Document:

Exhibit 10.1

SERIES
B PREFERRED

SUBSCRIPTION
AGREEMENT

THIS SUBSCRIPTION AGREEMENT
(this “Agreement”), dated as of April 16, 2007, by and among Andover Medical,
Inc., a Delaware corporation (the “Company”), and the subscribers identified on
the signature page hereto (each a “Subscriber” and collectively “Subscribers”).

WHEREAS, the Company and the
Subscribers are executing and delivering this Agreement in reliance upon an
exemption from securities registration afforded by the provisions of Section
4(2), Section 4(6) and/or Regulation D (“Regulation D”) as promulgated by the
United States Securities and Exchange Commission (the “SEC”) under the
Securities Act of 1933, as amended (the “1933 Act,” collectively the “Offering
Exemption”); and

WHEREAS, the parties desire
that, upon the terms and subject to the conditions contained herein, the
Company shall issue and sell (the “Series B Offering”) to the Subscribers, at
$1,000 per unit (the “Unit Purchase Price”) on a “best efforts” no minimum
basis, up to $1,700,000 of Units (defined below).  Each “Unit” will consist of (i) one share of
Series B Convertible Preferred Stock of the Company (“Share,” or “Series B
Preferred Stock”), convertible at the holder’s option into 2,857 shares of
common stock, $.001 par value (“Common Stock”) at $0.35 per share (the “Conversion
Price”), (ii) one Class C Common Stock Purchase Warrant to purchase 2,857
shares of Common Stock exercisable for a period of five years from the
Effective Date (as defined below) at a price of $0.35 per share (“C Warrant”),
and (iii) one Class D Common Stock Purchase Warrant to purchase 2,857 shares of
Common Stock exercisable for a period of five years from the Effective Date at
a price of $0.35 per share (“D Warrant,” together with the C Warrant, collectively
referred to herein as the “C and D Warrants” or the “Warrants”).  The Units, Shares, Warrants and Common Stock
issuable upon conversion of the Shares and upon exercise of the Warrants, are
collectively referred to herein as the “Securities;”

NOW, THEREFORE, in consideration
of the mutual covenants and other agreements contained in this Agreement, the
Company and the Subscribers hereby agree as follows:

1.             Purchase and Sale of Shares and Warrants.  Subject to the satisfaction (or waiver) of
the terms and conditions of this Agreement, each Subscriber hereby irrevocably
agrees to purchase the full number of Units, consisting of Shares and Warrants
in the amounts designated on the signature page hereto at the Unit Purchase
Price and the Company shall sell such Shares and Warrants to such Subscriber.

2.1           Conversion of the Shares.  Each Share will convert into 2,857 shares of
Common Stock at the holder’s sole discretion on 5 days’ prior written notice,
at any time at the Conversion Price of $.35 per share, subject to adjustment
under certain circumstances. The Series B Preferred Stock, pursuant to the form
of Certificate of Designations attached hereto as Exhibit A, is also
convertible at the Conversion Price at the Company’s sole discretion any time
after the Effective Date of the registration statement of the Company on Form
SB-2, or another suitable form permitted by the SEC, registering the shares of
Common Stock underlying the Series B

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Preferred Stock and the C and D Warrants (the “Series
B Registration Statement”), provided that the Common Stock is trading above
500% of the Conversion Price per share for the 30 consecutive days ending not
more than 15 days prior to the date of notice of conversion.

2.2           Exercise Period and Price of the
Warrants.  Each C Warrant and D
Warrant, the forms of which are attached hereto as Exhibit B and Exhibit
C, respectively, will entitle the holder to purchase 2,857 shares of Common
Stock for a period of five (5) years from the Effective Date (the “Exercise
Period”), at an exercise price of $0.35 per share in each case, subject to
adjustment in certain circumstances to prevent dilution. The Warrants will be
subject to redemption by the Company at $.01 per Warrant on not less than 30
days’ prior written notice to the holders of the Warrants at any time after the
Effective Date provided (i) the average closing bid quotation or last sales
price of the Common Stock, as applicable, exceeds $1.75 per share for a period
of 20 consecutive trading days ending not more than 15 days prior to the date
on which the Company gives notice of redemption, and (ii) the Series B
Registration Statement allowing the resale of the shares underlying the
Warrants is in effect. The Warrants will be exercisable until 5:00 p.m.
(Eastern Standard Time) on the day immediately preceding the date fixed for
redemption.

3.1           Closing.  At Closing of the purchase and sale of the
Units (the “Closing”), the Subscribers shall purchase, severally and not
jointly, and the Company shall sell and issue, in the aggregate, a maximum of 1,700
shares of  Series B Preferred Stock, 1,700
C Warrants and 1,700 D Warrants.  Each
Subscriber shall purchase from the Company, and the Company shall issue and
sell to each Subscriber, a number of Units equal to such Subscriber’s
subscription amount (the “Subscription Amount”) divided by the Unit Purchase
Price.  The Closing shall occur upon
satisfaction of the conditions set forth in Section 3.2 (the “Closing Date”).

3.2                   Closing
Conditions.

(a)           At Closing the
Company shall deliver or cause to be delivered to each Subscriber:

(i)            this
Agreement duly executed by the Company;

(ii)           a
certificate evidencing a number of shares of Series B Preferred Stock equal to
such Subscriber’s Subscription Amount at Closing divided by the per Unit
Purchase Price, registered in the name of such Subscriber; and

(iii)          C
and D Warrants, registered in the name of such Subscriber, pursuant to which
such Subscriber shall have the right to acquire, with respect to each Warrant,
up to the number of shares of Common Stock equal to the product of (i) the
Subscriber’s Subscription Amount at Closing divided by the per Unit Purchase
price, and (ii) 2,857.

(b)           At Closing each
Subscriber shall deliver or cause to be delivered to the Company the following:

(i)            this
Agreement duly executed by such Subscriber;

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(ii)           such
Subscriber’s Subscription Amount by (a) check or wire transfer to the Company
pursuant to the wiring instructions provided to the Subscribers by the Company;

(iii)          an
executed and properly completed copy of the appropriate Confidential Purchaser
Questionnaire; and

(iv)          an
executed and properly completed copy of the form of Registration Rights
Agreement.

(c)           All representations
and warranties of the other party contained herein shall remain true and
correct as of the Closing.

(d)           As of Closing, there
shall have been no Material Adverse Effect (as defined below) with respect to
the Company since the date hereof.

(e)           From the date hereof
to Closing, trading in the Common Stock shall not have been suspended by the
SEC and, at any time prior to Closing, trading in securities generally as
reported by Bloomberg Financial Markets shall not have been suspended or
limited, or minimum prices shall not have been established on securities whose
trades are reported by such service, or on any trading market, nor shall a
banking moratorium have been declared either by the United States or New York
State authorities.

4.             Subscriber’s
Representations and Warranties.  Each
Subscriber hereby represents and warrants as of the date hereof and as of the
Closing, to and agrees with the Company as to such Subscriber and no other
Subscriber that:

(a)           Information
on Company.  The Subscriber has
either obtained or has access to (through the EDGAR website of the SEC or
otherwise) the Company’s Form 10-KSB for the year-ended December 31, 2006,
together with the Company’s Form SB-2 Registration Statement declared effective
on January 20, 2006, and all other Forms 10-KSB, 10-QSB, 8-K, and any
amendments thereto, including any exhibits filed with such Forms, and all other
filings previously made with the SEC (hereinafter referred to collectively as
the “Reports”).  In addition, the
Subscriber has received in writing from the Company such other information
concerning its operations, financial condition and other matters as the
Subscriber has requested in writing (such other information is collectively,
the “Other Written Information”), and considered all factors the Subscriber
deems material in deciding on the advisability of investing in the Securities.

(b)           Information
on Subscriber.  The Subscriber is,
and will be at the time of conversion of the Shares and exercise of the
Warrants, an “accredited investor” as defined in Section 2(15)  of the 1933 Act and Rule 501 promulgated
thereunder. Such Subscriber is not required to be registered as a broker-dealer
under Section 15 of the Securities Exchange Act of 1934, as amended (the “1934
Act”), is experienced in investments and business matters, has made investments
of a speculative nature, understands that an investment in the Securities
involves a high degree of risk, has purchased securities of United States
publicly-owned companies in private placements in

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the past and, with its representatives, has such knowledge and
experience in financial, tax and other business matters as to enable the
Subscriber to utilize the information made available by the Company to evaluate
the merits and risks of and to make an informed investment decision with
respect to the proposed purchase, which represents a speculative investment.  The Subscriber has the authority and is duly
and legally qualified to purchase and own the Securities.  The Subscriber is able to bear the risk of
such investment for an indefinite period and to afford a complete loss
thereof.  The information set forth on
the signature page hereto regarding the Subscriber is accurate.  The sale of the Securities to the Subscriber
as contemplated in this Subscription Agreement complies with or is exempt from
the applicable securities legislation of the jurisdiction of the residence of
the Subscriber.

(c)           Purchase
of Shares and Warrants.  At Closing,
the Subscriber will purchase the Shares and Warrants as principal for its own
account for investment only and not as a nominee or agent and not with a view
towards or for resale in connection with the distribution of the Securities.

(d)           Compliance
with Securities Act.  The Subscriber
understands and agrees that the Securities are “restricted securities” and have
not been registered under the 1933 Act or any applicable state securities laws,
by reason of their issuance in a transaction that does not require registration
under the 1933 Act (based in part on the accuracy of the representations and
warranties of Subscriber contained herein), and that such Securities must be
held indefinitely unless a subsequent disposition is registered under the 1933
Act or any applicable state securities laws or is exempt from such
registration.

