Document:

Exhibit 10.10

AGREEMENT

BETWEEN

SCOTT PETROLEUM CORPORATION

AND

BIOSOURCE AMERICA, INC.

This Agreement has been prepared for use with the
Standard General Conditions of the Contract Between Owner and Design/Builder. Their
provisions are interrelated and a change in one may necessitate a change in the
other.

 

AGREEMENT

BETWEEN OWNER AND DESIGN/BUILDER

THIS AGREEMENT is by and between SCOTT PETROLEUM
CORPORATION (Owner) of 102 Main Street, Itta Bena, MS 38941 and BIOSOURCE
AMERICA, INC. (Design/Builder) of The Riviana Building, 2777 Allen Parkway, Suite 800,
Houston, Texas 77019. The Effective Date of this Agreement is March 31st,
2006.

Owner and Design Builder, in consideration of the
mutual covenants hereinafter set forth, agree as follows:

ARTICLE
1 - THE WORK

1.01                        The
Owner has determined to construct a biodiesel processing facility in
Greenville, Mississippi and has elected to construct the tank farm, yard
piping, product handling, process building, site development and fuel handling
infrastructure utilizing their own resources and to retain the services of the
Design/Builder to design, install and commission the process equipment portion
only. The Owner has requested that the Design/Builder provide design
requirements for the Owner-furnished components and the Owner will be
responsible for the final design, permitting and construction of the tank farm,
yard piping, product handling, process building, site development and fuel
handling infrastructure.

1.02                        The
Owner has required the Design/Builder to assume responsibility for the entire “turn-key”
delivery of the process equipment only. As a result of this requirement, the
Design/Builder will be contractually responsible to complete all Work required
to design, fabricate, install, and commission all of the actual process
equipment required to complete the transformation of feedstocks into methyl
esters and glycerin. Additionally the Design/Builder will be responsible for
the vacuum system, thermal fluids system, cooling water towers, nitrogen
storage and the plant air compressor systems.

1.03                        More
specifically, Design/Builder shall complete all Work as specified or indicated
in the Contract Scope of Work attached as Exhibit A to this Agreement and
dated March 3lst, 2006. The Work is generally described as follows:

Project Management - provide programmatic oversight to
aid in the execution of the Project, provide a communication link with the
Owner and provide direction and guidance to subcontractors during the execution
of the Project.

Professional Design Services - provide professional
engineering process development and design phase services to develop and
assemble fabrication drawings, equipment specifications and Project
requirements as well as provide construction phase professional support
services.

Fabrication and Installation - provide procurement,
purchasing, fabrication and construction services for the creation, assembly
and installation of various process equipment, piping, wiring, instrumentation
and controls, and other various mechanical,

 1
 

 

structural, and electrical construction services.

Plant Commissioning and Startup - provide professional
services to direct and oversee the commissioning and startup of the various
Plant process units as well as their integrated process operations and operate
the Plant during an initial startup period until the various process warranties
and Owner’s objectives are met.

Training and Technical Support - provide training to
the Owner’s selected operators during the commissioning and startup phase.

ARTICLE
2 - THE PROJECT

2.01                        The
Project for which the Work under the Contract Documents may be the whole or
only a part is generally described as follows:

SCOTT PETROLEUM CORPORATION has contracted the
services of BIOSOURCE AMERICA, INC. under this Agreement to design, build,
deliver, startup and commission the process equipment and technology package
which forms the primary part of a biodiesel production facility to be located
in Greenville, Mississippi on lands currently owned by SCOTT PETROLEUM (the “Project”).
This biodiesel production facility (the “Plant”), and the process equipment and
technology package for which Design/Builder will be responsible, will utilize a
variety of feedstocks for conversion to fuel quality methyl esters and a
co-product glycerin.

The Plant must be a continuous process capable of
producing 20-million gallons per year of 100% biodiesel (“B100”) and
glycerin co-products. The Plant will be adjacent to an existing tank farm and
be operated by Owner or an affiliated company.

ARTICLE
3 - CONTRACT TIMES

3.01                        Time
of the Essence

All time limits for Milestones, if any, Substantial
Completion, and completion and readiness for final payment as stated in the
Contract Documents are of the essence.

3.02                        Days
to Achieve Substantial Completion and Final Payment

The Work is targeted for Substantial Completion as
defined in Article 13.05 of the Standard General Conditions within 360 calendar days of the Effective
Date of this Agreement and is to be completed and ready for final payment in
accordance with paragraph 13.08 of the Standard General Conditions within 45 calendar days after the date of
Substantial Completion.

3.03                        Definition
of Substantial Completion

Design/Builder and Owner have agreed to the following
standards as a measure of the Project’s Substantial Completion and acceptance. Articles
1.01.43 and 13.05 of the General Conditions shall be amended to include the
following elements to define

 2
 

 

Substantial Completion:

3.03.01               Feedstock Specification Requirements

The design standard and
benchmark for process warranties including product quality, throughput and yield
shall be a variable lipid feedstock with 20% free fatty acid (“FFA”), 70%
triacylglycerol lipid feedstock with a MIU content not to exceed 2.5%.

3.03.02               Product Specifications

To achieve Substantial
Completion, the Project must demonstrate that the final biodiesel product shall
be in conformance with ASTM D 675 1-03 Grade S15.

To achieve Substantial
Completion, the Project must demonstrate that the final Glycerin will meet 97%
purity.

3.03.03               Process Throughput

To achieve Substantial
Completion, the Project must demonstrate that the plant must be a continuous
process capable of producing 20-million gallons per year of acceptable
biodiesel. The plant will be designed to operate as a continuous process based
on a 24-hour day, 350-day per year operation. The process warranty
will be for 2,400 gallons per hour as measured in the transfer line to the
final biodiesel inventory tankage.

3.03.04               Product Yield

Yield shall be defined as
pounds of feedstock as defined in Article 3.03.01 required to yield one
U.S gallon of ASTM D 6751-03 quality biodiesel as measured during steady
state operating conditions. To achieve Substantial Completion, the Project must
demonstrate that the plant can achieve the minimum yield of no less than one
gallon of acceptable biodiesel per 8.20 pounds of feedstock.

ARTICLE
4 - CONTRACT PRICE

4.01                        Scope

The Contract Price is the cost of the Work to Owner
for the Design/Builder to design and construct the Project. The Contract Price
is limited to Design Professional Services and Construction to be furnished by
Design/Builder, and does not include costs of items not provided by
Design/Builder including but not limited to cost of land and rights of way,
compensation for damages to properties, interest and financing charges, and
charges for services to be provided to Owner by others not covered by this
Agreement, as set forth in Exhibit A. Owner shall pay Design/Builder for
completion of the Work in accordance with the Contract Documents an amount
equal to the Contract Price.

 3
 

 

4.02                        Contract
Price

The Contract Price for the Work to be performed and
provided by the Design/Builder for the Project under this Agreement and
Contract Documents is Twelve million five hundred thousand dollars
($12,500,000).

ARTICLE
5 - CHANGES IN CONTRACT PRICE

5.01                        The
amount of any increases or decreases in the Contract Price which results from a
Change Order shall be set forth in the applicable Change Order subject to the
following:

1.                                       In
the case of net additions in the Work, the amount of any increase in the
Contract Price shall be determined in accordance with paragraph 11.01 of the
Standard General Conditions.

2.                                       In
the case of net deletions in the Work, the amount of any such decrease shall be
determined in accordance with paragraph 11.01 of the Standard General Conditions,
and any Contract Price shall be reduced by mutual agreement.

ARTICLE
6 - PAYMENT PROCEDURES

6.01                        Submittal
and Processing of Payments

A.            Design/Builder shall submit, and Owner will process,
Applications for Payment in accordance with Article 13 of the Standard
General Conditions and the Schedule of Values of the Standard General
Conditions and shown in Exhibit B dated March 15th, 2006 to this
Agreement. Applications for Payment will indicate the amount of the Contract
Price then payable.

6.02                        Progress
Payments

A.            Owner shall make progress payments on account of the
Contract Price on the basis of Design/Builders Applications for Payment that
are to be submitted in accordance with the Schedule of Values - Exhibit B
dated March 15th, 2006 to this Agreement.

6.03                        Final
Payment

Upon final completion and acceptance of the Work in
accordance with paragraph 13.08 of the Standard General Conditions, Owner shall
pay the remainder of the Contract Price.

6.04                        Lien
Waivers

In lieu of providing the required Performance and
Payment bonds provided under this Agreement and as defined in Article 2.01
of the Standard General Conditions of the Contract Between Owner and
Design/Builder, the Design Builder shall be responsible for the following:

 4
 

 

A.                                   Design/Builder
shall secure and provide lien releases from each of the respective vendors
utilized in the completion of the Work and provide both the individual lien
releases as well as a Final Affidavit of Lien Release to the Owner prior to
making application for Final Payment in accordance with Articles 13.08.1, 2 and
3 of the Standard General Conditions.

B.                                     Beginning
with the second Application for Payment, each Application shall include an
affidavit of Design/Builder stating that all previous progress payments
received on account of the Work have been applied on account to discharge
Design/Builders legitimate obligations associated with prior Applications for
Payment.

ARTICLE
7 - INTEREST

7.01                        All
moneys not paid when due as provided in Article 13 of the Standard General
Conditions shall bear interest at the rate of 1 – 1/2% percent per month.

ARTICLE
8 - REPRESENTATIONS

8.01                        Design/Builder’s
Representations.

To induce Owner to enter into this Agreement,
Design/Builder makes the following representations:

A.                                   Design/Builder
has examined and carefully studied the Contract Documents listed in paragraphs
13.01.A - D of this Agreement.

B.                                     Design/Builder
has visited the Site and become familiar with and is satisfied as to the
general, local, and Site conditions that may affect cost, progress, and
performance of the Work.

C.                                     Design/Builder
is familiar with and is satisfied as to all federal, state, and local Laws and
Regulations that may affect cost, progress, and performance of the Work.

D.                                    Design/Builder
is aware of the general nature of work to be performed by Owner and others at
the Site that relates to the Work.

E.                                      Design/Builder
has correlated the information known to Design/Builder, information and
observations obtained from visits to the Site, reports and drawings identified
in the Contract Documents, and all additional examinations, investigations,
explorations, tests, studies and data with the Contract Documents.

F.                                      Design/Builder
has given Owner written notice of all conflicts, errors, ambiguities, or
discrepancies that Design/Builder has discovered in the Contract Documents and
the written resolution thereof by Owner is acceptable to Design/Builder.

 5
 

 

G.                                     The
Contract Documents are generally sufficient to indicate and convey
understanding of all terms and conditions for performance and furnishing of the
Work.

8.02                        Owner’s
Representations.

Owner makes the following representations:

A.            Owner
will secure a Site zoned for industrial use with minimum dimensions of 300 feet
by 300 feet with road access, water, sewage, electric, and natural gas
utilities. This site footprint is exclusive of the proposed tank farm footprint
requirement.

B.            Owner
will secure or prepare a Site with soil capable of supporting a minimum of 850
pounds per square foot or Owner will pay additional costs for foundations.

C.            The
Site will be free of hazardous waste or Owner will pay the costs of any
required environmental remediation.

