Document:

Exhibit 10.9

 

REGISTRATION
RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”),
dated July 6, 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]

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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]

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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
10.10

SECURITIES
PURCHASE AGREEMENT

This Securities Purchase
Agreement (this “Agreement”),
dated July 10, 2006, among Nova Oil, Inc., a Nevada corporation (the “Company”),
and the purchasers identified on the signature pages and the Schedule of Purchasers
attached hereto (each, a “Purchaser” and collectively, the “Purchasers”).

RECITALS

A.                                   Subject
to the terms and conditions set forth in this Agreement and pursuant to Section
4(2) of the Securities Act (as defined below) and Rule 506 promulgated thereunder,
the Company desires to issue and sell to the Purchasers, and the Purchasers,
severally and not jointly, desire to purchase from the Company certain
securities of the Company, as more fully described in this Agreement.

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:

ARTICLE I.

DEFINITIONS

1.1                                 Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes
of this Agreement, the following terms shall have the meanings indicated in
this Section 1.1:

“Action” means any action, suit, inquiry, notice of
violation, proceeding (including any partial proceeding such as a deposition)
or investigation pending or threatened in writing against or affecting the
Company, any Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency, regulatory authority
(federal, state, county, local or foreign), stock market, stock exchange or
trading facility.

“Affiliate” means any Person that, directly or
indirectly through one or more intermediaries, controls or is controlled by or
is under common control with a Person, as such terms are used in and construed
under Rule 144.

“Business Day” means any day except Saturday, Sunday
and any day which shall be a federal legal holiday or a day on which banking
institutions in the State of New York are authorized or required by law or
other governmental action to close.

“Closing” means the closing of the purchase and sale
of the Securities pursuant to Article II.

“Commission” means the Securities and Exchange
Commission.

“Common Stock” means the common stock of the Company,
$0.001 par value per share,

 

and any securities into which such common stock may
hereafter be reclassified.

“Disclosure Materials” has the meaning set forth in
Section 3.1(h).

“Effective Date” means the date that the Registration
Statement required by Section 2(a) of the Registration Rights Agreement is
first declared effective by the Commission.

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

“Investment Amount” means, with respect to each
Purchaser, the investment amount indicated below such Purchaser’s name on the
signature page of this Agreement.

“Lien” means any lien, charge, encumbrance, security
interest, right of first refusal or other restrictions of any kind.

“Per Unit Purchase Price” means $1.55, which equals
75% of the per share volume-weighted average price of shares of Common Stock for
the ten (10) Trading Days immediately preceding the date of this Agreement as
reported by Bloomberg Financial L.P.

“Person” means an individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or subdivision
thereof) or other entity of any kind.

“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.

“Registration Statement” means a registration
statement meeting the requirements set forth in the Registration Rights
Agreement and covering the resale by the Purchasers of the Registrable
Securities (as defined in the Registration Rights Agreement).

“Registration Rights Agreement” means the Registration
Rights Agreement, dated as of the date of this Agreement, among the Company and
the Purchasers, in the form of Exhibit B.

“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.

“Securities” means the Shares, the Warrants and the
Warrant Shares.

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

“Shares” means the shares of Common Stock issued to
the Purchasers at the Closing.

“Subsidiary” means any subsidiary of the Company that
is required to be listed in Schedule 3.1(b).

“Trading Day” means (i) a day on which the Common
Stock is traded on a Trading Market, or (ii) if the Common Stock is not listed
on a Trading Market, a day on which the

 2
 

 

Common Stock is traded in the over-the-counter market,
as reported by the Nasdaq Over The Counter Bulletin Board System, or (iii) if
the Common Stock is not quoted on the Nasdaq Over The Counter Bulletin Board
System, a day on which the Common Stock is quoted in the over-the-counter
market as reported by the National Quotation Bureau Incorporated (or any
similar organization or agency succeeding to its functions of reporting
prices); provided, that in the event that the Common Stock is not listed or
quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean
a Business Day.