(e)           Shares
Legend.  The Shares and the Warrants
shall bear the following or similar legend:

“THE SHARES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED.  THESE SHARES MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE
SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ANDOVER
MEDICAL, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.”

(f)            Warrants
Legend.  The Warrants shall bear the
following or
similar legend:

“THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THIS WARRANT AND THE SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE OF THIS

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WARRANT
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION
STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR ANY APPLICABLE STATE SECURITIES
LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ANDOVER MEDICAL, INC.
THAT SUCH REGISTRATION IS NOT REQUIRED.”

(g)           Communication
of Offer.  The offer to sell the
Securities was directly communicated to the Subscriber by the Company.  At no time was the Subscriber presented with
or solicited by any leaflet, newspaper or magazine article, radio or television
advertisement, or any other form of general advertising, or solicited or
invited to attend a promotional meeting otherwise than in connection and
concurrently with such communicated offer.

(h)           Organization;
Authority.  Such Subscriber is an
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with full right, corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the Series B Offering and otherwise to carry out its
obligations thereunder.

(i)            Authority;
Enforceability.  This Agreement and
other agreements delivered together with this Agreement or in connection
herewith have been duly authorized, executed and delivered by the Subscriber
and are valid and binding agreements enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights generally and to general principles of equity; and Subscriber
has full corporate power and authority necessary to enter into this Agreement
and such other agreements and to perform its obligations hereunder and under
all other agreements entered into by the Subscriber relating hereto.

(j)            Correctness
of Representations.  Each Subscriber
represents that the foregoing representations and warranties are true and
correct as of the date hereof and, unless a Subscriber otherwise notifies the
Company prior to the Closing, shall be true and correct as of Closing.  The foregoing representations and warranties
shall survive the Closing Date for a period of three years.

(k)           No
Tax or Legal Advice.  Such Subscriber
understands that nothing in this Agreement, any other agreement or any other
materials presented to such Subscriber in connection with the purchase and sale
of the Units constitutes legal, tax or investment advice and such information may
not be used, for the purpose of (i) avoiding tax-related penalties under the
Internal Revenue Code or (ii) promoting, marketing or recommending to another
party any tax-related matters addressed herein.  Such Subscriber has consulted such
legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of Units.

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Circular 230 disclosure:
pursuant to recently-enacted U.S. treasury department regulations, prospective
investors are advised that, unless otherwise expressly indicated, any federal
tax advice contained in this Agreement is not intended or written to be used,
and may not be used, for the purpose of (i) avoiding tax-related penalties
under the Internal Revenue Code or (ii) promoting, marketing or recommending to
another party any tax-related matters addressed herein.

5.             Company
Representations and Warranties.  The
Company represents and warrants to and agrees with each Subscriber that:

(a)           Due
Incorporation.  The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power to own
their properties and to carry on its business as now being conducted.  The Company is duly qualified as a foreign
corporation to do business and is in good standing in each jurisdiction where
the nature of the business conducted or property owned by it makes such
qualification necessary, where the failure to be so qualified or in good
standing, as the case may be, would not have or reasonably be expected to
result in (i) a material adverse effect on the legality, validity or
enforceability of this Agreement or any other document in connection with the Series
B Offering, (ii) a material adverse effect on the results of operations,
assets, business or financial condition of the Company, or (iii) a material
adverse effect on the Company’s ability to perform in any material respect on a
timely basis its obligations under this Agreement (any of (i), (ii) or (iii), a
“Material Adverse Effect”).

(b)           Outstanding
Stock.  All issued and outstanding
shares of capital stock of the Company has been duly authorized and validly
issued and are fully paid and non-assessable.

(c)           Authority;
Enforceability.  This Agreement and
the Warrants have been duly authorized, executed and delivered by the Company
and are valid and binding agreements enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights generally and to general principles of equity; and the
Company has full corporate power and authority necessary to enter into this
Agreement, the Warrants, the Escrow Agreement, a copy of which is attached
hereto as Exhibit D, and such other agreements and to perform its
obligations hereunder and under all other agreements entered into by the
Company relating hereto.

(d)           Consents.  No consent, approval, authorization or order
of any court, governmental agency or body or arbitrator having jurisdiction
over the Company, or any of its affiliates, the NASD, Inc., Nasdaq, the OTC
Bulletin Board nor the Company’s stockholders is required for execution of this
Agreement and all other agreements entered into by the Company relating
thereto, including, without limitation, the issuance and sale of the
Securities, and the performance of the Company’s obligations hereunder and
under all such other agreements.

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(e)           No
Violation or Conflict.  Assuming the
representations and warranties of the Subscribers in Section 4 are true and
correct, neither the execution and delivery of this Agreement nor the issuance
and sale of the Securities nor the performance of the Company’s obligations
under this Agreement and all other agreements entered into by the Company
relating thereto by the Company will:

(i)            violate,
conflict with, result in a material breach of, or constitute a default (or an
event which with the giving of notice or the lapse of time or both would be
reasonably likely to constitute a default) or gives to others any rights of
termination, amendment, acceleration or cancellation under (A) the certificate
of incorporation, charter or bylaws of the Company, (B) any decree, judgment,
order, law, treaty, rule, regulation or determination applicable to the Company
of any court, governmental agency or body, or arbitrator having jurisdiction
over the Company or any of its affiliates (including federal and state
securities laws and regulations) or over the properties or assets of the
Company or any of its affiliates, (C) the terms of any bond, debenture, note or
any other evidence of indebtedness, or any agreement, stock option or other
similar plan, indenture, lease, mortgage, deed of trust or other instrument to
which the Company or any of its affiliates is a party, by which the Company or
any of its affiliates is bound or affected, or to which any of the properties
or assets of the Company or any of its affiliates is subject, or (D) the terms
of any “lock-up” or similar provision of any underwriting or similar agreement
to which the Company, or any of its affiliates is a party except the violation,
conflict, breach, or default of which would not have a Material Adverse Effect
on the Company; or

(ii)           result
in the creation or imposition of any lien, charge or encumbrance upon the
securities or any of the assets of the Company or any of its affiliates.

(f)            The
Securities.  The Securities upon
issuance:

(i)            are,
or will be, free and clear of any security interests, liens, claims or other
encumbrances, subject to restrictions upon transfer under the 1933 Act and any
applicable state securities laws;

(ii)           have
been, or will be, duly and validly authorized and on the date of issuance will
be duly and validly issued, fully paid and nonassessable (and if registered
pursuant to the 1933 Act, and resold pursuant to an effective Series B
Registration Statement will be free trading and unrestricted, provided that
each Subscriber complies with the prospectus delivery requirements of the 1933
Act and any state securities laws);

(iii)          will
not have been issued or sold in violation of any preemptive or other similar
rights of the holders of any securities of the Company; and

(iv)          will
not subject the holders thereof to personal liability by reason of being such
holders.

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(g)           Litigation.  There is no pending or, to the best knowledge
of the Company, threatened action, suit, proceeding inquiry, notice of
violation, or investigation before any court, governmental or administrative
agency or regulatory body (federal, state, county, local or foreign), or
arbitrator having jurisdiction over the Company, or any of its affiliates that
would challenge the legality, validity or enforceability of this Agreement
and/or the Series B Offering, or otherwise affect the execution by the Company
or the performance by the Company of its obligations under this Agreement, and
all other agreements entered into by the Company relating hereto.  Except as disclosed in the Reports or Other
Written Information, there is no pending or, to the best knowledge of the Company,
threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the
Company, or any of its affiliates which litigation if adversely determined
could have a Material Adverse Effect on the Company.

(h)           Reporting
Company.  The Company is subject to
reporting obligations pursuant to Section 15(d) of the 1934 Act.  Pursuant to the provisions of the 1934 Act,
the Company has filed all reports and other materials required to be filed
thereunder with the SEC during the preceding twelve months.

(i)            No
Market Manipulation.  The Company has
not taken, and will not take, directly or indirectly, any action designed to,
or that might reasonably be expected to, cause or result in stabilization or
manipulation of the price of the common stock of the Company to facilitate the
sale or resale of the Securities or affect the price at which the Securities
may be issued or resold.

(j)            Information
Concerning Company.  The Reports
contain all material information relating to the Company and its operations and
financial condition from August 31, 2006 through their respective dates for
which information is required to be disclosed therein.  Since the date of the financial statements
included in the Reports, and except as modified in the Other Written
Information or in the Schedules hereto, there has been no Material Adverse
Effect in the Company’s business, financial condition or affairs not disclosed
in the Reports.  The Reports do not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances when made.  The
Company has not incurred any liabilities (contingent or otherwise) other than
(A) trade payables and accrued expenses incurred in the ordinary course of
business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or required to
be disclosed in filings made with the SEC, (ii) the Company has not altered its
method of accounting, (iii) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (iv) the Company does not have pending before the SEC any request for
confidential treatment of information.

(k)           SEC
Action; Stop Transfers.  To the
Company’s best knowledge there has not been, there is not pending or
contemplated, any investigation by the SEC involving the Company.  The SEC
has not issued any stop order or other order suspending the

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effectiveness of any registration statement filed by the Company or any
subsidiary under the 1933 Act or the 1934 Act. 
The Securities, when issued, will be restricted securities.  The Company will not issue any stop transfer
order or other order impeding the sale, resale or delivery of any of the
Securities, except as may be required by any applicable federal or state
securities laws.  Except as described in
this Agreement, the Company will not issue any stop transfer or other order
impeding the sale, resale or delivery of the Securities unless contemporaneous
notice of such instruction is given to the Subscriber.

