesh, India represented by Mr. Kapil Bhargava, Director of M/s. TECH-START AUTOMATION CONSULTING (INDIA) PVT.LTD, which expression shall unless repugnant to the context, mean and include its successors and permitted assignees, here in after called as the BUYER.

Date                      :           14 August 2007

RECITALS

 

	
  

	
A.

	
CCI is an engineering firm with technical collaboration, experience and expertise in the design and construction of -

 

	
  

	
 

	
(i)      A 4000 TPD Soybean Extraction Plant as per Annexure "A" enclosed herewith.

 

	
  

	
B.

	
The BUYER desires to construct such plants for BIOFUEL

 

	
  

	
ADVANCE RESEARCH & DEVELOPMENT to be located at

 

Keystone Industrial Port Complex 

One Ben Fairless Drive 

Fairless Hills, PA 19030 

USA

 

 

Techno-Commercial Agreement BARD 4000 TPD Extraction Plant Status: Confidential

 

  

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THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:

 

1. Definitions

 

The following terms shall have the meaning indicated below unless contrary to the context.

 

1.1.           Site

 

"Site" shall mean the proposed location of the Soybean Extraction Plants to be designed and supplied by CCI for the BUYER pursuant to the terms of this Agreement.

 

1.2.           Plant

 

"Plant" shall mean certain plant and machinery specified herein in Annexure "A" and manufactured and supplied by CCI for the BUYER for the production of Soybean Oil.

 

1.3.           Contract coming in to Force

 

Date of "Contract coming into Force" will mean the date of receipt of first advance payment, as per Clause 3.3 (a) of this Agreement, to CCI by the BUYER.

 

1.4.           Site Project Manager

 

Shall mean the person nominated by CCI from time to time for matters regarding various project site related activities under this contract.

 

1.5.           Machinery and Equipment

 

"Machinery and Equipment" shall mean those items listed on Annexure "A" meeting the technical specifications set forth herein.

 

1.6.           Consignee

 

The name of the Firm or Person or Representative to whom the BUYER requires the shipments to be consigned.

 

 

Techno-Commercial Agreement BARD 4000 TPD Extraction Plant Status: Confidential

 

  

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2. Scope of Supply and Service

 

	
2.1   

	
CCI shall design and supply the Plant as per Annexure "A" and shall provide those additional engineering services set forth in Annexure "B" under the heading "Engineering Services" with the intent and purpose of providing the BUYER with the Plant which shall be capable of meeting the Performance Guarantees specified in Annexure "C".

 

	
2.2   

	
CCI shall also manufacture and/or procure and supply to the BUYER the Machinery and Equipment in accordance with the specification set forth on Annexure "A" and shall hand over to the shipping company in India, who will arrange to ship them to the BUYER'S site.

 

	
2.3   

	
CCI also undertakes to also supply those additional equipments not mentioned in Annexure "A", but within Battery Limits, but found necessary to ensure performance of the plants, via Annexure "C"

 

	
2.4   

	
CCI also reserves the right to supply modified designs of items in Annexure "A" to ensure efficient plant performance as per Annexure "C".

 

	
2.5   

	
CCI shall also perform, on request of the BUYER, the following additional services:

 

	
(a)  

	
On-site supervision of the assembly and construction of the plant.

 

	
(b)  

	
Consultation regarding the plant by telephone, mail or facsimile transmission

 

	
(c)  

	
Pre-commissioning and testing of the plant

 

	
(d)  

	Commissioning of the plant

 

	
(e)  

	
Training of the BUYER'S personnel in the operation and maintenance of the plant during commissioning and startup of the plant and for a period of Thirty (30) days thereafter.

 

	
(f)  

	Any other services required by this agreement.

 

Such additional service shall be at the BUYER'S expense, billed at the "per diem" rates, plus expenses, as set forth in Annexure "E".

 

 

Techno-Commercial Agreement BARD 4000 TPD Extraction Plant Status: Confidential

 

  

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2.6   

	
The BUYER shall perform the actual erection and assembly of the plant through contractors and workmen hired by the BUYER at site. Such construction and assembly shall be in accordance with the instructions, drawings, and specifications of CCI and supervised by the CCI engineer stationed at the site.

 

	
2.7   

	
The Plant shall be designed to process 4000 TPD of Soybeans and will perform as per the figures in Annexure "C".

 

3.      Payments

 

	
3.1   

	
The Contract Price for the services and the Machinery and Equipment set forth in Annexure "A" is Rs. 33,68,10,000 (Rupees Thirty three Crores, Sixty Eight Lacs, Ten Thousand only) or equivalent of Euros €6,014,465 (Euros Six Million, Fourteen Thousand, Four Hundred and Sixty Five only) excluding all taxes, transportation, freight and insurance.