“Trading Market” means whichever of the New York Stock
Exchange, the American Stock Exchange, the NASDAQ Capital Market or the NASDAQ
Stock Market, on which the Common Stock is listed or quoted for trading on the
date in question.

“Transaction Documents” means this Agreement, the
Warrants, the Registration Rights Agreement, and any other documents or
agreements executed in connection with the transactions contemplated hereunder.

“Warrants” means the Common Stock purchase warrants in
the form of Exhibit A, which are issuable to the Purchasers at the
Closing.

“Warrant Shares” means the shares of Common Stock
issuable upon exercise of the Warrants.

ARTICLE II.

PURCHASE
AND SALE

2.1                                 Closing.  Subject to the terms and conditions set forth
in this Agreement, at the Closing the Company shall issue and sell to each
Purchaser, and each Purchaser shall, severally and not jointly, purchase from
the Company, the Shares and the Warrants representing such Purchaser’s
Investment Amount.  The Closing shall
take place on July 10, 2006 and at the offices of Baker & McKenzie LLP,
2001 Ross Avenue, Suite 2300, Dallas, Texas 75201 or at such other time and
location as the parties may agree.

2.2                                 Closing
Deliveries.

(a)                                  At
the Closing, the Company shall deliver or cause to be delivered to each
Purchaser, and the obligations of the Purchasers to close the purchase and sale
of the Securities shall be subject to the fulfillment or satisfaction of, the
following:

(i)                                     a
certificate evidencing the number of Shares and the number of Warrants to
purchase Warrant Shares as set forth opposite such Purchaser’s name on Schedule
of Purchasers attached hereto (the Shares and Warrants referred to collectively
herein as the “Units”) for the
Per Unit Purchase Price.  For each two
(2) Shares purchased by a Purchaser, such Purchaser shall receive a Warrant,
registered in the name of such Purchaser, pursuant to which such Purchaser
shall have the right to acquire one (1) Warrant Share at an exercise price of $2.60,
which represents 130% of the closing bid price per share of Common Stock on the
date immediately preceding the date of this Agreement as reported on the Nasdaq
Over The Counter Bulletin Board System in the form attached hereto as Exhibit
A.

 3
 

 

(ii)                                  the
legal opinions of Woodburn & Wedge, special Nevada counsel to the Company,
and Baker & McKenzie LLP, special counsel to the Company, each in agreed
form, addressed to the Purchasers.

(iii)                               the
Registration Rights Agreement duly executed by the Company.

(iv)                              the
representations and warranties made by the Company in Article III shall be true
and correct in all material respects, all covenants, agreements and conditions
contained in this Agreement to be performed or complied with by the Company
prior to the Closing shall have been performed or complied with (or waived by
the Purchasers), and the Company shall have obtained any approvals, consents
and qualifications necessary to perform its obligations hereunder.

(v)                                 the
Company shall have delivered to each of the Purchasers at the Closing a
certificate signed on its behalf by its Chief Executive Officer certifying that
the conditions specified in Section 2.2 hereof have been fulfilled.

(vi)                              at
the Closing, the Company shall have delivered to the Purchasers copies of each
of the following, in each case certified by the Secretary of the Corporation to
be in full force and effect on the date of the Closing:

(a)                                          the
articles of incorporation of the Company as of the Closing (which shall be the
Articles) certified by the Secretary of State of the State of Nevada as of a
date not more than thirty (30) days prior to the Closing;

(b)                                         a
good standing certificate with respect to the Company certified by the
Secretary of State of Nevada as of a date not more than thirty (30) days prior
to the Closing;

(c)                                          the
by-laws of the Company; and

(d)                                         resolutions
of the Board, and, as necessary, the shareholders of the Company, authorizing
the execution, delivery and performance of the Transaction Documents, and the
transactions contemplated hereby and thereby, including the issuance and sale
of the shares of Common Stock and the reservation of shares of Common Stock for
issuance upon exercise of the Warrants.