(l)            Defaults.  The Company is not in violation of its
Certificate of Incorporation or ByLaws. 
The Company is (i) not in default under or in violation of any other
material agreement or instrument to which it is a party or by which it or any
of its properties are bound or affected, which default or violation would have
a Material Adverse Effect on the Company, (ii) not in default with respect to
any order of any court, arbitrator or governmental body or subject to or party
to any order of any court or governmental authority arising out of any action,
suit or proceeding under any statute or other law respecting antitrust,
monopoly, restraint of trade, unfair competition or similar matters, or (iii)
to its knowledge in violation of any statute, rule or regulation of any
governmental authority which violation would have a Material Adverse Effect on
the Company.

(m)          No
General Solicitation.  Neither the
Company, nor any of its affiliates, nor to the Company’s knowledge, any person
acting on its or their behalf, has since August 31, 2006, directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security, except as described in the Company’s selling stockholder
registration statement on Form SB-2 (No. 333-128526) declared effective by the
SEC on January 20, 2006, that would cause the offer of the Securities pursuant
to this Agreement to be integrated with prior offerings by the Company for
purposes of the 1933 Act or any applicable stockholder approval provisions. The
Company or any of its affiliates will not take any action or steps that would
cause the offer of the Securities to be integrated with other offerings if such
integration would eliminate the Series B Offering Exemption.  The Company will not conduct any offering
other than the transactions contemplated hereby that will be integrated with
the offer or issuance of the Securities, unless otherwise advised by Nasdaq or
the SEC.

(n)           Listing.  The Company’s common stock is listed for
trading on the Over-The-Counter Bulletin Board (“OTCBB”). Except for prior
notices, which as of the date hereof have been satisfied, and as provided for
in Section 9(b) below, the Company has not received any oral or written notice
that its common stock will be delisted from the OTCBB nor that its common stock
does not meet all requirements for the continuation of such quotation and the
Company satisfies the requirements for the continued listing of its common
stock on the OTCBB.

(o)           No
Undisclosed Liabilities.  The Company
has no liabilities or obligations which are material, individually or in the
aggregate, which are not disclosed in the Reports and/or Other Written
Information, other than those incurred in the ordinary course of the Company’s
businesses since the August 31, 2006 change in control of the Company and
which, individually or in the aggregate, would reasonably be expected to

 9
 

have a Material Adverse Effect on the Company’s financial condition,
other than as set forth in Schedule 5(o), or as described in the
Reports.

(p)           No
Undisclosed Events or Circumstances. 
There has been no event or circumstance that has occurred or exists with
respect to the Company or its businesses, properties, operations or financial
condition, that, under applicable law, rule or regulation, requires public
disclosure or announcement prior to the date hereof by the Company but which
has not been so publicly announced or disclosed in the Reports.

(q)           Capitalization.  The authorized and outstanding capital stock
of the Company as of the date of this Agreement and each Closing are set forth
on Schedule 5(q).  No person has
any right of first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated by this Series B
Offering except as set forth on Schedule 5(q), or as described in the
Reports.  Except as set forth on Schedule 5(q) concerning proposed
acquisitions and as described in the Reports and/or as a result of the purchase
and sale of the Securities and except for employee stock options under the
Company’s stock option plans and except for employee rights under the Company’s
employee stock purchase plan, there are no outstanding options, warrants,
script rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any subsidiary is or may become bound to issue
additional shares of Common Stock, or securities or rights convertible or
exchangeable into shares of Common Stock.  Except as required by
agreements filed as exhibits to the Reports, the issue and sale of the Units
will not obligate the Company to issue shares of Series B Preferred Stock or
other securities to any person (other than the Subscribers) and will not result
in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities.

(r)            Correctness
of Representations.  The Company
represents that the foregoing representations and warranties are true and
correct as of the date hereof in all material respects The foregoing
representations and warranties shall survive until the earlier of:  one year after the Closing Date, or the
Subscribers own less than an aggregate of 25% shares of Series B Preferred
Stock.

(s)           Title
to Assets.  Except as disclosed in the Reports, the Company has good
and marketable title in fee simple to all real property owned by it that is
material to the business of the Company, and good and marketable title in all
personal property owned by them that is material to the business of the
Company, in each case free and clear of all liens, charges, security interests,
encumbrances, rights of first refusal or other restrictions (collectively “Liens”)
except for Liens as do not materially affect the value of such property and do
not materially interfere with the use made and proposed to be made of such
property by the Company and Liens for the payment of federal, state or other
taxes, the payment of which is neither delinquent nor subject to
penalties.  Any real property and facilities held under lease by the
Company are held by them under valid, subsisting and enforceable leases with
which the Company is in material compliance.

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(t)            Disclosure. 
The Company confirms that, neither the Company nor any other person acting on
its behalf has provided any of the Subscribers or their agents or counsel with
any information that constitutes or might constitute material, non-public
information.   The Company understands and confirms that the
Subscribers will rely on the foregoing representations and covenants in
effecting transactions in securities of the Company. All disclosure provided to
the Subscribers regarding the Company, its business and the transactions
contemplated hereby, including the disclosure schedules to this Agreement (the “Disclosure
Schedules”), furnished by or on behalf of the Company are true and correct and
do not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.

(u)           Internal
Accounting Controls.  The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
The Company has established disclosure controls and procedures (as defined in
the 1934 Act Rules 13a-14 and 15d-14) for the Company and designed such
disclosure controls and procedures to ensure that material information relating
to the Company (but not any proposed acquisition), and each subsidiary, is made
known to the certifying officers by others within those entities, particularly
during the period in which the Company’s Form 10-KSB or 10-QSB, as the case may
be, is being prepared.

(v)           Registration
Rights.  Except as set forth in the
Reports or on Schedule 5(v), no person has any right to cause the
Company to effect the registration under the 1933 Act of any securities of the
Company.

6.             Regulation
D Offering.  This Series B Offering
is being made pursuant to the exemption from the registration provisions of the
1933 Act afforded by Section 4(2) or Section 4(6) of the 1933 Act and/or Rule
506 of Regulation D promulgated thereunder. 
On the Closing Date, the Company will provide an opinion reasonably
acceptable to Subscriber from the Company’s legal counsel opining on the
availability of an exemption from registration under the 1933 Act as it relates
to the offer and issuance of the Securities, exclusive of the issue of
integration with prior offerings of the Company.  The Company will provide, at the Company’s
expense, such other legal opinions in the future as are reasonably necessary
for the conversion of the Series B Preferred Stock, exercise of the Warrants,
and resale of the shares of Common Stock underlying such securities.

7.             Reissuance
of Securities.  The Company agrees to
reissue certificates representing the Shares and the Warrant Shares without the
legends set forth in Sections 4(e) and 4(f) above at such time as (a) the
holder thereof is permitted to and disposes of the Securities pursuant to Rule
144(d) and/or Rule 144(k) under the 1933 Act in the opinion of counsel
reasonably satisfactory to the Company, or (b) upon resale subject to an
effective

 11

registration
statement after the shares of Common Stock underlying the Series B Preferred
Stock and the Warrants are registered under the 1933 Act.  The Company agrees to cooperate with each
Subscriber in connection with all resales pursuant to Rule 144(d) and Rule
144(k) and provide legal opinions at the Company’s expense necessary to allow
such resales provided the Company and its counsel receive reasonably requested
written representations from each Subscriber and selling broker, if any.  Provided each Subscriber provides required
certifications and representation letters, if any, if the Company fails to
remove any legend as required by this Section 7 (a “Legend Removal Failure”),
then beginning on the tenth (10th) day following the date that each Subscriber has
requested the removal of the legend and delivered all items reasonably required
by the Company to be delivered by each Subscriber, that the Company continues
to fail to remove such legend, the Company shall pay to each Subscriber or
assignee holding shares of Common Stock underlying the Shares and Warrants,
subject to a Legend Removal Failure, as liquidated damages and not a penalty an
amount equal to ten percent (10%) of the purchase price of the Shares and
shares of Common Stock underlying the Shares subject to a Legend Removal
Failure for each 15-day period or part thereof that such failure
continues.  If during any twelve (12)
month period, the Company fails to remove any legend as required by this
Section 7 for an aggregate of thirty (30) days, each Subscriber or assignee
holding Securities subject to a Legend Removal Failure may, at its option,
require the Company to purchase all or any portion of the Shares or shares of
Common Stock underlying the Shares and Warrants subject to a Legend Removal
Failure held by each Subscriber or assignee at a price per share equal to 110%
of the purchase price of such Shares.

8.             NASD
Member Firm Compensation.  The
Company on the one hand, and each Subscriber on the other hand, agree to
indemnify the other against and hold the other harmless from any and all
liabilities to any persons claiming brokerage commissions on account of
services purported to have been rendered on behalf of the indemnifying party in
connection with this Agreement or the transactions contemplated hereby and
arising out of such party’s actions.