 

	
3.2   

	
The Contract Price excludes any and all taxes and duties.

 

	
3.3   

	
The Contract Price shall be paid directly to CCI by the BUYER as follows:

 

	
(a)  

	
Thirty Five percent (35%) shall be paid as advance to bring this agreement in to force.

 

	
(b)  

	
Sixty Five percent (65%) shall be paid under a confirmed, irrevocable and divisible Letter of Credit opened in favor of CCI by the BUYER from a First Class Bank, allowing for partial shipments and confirmed for payment at CCFs Bankers in New Delhi, against the delivery documents consisting of B/L, invoices, certificate of origin, packing list of the equipment. The Letter of Credit will be valid for Thirteen (13) months

 

	
(c)  

	
Ten percent (10%) shall be provided as Bank Guarantee to the BUYER for the performance of the Plant for successful commissioning of the Plant as per Annexure "C". This Bank Guarantee shall be part of the documents of the last shipment forpayment under the Letter of Credit.

 

4.      Inspection

 

	
4.1   

	
When any item of Machinery and Equipment is shipped to the BUYER'S site, CCI shall notify the BUYER who shall arrange to inspect the item within Seven (7) days for compliance with the specifications listed on Annexure "A".    In case the inspection is not taken up by the BUYER within this period, the inspection of such items shall be deemed to have been waived.

 

 

Techno-Commercial Agreement BARD 4000 TPD Extraction Plant Status: Confidential

 

  

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4.2   

	
Certain special items being very large may be shipped in a disassembled condition for assembly at the site by the BUYER'S contractors in accordance with instructions to be furnished by CCI.

 

5. CCPs Responsibilities

 

	
5.1   

	
Subject to the BUYER fulfilling each and every one of its obligations hereunder on a timely basis, CCI agrees that it shall hand over the Plant after successful trials and successful commissioning within Twelve (12) months from the date of this agreement coming in to force.

 

	
5.2   

	
CCI shall commence deliveries to the BUYER, not later than Sixty (60) days after the date of this contract coming into force, Items 1 through 4 listed under "Engineering Services" in Annexure "B". The plans and drawings for the construction of the plant shall be complete, adequate, legible and in English. All clarifications, if any, shall be available forthwith from the Site Project Manager for the understanding of the BUYER'S contractors/ engineers.

 

	
5.3   

	
CCI shall station its Project Manager at the site to supervise the entire Plant commissioning work including receiving, handling, unloading, and proper storage of the Machinery and Equipment until its installation and successful commissioning.

 

	
5.4   

	
CCI shall provide a detailed packing list of the machinery and Equipment contained in each shipment for the purpose of allowing the BUYER to check each shipment upon arrival.

 

	
5.5   

	
The BUYER'S Representatives shall have the right to visit the shops constructing and assembling the Machinery and Equipment, and to inspect the same from time to time. The BUYER shall be entitled to bring to the attention of CCI any deviation observed from the prescribed specifications, flow charts, layout drawings, and other provisions of this Agreement and CCI shall rectify any such deviations or other defects at its own cost, within the schedule and terms of this Agreement.

 

 

Techno-Commercial Agreement BARD 4000 TPD Extraction Plant Status: Confidential

 

  

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5.6   

	
CCI shall station an adequate number of competent engineers and supervisors at the plant for up to One (1) month after successful commercial commissioning in order to train the BUYER'S staff for the takeover, working, and maintenance of the Plant. The supervisory services will be provided as per Annexure "E".

 

	
5.7   

	
CCI shall notify the BUYER in writing at least Sixty (60) days in advance, specifying the date and time when CCI intends to carryout a trial run of the plant so as to enable the BUYER to arrange for the continuous supply of all feed stocks, operational staff, workmen, other facilities and input materials. Unless otherwise agreed by the parties, the trial shall begin at the time and date notified and the BUYER shall attend at such time.

 

	
5.8   

	
If such trials are completed to the satisfaction of CCI and BUYER, the BUYER shall issue a certificate to such effect to CCI forthwith.

 

	
5.9   

	
CCI shall, if required, assist the BUYER in recruiting competent staff and to train them for the Plant Operations.

 

6. Performance Guarantees:

 

	
6.1   

	
CCI guarantees :

 

	
(a)  

	
That all of the Machinery and Equipment shall be properly designed and constructed and shall meet the specifications set forth in Annexure "A".

 

	
(b)  

	
That all of the Machinery and Equipment will be brand new, of first class material and workmanship designed to be operational under normal use.

 

Any part found to be defective within Twelve (12) months from the date of start up, or Eighteen (18) months from the date of supply, whichever is earlier, shall be replaced or satisfactorily repaired by CCI at free of charge.