(vii)                           At
the Closing, the Company shall pay (or reimburse the Purchasers for) the fees
and expenses of the Purchasers specified in Section 5.1 as payable by the
Company.

(viii)                        As
of the Closing, the purchase of the Shares by each of the Purchasers shall be
legally permitted by all laws and regulations to which each of the Purchasers
and the Company is subject.

(ix)                                As
of the Closing, all authorizations, approvals or permits of, or filings with
any governmental authority, including state securities or “Blue Sky” offices,
that are

 4
 

 

required by law in connection with the lawful sale and
issuance of the Securities, including the exercise of the Warrants for Warrant
Shares, shall have been duly obtained by the Company, and shall be effective as
of the Closing.

(x)                                   All
corporate and other proceedings in connection with the transactions
contemplated by the Transaction Documents, and all documents and instruments
incident to such transactions, shall be satisfactory in form and substance to
each of the Purchasers, and each of the Purchasers shall have received at or
prior to the Closing all such documents as each such Purchaser shall have
requested.

(b)                                 At
the Closing, each Purchaser shall deliver or cause to be delivered to the
Company, and the obligations of the Company to close the purchase and sale of
the securities shall be subject to the fulfillment or satisfaction of, the
following:

(i)                                     the
product of the Per Unit Purchase Price and the number of Units as set forth
opposite such Purchaser’s name on Schedule of Purchasers attached hereto, in
United States dollars and in immediately available funds, by wire transfer to
an account designated in writing by the Company for such purpose; and

(ii)                                  the
Registration Rights Agreement duly executed by such Purchaser.

ARTICLE III.

REPRESENTATIONS
AND WARRANTIES

3.1                                 Representations
and Warranties of the Company. The Company hereby makes the following
representations and warranties to each Purchaser and to the Placement Agent:

(a)                                  Organization
and Qualification.  Each of the
Company and each Subsidiary is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted.  Neither the Company nor any Subsidiary is in
violation of any of the provisions of its respective articles of incorporation,
bylaws or other organizational or charter documents.  Each of the Company and each Subsidiary is
duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case
may be, could not, individually or in the aggregate, have or reasonably be
expected to result in (i) an adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material and adverse effect
on the results of operations, assets, prospects, business or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a whole,
or (iii) an adverse impairment to the Company’s ability to perform on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or
(iii), a “Material
Adverse Effect”).

(b)                                 Subsidiaries.
The Company has no direct or indirect Subsidiaries other than those listed in Schedule
3.1(b).  Except as disclosed in Schedule
3.1(b), the Company owns, directly or indirectly, all of the capital stock
of each Subsidiary free and clear of any and all Liens, and all

 5
 

 

the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights.

(c)                                  Authorization;
Enforcement. The Company has the requisite corporate power and authority to
enter into and to consummate the transactions contemplated by each of the
Transaction Documents and otherwise to carry out its obligations thereunder.  The execution, delivery and performance of
each of the Transaction Documents by the Company and the consummation by it of
the transactions contemplated thereby have been duly authorized by all
necessary corporate action on the part of the Company and no further corporate
action is required by the Company in connection therewith.  Each Transaction Document has been duly
executed by the Company and, when delivered in accordance with the terms
hereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as rights
to indemnity and contribution may be limited by state or federal securities
laws or the public policy underlying such laws, as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ and contracting parties’ rights generally and
as enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

(d)                                 No
Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the
transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of the Company’s or any Subsidiary’s articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect.

(e)                                  Filings,
Consents and Approvals.  The Company
is not required to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or other
federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than: (i) the filing with the Commission of one or
more Registration Statements in accordance with the requirements of the
Registration Rights Agreement, (ii) notice filings required by state securities
laws, the failure of which to make will not affect the validity of the
Securities or the enforceability of this Agreement, and (iii) those that have
been made or obtained prior to the date of this Agreement.