9.             Covenants
of the Company.  The Company
covenants and agrees with the Subscribers that from the Closing Date until the
earlier of (i) the Subscribers own less than 20% of the aggregate Series B
Preferred Stock, or (ii) two years from the Closing as follows:

(a)           Stop Orders.  The Company will advise the Subscribers,
promptly after it receives notice of issuance by the SEC, any state securities
commission or any other regulatory authority of any stop order or of any order
preventing or suspending any offering of any securities of the Company, or of
the suspension of the qualification of the Common Stock of the Company for
offering or sale in any jurisdiction, or the initiation of any proceeding for
any such purpose.

(b)           Listing.  If applicable, the Company shall use its
reasonable best efforts to promptly secure the listing of the shares of Common
Stock to be purchased hereunder and the Warrant Shares upon each national
securities exchange, or automated quotation system, if any, upon which shares
of common stock are then listed (subject to official 

 12
 

notice of issuance) and shall use its reasonable best efforts to
maintain such listing so long as any Securities are outstanding.  The Company shall use its reasonable best
efforts to maintain the listing of its Common Stock on the American Stock
Exchange, Nasdaq Capital Market, Nasdaq Global Market, OTC Bulletin Board, or
New York Stock Exchange (whichever of the foregoing is at the time the
principal trading exchange or market for the Common Stock (the “Principal
Market”)), and will comply in all material respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the
Principal Market, as applicable.  The
Company will provide the Subscribers copies of all notices it receives
notifying the Company of the threatened and actual delisting of the Common
Stock from any Principal Market.

(c)           Market Regulations.  If required, the Company shall notify the
SEC, the Principal Market and applicable state authorities, in accordance with
their requirements, if any, of the transactions contemplated by this Agreement,
and shall take all other necessary action and proceedings as may be required
and permitted by applicable law, rule and regulation, for the legal and valid
issuance of the Securities to the Subscribers and promptly provide copies
thereof to Subscriber.

(d)           Reporting Requirements.  The Company will (i) cause its Common Stock
to become registered under Section 12(b) or 12(g) of the 1934 Act following the
completion of the Series B Offering, (ii) comply in all respects with its
reporting and filing obligations under the 1934 Act, (iii) comply with all
reporting requirements that are applicable to an issuer with a class of shares
registered pursuant to Section 15(d) of the 1934 Act, as applicable, and (iv)
comply with all requirements related to any registration statement filed
pursuant to this Agreement.  The Company
will use its best efforts not to take any action or file any document (whether
or not permitted by the 1933 Act or the 1934 Act or the rules thereunder) to
terminate or suspend such registration or to terminate or suspend its reporting
and filing obligations under said acts. 
Until the earlier of the resale of the Shares, and shares of Common
Stock underlying the Shares and the Warrants by each Subscriber or at least two
(2) years after the Shares have been converted and the Warrants have been
exercised, the Company will use reasonable efforts to continue the listing or quotation
of the Common Stock on the Principal Market and will comply in all respects
with the Company’s reporting, filing and other obligations under the bylaws or
rules of the Principal Market.

(e)           Use of Proceeds.  The Purchase Price will be used by the Company
for working capital and acquisitions and may not and will not be used for
accrued and unpaid officer and director salaries, payment of financing related
debt, redemption of redeemable notes or equity instruments of the Company.

(f)            Reservation of Common Stock.  The Company undertakes to reserve from its
authorized but unissued common stock, at all times that Shares and Warrants
remain outstanding, a number of shares of Common Stock equal to the amount of
Common Stock issuable upon conversion of the Shares and exercise of the
Warrants.

(g)           Taxes.  The Company will promptly pay and discharge,
or cause to be paid and discharged, when due and payable, all lawful taxes,
assessments and 

 13
 

governmental charges or levies imposed upon the income, profits, property
or business of the Company; provided, however, that any such tax, assessment,
charge or levy need not be paid if the validity thereof shall currently be
contested in good faith by appropriate proceedings and if the Company shall
have set aside on its books adequate reserves with respect thereto, and
provided, further, that the Company will pay all such taxes, assessments,
charges or levies forthwith upon the commencement of proceedings to foreclose
any lien which may have attached as security therefore.

(h)           Insurance.  The Company is insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company is
engaged.  The Company has no reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business without a significant increase in cost.  The Company will keep its assets which are of
an insurable character insured by financially sound and reputable insurers
against loss or damage by fire, explosion and other risks customarily insured
against by companies in the Company’s line of business, in amounts sufficient
to prevent the Company from becoming a co-insurer and not in any event less
than 100% of the insurable value of the property insured; and the Company will
maintain, with financially sound and reputable insurers, insurance against
other hazards and risks and liability to persons and property to the extent and
in the manner customary for companies in similar businesses similarly situated
and to the extent available on commercially reasonable terms.

(i)            Books and Records.  The Company will keep true records and books
of account in which full, true and correct entries will be made of all dealings
or transactions in relation to its business and affairs in accordance with
generally accepted accounting principles applied on a consistent basis.

(j)            Governmental Authorities.  The Company shall duly observe and conform in
all material respects to all valid requirements of governmental authorities
relating to the conduct of its business or to its properties or assets.

(k)           Intellectual Property.  To the knowledge of the Company, the Company
has, or has rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, copyrights, licenses
necessary to conduct business and other similar rights that are necessary or
material for use in connection with its business as described in the
Reports and which the failure to so have could have or reasonably be expected
to result in a Material Adverse Effect (collectively, the “Intellectual
Property Rights”).  In the last three years, the Company has not
received a written notice that the Intellectual Property Rights used by the
Company or any subsidiary violates or infringes the rights of any person. 
The Company shall maintain in full force and effect its corporate existence,
rights and franchises and all licenses necessary to conduct business and other
rights to use intellectual property owned or possessed by it and reasonably
deemed to be necessary to the conduct of its business.

 14
 

(l)            Properties.  The Company will keep its properties in good
repair, working order and condition, reasonable wear and tear excepted, and
from time to time make all needful and proper repairs, renewals, replacements,
additions and improvements thereto; and the Company will at all times comply
with each provision of all leases to which it is a party or under which it
occupies property if the breach of such material provision could reasonably be
expected to have a Material Adverse Effect.

(m)          Confidentiality.  The Company agrees that it will not disclose
publicly or privately the identity of the Subscribers unless expressly agreed
to in writing by a Subscriber or only to the extent required by law; provided,
however, the Subscribers consent to being named in the Form 8-K filed by the
Company in connection with the sale of the Securities.

(n)           Press Release; Form 8-K.  The Company shall issue a press release
through a national news service on the morning immediately following the
Subscription Acceptance Date (defined below). 
Such press release shall be issued in compliance with Rule 135(c) under
the 1933 Act.  Such press release, along
with all other material information, shall be filed on a timely basis with the
SEC on a current report on Form 8-K.

10.          Covenants of the
Company and Subscriber Regarding Indemnification.

(a)           The Company agrees to indemnify, hold
harmless, reimburse and defend the Subscribers, the Subscribers’ officers,
directors, agents, affiliates, control persons, and principal shareholders,
against any claim, cost, expense, liability, obligation, loss or damage
(including reasonable legal fees) of any nature, incurred by or imposed upon
the Subscriber or any such person which results, arises out of or is based upon
(i) any material misrepresentation by Company or breach of any warranty by
Company in this Agreement or in any Exhibits or Schedules attached hereto, or
other agreement delivered pursuant hereto; or (ii) after any applicable notice
and/or cure periods, any breach or default in performance by the Company of any
covenant or undertaking to be performed by the Company hereunder, or any other
agreement entered into by the Company and Subscriber relating hereto.

(b)           Each Subscriber agrees to indemnify, hold
harmless, reimburse and defend the Company and each of the Company’s officers,
directors, agents, affiliates, control persons against any claim, cost,
expense, liability, obligation, loss or damage (including reasonable legal
fees) of any nature, incurred by or imposed upon the Company or any such person
which results, arises out of or is based upon (i) any material
misrepresentation by such Subscriber in this Agreement or in any Exhibits or
Schedules attached hereto, or other agreement delivered pursuant hereto; or
(ii) after any applicable notice and/or cure periods, any breach or default in
performance by such Subscriber of any covenant or undertaking to be performed
by such Subscriber hereunder, or any other agreement entered into by the
Company and Subscribes relating hereto.

(c)           The procedures set forth in Section 11.6
shall apply to the indemnifications set forth in Sections 10(a) and 10(b)
above.

 15
 

11.1         Registration Rights.  The
Company shall file the Series B Registration Statement registering the shares
of Common Stock underlying the Series B Preferred Stock, the C and D Warrants
(collectively, “Registrable Securities”), within 30 days following the Closing
Date of the Series B Offering (the “Scheduled Filing Date”), and use its best
efforts to have the Series B Registration Statement declared effective (the “Effective
Date”) by the SEC within six (6) months of the effectiveness of the
registration statement of the Company on Form SB-2, or another suitable form
permitted by the SEC, registering the shares of Common Stock underlying the
Series A Preferred Stock and the A and B Warrants included in the Series A
offering (the “Series A Registration Statement”).

Notwithstanding the foregoing, the obligations of
the Company under this Section 11.1 shall terminate as to any Subscriber at
such time as (i) all Registrable Securities held by such Subscriber can be sold
within a single three month period pursuant to Rule 144 under the 1933 Act (or
any successor provision of such 1933 Act, and (ii) the number of shares of
Common stock held by such Subscriber and issuable upon conversion of the Shares
and exercise of the Warrants held by such Subscriber is less than one percent
of the outstanding capital stock of the Company on an as converted basis
(adjusted for stock dividends, stock splits, reverse stock splits, combinations
and the like occurring after the date hereof).