D.            Owner
will provide Design/Builder with all criteria and full information as to Owner’s
requirements for the Project, including design objectives and constraints,
space, capacity and performance requirements, flexibility and expandability,
and any budgetary limitations.

E.             Owner
will furnish copies of all design and construction standards which Owner will
require to be included in the Contract Documents.

F.             Owner
will furnish to Design/Builder any other available information pertinent to the
Project including reports and data relative to previous designs, or
investigation at or adjacent to the Site.

G.            Following
Design/Builder’s assessment of initially available Project information and
data, upon Design/Builder’s request, furnish or otherwise make available such
additional Project-related information and data as is reasonably required to
enable Design/Builder to complete its Services. Such additional information or
data would generally include the following:

1.             Property
descriptions;

2.             Zoning,
deed, and other land use restrictions;

3.             Property,
boundary, easement, right-of-way, and other special engineering surveys or
data, including establishing relevant reference points for design and
construction which in Owner’s judgment are necessary to enable Design/Builder
to proceed with the Work;

4.             Data
prepared by or services of others, including without limitation explorations
and tests of subsurface conditions at or contiguous to the Site, drawings of
physical conditions in or relating to existing surface or subsurface structures
at or contiguous to the Site, or hydrographic surveys, with appropriate
professional interpretation thereof;

 6
 

 

5.             Environmental
assessments, audits, investigations, and impact statements, and other relevant
environmental or cultural studies as to the Project, the Site, and adjacent
areas; and

6.             Data
or consultations as required for the Project but not otherwise identified in
the Agreement or the Exhibits thereto.

H.            Owner
will give prompt written notice to Design/Builder whenever Owner observes or
otherwise becomes aware of any development that affects the scope or time of
performance or furnishing of Design/Builder’s services, or any defect or
nonconformance in Design/Builders services.

I.              Owner
will arrange for safe access to and make all provisions for Design/Builder and
Design/Builder’s subcontractors to enter upon public and private property as
may reasonably be required for Design/Builder to perform services under the
Agreement.

J.             Owner
will examine all alternate solutions, studies, reports, sketches, drawings,
specifications, proposals, and other documents presented by Design/Builder
(including obtaining advice of an attorney, insurance counselor, and other
consultants as Owner deems appropriate with respect to such examination) and
render decisions pertaining thereto within a reasonable time after receipt of
documents.

K.            Owner
will obtain reviews, approvals, and permits as well as being responsible for
payment for such permits from all governmental authorities having jurisdiction
over the Project or from such others as may be necessary for completion of each
Phase of the services in this Agreement.

L.             Owner
will provide accounting, bond, financial advisory, legal and insurance
counseling services for the Project as needed by Owner, or as Design/Builder
reasonably requests.

ARTICLE
9 - PROCESS WARRANTIES

9.01                        Design
Standard and Benchmark

The feedstock for the biodiesel synthesis process will
be variable lipid feedstocks with a Free Fatty Acid content of up to 20% with
an Moisture Impurities Unsaponifiables (“MIU”) concentration not to exceed 2.5%
by mass. The design standard and benchmark of feedstock on which the below
process warranties are based shall be a 20% FFA, 70% triacylglycerol lipid with
the MIU content to not exceed 2.5% by mass.

9.02                        Product
Yield Warranty

Biodiesel yield shall be defined as pounds of
feedstock as defined in Article 9.01 required to produce one U.S. gallon
of ASTM D 6751-03 Grade S15 quality biodiesel as measured during steady
state operating conditions. The Plant will yield no less than one gallon of
acceptable biodiesel per 8.20 pounds of feedstock (the “Product Yield Warranty”).

During Plant commissioning and before Substantial
Completion, if the measured yield fails to meet the product Yield Warranty, the
Design/Builder will invest in and install

 7
 

 

additional capital equipment into the Plant and/or
take other steps as necessary to achieve the Product Yield Warranty at no
charge to Owner.

9.03                        Product
Specification Warranties

The Bl00 Biodiesel shall conform to the standards in
the following Table 1 (the “Biodiesel Product Warranty”). The glycerin
co-product will meet 97% purity (the “Glycerin Product Warranty”).

TABLE 1: 
ASTM-D-6751-03 (Grade S15) Biodiesel Standards

	
  Property

  	
   

  	
   

  	
   

  	
  Test Method

  	
   

  	
  Current Limits

  	
   

  	
  Units

  
	
  Flash Point
  (closed cup)

  	
   

  	
  ASTM D 93

  	
   

  	
  130.0
  min

  	
   

  	
  °C

  
	
  Water and
  Sediment

  	
   

  	
  ASTM D 2709

  	
   

  	
  0.050
  max

  	
   

  	
  %
  volume

  
	
  Kinematic
  Viscosity, 40 °C

  	
   

  	
  ASTM D 445

  	
   

  	
  1.9
  – 6.0

  	
   

  	
  mm2/s

  
	
  Sulfated Ash

  	
   

  	
  ASTM D 874

  	
   

  	
  0.020
  max

  	
   

  	
  %
  mass

  
	
  Sulfur

  	
   

  	
  ASTM D 5453

  	
   

  	
  0.0015
  max

  	
   

  	
  %
  mass

  
	
  Copper Strip
  Corrosion

  	
   

  	
  ASTM D 130

  	
   

  	
  No. 3
  max

  	
   

  	
   

  
	
  Cetane Number

  	
   

  	
  ASTM D 613

  	
   

  	
  47
  min

  	
   

  	
   

  
	
  Cloud Point

  	
   

  	
  ASTM D 2500

  	
   

  	
  Report

  	
   

  	
  °C

  
	
  Carbon Residue

  	
   

  	
  ASTM D 4530

  	
   

  	
  0.050
  max

  	
   

  	
  %
  mass

  
	
  Acid Number

  	
   

  	
  ASTM D 664

  	
   

  	
  0.80
  max

  	
   

  	
  mg
  KOH/g

  
	
  Free Glycerin

  	
   

  	
  ASTM D 6584

  	
   

  	
  0.02
  max

  	
   

  	
  %
  mass

  
	
  Total Glycerin

  	
   

  	
  ASTM D 6584

  	
   

  	
  0.24
  max

  	
   

  	
  %
  mass

  
	
  Phosphorous
  Content

  	
   

  	
  ASTM D 4951

  	
   

  	
  0.001
  max

  	
   

  	
  % mass

  
	
  Distillation
  Temperature, AET, 90%

  	
   

  	
  ASTM D 1160

  	
   

  	
  360 max

  	
   

  	
  °C

  

 

During Plant commissioning and before Substantial
Completion, finished samples of biodiesel will be sent to an independent
laboratory for testing in accordance with Table 1. If three consecutive
samples, taken over a period of not less than two consecutive weeks, fails to
meet the Biodiesel Product Warranty, the Design/Builder will invest in and
install additional capital equipment into the Plant and/or take other steps as
necessary to achieve the Biodiesel Product Warranty at no charge to Owner.

During Plant commissioning and before Substantial
Completion, finished samples of glycerin will be sent to an independent
laboratory for testing for a minimum purity of 97%. If three consecutive samples,
taken over a period of not less than two consecutive weeks, fails to meet the
Glycerin Product Warranty, the Design/Builder will invest in and install
additional capital equipment into the Plant and/or take other steps as
necessary to achieve the Glycerin Product Warranty at no charge to Owner.

9.04                        Process
Throughput Warranty

The Plant must be a continuous process capable of
producing 20 million gallons per year of acceptable biodiesel. The Plant will
be designed to operate as a continuous process

 8
 

 

based on a 24-hour day, 350 - day per year
operation. The process throughput requirement will be 2,400 gallons per hour as
measured in the transfer line to the final Bl00 inventory tankage (the “Process
Throughput Warranty”).

During Plant commissioning and before Substantial
Completion, if the flow rate is less than 2,400 gallons of acceptable biodiesel
per hour, Design/Builder will invest in and install additional capital
equipment and/or take other steps as necessary to achieve the Process
Throughput Warranty at no charge to Owner.

ARTICLE
10 - WARRANTY PERIODS

All warranties provided for in Articles 9.02, 9.03 and
9.04 and associated damages as defined in Articles 11.01, 11.02 and 11.03 shall
be required to be satisfied prior to the issuance of a certificate of
Substantial Completion and shall extend for a period of 180 days after the date
of Substantial Completion.

ARTICLE
11 - DAMAGES FOR FAILURE TO MEET PROCESS WARRANTIES

11.01                 Damages
for Failure to Meet Product Yield Warranty

If, after the date of Substantial Completion, the
product yield of the Plant fails to meet the Product Yield Warranty,
Design/Builder shall reimburse the Owner for the cost of the amount of the
additional feedstock (i.e., above 8.20 pounds per gallon) which was required to
produce one gallon of biodiesel until such time as the Product Yield Warranty
is satisfied.

11.02                 Damages
for Failure to Meet Product Warranties

If, after the date of Substantial Completion, the
biodiesel produced fails to meet the Biodiesel Product Warranty, the Design/Builder
shall pay Owner, until such time as the Biodiesel Product Warranty is
satisfied, damages in the amount of the lost revenue, defined as the difference
between the amount of money that Owner could have reasonably sold biodiesel
that met the Biodiesel Product Warranty compared to the amount of money Owner
was able to sell the biodiesel that failed to meet the Biodiesel Product
Warranty.

If, after date of Substantial Completion, the glycerin
produced fails to meet the Glycerin Product Warranty, the Design/Builder shall
pay Owner, until such time as the Glycerin Product Warranty is satisfied,
damages in the amount of the lost revenue, defined as the difference between
the amount that Owner could have reasonably sold glycerin that met the Glycerin
Product Warranty compared to the amount Owner was able to sell the glycerin
that failed to meet the Glycerin Product Warranty.

11.03                 Damages
for Failure to Meet Process Throughput Warranty

If, after the date of Substantial Completion, the
Plant throughput fails to meet the Process Throughput Warranty, but where the
Plant remains operating (i.e., throughput is greater than zero gallons per
hour), the Design/Builder will pay Owner, until such time as the

 9
 

 

Throughput Warranty is satisfied, 20% of the average
price that Owner can reasonably sell biodiesel at, multiplied by the difference
between the Process Throughput Warranty amount (2,400 gallons per hour) and the
actual process throughput, and the number of hours of operation below the
Process Throughput Warranty.

If, after the date of Substantial Completion, the
Plant fails to be operational (i.e., throughput is zero gallons per hour), the
Design/Builder will pay Owner, until such time as the Throughput Warranty is
satisfied, 20% of the average price that Owner can reasonably sell biodiesel
at, multiplied by 2,400 gallons per hour, and by 24 hours per day. Damages for
failure to meet the Biodiesel Product Warranty, Glycerin Product Warranty, and
Product Yield Warranty will not be assessed if, after the date of Substantial
Completion, the Plant fails to be operational (i.e., throughput is zero gallons
per hour). Damages for failure to meet the Biodiesel Product Warranty (11.02),
Glycerin Product Warranty (11.02), and Product Yield Warranty (11.01) will be
assessed if, after the date of Substantial Completion, throughput is greater
than zero gallons per hour.

11.04                 Cap
on Damages

Total cumulative damages for failing to meet the
warranties discussed above shall not exceed $500,000.