 

	
(c)  

	
That the Plant, when fully completed in accordance with the plans and drawings of CCI, shall be able to process 4000 TPD of Soybean to produce extracted Soy meal and Soya Oil as set forth in the Performance Guarantees set forth in Annexure "C" attached hereto subject to operation and maintenance as per CCTs Operation Manuals.

 

	
6.2   

	

In the event the Plant does not meet the Performance Guarantees set forth in Annexure "C", CCI shall, at its own expense, promptly make whatever modifications, improvements, or adjustments that are necessary in order to bring the plant up to the required Performance Guarantee levels.

 

 

Techno-Commercial Agreement BARD 4000 TPD Extraction Plant Status: Confidential

 

  

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6.3   

	
6.3 CCI assures the BUYER that the unit will work on full capacity of 4000 tons Soybeans per day. In case of any problem during the warrantee period, CCI shall attend within Seventy Two (72) hours and shall try to solve the same at the earliest.

 

7. BUYER'S Responsibilities:

 

	
7.1   

	
The BUYER shall arrange the payments set forth in Clause 3.3 of this agreement.

 

	
7.2   

	
The BUYER shall complete foundations, buildings, structural and site preparation as per instructions of CCI to enable the installation and commissioning of the Plant.

 

	
7.3   

	
The BUYER shall provide 400 M3 of Raw water per day of zero commercial hardness to the points nominated by CCI at the Plant.

 

	
7.4   

	
The BUYER shall make available all inputs as per Annexure "C" and personnel for start-up, trials and commissioning of the fully assembled plant on the pre-commissioning test dates specified by CCI.

 

	
7.5   

	
The BUYER shall obtain permission and comply with all requirements of all governmental or regulatory bodies having jurisdiction over the Plant.

 

    CCI will assist with all technical advisement and assistance to the BUYER to apply for all necessary clearances from the related regulatory authorities.

 

	
7.6   

	
The BUYER shall be responsible for properly storing and securing all machinery and equipment at the site, in accordance with instructions provided by CCI.

 

	
7.7   

	
The BUYER shall procure all feedstock materials of the required quality in the plant strictly in accordance with the requirements of CCI. The technical specifications for the feedstock are attached hereto as Annexure "C".

 

8. Warranty

 

	
8.1   

	
CCI shall assign and deliver to the BUYER the originals of all warranties and guarantees of other manufacturers or subcontractors of material, machinery and equipment purchased from or constructed by third parties for delivery to the BUYER, but no such assignment shall release CCI from its duties hereunder.

 

	
8.2   

	
For a period of Twelve (12) months from the date of start up or Eighteen (18) months from the date of supply, whichever is earlier, CCI shall remain responsible for the repair and replacement of the plant and any portions thereof as may be found to be defective or as may fail under proper use, as per the instructions provided by CCI in the Operations Manual, whether arising from faulty design, materials, or workmanship. This excludes failure or defects due to improper use of the plant or any portions thereof.

 

 

Techno-Commercial Agreement BARD 4000 TPD Extraction Plant Status: Confidential

  

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9. Maintenance Contract

 

	
9.1   

	
After the guarantee period, CCI agrees to undertake a Comprehensive Annual Maintenance Contract (CAMC) or Annual Maintenance Contract (AMC) for a yearly period on terms to be agreed upon if the BUYER so desires.

10. Transferability of the Contract

 

	
10.1   

	
CCI shall not transfer or assign its rights and obligation arising out of or in relation to this agreement except with the written consent of the BUYER.

11.      Penalty for Delay

 

	
11.1   

	
Subject to the BUYER fulfilling each and every obligation under this Agreement, CCI will compensate the BUYER for delay in commercial startup of the Plant in the amount of one-half of one percent (0.5%) per week of the price of the plants so delayed up to a maximum of 5% of the price.

 

	
11.2   

	
This compensation shall only apply if commissioning is late by a grace period of more than Thirty (30) calendar days from the date specified in clause 5.1. This provision is subject to adjustment on account of Force Majeure.

 

12.      Force Majeure

 

In the event of any delay by either party hereunder caused by acts of government, the public enemy, floods, epidemics, war, acts of God, fires, civil commotion, strikes, lockouts, explosion, earthquakes, public disorders, sabotage and serious accidents and other acts beyond the control of, and not reasonably foreseeable by, or to be reasonably anticipated and prepared for by the parties, the time for completion of such party's duties shall be extended to the extent of the delay was caused by such incidents of force majeure. No change in the costs of materials or labour shall constitute a force majeure.

 

In the event of a force majeure occurrence, the party intending to claim the benefit thereof shall immediately notify the other of such occurrence and shall keep the other fully and currently informed of the status of such force majeure and of the termination thereof.