With a view of making available to the Subscriber
the benefits of Rule 144 promulgated under the 1933 Act or any other similar
rule or regulation of the SEC that may at any time permit the Subscriber to
sell securities of the Company to the public without registration during the
registration period, the Company for a period of two years which period shall
commence on the date hereof, agrees to:

(a)           make and keep public
information available, as those terms are understood and defined in Rule 144.

(b)           file with the SEC in a
timely manner all reports and other documents required of the Company under the
1933 Act and the 1934 Act so long as the Company remains subject to such
requirements and the filing of such reports and other documents as required for
the applicable provisions of Rule 144; 
and

(c)           furnish to each
Subscriber so long as such Subscriber owns Registrable Securities, promptly
upon request, (i) a written statement by the Company that it has complied with
the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a
copy of the most recent annual or quarterly report of the Company and such
other reports and documents so filed by the Company, (iii) such other
information as may be reasonably requested to permit the Subscribers to sell
such securities pursuant to Rule 144 without registration.

11.2         Registration
Procedures. With respect to the registration of the Securities as required
by Section 11.1, the Company will, as expeditiously as possible:

(a)           subject to the
timelines provided in this Agreement, prepare and file with the SEC the
Registration Statement required by Section 11, with respect to such securities
and use its reasonable best efforts to cause such Registration Statement to
become and 

 16
 

remain
effective for the period of the distribution contemplated hereby, and promptly
provide to the holders of Registrable Securities (the “Sellers”) copies of all
filings;

(b)           prepare and file with
the SEC such amendments and supplements to the Registration Statement and the
prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective for a period of two (2) years, or the
Subscribers no longer own the Securities, whichever is earlier, and comply with
the provisions of the 1933 Act with respect to the disposition of all of the
Registrable Securities covered by the Registration Statement in accordance with
the Seller’s intended method of disposition set forth in the Registration
Statement for such period;

(c)           furnish to the Seller,
at the Company’s expense, such number of copies of the Registration Statement
and the prospectus included therein (including each preliminary prospectus) as
such persons reasonably may request in order to facilitate the public sale or
their disposition of the securities covered by such Registration Statement;

(d)           use its best efforts to
register or qualify the Seller’s Registrable Securities covered by such
Registration Statement under the securities or “blue sky” laws of such
jurisdictions as the Seller shall request, provided, however, that the Company
shall not for any such purpose be required to qualify generally to transact
business as a foreign corporation in any jurisdiction where it is not so
qualified or to consent to general service of process in any such jurisdiction;

(e)           if applicable, list the
Registrable Securities covered by such registration statement with any
securities exchange on which the Common Stock of the Company is then listed;
and

(f)            immediately notify the
Seller when a prospectus relating thereto is required to be delivered under the
1933 Act, of the happening of any event of which the Company has knowledge as a
result of which the prospectus contained in such Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.

11.3.        Provision
of Documents.  In connection with the registration described
in this Section 11, the Seller will furnish to the Company in writing such
information and representation letters with respect to itself and the proposed
distribution by it as reasonably shall be necessary in order to assure
compliance with federal and applicable state securities laws.

11.4.        Non-Registration
Events.  In the event the Series B Registration
Statement is not filed on or before the Scheduled Filing Date or declared
effective within six (6) months from the date the Series A Registration
Statement is declared effective, the number of shares of Common Stock issuable
upon exercise of the C and D Warrants shall automatically increase to twice the
original amount.  The Company agrees to
keep the Series B Registration Statement effective until expiration of the C
and D Warrants.

11.5.        Expenses.  All
expenses incurred by the Company in complying with Section 11, including,
without limitation, all registration and filing fees, printing expenses, fees
and 

 17
 

disbursements of counsel and independent public accountants for the
Company, fees and expenses (including reasonable counsel fees) incurred in
connection with complying with state securities or “blue sky” laws, fees of the
NASD, transfer taxes, fees of transfer agents and registrars, and costs of
insurance are called “Registration Expenses”. 
Notwithstanding anything to the contrary herein, the Seller shall pay
the fees of its own additional counsel, if any. 
The Company will pay all Registration Expenses in connection with the
Registration Statement.

11.6.        Indemnification
and Contribution.

(a)           In connection with the
registration of Registrable Securities, the Company will, to the extent
permitted by law, indemnify and hold harmless the Seller, each officer of the
Seller, each director of the Seller, each underwriter of such Registrable
Securities thereunder and each other person, if any, who controls such Seller
or underwriter within the meaning of the 1933 Act, against any losses, claims,
damages or liabilities, joint or several, to which the Seller, or such
underwriter or controlling person may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement under which such Registrable Securities were registered under the
1933 Act pursuant to Section 11, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances when made, and will, subject to
the provisions of Section 11.6(c), reimburse the Seller, each such underwriter
and each such controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company shall
not be liable to the Seller to the extent that any such damages arise out of or
are based upon an untrue statement or omission made in any preliminary
prospectus if (i) the Seller failed to send or deliver a copy of the final
prospectus delivered by the Company to the Seller with or prior to the delivery
of written confirmation of the sale by the Seller to the person asserting the
claim from which such damages arise, (ii) the final prospectus would have
corrected such untrue statement or alleged untrue statement or such omission or
alleged omission, or (iii) to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with
information furnished by any such Seller, or any such controlling person in
writing specifically for use in such Registration Statement or prospectus, and
provided, however, that the liability of the Company hereunder shall be limited
to the gross proceeds received by the Company from the sale of Securities
covered by such Registration Statement.

(b)           Upon registration of
the Registrable Securities, the Seller will, to the extent permitted by law,
indemnify and hold harmless the Company, and each person, if any, who controls
the Company within the meaning of the 1933 Act, each officer of the Company who
signs the Registration Statement, each director of the Company, each
underwriter and each person who controls any underwriter within the meaning of
the 1933 Act, against all losses, claims, damages or liabilities, joint or
several, to which the 

 18
 

Company
or such officer, director, underwriter or controlling person may become subject
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the registration statement under which such Registrable Securities were
registered under the 1933 Act pursuant to Section 11, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company and each such officer, director, underwriter and controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
provided, however, that the Seller will be liable hereunder in any such case if
and only to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
information pertaining to such Seller, as such, furnished in writing to the
Company by such Seller specifically for use in such registration statement or
prospectus, and provided, further, however, that the liability of the Seller
hereunder shall be limited to the gross proceeds received by the Seller from
the sale of Registrable Securities covered by such Registration Statement.

(c)           Promptly after receipt
by an indemnified party hereunder of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party hereunder, notify the indemnifying party in
writing thereof, but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to such indemnified party other
than under this Section 11.6(c) and shall only relieve it from any liability
which it may have to such indemnified party under this Section 11.6(c), except
and only if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent
it shall wish, to assume and undertake the defense thereof with counsel
reasonably satisfactory to such indemnified party, and, after notice from the
indemnifying party to such indemnified party of its election so to assume and
undertake the defense thereof, the indemnifying party shall not be liable to
such indemnified party under this Section 11.6(c) for any legal expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, provided, however, that, if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be reasonable defenses available
to it which are different from or additional to those available to the
indemnifying party or if the interests of the indemnified party reasonably may
be deemed to conflict with the interests of the indemnifying party, the
indemnified parties, as a group, shall have the right to select one separate
counsel and to assume such legal defenses and otherwise to participate in the
defense of such action, with the reasonable expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by
the indemnifying party as incurred.

 19
 

(d)           In order to provide for
just and equitable contribution in the event of joint liability under the 1933 Act
in any case in which either (i) the Seller, or any controlling person of the
Seller, makes a claim for indemnification pursuant to this Section 11.6 but it
is judicially determined (by the entry of a final judgment or decree by a court
of competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 11.6 provides for
indemnification in such case, or (ii) contribution under the 1933 Act may be
required on the part of the Seller or controlling person of the Seller in
circumstances for which indemnification is not provided under this Section 11.6;
then, and in each such case, the Company and the Seller will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that the Seller is
responsible only for the portion represented by the percentage that the public
offering price of its securities offered by the registration statement bears to
the public offering price of all securities offered by such registration
statement provided, however, that, in any such case, (y) the Seller will not be
required to contribute any amount in excess of the public offering price of all
such securities offered by it pursuant to such registration statement; and (z)
no person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 10(f) of the 1933 Act) will be entitled to contribution from any
person or entity who was not guilty of such fraudulent misrepresentation.  Notwithstanding anything to the contrary in
this Section, the liability of the Company hereunder shall be limited to the gross
proceeds received by the Company from the sale of Securities covered by such
registration statement.

11.7         Delivery
of Unlegended Shares.

(a)           Within five (5)
business days (such fifth business day, the “Delivery Date”) after the business
day on which the Company has received (i) a notice that Registrable Securities
have been sold, (ii) a representation that the prospectus delivery
requirements, if applicable, have been satisfied, and (iii) the original share
certificates representing the shares of Common Stock that have been sold, the
Company at its expense, (i) shall deliver, and shall cause legal counsel
selected by the Company to deliver, to its transfer agent (with copies to
Subscriber) an appropriate instruction and opinion of such counsel, for the
delivery of unlegended shares of Common Stock issuable pursuant to any
effective and current registration statement described in Section 11 of this
Agreement (the “Unlegended Shares”); and (ii) cause the transmission of the
certificates representing the Unlegended Shares together with a legended
certificate representing the balance of the unsold shares of Common Stock, if
any, to the Subscriber at the address specified in the notice of sale, via
express courier, by electronic transfer or otherwise on or before the Delivery
Date.