ARTICLE
12 - TECHNICAL SUPPORT

12.01                 Technical
Support

Design/Builder will provide technical support services
at the option of the Owner. If Owner desires to have technical support via 24
hour telephone access and periodic updates to control system architecture,
programmable ladder logic, process condition set points, operating values and
service updates for the Biodiesel Plant, Owner shall make an annual payment of
$25,000 per year payable within 30 days at the beginning of each year unless
the parties agree on some other mutually acceptable technical support
arrangement.

12.02                 On-Site
Support

Design/Builder can provide on-site technical support,
plant visits, and/or process audits at Owner’s requests. These services will be
billed by Design/Builder to Owner for a rate of $1000 per day including travel
time plus expenses for travel, lodging and per diem unless the parties agree on
some other mutually acceptable technical support arrangement.

ARTICLE
13 - CONTRACT DOCUMENTS

13.01                 The
Contract Documents consist of the following:

A.            This Agreement;

B.            Standard General Conditions of the Contract Between Owner
and Design/Builder;

 10
 

 

C.            Exhibits
A through B to this Agreement;

D.            The following, which may be delivered, prepared, or
issued after the Effective Date of this Agreement and are not attached hereto:

1.                                       Notice
to Proceed;

2.                                       All
Work Change Directives and Change Orders amending, modifying or supplementing
the Contract Documents pursuant to paragraph 3.04.A of the Standard General
Conditions;

3.                                       Specifications
as defined in Paragraph 1.01.A.40 of the Standard General Conditions; and

4.                                       Drawings
as defined in Paragraph 1.01.A.18 of the Standard General Conditions.

13.02                 The
documents listed in paragraph 13.01 above are attached to this Agreement
(except as expressly noted otherwise above). There are no Contract Documents
other than those listed above in Article 13.01. The Contract Documents may
only be amended, modified, or supplemented as provided in paragraph 3.03.A of
the Standard General Conditions.

ARTICLE
14 - MISCELLANEOUS

14.01                 The
Standard General Conditions of the Contract Between Owner and Design/Builder
are referred to herein as the General Conditions. Terms not otherwise defined
in this Agreement will have the meanings indicated in the Standard General
Conditions.

14.02                 No
assignment by a party hereto of any rights under or interests in the Contract
Documents will be binding on another party hereto without the written consent
of the party sought to be bound; and, specifically but without limitation,
moneys that may become due and moneys that are due may not be assigned without
such consent (except to the extent that the effect of this restriction may be
limited by law), and unless specifically stated to the contrary in any written
consent to an assignment no assignment will release or discharge the assignor
from any duty or responsibility under the Contract Documents. The Owner may
assign this Agreement and the Contract Documents to its affiliate without
Design/Builders consent.

14.03                 Owner
and Design/Builder each binds itself, its partners, successors, assigns and
legal representatives to the other party hereto, its partners, successors,
assigns, and legal representatives in respect to all covenants, agreements, and
obligations contained in the Contract Documents.

14.04                 Any
provision or part of the Contract Documents held to be void or unenforceable
under any Law or Regulation shall be deemed stricken, and all remaining
provisions shall continue to be valid and binding upon Owner and
Design/Builder, who agree that the Contract Documents shall be reformed to
replace such stricken provision or part thereof with a valid and enforceable
provision that comes as close as possible to expressing the

 11
 

 

intention of the stricken
provision.

[Remainder of page intentionally
left blank]

IN WITNESS WHEREOF, Owner and Design/Builder have
signed this Agreement in duplicate. One counterpart each has been delivered to
Owner and Design/Builder. All portions of the Contract Documents have been
signed, initialed, or identified by Owner and Design/Builder.

This Agreement will be
effective on March 31st, 2006 (which is the Effective Date of the
Agreement).

	
  OWNER:

  	
   

  	
  DESIGN/BUILDER:

  
	
   

  	
   

  	
   

  
	
  SCOTT PETROLEUM
  CORPORATION

  	
   

  	
  BIOSOURCE AMERICA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BY: /s/ JASON SCOTT

  	
   

  	
  BY: /s/ DICK TALLEY

  
	
   

  	
   

  	
   

  
	
  ITS: PRESIDENT

  	
   

  	
  ITS: PRESIDENT

  
	
   

  	
   

  	
   

  
	
  Address for giving notices:

  	
   

  	
  Address for giving notices:

  
	
   

  	
   

  	
   

  
	
  102 Main Street

  Itta Bena, Mississippi 38941

  662-254-9024

  	
   

  	
  600 Dewey Boulevard

  Butte, Montana 59701

  406-494-6644

  

 

 12Exhibit 10.11

NOVA
ENERGY HOLDING, INC.

2006
EQUITY INCENTIVE PLAN

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  SECTION 1.

  	
   

  	
  PURPOSE.

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
   

  	
  DEFINITIONS.

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
   

  	
  ADMINISTRATION.

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
   

  	
  COMMON STOCK SUBJECT TO THE PLAN.

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
   

  	
  ELIGIBILITY TO RECEIVE AWARDS.

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
   

  	
  STOCK OPTIONS.

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
   

  	
  STOCK APPRECIATION RIGHTS.

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
   

  	
  RESTRICTED STOCK AWARDS.

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
   

  	
  STOCK BONUS AWARDS.

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
   

  	
  OTHER STOCK-BASED AWARDS.

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
   

  	
  CANCELLATION OR RESCISSION OF AWARDS.

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
   

  	
  LOANS.

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
   

  	
  SECURITIES LAW REQUIREMENTS.

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
   

  	
  RESTRICTIONS ON TRANSFER; REPRESENTATIONS OF
  PARTICIPANT; LEGENDS.

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 15.

  	
   

  	
  SINGLE OR MULTIPLE AGREEMENTS.

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 16.

  	
   

  	
  RIGHTS OF A STOCKHOLDER.

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 17.

  	
   

  	
  NO RIGHT TO CONTINUE EMPLOYMENT OR SERVICE.

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 18.

  	
   

  	
  WITHHOLDING.

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 19.

  	
   

  	
  INDEMNIFICATION.

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 20.

  	
   

  	
  NON-ASSIGNABILITY.

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 21.

  	
   

  	
  NONUNIFORM DETERMINATIONS.

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 22.

  	
   

  	
  ADJUSTMENTS.

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 23.

  	
   

  	
  TERMINATION AND AMENDMENT.

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 24.

  	
   

  	
  SEVERABILITY.

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 25.

  	
   

  	
  EFFECT ON OTHER PLANS.

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 26.

  	
   

  	
  EFFECTIVE DATE OF THE PLAN.

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 27.

  	
   

  	
  GOVERNING LAW.

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 28.

  	
   

  	
  GENDER AND NUMBER.

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 29.

  	
   

  	
  ACCELERATION OF EXERCISABILITY AND VESTING

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 30.

  	
   

  	
  MODIFICATION OF AWARDS

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 31.

  	
   

  	
  NO STRICT CONSTRUCTION

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 32.

  	
   

  	
  SUCCESSORS

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 33.

  	
   

  	
  PLAN PROVISIONS CONTROL

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 34.

  	
   

  	
  HEADINGS

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 35.

  	
   

  	
  CHANGE IN CONTROL

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 36.

  	
   

  	
  COMPLIANCE WITH SECTION 409A OF THE CODE

  	
   

  	
  21

  

 

 i

NOVA ENERGY HOLDING, INC.

2006 EQUITY INCENTIVE PLAN

Section 1.      Purpose. The Nova
Energy Holding, Inc. 2006 Equity Incentive Plan (the “Plan”) has been
established by Nova Energy Holding, Inc., a Nevada corporation (the “Company”), effective as of April 24,
2006 (the “Effective Date”), to foster and promote the long-term financial
success of the Company and its Subsidiaries and thereby increase stockholder
value. The Plan provides for the Award (as defined in Section 3) of equity
incentives to those employees, directors, or officers of, or key advisers or
consultants to, the Company or any of its Subsidiaries who are responsible for
or contribute to the management, growth or success of the Company or any of its
Subsidiaries.

Section 2.      Definitions. For
purposes of this Plan, the following terms used herein shall have the following
meanings, unless a different meaning is clearly required by the context.

2.1          “Board” means the
Board of Directors of the Company.

2.2          “Change in Control”
means the occurrence of any of the following:

(a)   the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act)) (a “Person”) of “beneficial ownership” (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either (i) the
then-outstanding shares of common stock of the Company, assuming conversion of
any outstanding preferred stock (the “Outstanding Company Common Stock”) or (ii) the
combined voting power of the then-outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that the following acquisitions
shall not constitute a Change in Control: 
(A) any acquisition directly from the Company (excluding an
acquisition by virtue of the exercise of a conversion privilege), (B) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (C) any
acquisition by any corporation or other entity pursuant to a reorganization,
merger, consolidation or other business combination, if, following such
reorganization, merger, consolidation or other business combination, the
conditions described in (i), (ii) and (iii) of Section 2.2(c) are
satisfied;

(b)   if individuals who, as of the date hereof,
constitute the Board of the Company (the “Incumbent Board”) cease for any
reason to constitute at least two-thirds of the Board; provided, however, that
any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s stockholders, was
approved by a two-thirds vote of the directors then constituting the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest subject to Regulation 14A promulgated under the
Exchange Act or

 

other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board;

(c)   approval by the stockholders of the Company
of a reorganization, merger, consolidation or other business combination,
unless following such reorganization, merger, consolidation or other business
combination (i) more than 50% of, respectively, the then-outstanding
shares of common stock or other equity interests of the corporation or other
entity resulting from such reorganization, merger, consolidation or other
business combination and the combined voting power of the then-outstanding
voting securities of such corporation or other entity entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
reorganization, merger, consolidation or other business combination in
substantially the same proportions as their ownership, immediately prior to
such reorganization, merger, consolidation or other business combination, of
the Outstanding Company Common Stock and Outstanding Company Voting Securities,
as the case may be (for purposes of determining whether such percentage test is
satisfied, there shall be excluded from the number of shares or other equity
interests and voting securities of the resulting corporation or other entity
owned by the Company’s stockholders, but not from the total number of
outstanding shares or other equity interests and voting securities of the
resulting corporation or other entity, any shares or voting securities received
by any such stockholder in respect of any consideration other than shares or
other equity interests or voting securities of the Company); (ii) no
Person (excluding the Company, any employee benefit plan (or related trust) of
the Company, any qualified employee benefit plan of such corporation or other
entity resulting from such reorganization, merger, consolidation or other
business combination and any Person beneficially owning, immediately prior to
such reorganization, merger, consolidation or other business combination,
directly or indirectly, 50% or more of the Outstanding Company Common Stock or
Outstanding Company Voting Securities, as the case may be) beneficially owns,
directly or indirectly, 50% or more of, respectively, the then-outstanding
shares of common stock or other equity interests of the corporation or other
entity resulting from such reorganization, merger, consolidation or other
business combination or the combined voting power of the then-outstanding
voting securities of such corporation entitled to vote generally in the election
of directors; and (iii) at least two-thirds of the members of the board of
directors of the corporation or other entity resulting from such
reorganization, merger, consolidation or other business combination were
members of the Incumbent Board at the time of the execution of the initial
agreement providing for such reorganization, merger, consolidation or other
business combination; or