(f)                                    Issuance
of the Securities.  The Securities
have been duly authorized and, when issued and paid for in accordance with the
Transaction Documents, will be duly and validly 

 6
 

 

issued, fully paid and
nonassessable, free and clear of all Liens.  The Company shall have reserved from its duly
authorized capital stock the maximum number of shares of Common Stock issuable
pursuant to this Agreement and the Warrants in order to issue the Shares and
the Warrant Shares.

(g)                                 Capitalization.
 The authorized capital stock of the
Company consists solely of 500,000,000 shares of Common Stock and 5,000,000
shares of preferred stock, $0.0001 par value per share.  As of the date hereof prior to Closing:  (i) 82,589,627 shares of Common Stock
are issued and outstanding and no shares of Common Stock are held in treasury,
(ii) 14,392,371 shares of Common Stock are reserved for future issuance
pursuant to the Company’s equity incentive plan and pursuant to outstanding
warrants and (iii) no shares of preferred stock are issued and
outstanding.

(h)                                 SEC
Reports; Financial Statements.  Since
January 1, 2006, the Company has filed all reports required to be filed by it
under the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof (the foregoing materials including all exhibits and
schedules thereto, being collectively referred to herein as the “SEC Reports” and, together with the Schedules to this
Agreement and any other materials prepared by the Company and delivered to you
in writing, the “Disclosure Materials”).
 As of their respective dates, the SEC
Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and, except as disclosed on Schedule
3.1(h), none of the SEC Reports or the Disclosure Materials, when filed or
prepared, as applicable, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.  The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing.  Such financial statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such
financial statements or the notes thereto, and fairly present in all material
respects the financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and cash flows
for the periods then ended, subject, in the case of unaudited statements, to
normal, immaterial, year-end audit adjustments or as otherwise disclosed in the
SEC Reports.

(i)                                     Litigation.
 Except as disclosed in the SEC Reports
or on Schedule 3.1(i), there is no Action which (i) adversely
affects or challenges the legality, validity or enforceability of any of the
Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect, neither the Company nor any
Subsidiary, nor any director or officer thereof, is or has been the subject of
any Action involving a claim of violation of or liability under federal or
state securities laws or a claim of breach of fiduciary duty and there has not
been, and to the knowledge of the Company, there is not pending or
contemplated, any investigation by the Commission involving the Company or any
current or former director or officer of the Company. The Commission has not
issued any stop order or other order suspending the effectiveness of any

 7
 

 

registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities
Act.

(j)                                     Transactions
With Affiliates and Employees.  Except
as set forth in the SEC Reports, none of the officers or directors of the
Company and, to the knowledge of the Company, none of the employees of the
Company is presently a party to any transaction with the Company or any
Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

(k)                                  Internal
Accounting Controls.  The Company and
the Subsidiaries maintain a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

(l)                                     Certain
Fees.  Except for dealings with the
Placement Agent (defined below), no brokerage or finder’s fees or commissions
are or will be payable by the Company to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by this Agreement.  The Purchasers shall have no obligation with
respect to any fees or with respect to any claims (other than such fees or
commissions owed by a Purchaser pursuant to written agreements executed by such
Purchaser which fees or commissions shall be the sole responsibility of such
Purchaser) made by or on behalf of other Persons for fees of a type
contemplated in this Section that may be due in connection with the transactions
contemplated by this Agreement.