(b)           In lieu of delivering
physical certificates representing the Unlegended Shares, if the Company’s
transfer agent is participating in the Depository Trust Company (“DTC”) Fast
Automated Securities Transfer program, upon request of a Subscriber and its
compliance with the provisions contained in this paragraph, so long as the
certificates therefore do not bear a legend and the Subscriber is not obligated
to return such certificate for the placement of a legend thereon, the Company
shall cause its transfer 

 20
 

agent
to electronically transmit the Unlegended Shares by crediting the account of
Subscriber’s prime broker with DTC through its Deposit Withdrawal Agent
Commission system.

12.          Miscellaneous.

(a)           Notices.  All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) personally served,
(ii) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile,
addressed as set forth below or to such other address as such party shall have
specified most recently by written notice. 
Any notice or other communication required or permitted to be given
hereunder shall be deemed effective (a) upon hand delivery or delivery by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur.  The addresses for such communications shall
be: (i) if to the Company, to: Andover Medical, Inc., 510 Turnpike Street,
Suite 204, N. Andover, MA 01845, Attn: Edwin A. Reilly, President, telecopier:
(978) 557-1004, and (ii) if to the Subscribers, to: the address and facsimile
number indicated on the signature page hereto, with a copy by facsimile only
to: Elliot H. Lutzker, Esq., Phillips Nizer LLP, 666 Fifth Avenue, New York, NY
10103,  telecopier: (212) 262-5152.

(b)           Entire Agreement; Assignment.  This Agreement and other documents delivered
in connection herewith represent the entire agreement between the parties
hereto with respect to the subject matter hereof and may be amended only by a
writing executed by both parties. 
Neither the Company nor the Subscribers have relied on any
representations not contained or referred to in this Agreement and the
documents delivered herewith.  No right
or obligation of either party shall be assigned by that party without prior
notice to and the written consent of the other party.

(c)           Execution.  This Agreement may be executed by facsimile
transmission, and in counterparts, each of which will be deemed an original.

(d)           Law Governing this Agreement.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to principles of conflicts of laws.  Any
action brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts of New
York or in the federal courts located in the state of New York.  Both parties and the individuals executing
this Agreement and other agreements on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury.  In the event that any provision of this
Agreement or any other agreement delivered in 

 21
 

connection herewith is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law.  Any
such provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any agreement.

(e)           Specific Enforcement, Consent to
Jurisdiction.  The Company and
Subscriber acknowledge and agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent or cure breaches
of the provisions of this Agreement and to enforce specifically the terms and
provisions hereof or thereof, this being in addition to any other remedy to
which any of them may be entitled by law or equity.  Subject to Section 12(d) hereof, each of the
Company and Subscriber hereby waives, and agrees not to assert in any such
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is brought in
an inconvenient forum or that the venue of the suit, action or proceeding is
improper.  Nothing in this Section shall
affect or limit any right to serve process in any other manner permitted by
law.

 22

SIGNATURE
PAGE TO SUBSCRIPTION AGREEMENT (A)

Please acknowledge your
acceptance of the foregoing Subscription Agreement by signing and returning a
copy to the undersigned whereupon it shall become a binding agreement between
us.

	
   

  	
  ANDOVER MEDICAL, INC.

  
	
   

  	
  A Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Dated: April       ,
  2007

  

 

	
  SUBSCRIBER

  	
   

  	
  PURCHASE PRICE

  	
   

  	
  SHARES

  	
   

  	
  C WARRANTS

  	
   

  	
  D WARRANTS

  	
   

  
	
  

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Signature)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name and Address

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
											

 

LIST OF EXHIBITS AND SCHEDULES

	
  Exhibit A

  	
   

  	
  Form of Certificate of Designations of Series B
  Preferred Stock

  
	
   

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  Form of C Warrant

  
	
   

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  Form of D Warrant

  
	
   

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  Form of Legal Opinion

  
	
   

  	
   

  	
   

  
	
  Schedule 5(n)

  	
   

  	
  Listing Notices

  
	
   

  	
   

  	
   

  
	
  Schedule 5(o)

  	
   

  	
  Undisclosed Liabilities

  
	
   

  	
   

  	
   

  
	
  Schedule 5(q)

  	
   

  	
  Capitalization

  
	
   

  	
   

  	
   

  
	
  Schedule 5(v)

  	
   

  	
  Registration Rights

  
	
   

  	
   

  	
   

  
	
  Schedule 13(a)

  	
   

  	
  Other Excepted IssuancesExhibit
4.2

NOVA
BIOSOURCE FUELS, INC. AND THE GUARANTORS NAMED HEREIN

Senior
Debt Securities 

Indenture

Dated
as of            ,     ,

                             , Trustee

CROSS-REFERENCE
TABLE

This
Cross-Reference Table is not a part of the Indenture.

	
  TIA Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  
	
  310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  7.08; 7.10; 11.02

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  2.05

  
	
  (b)

  	
   

  	
  11.03

  
	
  (c)

  	
   

  	
  11.03

  
	
  313(a)

  	
   

  	
  7.06

  
	
  (b)(1)

  	
   

  	
  N.A.

  
	
  (b)(2)

  	
   

  	
  7.06

  
	
  (c)

  	
   

  	
  11.02

  
	
  (d)

  	
   

  	
  7.06

  
	
  314(a)

  	
   

  	
  4.02; 11.02

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  11.04

  
	
  (c)(2)

  	
   

  	
  11.04

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  11.05

  
	
  315(a)

  	
   

  	
  7.01(b)

  
	
  (b)

  	
   

  	
  7.05; 11.02

  
	
  (c)

  	
   

  	
  7.01(a)

  
	
  (d)

  	
   

  	
  7.01(c)

  
	
  (e)

  	
   

  	
  6.11

  

 

 1
 

 

	
  316(a)(last sentence)

  	
   

  	
  11.06

  
	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  6.07

  
	
  317(a)(1)

  	
   

  	
  6.08

  
	
  (a)(2)

  	
   

  	
  6.09

  
	
  (b)

  	
   

  	
  2.04

  
	
  318(a)

  	
   

  	
  11.01

  

 

N.A. means Not Applicable.

 2

TABLE OF
CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE ONE

  	
   

  	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.01

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.02

  	
   

  	
  Other Definitions

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.03

  	
   

  	
  Incorporation by Reference of Trust Indenture Act

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.04

  	
   

  	
  Rules of Construction

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE TWO

  	
   

  	
  THE SECURITIES

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.01

  	
   

  	
  Form and Dating

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.02

  	
   

  	
  Execution and Authentication

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.03

  	
   

  	
  Registrar and Paying Agent

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.04

  	
   

  	
  Paying Agent to Hold Money in Trust

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.05

  	
   

  	
  Securityholder Lists

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.06

  	
   

  	
  Transfer and Exchange

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.07

  	
   

  	
  Replacement Securities

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.08

  	
   

  	
  Outstanding Securities

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.09

  	
   

  	
  Temporary Securities

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.10

  	
   

  	
  Cancellation

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.11

  	
   

  	
  Defaulted Interest

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.12

  	
   

  	
  Treasury Securities

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.13

  	
   

  	
  CUSIP Numbers

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.14

  	
   

  	
  Deposit of Moneys

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.15

  	
   

  	
  Book-Entry Provisions for Global Security

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE THREE

  	
   

  	
  REDEMPTION

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01

  	
   

  	
  Notices to Trustee

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.02

  	
   

  	
  Selection of Securities to be Redeemed

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.03

  	
   

  	
  Notice of Redemption

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.04

  	
   

  	
  Effect of Notice of Redemption

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.05

  	
   

  	
  Deposit of Redemption Price

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.06

  	
   

  	
  Securities Redeemed in Part

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE FOUR

  	
   

  	
  COVENANTS

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01

  	
   

  	
  Payment of Securities

  	
   

  	
  16

  

 

 i
 

 

	
  Section 4.02

  	
   

  	
  Maintenance of Office or Agency

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.03

  	
   

  	
  Compliance Certificate

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.04

  	
   

  	
  Payment of Taxes; Maintenance of Corporate
  Existence; Maintenance of Properties

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.05

  	
   

  	
  Additional Guarantors

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE FIVE

  	
   

  	
  SUCCESSOR CORPORATION

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01

  	
   

  	
  When Company May Merge, etc

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE SIX

  	
   

  	
  DEFAULTS AND REMEDIES

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.01

  	
   

  	
  Events of Default

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.02

  	
   

  	
  Acceleration

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.03

  	
   

  	
  Other Remedies

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.04

  	
   

  	
  Waiver of Existing Defaults

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.05

  	
   

  	
  Control by Majority

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.06

  	
   

  	
  Limitation on Suits

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.07

  	
   

  	
  Rights of Holders to Receive Payment

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.08

  	
   

  	
  Collection Suit by Trustee

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.09

  	
   

  	
  Trustee May File Proofs of Claim

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.10

  	
   

  	
  Priorities

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.11

  	
   

  	
  Undertaking for Costs

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE SEVEN

  	
   

  	
  TRUSTEE

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01

  	
   

  	
  Duties of Trustee

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.02

  	
   

  	
  Rights of Trustee

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.03

  	
   

  	
  Individual Rights of Trustee

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.04

  	
   

  	
  Trustee’s Disclaimer

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.05

  	
   

  	
  Notice of Defaults

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.06

  	
   