(d)   (i) approval by the stockholders of the
Company of a complete liquidation or dissolution of the Company or (ii) the
first to occur of (A) the sale or other disposition (in one transaction or
a series of related transactions) of all or substantially all of the assets of
the Company, or (B) the approval by the stockholders of the Company of any
such sale or disposition, other than, in each case, any such sale or
disposition to a corporation or other entity, with respect to which immediately
thereafter, (1) more than 50% of, respectively, the then-outstanding
shares of common stock or other equity interests of such corporation or other
entity and the combined voting power of the then-outstanding voting securities
of such corporation entitled to vote generally in the election of directors is
then beneficially owned, directly or

 2
 

 

indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition
in substantially the same proportion as their ownership, immediately prior to
such sale or other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be (for purposes of
determining whether such percentage test is satisfied, there shall be excluded
from the number of shares or other equity interests and voting securities of
the transferee corporation or other entity owned by the Company’s stockholders,
but not from the total number of outstanding shares and voting securities of
the transferee corporation or other entity, any shares or other equity
interests or voting securities received by any such stockholder in respect of
any consideration other than shares or voting securities of the Company), (2) no
Person (excluding the Company and any employee benefit plan (or related trust)
of the Company, any qualified employee benefit plan of such transferee
corporation or other entity and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or indirectly, 50% or more of
the Outstanding Company Common Stock or Outstanding Company Voting Securities,
as the case may be) beneficially owns, directly or indirectly, 50% or more of,
respectively, the then-outstanding shares of common stock or other equity
interests of such transferee corporation or other entity and the combined
voting power of the then-outstanding voting securities of such transferee
corporation or other entity entitled to vote generally in the election of
directors and (3) at least two-thirds of the members of the board of
directors of such transferee corporation or other entity were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the board providing for such sale or other disposition of assets of the
Company.

2.3          “Code” means the
Internal Revenue Code of 1986, as amended.

2.4          “Committee” shall
have the meaning provided in Section 3 of the Plan.

2.5          “Common Stock” means
the common stock of the Company.

2.6          “Continuous Service”
means that the Participant’s service with the Company, any Parent Company or
any Subsidiary, whether as an employee, officer, director, adviser or
consultant, is not interrupted or terminated. The Participant’s Continuous
Service shall not be deemed to have terminated merely because of a change in
the capacity in which the Participant renders service to the Company, any
Parent Company or any Subsidiary as an employee, officer, consultant, adviser
or director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the
Participant’s Continuous Service. For example, a change in status from an
employee of the Company to a consultant of any Parent Company or a Subsidiary
or a director will not constitute an interruption of Continuous Service. The
Committee, in its sole discretion, may determine whether Continuous Service
shall be considered interrupted in the case of any leave of absence approved by
the Committee, including sick leave, military leave or any other personal leave.

2.7          “Disability” means (a) as
it relates to the exercise of an Incentive Stock Option after termination of
employment, a disability within the meaning of Section 22(e)(3) of
the Code, and (b) for all other purposes, shall have the meaning given
that term by the group disability insurance, if any, maintained by the Company
for its employees or otherwise shall mean the

 3
 

 

complete inability of the
Participant, [with or] without a reasonable accommodation, to perform his or
her duties with the Company, any Parent Company or any Subsidiary on a
full-time basis as a result of physical or mental illness or personal injury he
or she has incurred, as determined by an independent physician selected with
the approval of the Company, any Parent Company or any Subsidiary and the
Participant.

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

2.9          “Fair Market Value”
means, as determined by the Committee, (i) if the Common Stock is listed
on the Nasdaq Stock Market, the last sale price as quoted on the Nasdaq Stock
Market on the trading day immediately preceding the date for which the
determination is being made or, in the event that no such sale takes place on
such day, the average of the reported closing bid and asked prices on such day,
or, (ii) if the Common Stock is listed on a national securities exchange,
the last reported sale price on the principal national securities exchange on
which the Common Stock is listed or admitted to trading on the trading day
immediately preceding the date for which the determination is being made or, if
no such reported sale takes place on such day, the average of the closing bid
and asked prices on such day on the principal national securities exchange on
which the Common Stock is listed or admitted to trading, or, (iii) if the
Common Stock is not quoted on such Nasdaq Stock Market nor listed or admitted
to trading on a national securities exchange, then, until such time as the
Company completes a public offering of Common Stock pursuant to a registration
statement filed with the Securities and Exchange Commission with gross proceeds
of not less than $25 million, the volume weighted average closing price for the
trading days within the 30 calendar day period (but in no event earlier than March 31,
2006) immediately preceding the date for which the determination is made and
thereafter (or earlier if elected by the Committee in its sole discretion) the
average of the closing bid and asked prices on the day immediately preceding
the date for which the determination is being made in the over-the-counter
market as reported by Nasdaq or, (iv) if bid and asked prices for the
Common Stock on such day shall not have been reported through Nasdaq, the
average of the bid and asked prices for such day as furnished by any New York
Stock Exchange member firm regularly making a market in the Common Stock
selected for such purpose by the Board or a committee thereof, or, (v) if
none of the foregoing is applicable, then the fair market value of the Common
Stock as determined in good faith by the Committee in its sole discretion.

2.10        “Immediate Family”
shall have the meaning provided in Section 20 of the Plan.

2.11        “Incentive Stock
Option” means a stock option granted under the Plan which is intended to be
designated as an “incentive stock option” within the meaning of Section 422
of the Code.

2.12        “Non-Qualified Stock
Option” means a stock option granted under the Plan which is not intended to be
an Incentive Stock Option, including any stock option that provides (as of the
time such option is granted) that it will not be treated as an Incentive Stock
Option nor as an option described in Section 423(b) of the Code.

2.13        “Other Stock-Based
Award” means Awards (other than Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, and Stock Bonus Awards) denominated or

 4
 

 

payable in, valued in
whole or in part by reference to, or otherwise based on, or related to, shares
of Common Stock and granted pursuant to Section 10.

2.14        “Outside Director”
means a member of the Board who is not employed by the Company, any Parent
Company or any Subsidiary.

2.15        “Parent Company”
means: (i) as it relates to Incentive Stock Options, any corporation
(other than the Company) in an unbroken chain of corporations ending with the
Company if, at the time of the granting of the Stock Option, each of the
corporations other than the Company owns stock possessing 50% or more of the
combined voting power of all classes of stock in one of the other corporations
in the chain; and (ii) for all other purposes, any corporation (other than
the Company) or other entity in an unbroken chain of corporations or other
entities ending with the Company if, at the time of the granting of the Stock
Option or other Award, each of the corporations or other entities other than the
Company owns stock possessing 50% or more of the combined voting power of all
classes of stock or other equity interests in one of the other corporations or
other entities in the chain.

2.16        “Participant” shall
mean any employee, director or officer of, or key adviser or consultant to, the
Company or any Subsidiary to whom an Award is granted under the Plan.

2.17        “Plan Year” means the
twelve-month period beginning on November 1 and ending on October 31;
provided, however, the first Plan Year shall be the short Plan Year beginning
on the Effective Date and ending on October 31, 2006.

2.18        “Restricted Stock
Award” means an Award of Common Stock made pursuant to Section 8.

2.19        “Stock Appreciation
Right” means an Award made pursuant to Section 7.

2.20        “Stock Bonus Award”
means an Award made pursuant to Section 9.

2.21        “Stock Option” means
any option to purchase Common Stock granted pursuant to Section 6.

2.22        “Subsidiary”
means:  (i) as it relates to
Incentive Stock Options, any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of
the granting of the Stock Option, each of the corporations (other than the last
corporation in the unbroken chain) owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain; and (ii) for all other purposes, a corporation
or other entity of which not less than 50% of the total voting power is held by
the Company or by a Subsidiary, whether or not such corporation or other entity
now exists or is hereafter organized or acquired by the Company or by a
Subsidiary.

2.23        “Term of the Plan”
means the period beginning on the Effective Date and ending on the earlier to
occur of (i) the date the Plan is terminated by the Board in accordance
with Section 23 and (ii) the day before the tenth anniversary of the
Effective Date.

 5
 

 

Section 3.      Administration.
The Plan shall be administered by the Compensation Committee of the Board or
such other committee as may be appointed by the Board from time to time for the
purpose of administering this Plan, or if no such committee is appointed or
acting, the entire Board; provided, however, that so long as the Company has
any class of equity security registered pursuant to Section 13 of the
Exchange Act, and if the Plan is to be administered by a committee, then such
committee shall consist of two or more members of the Board, each of whom shall
each qualify as a “non-employee director” within the meaning of Rule 16b-3
of the Exchange Act and, if applicable, as an “independent director” under
applicable national securities exchange or Nasdaq Stock Market rules, and also
qualify as an “outside director” within the meaning of Section l62(m) of
the Code and regulations pursuant thereto. For purposes of the Plan, the Board
acting in this capacity or the Compensation Committee described in the
preceding sentence shall be referred to as the “Committee.”  The Committee shall have the power and
authority to grant to eligible persons pursuant to the terms of the Plan:  (1) Stock Options, (2) Stock
Appreciation Rights, (3) Restricted Stock Awards, (4) Stock Bonus
Awards, (5) Other Stock-Based Awards, or (6) any combination of the
foregoing (collectively referred to as “Awards”).

The
Committee shall have authority in its discretion to interpret the provisions of
the Plan and to decide all questions of fact arising in its application. Except
as otherwise expressly provided in the Plan, the Committee shall have authority
to select the persons to whom Awards shall be made under the Plan; to determine
whether and to what extent Awards shall be made under the Plan; to determine
the types of Award to be made and the amount, size, terms and conditions of
each such Award; to determine the time when the Awards shall be granted; to
determine whether, to what extent and under what circumstances Common Stock and
other amounts payable with respect to an Award under the Plan shall be deferred
either automatically or at the election of the Participant; to adopt, alter and
repeal such administrative rules, guidelines and practices governing the Plan
as it shall from time to time deem advisable; and to make all other
determinations necessary or advisable for the administration and interpretation
of the Plan. The Committee, in its sole discretion, may determine that an Award
will be immediately exercisable, in whole or in part, or that all or any
portion may not be exercised until a date, or dates, subsequent to its date of
grant, or until the occurrence of one or more specified events, including the
attainment of performance criteria, subject in any case to the terms of the
Plan. If the Committee imposes conditions upon exercise, then subsequent to the
date of grant, the Committee may, in its sole discretion, accelerate the date
on which all or any portion of the Award may be exercised. Notwithstanding
anything in the Plan to the contrary, in the event that the Committee
determines that it is advisable to grant Awards which shall not qualify for the
exception for performance-based compensation from the tax deductibility
limitations of Section 162(m) of the Code, the Committee may make
such grants or Awards, or may amend the Plan to provide for such grants or
Awards, without satisfying the requirements of Section 162(m) of the
Code.

Notwithstanding
anything in the Plan to the contrary, the Committee also shall have authority
in its sole discretion to vary the terms of the Plan to the extent necessary to
comply with foreign, federal, state or local law or to meet the objectives of
the Plan. The Committee may, where appropriate, establish one or more sub-plans
for this purpose.