(m)                               Certain
Registration Matters.  Assuming the
accuracy of the Purchasers’ representations and warranties set forth in Section
3.2(b) to (g), no registration under the Securities Act is required for the
offer and sale of the Securities by the Company to the Purchasers under the
Transaction Documents.  The Company has
not offered the Securities by means of any form of general solicitation or
general advertising, including but not limited to the following: (A) any advertisement,
article, notice or other communication published in a newspaper or magazine or
similar media or broadcast over television or radio whether closed circuit or
generally available or (B) any seminar, meeting or industry investor conference
whose attendees were invited by any general solicitation or general
advertising.  The Company has not, and to
its knowledge no one acting on its behalf has, since March 31, 2006 (i) taken,
directly or indirectly, any action designed to cause or to result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Shares or Warrants in violation of
Regulation M under the Exchange Act, (ii) bid for, purchased or paid any
compensation for soliciting purchases of any of the Securities or (iii) paid or
agreed to pay to any person any compensation for soliciting another to purchase
any other securities of the

 8
 

 

Company, other than, in
the case of clauses (ii) and (iii), compensation paid to the Placement Agent
(as defined herein) in connection with the placement of the Securities.

(n)                                 Investment
Company.  The Company is not, and is
not an Affiliate of, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

(o)                                 No
Additional Agreements.  Except as
disclosed on Schedule 3.1(o), the Company does not have any agreement or
understanding with any Purchaser with respect to the transactions contemplated
by the Transaction Documents other than as specified in this Agreement.

(p)                                 ERISA.  Each employee benefit plan (as defined in
Section 3(3) of ERISA) and any other plan, agreement or arrangement for the
benefit of any director, officer or employee of the Company (each, an “Employee Benefit Plan”) has been operated in material compliance
with its terms and with all applicable laws, including, but not limited to,
ERISA and the Code.  All contributions
due and payable on or before the Closing in respect of any Employee Benefit
Plan have been made in full.

(q)                                 Tax.  Since January 1, 2006, the Company has filed
all federal, state and local tax reports and returns required by any law or
regulation to be filed by it, and such returns are true and correct.  The Company has paid all taxes, interest and
penalties, if any, reflected on such tax returns or otherwise due and payable
by it.  Any deficiencies proposed as a
result of any governmental audits or such tax returns have been paid or
settled, and there are no present disputes as to taxes payable by the
Company.  The Company has not elected
pursuant to the Internal Revenue Code of 1986, as amended (the “Code”), to be treated as a Subchapter S corporation or a
collapsible corporation pursuant to Section 1362(a) or Section 341(f) of the
Code, respectively, nor has it made any other elections pursuant to the Code
(other than elections that relate solely to methods of accounting, depreciation
or amortization) that would have a material effect on the Company, its
financial condition, its business as presently conducted or proposed to be conducted
or any of its properties or material assets. 
The Company has withheld or collected from each payment made to each of
its employees, the amount of all taxes (including, but not limited to, federal
income taxes, Federal Insurance Contribution Act taxes and Federal Unemployment
Tax Act taxes) required to be withheld or collected therefrom, and has paid the
same to the proper tax receiving officers or authorized depositories.

3.2                                 Representations
and Warranties of the Purchasers. Each Purchaser hereby, for itself and for
no other Purchaser, represents and warrants to the Company and the Placement
Agent as follows:

(a)                                  Organization;
Authority.  Such Purchaser is an
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with the requisite corporate or
partnership power and authority to enter into and to consummate the
transactions contemplated by the applicable Transaction Documents and otherwise
to carry out its obligations thereunder. The execution, delivery and
performance by such Purchaser of the transactions contemplated by this
Agreement has been duly authorized by all necessary corporate or, if such
Purchaser is not a corporation, such partnership, limited liability company or
other

 9
 

 

applicable like action, on the part of such Purchaser.
Each of this Agreement and the Registration Rights Agreement has been duly
executed by such Purchaser, and when delivered by such Purchaser in accordance
with terms hereof, will constitute the valid and legally binding obligation of
such Purchaser, enforceable against it in accordance with its terms, except as
rights to indemnity and contribution may be limited by state or federal
securities laws or the public policy underlying such laws, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