  	
  Reports by Trustee to Holders

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.07

  	
   

  	
  Compensation and Indemnity

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.08

  	
   

  	
  Replacement of Trustee

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.09

  	
   

  	
  Successor Trustee by Merger, etc

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.10

  	
   

  	
  Eligibility; Disqualification

  	
   

  	
  27

  

 ii
 

 

	
  Section 7.11

  	
   

  	
  Preferential Collection of Claims Against Company

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT

  	
   

  	
  DISCHARGE OF INDENTURE

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.01

  	
   

  	
  Defeasance upon Deposit of Moneys or U.S. Government
  Obligations

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.02

  	
   

  	
  Survival of the Company’s Obligations

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.03

  	
   

  	
  Application of Trust Money

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.04

  	
   

  	
  Repayment to the Company

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.05

  	
   

  	
  Reinstatement

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE NINE

  	
   

  	
  GUARANTEES

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.01

  	
   

  	
  Unconditional Guarantees

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.02

  	
   

  	
  Severability

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.03

  	
   

  	
  Release of a Guarantor

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.04

  	
   

  	
  Limitation of a Subsidiary Guarantor’s Liability

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.05

  	
   

  	
  Guarantors May Consolidate, etc., on Certain Terms

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.06

  	
   

  	
  Contribution

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.07

  	
   

  	
  Waiver of Subrogation

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.08

  	
   

  	
  Execution of Guarantee

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE TEN

  	
   

  	
  AMENDMENTS, SUPPLEMENTS AND WAIVERS

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.01

  	
   

  	
  Without Consent of Holders

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.02

  	
   

  	
  With Consent of Holders

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.03

  	
   

  	
  Compliance with Trust Indenture Act

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.04

  	
   

  	
  Revocation and Effect of Consents

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.05

  	
   

  	
  Notation on or Exchange of Securities

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.06

  	
   

  	
  Trustee to Sign Amendments, etc

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE ELEVEN

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.01

  	
   

  	
  Trust Indenture Act Controls

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.02

  	
   

  	
  Notices

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.03

  	
   

  	
  Communications by Holders with Other Holders

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.04

  	
   

  	
  Certificate and Opinion as to Conditions Precedent

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.05

  	
   

  	
  Statements Required in Certificate or Opinion

  	
   

  	
  39

  

 

 iii
 

 

	
  Section 11.06

  	
   

  	
  Rules by Trustee and Agents

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.07

  	
   

  	
  Legal Holidays

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.08

  	
   

  	
  Governing Law

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.09

  	
   

  	
  No Adverse Interpretation of Other Agreements

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.10

  	
   

  	
  No Recourse Against Others

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.11

  	
   

  	
  Successors and Assigns

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.12

  	
   

  	
  Duplicate Originals

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.13

  	
   

  	
  Severability

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNATURES

  	
   

  	
   

  	
   

  	
  41

  

 

This Table of Contents is
not a part of the Indenture.

 iv

INDENTURE dated as of            ,
    , by and among NOVA BIOSOURCE FUELS, INC., a Nevada
corporation (the “Company”), each of the Guarantors
(as defined in Section 1.01 below) and                   ,
a                      
(the “Trustee”).

Each party agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the Company’s
debt securities issued under this Indenture (the “Securities”):

ARTICLE ONE

Definitions and Incorporation by Reference

Section
1.01                            Definitions.

“Affiliate”
means, when used with reference to a specified person, any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Person specified.

“Agent” means
any Registrar, Paying Agent or co-Registrar or agent for service of notices and
demands.

“Attributable Debt”
means, with respect to any Capitalized Lease Obligations, the capitalized
amount thereof determined in accordance with GAAP.

“Authorizing Resolution”
means a resolution adopted by the Board of Directors or by an Officer or
committee of Officers pursuant to Board delegation authorizing a Series of
Securities.

“Bankruptcy Law”
means title 11 of the United States Code, as amended, or any similar federal or
state law for the relief of debtors.

“Board of Directors”
means the Board of Directors of the Company or any authorized committee
thereof.

“Capital Stock”
means, with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated) of or in such Person’s
capital stock or other equity interests, and options, rights or warrants to
purchase such capital stock or other equity interests, whether now outstanding
or issued after the applicable Issue Date, including, without limitation, all
Disqualified Stock and Preferred Stock.

“Capitalized Lease
Obligations” of any Person means the obligations of such Person to
pay rent or other amounts under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP, and the amount of such
obligations will be the capitalized amount thereof determined in accordance
with GAAP.

“Change of Control
Provisions” has the meaning set forth in the definition of “Disqualified Stock” below.

 1
 

“Company” means
the party named as such in this Indenture until a successor replaces it
pursuant to the Indenture and thereafter means the successor.

“Currency Agreement”
of any Person means any foreign exchange contract, currency swap agreement or
other similar agreement or arrangement designed to protect such Person or any
of its Subsidiaries against fluctuations in currency values.

“Default” means
any event, act or condition that is, or after notice or the passage of time or
both would be, an Event of Default.

“Disqualified Stock”
means any Capital Stock that, by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable), or upon the
happening of any event, (i) matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or prior to the final maturity date of
the Securities of the applicable Series or (ii) is convertible into or
exchangeable or exercisable for (whether at the option of the issuer or the
holder thereof) (a) debt securities or (b) any Capital Stock referred to in (i)
above, in each case, at any time prior to the final maturity date of the
Securities of the applicable Series; provided, however, that any Capital Stock
that would not constitute Disqualified Stock but for provisions thereof giving
holders thereof (or the holders of any security into or for which such Capital
Stock is convertible, exchangeable or exercisable) the right to require the
Company to repurchase or redeem such Capital Stock upon the occurrence of a
change in control occurring prior to the final maturity date of the Securities
of the applicable Series shall not constitute Disqualified Stock if the change
in control provisions applicable to such Capital Stock are no more favorable to
such holders than any provisions described in the Authorizing Resolution or
supplemental indenture pertaining to the Securities of the applicable Series (“Change
of Control Provisions”) and such Capital Stock specifically provides that the
Company will not repurchase or redeem any such Capital Stock pursuant to such
provisions prior to the Company’s repurchase of the Securities of the
applicable Series to the extent required pursuant to any such Change of Control
Provisions.

“GAAP” means
generally accepted accounting principles set forth in the statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect on the date of
this Indenture.

“Guarantee”
means the guarantee of Securities of any applicable Series by each Guarantor
under this Indenture.

“Guarantors”
means (i) initially on the execution of this Indenture, each of: Biosource America, Inc., a Texas corporation;
Nova Holding Trade Group LLC, a Delaware limited liability company; Nova
Biofuels Trade Group LLC, a Delaware limited liability company; Nova Holding
Seneca LLC, a Delaware limited liability company; Nova Biofuels Seneca LLC, a
Delaware limited liability company; Nova Holding Oklahoma LLC, a Delaware
limited liability company; and Nova Biofuels Oklahoma LLC, a Delaware limited
liability company; and (ii) each of the Company’s Subsidiaries which
becomes a guarantor of Securities pursuant to the provisions of this
Indenture.  An Unrestricted Subsidiary
may become a Guarantor if it is so designated by resolution of the Board of
Directors of the Company.

 2
 

“Holder” or “Securityholder” means the person in whose name a Security is
registered on the Registrar’s books.

“Indebtedness”
of any Person means, without duplication, (i) any liability of such Person (a)
for borrowed money or under any reimbursement obligation relating to a letter
of credit or other similar instruments (other than standby letters of credit
issued for the benefit of or surety, performance, completion or payment bonds,
earnest money notes or similar purpose undertakings or indemnifications issued
by, such Person in the ordinary course of business), (b) evidenced by a bond,
note, debenture or similar instrument (including a purchase money obligation)
given in connection with the acquisition of any businesses, properties or
assets of any kind or with services incurred in connection with capital
expenditures (other than any obligation to pay a contingent purchase price
which, as of the date of incurrence thereof is not required to be re corded as
a liability in accordance with GAAP), or (c) in respect of Capitalized Lease
Obligations (to the extent of the Attributable Debt in respect thereof), (ii)
any Indebtedness of others that such Person has guaranteed to the extent of the
guarantee, (iii) to the extent not otherwise included, the obligations of such
Person under Currency Agreements or Interest Protection Agreements to the
extent recorded as liabilities not constituting Interest Incurred, net of
amounts recorded as assets in respect of such agreements, in accordance with
GAAP, and (iv) all Indebtedness of others secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person;
provided, that Indebtedness shall not include accounts payable, liabilities to
trade creditors of such Person or other accrued expenses arising in the
ordinary course of business. The amount of Indebtedness of any Person at any
date shall be (a) the outstanding balance at such date of all unconditional
obligations as described above, net of any unamortized discount to be accounted
for as Interest Expense, in accordance with GAAP, (b) the maximum liability of
such Person for any contingent obligations under clause (ii) above at such
date, net of, any unamortized discount to be accounted for as Interest Expense
in accordance with GAAP and (c) in the case of clause (iv) above, the lesser of
(1) the fair market value of any asset subject to a Lien securing the
Indebtedness of others on the date that the Lien attaches and (2) the amount of
the Indebtedness secured.

“Indenture”
means this Indenture as amended or supplemented from time to time, including pursuant
to any Authorizing Resolution or supplemental indenture pertaining to any
Series.