 6
 

 

All
decisions made by the Committee pursuant to the provisions of the Plan shall be
final and binding on all persons who participate in the Plan.

All
expenses and liabilities incurred by the Committee in the administration and
interpretation of the Plan shall be borne by the Company. The Committee may
employ attorneys, consultants, accountants or other persons in connection with
the administration and interpretation of the Plan. The Company, and its
officers and directors, shall be entitled to rely upon the advice, opinions or
valuations of any such persons.

Section 4.      Common
Stock Subject to the Plan.

4.1          Share
Reserve. Subject to the following provisions of this Section 4 and to
such adjustment as may be made pursuant to Section 22, the maximum number
of shares available for issuance under the Plan shall be equal to 10,000,000
shares of Common Stock. The maximum number of shares that may be issued upon
the exercise of Incentive Stock Options granted under the Plan shall not exceed
10,000,000 shares of Common Stock (as adjusted pursuant to Section 22). During
the terms of the Awards under the Plan, the Company shall keep available at all
times the number of shares of Common Stock required to satisfy such Awards.

4.2          Source of Shares.
Such shares may consist in whole or in part of authorized and unissued shares
or treasury shares or any combination thereof as the Committee may determine. Except
as otherwise provided herein, any shares subject to an option or right granted
or awarded under the Plan which for any reason expires or is terminated
unexercised, becomes unexercisable, or is forfeited or otherwise terminated,
surrendered or cancelled as to any shares, or if any shares are not delivered
because an Award under the Plan is settled in cash or the shares are used to
satisfy the applicable tax withholding obligation, such shares shall not be
deemed to have been delivered for purposes of determining the maximum number of
shares of Common Stock available for issuance under the Plan and shall again
become eligible for issuance under the Plan. If the exercise price of any Stock
Option granted under the Plan is satisfied by tendering shares of Common Stock
to the Company (whether by actual delivery or by attestation and whether or not
such surrendered shares were acquired pursuant to any Award granted under the
Plan), only the number of shares of Common Stock issued net of the shares of
Common Stock tendered shall be deemed delivered for purposes of determining the
maximum number of shares of Common Stock available for issuance under the Plan.
No Awards may be granted following the end of the Term of the Plan.

4.3          Code Section 162(m) Limitation.
The total number of shares of Common Stock for which Stock Options and Stock
Appreciation Rights may be granted to any employee during any 12 month period
shall not exceed 2,000,000 shares in the aggregate (as adjusted pursuant to Section 22).
The total number of shares of Common Stock for which Restricted Stock Awards,
Stock Bonus Awards and Other Stock-Based Awards that are subject to the
attainment of performance criteria in order to protect against the loss of
deductibility under Section 162(m) of the Code may be granted to any
employee during any twelve month period shall not exceed 2,000,000 shares in
the aggregate (as adjusted pursuant to Section 22).

Section 5.      Eligibility to Receive Awards.
An Award may be granted to any employee, director, or officer of, or key
adviser or consultant to, the Company or any Subsidiary, who is 

 7
 

 

responsible for or
contributes to the management, growth or success of the Company or any
Subsidiary, provided that bona fide services shall be rendered by consultants
or advisers to the Company or its Subsidiaries and, unless otherwise approved
by the Committee, such services must not be in connection with the offer and
sale of securities in a capital-raising transaction and must not directly or
indirectly promote or maintain a market for the Company’s securities. Subject
to the preceding sentence and Section 6.7, the Committee shall have the
sole authority to select the persons to whom an Award is to be granted
hereunder and to determine what type of Award is to be granted to each such
person. No person shall have any right to participate in the Plan. Any person
selected by the Committee for participation during any one period will not by
virtue of such participation have the right to be selected as a Participant for
any other period.

Section 6.      Stock Options. A
Stock Option may be an Incentive Stock Option or a Non-Qualified Stock Option. Only
employees of the Company or a Subsidiary are eligible to receive Incentive
Stock Options. To the extent that any Stock Option does not qualify as an
Incentive Stock Option, it shall constitute a separate Non-Qualified Stock
Option. Stock Options may be granted alone or in addition to other Awards
granted under the Plan. Except as otherwise expressly provided in Section 6.7,
the terms and conditions of each Stock Option granted under the Plan shall be
specified by the Committee, in its sole discretion, and shall be set forth in a
written Stock Option agreement between the Company and the Participant in such
form as the Committee shall approve from time to time or as may be reasonably
required in view of the terms and conditions approved by the Committee from
time to time. No person shall have any rights under any Stock Option granted
under the Plan unless and until the Company and the person to whom such Stock
Option shall have been granted shall have executed and delivered an agreement
expressly granting the Stock Option to such person and containing provisions
setting forth the terms and conditions of the Stock Option. The terms and
conditions of each Incentive Stock Option shall be such that each Incentive
Stock Option issued hereunder shall constitute and shall be treated as an “incentive
stock option” as defined in Section 422 of the Code. The terms and
conditions of each Non-Qualified Stock Option will be such that each
Non-Qualified Stock Option issued hereunder shall not constitute nor be treated
as an “incentive stock option” as defined in Section 422 of the Code or an
option described in Section 423(b) of the Code and will be a “non-qualified
stock option” for federal income tax purposes. The terms and conditions of any
Stock Option granted hereunder need not be identical to those of any other
Stock Option granted hereunder. The Stock Option agreements shall contain in
substance the following terms and conditions and may contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the
Committee shall deem desirable.

6.1          Type of Option.
Each Stock Option agreement shall identify the Stock Option represented thereby
as an Incentive Stock Option or a Non-Qualified Stock Option, as the case may
be.

6.2          Option Price.
The Incentive Stock Option exercise price shall be fixed by the Committee but
shall in no event be less than 100% (or 110% in the case of an employee referred
to in Section 6.6(ii) below) of the Fair Market Value of the shares
of Common Stock subject to the Incentive Stock Option on the date the Incentive
Stock Option is granted. The Non-Qualified Stock Option exercise price shall be
fixed by the Committee but shall in no event be less than 100% of the Fair
Market Value of the shares of Common Stock subject to the Non-Qualified Stock
Option at the time the Stock Option is granted.

 8
 

 

6.3          Exercise Term.
Each Stock Option agreement shall state the period or periods of time within
which the Stock Option may be exercised, in whole or in part, which shall be
such period or periods of time as may be determined by the Committee, provided
that no Stock Option shall be exercisable after ten years from the date of grant
thereof (or, in the case of an Incentive Stock Option granted to an employee
referred to in Section 6.6(ii) below, such term shall in no event
exceed five years from the date on which such Incentive Stock Option is
granted). The Committee shall have the power to permit an acceleration of
previously established exercise upon such circumstances and subject to such
terms and conditions as the Committee deems appropriate.

6.4          Payment
for Shares. A Stock Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance with the
terms of the Stock Option agreement by the Participant entitled to exercise the
Stock Option and full payment for the shares of Common Stock with respect to
which the Stock Option is exercised has been received by the Company. The Committee, in its sole discretion, may
permit the exercise price for any Stock Option to be paid by (i) cash,
certified or cashier’s check, bank draft, money order, wire transfer payable to
the order of the Company, free from all collection charges; (ii) delivery
of shares of Common Stock already owned by the Participant and having a Fair
Market Value equal to the aggregate exercise price, or by a combination of cash
and shares of Common Stock, in each case to the extent permitted by applicable
law and not in violation of any instrument or agreement to which the Company is
a party and, unless approved by the Committee, not resulting in a charge to the
Company’s reported earnings; or (iii) delivery (including by facsimile or
by electronic mail) to the Company or its designated agent of an executed
irrevocable option exercise form together with irrevocable instructions from
the Participant to a broker or dealer, reasonably acceptable to the Company, to
sell certain of the shares of Common Stock purchased upon exercise of the Stock
Option or to pledge such shares as collateral for a loan and promptly deliver
to the Company the amount of sale or loan proceeds necessary to pay such
purchase price and any tax withholding obligations that may arise in connection
with such exercise (otherwise known as a “cashless exercise”). No shares
of Common Stock shall be issued to any Participant upon exercise of a Stock
Option until the Company receives full payment therefor as described above. Upon
the receipt of notice of exercise and full payment for the shares of Common
Stock, the shares of Common Stock shall be deemed to have been issued and the
Participant shall be entitled to receive such shares of Common Stock and shall
be a stockholder with respect to such shares, and the shares of Common Stock
shall be considered fully paid and nonassessable. No adjustment will be made
for a dividend or other right for which the record date is prior to the date on
which the Common Stock is issued, except as provided in Section 22 of the
Plan. Each exercise of a Stock Option shall reduce, by an equal number, the
total number of shares of Common Stock that may thereafter be purchased under
such Stock Option.

6.5          Rights upon
Termination of Continuous Service. In the event that a Participant’s
Continuous Service terminates for any reason, other than death or Disability,
any rights of the Participant under any Stock Option shall immediately
terminate; provided, however, that the Participant (or any successor or legal
representative) shall have the right to exercise the Stock Option to the extent
that the Stock Option was exercisable at the time of termination, until the
earlier of (i) the date that is three months after the effective date of
such termination of 

 9
 

 

Continuous Service, or
such other date as determined by the Committee in its sole discretion, or (ii) the
expiration of the term of the Stock Option.

Notwithstanding the foregoing, the Participant (or any
successor or legal representative) shall not have any rights under any Stock
Option to the extent that such Stock Option has not previously been exercised,
and the Company shall not be obligated to sell or deliver shares of Common
Stock (or have any other obligation or liability) under such Stock Option if
the Committee shall determine in its sole discretion that the Participant’s
Continuous Service shall have been terminated for “Cause” (as such term is
defined in the Participant’s Stock Option agreement or employment agreement, if
any), which determination shall be made in good faith. If there is a conflict
between the definition of Cause as defined in the Participant’s Stock Option
agreement and as defined in the Participant’s employment agreement, if any, the
most restrictive definition of Cause shall apply unless the employment
agreement expressly provides otherwise. In the event of such determination, the
Participant (or any successor or legal representative) shall have no right
under any Stock Option, to the extent that such Stock Option has not previously
been exercised, to purchase any shares of Common Stock. Any Stock Option may be
terminated entirely by the Committee at the time or at any time subsequent to a
determination by the Committee under this Section 6.5 which has the effect
of eliminating the Company’s obligation to sell or deliver shares of Common
Stock under such Stock Option.

In
the event that a Participant’s Continuous Service terminates because such
Participant dies or suffers a Disability prior to the expiration of the Stock
Option and without the Participant’s having fully exercised the Stock Option,
the Participant or his or her successor or legal representative shall be fully
vested in the Stock Option and shall have the right to exercise the Stock
Option within the next 12 months following
such event, or such other period as determined by the Committee in its sole
discretion, but not later than the expiration of the term of the Stock Option.

6.6          Special Incentive
Stock Option Rules. Notwithstanding the foregoing, in the case of an
Incentive Stock Option, each Stock Option agreement shall contain such other
terms, conditions and provisions as the Committee determines necessary or
desirable in order to qualify such Stock Option as an Incentive Stock Option
under the Code including, without limitation, the following:

(i)            To the extent that the aggregate
Fair Market Value (determined as of the time the Stock Option is granted) of
the Common Stock, with respect to which Incentive Stock Options granted under
this Plan (and all other plans of the Company, any Parent Company and any
Subsidiary) become exercisable for the first time by any person in any calendar
year, exceeds $100,000, such Stock Options shall be treated as Non-Qualified
Stock Options.