 

13. Arbitration

 

All disputes, differences, and disagreements arising out of the performance by either party of this Agreement shall be resolved, if possible, by an amicable agreement of the parties. In the event, however, the said parties cannot agree, such matters shall be referred to arbitration by Arbitrators, one by each of the signatories and an umpire chosen by them.

 

This agreement shall be in accordance with the Rules of Conciliation and Arbitration of the CURRENT Indian Arbitration Act, and governed by the laws of UNION OF INDIA.

 

Techno-Commercial Agreement BARD 4000 TPD Extraction Plant Status: Confidential

 

  

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14. General Provisions

 

Whenever any certificate, consent or concurrence is by the terms of this Agreement required to be given by any party, the same shall be given within Seven (7) days from the date so requested.

 

Any alterations, amendments, or changes to this Agreement or its schedules shall be valid only if agreed to by the parties in writing. This Agreement embodies the entire agreement between the parties with respect to the subject matter hereof, and all previous representations, communications and agreements, whether oral or in writing, are incorporated herein.

 

Time is of the essence of this Agreement and each and every provision herein. Any extension of time granted for the performance of any duty under this Agreement shall not be considered an extension of time for the performance of any other duty under this Agreement.

 

The language of the contract for all matters shall be English.

 

This contract consists of Fifty Two (52) pages inclusive of Annexure ''A" to "E"

 

 

Techno-Commercial Agreement BARD 4000 TPD Extraction Plant Status: Confidential

 

  

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IN WITNESS WHEREOF, the parties hereto have set :helr hands as of the date set forth above.

 

	 	TECH-START AUTOMATION CONSULTING (INDIA) PVT.LTD	 
	 	 	 	 
	
 

	

Signature:

	/s/ KAPIL BHARGAV	 
	 	 	

(AUTHORISED SIGNATORY)

 

	 
	 	Name: 	
KAPIL BHARGAV

	 
	 	 	 	 
	 	Date: 	14. 08 . 2007	 

 

 

	 	CHEMICAL CONSTRUCTION INTERNATIONAL (P) LTD.	 
	 	 	 	 
	
 

	

Signature:

	/s/ O.P NANDBIAR	 
	 	 	

(AUTHORISED SIGNATORY)

 

	 
	 	Name: 	O.P NANDBIAR	 
	 	 	 	 
	 	Date: 	14 . 08 . 2007	 

 

 

	 	
BIOFUEL ADVANCED RESEARCH & DEVELOPM1

	 
	 	 	 	 
	
 

	

Signature:

	/s/  SURAJIET KHANNA	 
	 	 	

(AUTHORISED SIGNATORY)

 

	 
	 	Name: 	SURAJIET KHANNA	 
	 	 	 	 
	 	Date: 	14 . 08 . 2007	 

 

Techno-Commercial Agreement BARD 4000 TPD Extraction Plant Status: Confidential

 

  

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Assignment of Contract

FOR VALUE RECEIVED, Biofuel Advance Research & Development, LLC (BARD). (“Assignor”) hereby assigns and otherwise transfers (“assigns”) to Bard Holding, INC. (“Assignee”) all rights, title and interest held by Assignor in and to the contract described as follows:

 

Contract dated August 14th, 2007, between Chemical Constructions International (P) Limited (CCI) & Tech Start Automation Consulting PVT. LTD and Biofuel Advance Research & Development, LLC (BARD) and concerning for design, supply of equipment and construction of 4000 TPD Soybean Extraction Plant.

Assignor warrants and represents that said contract is in full force and effect and is fully assignable.  Assignor further warrants that it has the full right and authority to transfer said contract and that contract rights herein transferred are free of lien, encumbrance or adverse claim.  Said contract has not been modified and remains on the terms contained therein.

Assignee hereby assumes and agrees to perform all remaining and obligations of Assignor under the contract and agrees to indemnify and hold Assignor harmless from any claim or demand resulting from non-performance by Assignee.  Assignee shall be entitled to all monies remaining to be paid under the contract, which rights are also assigned hereunder.

This Assignment shall become effective as of the date last executed and shall be binding upon and inure to the benefit of the parties, their successors and assigns.

 

 

	 	 	 	 
	

Dated: ___12/01/2009______

	
 

	/s/Surajit Khanna	 
	 	 	Surajit Khanna, Managing Member	 
	 	 	Biofuel Advance Research & Development (BARD), LLC Assignor	 
	 	 	
 

	 
	 	 	 	 
	 	 	/s/Howard L. Bobb	 
	
Dated: ___12/01/2009______

	 	Howard L. Bobb, President	 
	 	 	 Bard Holding, Inc.Assignee

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