(b)                                 Investment
Intent.  Such Purchaser is acquiring
the Securities as principal for its own account for investment purposes only
and not with a view to or for distributing or reselling such Securities or any
part thereof, without prejudice, however, to such Purchaser’s right, subject to
the provisions of this Agreement and the Registration Rights Agreement, at all
times to sell or otherwise dispose of all or any part of such Securities
pursuant to an effective registration statement under the Securities Act or
under an exemption from such registration or in a transaction not subject to
the registration provisions of the Securities Act and in compliance with
applicable federal and state securities laws.  Subject to the immediately preceding sentence,
nothing contained herein shall be deemed a representation or warranty by such
Purchaser to hold the Securities for any period of time.  Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business. Such Purchaser does not have
any agreement or understanding, directly or indirectly, with any Person to
distribute any of the Securities.

(c)                                  Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and
at the date hereof it is, and on each date on which it exercises the Warrants
it will be, an “accredited investor” as defined in Rule 501(a) under the
Securities Act. Such Purchaser is not a registered broker-dealer under Section
15 of the Exchange Act.

(d)                                 Experience
of such Purchaser. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford
a complete loss of such investment.

(e)                                  General
Solicitation. No Securities were offered or sold to such Purchaser by means
of any form of general solicitation or general advertising, including but not
limited to the following: (A) any advertisement, article, notice or other
communication published in a newspaper or magazine or similar media or
broadcast over television or radio whether closed circuit or generally
available or (B) any seminar, meeting or industry investor conference whose
attendees were invited by any general solicitation or general advertising.

(f)                                    Access
to Information. Such Purchaser acknowledges that it has reviewed the
Disclosure Materials and has been afforded (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in

 10
 

 

the Securities; (ii) access to information about the
Company and the Subsidiaries and their respective financial condition, results
of operations, business, properties, management and prospects sufficient to
enable it to evaluate its investment; and (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without unreasonable
effort or expense.

(g)                                 Reliance.
Such Purchaser understands and acknowledges that: (i) the Securities are being
offered and sold to it without registration under the Securities Act in a
private placement that is exempt from the registration provisions of the
Securities Act and (ii) the availability of such exemption depends in part on,
and the Company will rely upon the accuracy and truthfulness of, the foregoing
representations and such Purchaser hereby consents to such reliance.

(h)                                 Residency.
Such Purchaser is a resident of the jurisdiction set forth immediately below
such Purchaser’s name on the signature pages hereto.

(i)                                     Certain
Trading Activities. Such Purchaser has not, directly or indirectly, nor has
any Person acting on behalf of or pursuant to any understanding with such
Purchaser, engaged in (i) any Short Sales (defined below) involving the Company’s
securities during the thirty Trading Days immediately preceding the date hereof
or (ii) any transactions in any securities of the Company following the date on
which such Purchaser was aware of this Transaction (other than this
Transaction, other than transactions among Purchasers in compliance with
federal and state securities laws and other than transfers by a Purchaser to
its affiliated funds which affiliated funds have not engaged in any such
transactions).  For purposes of this
Section, “Short Sales” include, without
limitation, all types of direct and indirect stock pledges, forward sale
contracts, options, puts, calls, short sales, swaps and similar arrangements
(including on a total return basis), and sales and other transactions through
non-US broker dealers or foreign regulated brokers having the effect of hedging
the securities or investment made under this Agreement.

(j)                                     Acknowledgements
Regarding Placement Agent. Such Purchaser acknowledges that Ardour Capital
Investments, LLC (the “Placement
Agent”) is acting as the Company’s placement agent for the sale of
the securities being offered hereby and will be compensated solely by the
Company in such capacity.

ARTICLE IV.

OTHER
AGREEMENTS OF THE PARTIES

4.1                                 Restricted
Securities.

(a)                                  Securities
may only be disposed of pursuant to an effective registration statement under
the Securities Act, to the Company or pursuant to an available exemption from
or in a transaction not subject to the registration requirements of the
Securities Act, and in compliance with any applicable state securities laws.  In connection with any transfer of the
Securities, other than pursuant to an effective registration statement, a Rule
144 transfer, to the Company or to an Affiliate of a Purchaser, the Company may
require the transferor thereof to provide to the Company an opinion of counsel
selected by the transferor, the form and substance of which

 11
 

 

opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act.