(ii)           No Incentive Stock Option shall be
granted to any employee if, at the time the Incentive Stock Option is granted,
the employee (by reason of the attribution rules applicable under Section 424(d) of
the Code) owns more than 10% of the combined voting power of all classes of
stock of the Company or any Parent Company or Subsidiary unless at the time
such Incentive Stock Option is granted the Stock Option exercise price is at
least 110% of the Fair Market Value (determined as of the time the Incentive
Stock Option is granted) of the

 10
 

 

shares of Common Stock
subject to the Incentive Stock Option and such Incentive Stock Option by its
terms is not exercisable after the expiration of five years from the date of
grant.

If an Incentive Stock Option is exercised after the expiration of the exercise
periods that apply for purposes of Section 422 of the Code, such Stock
Option shall thereafter be treated as a Non-Qualified Stock Option.

6.7          Conversion of
Director Fees. The Board may, at its sole discretion, permit an Outside
Director to receive all or a portion of his or her annual retainer fee, any
fees for attending meetings of the Board or committees thereof, committee
chairmanship fees or any other fees payable to an Outside Director in the form
of a Stock Option. The terms and conditions of such Stock Option, including
(without limitation) the method for converting the annual retainer fee or any
other fee payable to an Outside Director into a Stock Option, the date of
grant, the vesting schedule, if any, and the time period for an Outside Director
to elect such a Stock Option shall be determined solely by the Board. The Board’s
decision shall be final, binding and conclusive.

Section 7.      Stock Appreciation Rights. Stock
Appreciation Rights entitle Participants to increases in the Fair Market Value
of shares of Common Stock. The terms and conditions of each Stock Appreciation
Right granted under the Plan shall be specified by the Committee, in its sole
discretion, and shall be set forth in a written agreement between the Company
and the Participant in such form as the Committee shall approve from time to
time or as may be reasonably required in view of the terms and conditions
approved by the Committee from time to time. The agreements shall contain in
substance the following terms and conditions and may contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the
Committee shall deem desirable.

7.1          Award. Stock
Appreciation Rights shall entitle the Participant, subject to such terms and
conditions determined by the Committee, to receive upon exercise thereof an
Award equal to all or a portion of the excess of:  (i) the Fair Market Value of a specified
number of shares of Common Stock at the time of exercise over (ii) a
specified price which shall not be less than 100% of the Fair Market Value of
the Common Stock at the time the right is granted. Such amount may be paid by
the Company in cash, Common Stock (valued at its then Fair Market Value) or any
combination thereof, as the Committee may determine. In the event of the
exercise of a Stock Appreciation Right that is fully or partially settled in
shares of Common Stock, the number of shares reserved for issuance under this
Plan shall be reduced by the number of shares issued upon exercise of the Stock
Appreciation Right.

7.2          Term. Each
agreement shall state the period or periods of time within which the Stock
Appreciation Right may be exercised, in whole or in part, subject to such terms
and conditions prescribed for such purpose by the Committee, provided that no
Stock Appreciation Right shall be exercisable after ten years from the date of
grant thereof. The Committee shall have the power to permit an acceleration of
previously established exercise terms upon such circumstances and subject to
such terms and conditions as the Committee deems appropriate.

7.3          Rights upon
Termination of Continuous Service. In the event that a Participant’s
Continuous Service terminates for any reason, other than death or Disability,
any rights of the

 11
 

 

Participant under any
Stock Appreciation Right shall immediately terminate; provided, however, the
Participant (or any successor or legal representative) shall have the right to
exercise the Stock Appreciation Right to the extent that the Stock Appreciation
Right was exercisable at the time of termination, until the earlier of (i) the
date that is three months after the effective date of such termination of
Continuous Service, or such other date as determined by the Committee in its
sole discretion, or (ii) the expiration of the term of the Stock
Appreciation Right.

Notwithstanding the foregoing, the Participant (or any
successor or legal representative) shall not have any rights under any Stock
Appreciation Right, to the extent that such Stock Appreciation Right has not
previously been exercised, and the Company shall not be obligated to pay or
deliver any cash, Common Stock or any combination thereof (or have any other
obligation or liability) under such Stock Appreciation Right if the Committee
shall determine in its sole discretion that the Participant’s Continuous
Service shall have been terminated for “Cause” (as such term is defined in the
Participant’s Stock Appreciation Right agreement or employment agreement, if
any), which determination shall be made in good faith. If there is a conflict
between the definition of Cause as defined in the Participant’s Stock
Appreciation Right agreement and as defined in the Participant’s employment
agreement, if any, the most restrictive definition of Cause shall apply unless
the employment agreement expressly provides otherwise. In the event of such
determination, the Participant (or any successor or legal representative) shall
have no right under such Stock Appreciation Right, to the extent that such
Stock Appreciation Right has not previously been exercised. Any Stock
Appreciation Right may be terminated entirely by the Committee at the time of
or at any time subsequent to the determination by the Committee under this Section 7.3
which has the effect of eliminating the Company’s obligations under such Stock
Appreciation Right.

In
the event that a Participant’s Continuous Service terminates because such
Participant dies or suffers a Disability prior to the expiration of his or her
Stock Appreciation Right and without having fully exercised his or her Stock
Appreciation Right, the Participant or his or her successor or legal
representative shall be fully vested in the Stock Appreciation Right and shall
have the right to exercise any Stock Appreciation Right within the next 12
months following such event, or such other period as determined by the
Committee in its sole discretion, but not later than the expiration of the
Stock Appreciation Right.

Section 8.      Restricted Stock Awards.
Restricted Stock Awards shall consist of shares of Common Stock restricted
against transfer (“Restricted Stock”) and subject to a substantial risk of
forfeiture. The Committee may, in its sole discretion, grant Restricted Stock
at no cost to a Participant or it may establish a cost (the “Purchase Price”),
which may be less than or equal to the Fair Market Value of a share of Common
Stock on the date of grant, for each share of Restricted Stock granted to a
Participant. The terms and conditions of each Restricted Stock Award granted
under the Plan shall be specified by the Committee, in its sole discretion, and
shall be set forth in a written agreement between the Company and the
Participant in such form as the Committee shall approve from time to time or as
may be reasonably required in view of the terms and conditions approved by the
Committee from time to time. The agreements shall contain in substance the
following terms and conditions and may contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem desirable.

 12

 

8.1          Vesting Period.
Restricted Stock Awards shall be subject to the restrictions described in the
preceding paragraph over such vesting period as the Committee determines. To
the extent the Committee deems necessary or appropriate to protect against loss
of deductibility pursuant to Section 162(m) of the Code, Restricted
Stock Awards to any Participant may also be subject to certain conditions with
respect to attainment of one or more preestablished performance objectives
which shall relate to corporate, subsidiary, division, group or unit
performance in terms of growth in gross revenue, earnings per share or ratios
of earnings to equity or assets, net profits, stock price, market share, sales
or costs. In order to take into account unforeseen events or changes in
circumstances, such objectives may be adjusted by the Committee in its sole
discretion; provided, to the extent the Committee deems necessary or
appropriate to protect against loss of deductibility pursuant to Section 162(m) of
the Code, such objectives may not be adjusted by the Committee to increase an
Award but only to reduce or eliminate an Award.

8.2          Restriction upon
Transfer. Shares awarded, and the right to vote such shares and to receive
dividends thereon, may not be sold, assigned, transferred, exchanged, pledged,
hypothecated or otherwise encumbered, except as herein provided or as provided
in any agreement entered into between the Company and a Participant in
connection with the Plan, during the vesting period applicable to such shares.
Notwithstanding the foregoing, and except as otherwise provided in the Plan,
the Participant shall have all the other rights of a stockholder including, but
not limited to, the right to receive dividends and the right to vote such
shares, until such time as the Participant disposes of the shares or forfeits
the shares pursuant to the agreement relating to the Restricted Stock Award.

8.3          Certificates.
Any stock certificate issued in respect of shares awarded to a Participant
shall be registered in the name of the Participant and deposited with the
Company, or its designee, and shall bear the following legend:

“THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE PROVISIONS AND
RESTRICTIONS AGAINST TRANSFER) CONTAINED IN THE NOVA ENERGY HOLDING, INC. 2006
EQUITY INCENTIVE PLAN AND A RESTRICTED STOCK AWARD AGREEMENT ENTERED INTO
BETWEEN THE REGISTERED OWNER AND NOVA ENERGY HOLDING, INC. RELEASE FROM SUCH
TERMS AND CONDITIONS SHALL BE OBTAINED ONLY IN ACCORDANCE WITH THE PROVISIONS
OF THE PLAN AND AGREEMENT, A COPY OF EACH OF WHICH IS ON FILE IN THE OFFICE OF
THE SECRETARY OF NOVA ENERGY HOLDING, INC.”

Each Participant, as a condition of any Restricted Stock Award, shall
have delivered a stock power, endorsed in blank, relating to the Common Stock
covered by such Award.

8.4          Termination of
Continuous Service. Except as otherwise provided in the written agreement
relating to the Participant’s Restricted Stock Award, in the event that a
Participant’s

 13
 

 

Continuous Service
terminates for any reason, other than death or Disability, any rights of the
Participant or his or her successors or legal representatives under any
Restricted Stock Award that remains subject to restrictions shall immediately
terminate and any Restricted Stock Award with unlapsed restrictions shall be
forfeited to the Company without payment of any consideration; provided that,
if a Participant paid a Purchase Price in connection with the grant of a share
of Restricted Stock, upon forfeiture of such a share of Restricted Stock the
Company shall pay to the Participant, as soon as reasonably practicable
following such forfeiture, the lesser of (i) the Purchase Price or (ii) the
Fair Market Value of a share of Common Stock on the date of forfeiture. If an
amount due to a Participant under this Section 8.4 exceeds $50,000, the
Committee may, in its sole discretion, pay any amount exceeding $50,000 in a
series of up to ten equal annual installments, with the first installment
payment due on the first anniversary of the date of forfeiture.

Unless
the written agreement between the Participant and the Company relating to the
Restricted Stock Award provides otherwise, in the event that a Participant’s
Continuous Service terminates because such Participant dies or suffers a
Disability, all remaining shares of a Restricted Stock Award shall no longer be
subject to any unlapsed restrictions.

Section 9.      Stock Bonus Awards. Stock
Bonus Awards shall consist of Awards of shares of Common Stock. To the extent
the Committee deems necessary or appropriate to protect against the loss of
deductibility pursuant to Section 162(m) of the Code, the Committee
may, in its sole discretion, grant a Stock Bonus Award based upon corporate,
division, subsidiary, group or unit performance in terms of growth in gross
revenue, earnings per share or ratios of earnings to equity or assets, net
profits, stock price, market share, sales or costs or, with respect to
Participants not subject to Section 162(m) of the Code, such other
measures or standards determined by the Committee in its discretion. In order
to take into account unforeseen events or changes in circumstances, such
performance objectives may be adjusted; provided, to the extent the Committee
deems necessary or appropriate to protect against loss of deductibility
pursuant to Section 162(m) of the Code, such performance objectives
may not be adjusted by the Committee to increase an Award but only to reduce or
eliminate an Award.

The terms and conditions of each Stock Bonus Award granted
under the Plan shall be specified by the Committee, in its sole discretion, and
shall be set forth in a written agreement between the Company and the
Participant in such form as the Committee shall approve from time to time or as
may be reasonably required in view of the terms and conditions approved by the
Committee from time to time. In any event, each Stock Bonus Award agreement
must provide that such Stock Bonus Award shall be payable to the Participant no
later than two and one half months following the end of the calendar year in
which the Participant became vested in such Stock Bonus Award in order to
satisfy the short-term deferral rule applicable under Section 409A of
the Code. In addition to any applicable performance goals, shares of Common
Stock subject to a Stock Bonus Award may be: 
(i) subject to additional restrictions (including, without
limitation, restrictions on transfer) or (ii) granted directly to a person
free of any restrictions, not inconsistent with the terms of the Plan, as the
Committee shall deem desirable.

Section 10.    Other Stock-Based Awards. Other
Stock-Based Awards may be awarded, subject to limitations under applicable law
and this Plan, that are denominated or payable in, valued in whole or in part
by reference to, or otherwise based on, or related to, shares

 14
 

 

of Common Stock,
as deemed by the Committee to be consistent with the purposes of the Plan,
including, without limitation, purchase rights, convertible or exchangeable
debentures, or other rights convertible into shares of Common Stock and Awards
valued by reference to the value of securities of or the performance of
specified Subsidiaries. Other Stock-Based Awards may be awarded either alone or
in addition to or in tandem with any other Awards under the Plan or any other
plan of the Company. The terms and conditions of each Other Stock-Based Award
granted under the Plan shall be specified by the Committee, in its sole
discretion, and shall be set forth in a written agreement between the Company
and the Participant in such form as the Committee shall approve from time to
time or as may be reasonably required in view of the terms and conditions
approved by the Committee from time to time. Each Other Stock-Based Award
granted under this Plan must satisfy the requirements of, or be exempt from, Section 409A
of the Code.

To
the extent the Committee deems necessary or appropriate to protect against loss
of deductibility pursuant to Section 162(m) of the Code, Other
Stock-Based Awards to any Participant may also be subject to certain conditions
with respect to attainment of one or more preestablished performance objectives
which shall relate to corporate, subsidiary, division, group or unit
performance in terms of growth in gross revenue, earnings per share or ratio of
earnings to equity or assets, net profits, stock price, market share, sales or
costs. In order to take into account unforeseen events or changes in
circumstances, such performance objectives may be adjusted; provided, to the
extent the Committee deems necessary or appropriate to protect against loss of
deductibility pursuant to Section 162(m) of the Code, such
performance objectives may not be adjusted by the Committee to increase an
Award but only to reduce or eliminate an Award.

Section 11.    Cancellation or Rescission of Awards.

(a)           Unless the agreement evidencing an
Award specifies otherwise, the Committee may cancel, rescind, suspend, withhold
or otherwise limit or restrict any unexpired, unpaid, or deferred Awards at any
time if the Participant is not in compliance with all applicable provisions of
the applicable Award agreement and the Plan, or if the Participant engages in
any “Detrimental Activity.”

For purposes of this Section 11,
“Detrimental Activity” shall include:

(i)            the rendering of services for any
organization or engaging directly or indirectly in any business which is or
becomes competitive with the Company, any Parent Company or any Subsidiary or
the willful or intentional breach of any agreement between the Company, a
Parent Company or a Subsidiary and the Participant regarding noncompetition
with the Company, such Parent Company or such Subsidiary (or the finding by a
court or other tribunal that any such agreement regarding noncompetition is
unenforceable);

(ii)           the willful or intentional breach of
any agreement or policy of the Company, any Parent Company or a Subsidiary
regarding the protection and disclosure of the confidential information of the
Company, any Parent Company or any Subsidiary;

 15
 

 

(iii)          the willful
or intentional breach of the provisions of any agreement between the Company,
any Parent Company or a Subsidiary and
the Participant regarding the protection, declaration or assignment of
inventions or the protection, declaration or assignment of copyrights;

(iv)          the willful or intentional breach of
the provisions of any agreement between the Company, a Parent Company or
a Subsidiary and the Participant
prohibiting the Participant from directly or indirectly (i) inducing or
attempting to induce any employee of the Company, a Parent Company or a
Subsidiary to quit employment with the
Company, a Parent Company or a Subsidiary; (ii) otherwise interfering with or disrupting the Company’s, a
Parent Company’s or a Subsidiary’s relationship
with its employees, customers or suppliers; (iii) identifying employees of
the Company, a Parent Company or a Subsidiary for any future employer of the Participant; (iv) soliciting,
enticing or hiring away any employee of the Company, a Parent Company or
a Subsidiary; or (v) hiring or
engaging any employee of the Company, a Parent Company or a Subsidiary or any former employee of the Company, a Parent
Company or a Subsidiary whose
employment with the Company, a Parent Company or a Subsidiary ceased less than one year before the date of
such hiring or engagement (or the finding by a court or other tribunal
that any such agreement regarding such matters is unenforceable); or

(v)           any activity that may result
in termination of the Participant’s employment for “Cause” as defined in the
Participant’s Award Agreement or an employment agreement between the Company, a Parent Company or a Subsidiary and the
Participant.

(b)           Upon exercise, payment or delivery
pursuant to an Award, the Participant shall certify in a manner acceptable to
the Committee that he or she is in compliance with the terms and conditions of
the Plan. In the event a Participant fails to comply with any applicable
provision of the applicable Award agreement and the Plan, or engages in
Detrimental Activity, prior to, or during the two years after, any exercise,
payment or delivery pursuant to an Award, such exercise, payment or delivery
may be rescinded within two years thereafter. In the event of any such
rescission, the Participant shall pay to the Company the amount of any gain
realized or payment received as a result of the rescinded exercise, payment or
delivery, in such manner and on such terms and conditions as may be required,
and the Company shall be entitled to set-off against the amount of any such
gain any amount owed to the Participant by the Company, any Parent Company or
any Subsidiary.

Section 12.    Loans.
The Committee may, in its sole discretion and to further the purpose of the
Plan, provide for loans to persons in connection with all or any part of an
Award under the Plan. Any loan made pursuant to this Section 12 shall be
evidenced by a loan agreement, promissory note or other instrument in such form
and which shall contain such terms and conditions (including without
limitation, provisions for interest, payment, schedules, collateral, forgiveness,
acceleration of such loans or parts thereof or acceleration in the event of
termination) as the Committee shall prescribe from time to time. Notwithstanding
the foregoing, each loan shall comply with all applicable laws, regulations and
rules of the Board of Governors of the Federal Reserve System and any
other governmental agency having jurisdiction.

 16
 

 

Section 13.    Securities
Law Requirements. No shares of Common Stock shall be
issued upon the exercise or payment of any Award unless and until:

(i)          The shares of Common Stock underlying
the Award have been registered under the Securities Act of 1933, as amended
(the “Act”), or the Company has determined that an exemption from the
registration requirements under the Act is available or the registration
requirements of the Act do not apply to such exercise or payment;

(ii)         The Company has determined that all
applicable listing requirements of any stock exchange or quotation system on
which the shares of Common Stock are listed have been satisfied; and

(iii)        The Company has determined that any
other applicable provision of state or Federal law, including without
limitation applicable state securities laws, has been satisfied.

Section 14.    Restrictions
on Transfer; Representations of Participant; Legends. Regardless
of whether the offering and sale of shares of Common Stock has been registered
under the Act or has been registered or qualified under the securities laws of
any state, the Company may impose restrictions upon the sale, pledge, or other
transfer of such shares, including the placement of appropriate legends on
stock certificates, if, in the judgment of the Company and its counsel, such
restrictions are necessary or desirable in order to achieve compliance with the
provisions of the Act, the securities laws of any state, or any other law. As a
condition to the Participant’s receipt of shares, the Company may require the
Participant to represent that such shares are being acquired for investment,
and not with a view to the sale or distribution thereof, except in compliance
with the Act, and to make such other representations as are deemed necessary or
appropriate by the Company and its counsel. Stock certificates evidencing
shares acquired pursuant to an unregistered transaction to which the Act applies
shall bear a restrictive legend substantially in the following form and such
other restrictive legends as are required or deemed advisable under the Plan or
the provisions of any applicable law:

“THE SHARES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1993,
AS AMENDED (THE “ACT”), OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.
THESE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR
SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF, AND MAY NOT BE SOLD,
MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION UNDER THE ACT AND QUALIFICATION UNDER ANY APPLICABLE STATE
SECURITIES LAWS, OR WITHOUT AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY AND
ITS COUNSEL THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.”

 17
 

 

The Company may,
but shall not be obligated to, register or qualify the sale of shares under the
Act or other applicable law. In the event of a public offering of Common Stock
or any other securities of the Company, it may be necessary for the Company to
restrict for a period of time (during or following the offering process) the
transfer of shares of Common Stock issued to a Participant under the Plan
(including any securities issued with respect to such shares in accordance with
Section 22 of the Plan). As a condition to the Participant’s receipt of
shares, the Committee may require the Participant to agree not to effect any
sale, transfer, pledge or other disposal of the Participant’s shares during
such time and agree to execute any “lock-up letter” or similar agreement
requested by the Company or its underwriters. Any determination by the Company
and its counsel in connection with any of the matters set forth in this Section 14
shall be conclusive and binding on all persons.

Section 15.    Single or Multiple Agreements.
Multiple forms of Awards or combinations thereof may be evidenced by a single
agreement or multiple agreements, as determined by the Committee.

Section 16.    Rights of a Stockholder.
The recipient of any Award under the Plan, unless otherwise expressly provided
by the Plan, shall have no rights as a stockholder with respect thereto unless
and until shares of Common Stock are issued to him.

Section 17.    No Right to Continue Employment or Service.
Nothing in the Plan or any instrument executed or Award granted pursuant
thereto shall confer upon any Participant any right to continue to serve the
Company, Parent Company or any Subsidiary in the capacity in effect at the time
the Award was granted or shall affect the right of the Company, Parent Company
or any Subsidiary to terminate (i) the employment of an employee with or
without notice and with or without cause, (ii) the service of a consultant
or adviser pursuant to the terms of such consultant’s or adviser’s agreement
with the Company, Parent Company or any Subsidiary, if any or (iii) the
service of a director pursuant to the Bylaws of the Company, Parent Company or
any Subsidiary and any applicable provisions of the corporate law of the state
in which the Company, Parent Company or any Subsidiary is incorporated, as the
case may be.