(b)                                 Certificates
evidencing the Securities will contain the following legend, so long as is
required by this Section 4.1(b) or Section 4.1(c):

[NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF
THESE SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN
REGISTERED]WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.

(c)                                  Subject
to receipt of appropriate representations from the Purchaser and, if applicable
its broker, following the Effective Date or at such earlier time as a legend is
no longer required for the Shares and Warrant Shares under this Section 4.1(c),
the Company will, no later than ten Trading Days following the delivery by a
Purchaser to the Company or the Company’s transfer agent of a certificate
representing Shares or Warrant Shares containing a restrictive legend, together
with a request to issue a certificate without a restrictive legend, deliver or
cause to be delivered to such Purchaser a certificate representing such Shares
or Warrant Shares that is free from all restrictive and other legends.  The Company may not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section except as it may
reasonably determine are necessary or appropriate to comply or to ensure
compliance with those applicable laws that are enacted or modified after the
Closing.

4.2                                 Furnishing
of Information; Information Rights. As long as any Purchaser owns the
Securities, the Company covenants to 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 the
Exchange Act and to disclose in the Registration Statement any material,
nonpublic information provided to the Purchasers except to the extent
previously disclosed or the Company determines that such information is no
longer material.  In furtherance of the
foregoing, the Company shall make available to each Purchaser or file with the
Commission via the EDGAR system: (a) as soon as practicable, but in any event
within ninety (90) days after the end of each fiscal year of the Company, (i) a
balance sheet as of the end of such year; (ii) statements of income and of cash
flows for such year; and (iii) a statement of stockholders’ equity as of the
end of such year, audited and certified by independent registered public
accounting firm selected by the Company and (b) as soon as practicable, but in
any event within forty-five (45) days after the end of each of the first three
(3) quarters of each fiscal year of the Company, unaudited statements of income
and of cash flows for such fiscal quarter, and an unaudited balance sheet as of
the end of such fiscal quarter, all prepared in accordance with

 12
 

 

GAAP
(except that the financial statements may (i) be subject to normal year-end
audit adjustments and (ii) not contain all notes thereto that may be required
in accordance with GAAP).

4.3                                 Integration.
The Company shall not, and shall use its best efforts to ensure that no
Affiliate of the Company shall, sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in Section 2 of
the Securities Act) that will be integrated with the offer or sale of the
Securities in a manner that would require the registration under the Securities
Act of the sale of the Securities to the Purchasers, or that will be integrated
with the offer or sale of the Securities for purposes of the rules and
regulations of any Trading Market.

4.4                                 Use
of Proceeds. The Company shall use the net proceeds from the sale of the
Securities hereunder for working capital purposes and not to redeem any capital
stock of the Company or to settle any outstanding Action.

4.5                                 Certain
Trading Activities. Such Purchaser will not, directly or indirectly, nor
permit any Person acting on behalf of or pursuant to any understanding with
such Purchaser, engage in any Short Sales involving the Company’s securities
prior to the Effective Date.

ARTICLE V.

MISCELLANEOUS

5.1                                 Fees
and Expenses.  At the Closing, the
Company shall reimburse Security Management Company, LLC from the proceeds
hereof up to $40,000 in the aggregate for the reasonable fees and disbursements
of legal counsel in connection with the negotiation of the Transaction
Documents and due diligence with respect to the transactions contemplated
hereby.  Except as specified in the
Registration Rights Agreement, each party shall pay the fees and expenses of
its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of the Transaction Documents.  The Company shall pay all stamp and other
taxes and duties levied in connection with the sale of the Securities.

5.2                                 Entire
Agreement. The Transaction Documents, together with the Exhibits and
Schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the
parties acknowledge have been merged into such documents, exhibits and
schedules.