Section 18.    Withholding.  The
Company’s obligations hereunder in connection with any Award shall be subject
to applicable foreign, federal, state and local withholding tax requirements. Foreign,
federal, state and local withholding tax due under the terms of the Plan may be
paid in cash or shares of Common Stock (either through the surrender of
already-owned shares of Common Stock that the Participant has held for the
period required to avoid a charge to the Company’s reported earnings or the
withholding of shares of Common Stock otherwise issuable upon the exercise or
payment of such Award) having a Fair Market Value equal to the required
withholding and upon such other terms and conditions as the Committee shall
determine; provided, however, the Committee, in its sole discretion, may
require that such taxes be paid in cash; and provided, further, any election by
a Participant subject to Section 16(b) of the Exchange Act to pay his
or her withholding tax in shares of Common Stock shall be subject to and must
comply with Rule 16b-3 of the Exchange Act.

Section 19.    Indemnification. No
member of the Board or the Committee, nor any officer or employee of the
Company or Parent Company or Subsidiary acting on behalf of the Board or the
Committee, shall be personally liable for any action, determination or
interpretation

 18
 

 

taken or made in
good faith with respect to the Plan, and all members of the Board or the
Committee and each and any officer or employee of the Company or any Parent
Company or any Subsidiary acting on their behalf shall, to the extent permitted
by law, be fully indemnified and protected by the Company in respect of any
such action, determination or interpretation.

Section 20.    Non-Assignability. No
right or benefit hereunder shall in any manner be subject to the debts,
contracts, liabilities or torts of the person entitled to such right or benefit.
No Award under the Plan shall be assignable or transferable by the Participant
except by will, by the laws of descent and distribution and by such other means
as the Committee may approve from time to time, and all Awards shall be
exercisable, during the Participant’s lifetime, only by the Participant.

However,
the Participant, with the approval of the Committee, may transfer a
Non-Qualified Stock Option for no consideration to or for the benefit of the
Participant’s Immediate Family (including, without limitation, to a trust for
the benefit of the Participant’s Immediate Family or to a partnership or
limited liability company for one or more members of the Participant’s
Immediate Family), subject to such limits as the Committee may establish, and
the transferee shall remain subject to all the terms and conditions applicable
to the Non-Qualified Stock Option prior to such transfer. The foregoing right
to transfer a Non-Qualified Stock Option shall apply to the right to consent to
amendments to the Stock Option agreement and, in the discretion of the
Committee, shall also apply to the right to transfer ancillary rights
associated with the Non-Qualified Stock Option. The term “Immediate Family”
shall mean the Participant’s spouse, parents, children, stepchildren, adoptive
relationships, sisters, brothers and grandchildren (and, for this purpose,
shall also include the Participant).

At
the request of the Participant and subject to the approval of the Committee,
Common Stock purchased upon exercise of a Non-Qualified Stock Option may be
issued or transferred into the name of the Participant and his or her spouse
jointly with rights of survivorship.

Except
as set forth above or in a Stock Option agreement, any attempted assignment,
sale, transfer, pledge, mortgage, encumbrance, hypothecation, or other
disposition of an Award under the Plan contrary to the provisions hereof, or
the levy of any execution, attachment, or similar process upon an Award under
the Plan shall be null and void and without effect.

Section 21.    Nonuniform Determinations.
The Committee’s determinations under the Plan (including without limitation
determinations of the persons to receive Awards, the form, amount and timing of
such Awards, the terms and provisions of such Awards and the agreements
evidencing same, and the establishment of values and performance targets) need
not be uniform and may be made by it selectively among persons who receive, or
are eligible to receive, Awards under the Plan, whether or not such persons are
similarly situated.

Section 22.    Adjustments. In the
event of any change in the outstanding shares of Common Stock, without the
receipt of consideration by the Company, by reason of a stock dividend, stock
split, reverse stock split or distribution, recapitalization, merger,
reorganization, reclassification, consolidation, split-up, spin-off,
combination of shares, exchange of shares or other change in corporate
structure affecting the Common Stock and not involving the receipt of
consideration by the Company, the Committee shall make appropriate adjustments
in (a) the

 19
 

 

aggregate number of
shares of Common Stock (i) available for issuance under the Plan, (ii) for
which grants or Awards may be made to any Participant or to any group of
Participants (e.g., Outside  Directors), (iii) which
are available for issuance under Incentive Stock Options, (iv) covered by
outstanding unexercised Awards and grants denominated in shares or units of
Common Stock, and (v) underlying Stock Options granted pursuant to Section 6.7,
(b) the exercise or other applicable price related to outstanding Awards
or grants and (c) the appropriate Fair Market Value and other price
determinations relevant to outstanding Awards or grants and shall make such
other adjustments as may be appropriate under the circumstances; provided, that
the number of shares subject to any Award or grant always shall be a whole
number.

Section 23.    Termination and Amendment.
The Board may terminate or amend the Plan or any portion thereof at any time
and the Committee may amend the Plan to the extent provided in Section 3,
without approval of the stockholders of the Company, unless stockholder
approval is required by Rule 16b-3 of the Exchange Act, applicable
stock exchange or NASDAQ or other quotation system rules, applicable Code
provisions, or other applicable laws or regulations. No amendment, termination
or modification of the Plan shall affect any Award theretofore granted in any
material adverse way without the consent of the recipient.

Section 24.    Severability. If
any of the terms or provisions of this Plan, or Awards made under this Plan,
conflict with the requirements of Section 162(m) or Section 422
of the Code with respect to Awards subject to or governed by Section 162(m) or
Section 422 of the Code, then such terms or provisions shall be deemed
inoperative to the extent they so conflict with the requirements of Section 162(m) or
Section 422 of the Code. With respect to an Incentive Stock Option, if
this Plan does not contain any provision required to be included herein under Section 422
of the Code (as the same shall be amended from time to time), such provision
shall be deemed to be incorporated herein with the same force and effect as if
such provision had been set out herein. If any provision of the Plan is held to
be invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision or any other jurisdiction, and the Plan
shall be reformed, construed and enforced in such jurisdiction so as to best
give effect to the intent of the Company under the Plan.

Section 25.    Effect on Other Plans.
Participation in this Plan shall not affect an employee’s eligibility to
participate in any other benefit or incentive plan of the Company or any
Subsidiary and any Awards made pursuant to this Plan shall not be used in
determining the benefits provided under any other plan of the Company or any
Subsidiary unless specifically provided.

Section 26.    Effective Date of the Plan.
The Plan shall become effective on the Effective Date, subject to approval of
the stockholders of the Company within twelve months after the Effective Date.

Section 27.    Governing Law. This
Plan and all agreements executed in connection with the Plan shall be governed
by, and construed in accordance with, the laws of the State of Nevada, without
regard to its conflicts of law doctrine.

 20
 

 

Section 28.    Gender and Number.
Words denoting the masculine gender shall include the feminine gender, and
words denoting the feminine gender shall include the masculine gender. Words in
the plural shall include the singular, and the singular shall include the
plural.

Section 29.    Acceleration of Exercisability and
Vesting. The Committee shall have the power to accelerate
the time at which an Award may first be exercised or the time during which an
Award or any part thereof will vest in accordance with the Plan,
notwithstanding the provisions in the Award stating the time at which it may
first be exercised or the time during which it will vest.

Section 30.    Modification of Awards.
Within the limitations of the Plan and subject to Sections 22 and 35, the
Committee may modify outstanding Awards or accept the cancellation of
outstanding Awards for the granting of new Awards in substitution therefor. Notwithstanding
the preceding sentence, except for any adjustment described in Section 22
or 34, no modification of an Award shall, without the consent of the
Participant, alter or impair any rights or obligations under any Award
previously granted under the Plan in any material adverse way without the
affected Participant’s consent. For purposes of the preceding sentence, any
modification to any of the following terms or conditions of an outstanding
unexercised Award or grant shall be deemed to be a material modification: (i) the
number of shares of Common Stock covered by such Award or grant, (ii) the
exercise or other applicable price or Fair Market Value determination related
to such Award or grant, (iii) the period of time within which the Award or
grant vests and is exercisable and the terms and conditions of such vesting and
exercise, (iv) the type of Award or Stock Option, and (v) the
restrictions on transferability of the Award or grant and of any shares of
Common Stock issued in connection with such Award or grant (including the
Company’s right of repurchase, if any).

Section 31.    No Strict Construction.
No rule of strict construction shall be applied against the Company, the
Committee, or any other person in the interpretation of any of the terms of the
Plan, any agreement executed in connection with the Plan, any Award granted
under the Plan, or any rule, regulation or procedure established by the
Committee.

Section 32.    Successors. This
Plan is binding on and will inure to the benefit of any successor to the
Company, whether by way of merger, consolidation, purchase, or otherwise.

Section 33.    Plan Provisions Control.
The terms of the Plan govern all Awards granted under the Plan, and in no event
will the Committee have the power to grant any Award under the Plan which is
contrary to any of the provisions of the Plan. In the event any provision of
any Award granted under the Plan shall conflict with any term in the Plan, the
term in the Plan shall control.

Section 34.    Headings. The
headings used in the Plan are for convenience only, do not constitute a part of
the Plan, and shall not be deemed to limit, characterize, or affect in any way
any provisions of the Plan, and all provisions of the Plan shall be construed
as if no captions had been used in the Plan.

 21
 

 

Section 35.    Change in Control. In
the event of a Change in Control, each Participant shall have the rights set
forth in his individual Award agreement or such other rights as may be
determined by the incumbent Board, in its sole discretion, prior to the Change
in Control.

Section 36.    Compliance with Section 409A of the
Code. All Awards granted hereunder shall be granted in
compliance with, or shall be structured to be exempt from, the provisions of Section 409A
of the Code. Notwithstanding anything to the contrary in the Plan, any and all
Awards, payments, distributions, deferral elections, transactions and any other
actions or arrangements made or entered into pursuant to the Plan shall remain
subject at all times to compliance with the requirements of Section 409A
of the Code. If the Committee determines that an Award, payment, distribution,
deferral election, transaction or any other action or arrangement contemplated
by the provisions of the Plan would, if undertaken, cause a Participant to
become subject to Section 409A of the Code, such Award, payment,
distribution, deferral election, transaction or other action or arrangement
shall not be undertaken and the related provisions of the Plan shall be deemed
modified or, if necessary, rescinded in order to comply with the requirements
of Section 409A of the Code to the extent determined by the Committee. Notwithstanding
the foregoing, with respect to any Award granted hereunder that is payable upon
vesting and intended to be exempt from the requirements of Section 409A of
the Code, such payment shall be made paid or otherwise settled as soon as
administratively feasible after the Award becomes vested but in no event later
than two and a half months after the end of the year in which such vesting
occurs to satisfy the exemption from Section 409A of the Code for
short-term deferrals of compensation. To the extent required in order to avoid
the imposition of any interest and/or additional tax under Section 409A(a)(1)(B) of
the Code, any payments or deliveries due upon the Participant’s termination of
Continuous Service may be delayed for six months if a Participant is deemed to
be a “specified employee” as defined by Section 409A(a)(2)(i)(B) of
the Code.

 22

 

CERTIFICATE

I,
Leon Van Kraayenburg, Secretary of Nova Oil, Inc. (also known as Nova
Energy Holding, Inc.) hereby certify that the attached document is a
correct copy of the Nova Energy Holding, Inc. 2006 Equity Incentive Plan,
as effective April 24, 2006.

Dated this 24th day of
April, 2006.

	
  

  	
   

  	
  /s/ Leon Van Kraayenburg

  
	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Corporate Seal)

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