5.3                                 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 (a) 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, (b) the next
Business Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section on a
day that is not a Business Day or later than 5:00 p.m. (Central time) on any
date and earlier than 11:59 p.m. (Central time) on such date, (c) the Business
Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (d) upon actual receipt by the

 13
 

 

party to whom such 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;

  

 

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

5.4                                 Amendments;
Waivers.  No provision of this
Agreement may be waived or amended except in a written instrument signed by the
Company and Purchasers holding no less than two-thirds of the Shares issued or
issuable under this Agreement.  The
Company shall provide prior notice to all Purchasers of any proposed waiver or
amendment.  No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of either party to exercise any right hereunder
in any manner impair the exercise of any such right.

5.5                                 Construction.
 The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied
against any party. This Agreement shall be construed as if drafted jointly by
the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement or any of the Transaction Documents.

5.6                                 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties and their successors and permitted assigns. The Company may not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the Purchasers. Any Purchaser may assign any or all of its
rights under this Agreement to any Person to whom such Purchaser assigns or
transfers any Securities, provided such transferee agrees in

 14
 

 

writing to be bound, with respect to the transferred
Securities, by the provisions hereof that apply to the “Purchasers.”

5.7                                 No
Third-Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

5.8                                 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, EXCEPT TO THE EXTENT THAT THE CORPORATE
LAWS OF THE STATE OF NEVADA APPLY PURSUANT TO THE “INTERNAL AFFAIRS DOCTRINE”
OR WITH RESPECT TO THE ISSUANCE OF SECURITIES.  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 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 the 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.

5.9                                 Survival.
The representations, warranties, agreements and covenants contained herein
shall survive the Closing and the delivery of the Shares and Warrants.

5.10                           Execution.
This Agreement may be executed in two or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original thereof.

5.11                           Severability.
If any provision of this Agreement is held to be invalid or unenforceable in
any respect, the validity and enforceability of the remaining terms and

 15
 

 

provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

5.12                           Remedies.
In addition to being entitled to exercise all rights provided herein or granted
by law, including recovery of damages, each of the Purchasers and the Company
will be entitled to specific performance under the Transaction Documents. The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be adequate.

5.13                           Independent
Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any
Transaction Document are several and not joint with the obligations of any
other Purchaser, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser under any Transaction
Document.  The decision
of each Purchaser to purchase Securities pursuant to the Transaction Documents
has been made by such Purchaser independently of, and without reliance on, any
other Purchaser or any other Purchaser’s legal counsel or financial advisors.
 Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document.  Each Purchaser acknowledges that no other
Purchaser has acted as agent for such Purchaser in connection with making its
investment hereunder and that no Purchaser will be acting as agent of such
Purchaser in connection with monitoring its investment in the Securities or
enforcing its rights under the Transaction Documents.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.

[SIGNATURE
PAGES ON NEXT PAGE]

 16
 

 

IN WITNESS WHEREOF, the
parties hereto have executed this Securities Purchase Agreement as of the date
first indicated above.

	
   

  	
  NOVA OIL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Kenneth T. Hern

  
	
   

  	
   

  	
  Chairman and
  Chief Executive Officer

  

 

[SIGNATURE
PAGES FOR PURCHASERS ON NEXT PAGE]

 17
 

 

IN WITNESS WHEREOF, the
parties have executed this Securities Purchase 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:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Jurisdiction:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Investment Amount:

  	
  $

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Purchaser hereby elects to omit either or both of
  clauses (i) or (ii) of Section 11 of the Warrant as follows:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Omit Clause (i):

  	
  o

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Omit Clause (ii):

  	
  o

  	
   

  
							

 

 18
 

 

Schedule of Purchasers

 

	
  Name

  	
   

  	
  Investment Amount

  	
   

  	
  Number of 

  Shares

  	
   

  	
  Number of

  Warrants

  	
   

  
	
            

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
            

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
            

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
            

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
            

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 19

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