“Insolvency or Liquidation
Proceeding” means, with respect to any Person, any liquidation,
dissolution or winding up of such Person, or any bankruptcy, reorganization,
insolvency, receivership or similar proceeding with respect to such Person,
whether voluntary or involuntary.

“Interest Expense”
of any Person for any period means, without duplication, the aggregate amount
of (i) interest which, in conformity with GAAP, would be set opposite the
caption “interest expense” or any like caption on an income statement for such
Person (including, without limitation, imputed interest included in Capitalized
Lease Obligations, all commissions, discounts and other fees and charges owned
with respect to letters of credit and bankers’ acceptance financing, the net
costs (but reduced by net gains) associated with Currency Agreements and
Interest Protection Agreements, amortization of other financing fees and
expenses, the interest portion of any deferred payment obligation, amortization
of discount or 

 3
 

premium, if any, and all other noncash interest
expense other than interest and other charges amortized to cost of sales), and
(ii) all interest actually paid by the Company or a Restricted Subsidiary under
any guarantee of Indebtedness (including, without limitation, a guarantee of
principal, interest or any combination thereof) of any Person other than the
Company or any Restricted Subsidiary during such period; provided, that Interest
Expense shall exclude any expense associated with the complete write-off of
financing fees and expenses in connection with the repayment of any
Indebtedness.

“Interest Protection
Agreement” of any Person means any interest rate swap agreement,
interest rate collar agreement, option or futures contract or other similar
agreement or arrangement designed to protect such Person or any of its
Subsidiaries against fluctuations in interest rates with respect to
Indebtedness permitted to be incurred under this Indenture.  “Investments” of
any Person means (i) all investments by such Person in any other Person in the
form of loans, advances or capital contributions, (ii) all guarantees of
Indebtedness or other obligations of any other Person by such person, (iii) all
purchases (or other acquisitions for consideration) by such Person of
Indebtedness, Capital Stock or other securities of any other Person and (iv)
all other items that would be classified as investments in any other Person
(including, without limitation, purchases of assets outside the ordinary course
of business) on a balance sheet of such Person prepared in accordance with
GAAP.

“Issue Date”
means, with respect to any Series of Securities, the date on which the
Securities of such Series are originally issued under this Indenture.

“Lien” means,
with respect to any Property, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such Property.  For purposes of this definition, a Person
shall be deemed to own, subject to a Lien, any Property which it has acquired
or holds subject to the interest of a vendor or lessor under any conditional
sale agreement, capital lease or other title retention agreement relating to
such Property.

“Non-Recourse Indebtedness”
with respect to any Person means Indebtedness of such Person for which (i) the
sole legal recourse for collection of principal and interest on such
Indebtedness is against the specific property identified in the instruments
evidencing or securing such Indebtedness and such property was acquired with
the proceeds of such Indebtedness or such Indebtedness was incurred within 90
days after the acquisition of such property and (ii) no other assets of such
Person may be realized upon in collection of principal or interest on such
Indebtedness. Indebtedness which is otherwise Non-Recourse Indebtedness will
not lose its character as Non-Recourse Indebtedness because there is recourse
to the borrower, any guarantor or any other Person for (i) environmental
warranties and indemnities, or (ii) indemnities for and liabilities arising
from fraud, misrepresentation, misapplication or non-payment of rents, profits,
insurance and condemnation proceeds and other sums actually received by the
borrower from secured assets to be paid to the lender, waste and mechanics’
liens.

“Officer” means
the Chairman of the Board, the Chief Executive Officer, the President, the
Chief Operating Officer, any Vice President, the Treasurer, the Controller or
the Secretary of the Company.

 4
 

“Officers’ Certificate”
means a certificate signed by two Officers or by an Officer and an Assistant
Treasurer or an Assistant Secretary of the Company.

“Opinion of Counsel”
means a written opinion from legal counsel who is reasonably acceptable to the
Trustee.  The counsel may be an employee
of or counsel to the Company or the Trustee.

“Person” means
any individual, corporation, partnership, limited liability company, joint
venture, incorporated or unincorporated association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

“Preferred Stock”
of any Person means all Capital Stock of such Person which has a preference in
liquidation or with respect to the payment of dividends.

“principal” of a
debt security means the principal of the security plus, when appropriate, the
premium, if any, on the security.

“Property” of
any Person means all types of real, personal, tangible, intangible or mixed
property owned by such Person, whether or not included in the most recent
consolidated balance sheet of such Person and its Subsidiaries under GAAP.

“Restricted Subsidiary”
means any Subsidiary of the Company which is not an Unrestricted Subsidiary.

“SEC” means the
Securities and Exchange Commission or any successor agency performing the
duties now assigned to it under the TIA.

“Securities”
means any Securities that are issued under this Indenture.

“Series” means a
series of Securities established under this Indenture.

“Significant Subsidiary”
means any Subsidiary of the Company which would constitute a “significant
subsidiary” as defined in Rule 1-02 of Regulation S-X under the Securities Act
and the Exchange Act.

“Subsidiary” of
any Person means any corporation or other entity of which a majority of the
Capital Stock having ordinary voting power to elect a majority of the Board of
Directors or other persons performing similar functions is at the time directly
or indirectly owned or controlled by such Person.

“TIA” means the
Trust Indenture Act of 1939, as in effect from time to time.

“Trustee” means
the party named as such in this Indenture until a successor replaces it
pursuant to this Indenture and thereafter means the successor serving
hereunder.

“Trust Officer”
means the Chairman of the Board, the President, any Vice President or any other
officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.

 5
 

“United States”
means the United States of America.

“U.S. government
obligations” means securities which are (i) direct obligations of
the United States for the payment of which its full faith and credit is pledged
or (ii) obligations of a person controlled or supervised by and acting as an
agency or instrumentality of the United States the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States, which, in either case are not callable or redeemable at the option of
the issuer thereof, and shall also include a depositary receipt issued by a
bank or trust company as custodian with respect to any such U.S. government
obligations or a specific payment of interest on or principal of any such U.S.
government obligation held by such custodian for the account of the holder of a
depositary receipt; provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the U.S. government obligation or the specific payment of interest on or principal
of the U.S. government obligation evidenced by such depositary receipt.

“Unrestricted Subsidiary”
means any Subsidiary of the Company so designated by a resolution adopted by
the Board of Directors of the Company as provided below; provided that (a) the
holders of Indebtedness thereof do not have direct or indirect recourse against
the Company or any Restricted Subsidiary, and neither the Company nor any
Restricted Subsidiary otherwise has liability, for any payment obligations in
respect of such Indebtedness (including any undertaking, agreement or
instrument evidencing such Indebtedness), except, (i) in each case, to the
extent that the amount thereof constitutes a “restricted payment” permitted to
be made under any provisions set forth limiting the making or paying of a “restricted
payment” under the Authorizing Resolution or supplemental indenture pertaining
to an applicable Series (“Restricted Payment Provisions”), (ii) in the case of
Non-Recourse Indebtedness, to the extent such recourse or liability is for the
matters discussed in the last sentence of the definition of “Non-Recourse
Indebtedness,” or (iii) to the extent such Indebtedness is a guarantee by such
Subsidiary of Indebtedness of the Company or a Restricted Subsidiary and (b) no
holder of any Indebtedness of such Subsidiary shall have a right to declare a
default on such Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity as a result of a default on any
Indebtedness of the Company or any Restricted Subsidiary.  Subject to the foregoing, the Board of
Directors of the Company may designate any Subsidiary to be an Unrestricted
Subsidiary; provided, however, that (i) the net amount (the “Designation Amount”)
then outstanding of all previous Investments by the Company and the Restricted
Subsidiaries in such Subsidiary will be deemed to be a “restricted payment”
pursuant to any Restricted Payment Provisions at the time of such designation
and will reduce the amount available for other restricted payments under any
Restricted Payment Provisions, to the extent provided therein, (ii) the Company
must be permitted under any Restricted Payment Provisions to make the “restricted
payment” deemed to have been made pursuant to clause (i), and (iii) after giving
effect to such designation, no Default or Event of Default shall have occurred
and be continuing.  The Board of
Directors of the Company may also redesignate an Unrestricted Subsidiary to be
a Restricted Subsidiary; provided, however, that (i) the Indebtedness of such
Unrestricted Subsidiary as of the date of such redesignation could then be
incurred under any provisions set forth limiting the incurrence of Indebtedness
under the Authorizing Resolution or supplemental indenture pertaining to an
applicable Series (“Debt Limitation Provisions”), (ii) immediately after giving
effect to such redesignation and the incurrence of any such additional
Indebtedness, the 

 6
 

Company and the Restricted Subsidiaries could incur
$1.00 of additional Indebtedness under any debt incurrence covenant ratio set
forth in any Debt Limitation Provisions and (iii) the Liens of such
Unrestricted Subsidiary as of the date of such redesignation could then be
incurred in accordance with any provisions set forth limiting the creation or
existence of Liens under the Authorizing Resolution or supplemental indenture
pertaining to an applicable Series (“Lien Limitation Provisions”).  Any such designation or redesignation by the
Board of Directors of the Company will be evidenced to the Trustee by the
filing with the Trustee of a certified copy of the resolution of the Board of
Directors of the Company giving effect to such designation or redesignation and
an Officers’ Certificate certifying that such designation or redesignation
complied with the foregoing conditions and setting forth the underlying
calculations of such Officers’ Certificate. 
The designation of any Person as an Unrestricted Subsidiary shall be
deemed to include a designation of all Subsidiaries of such Person as
Unrestricted Subsidiaries; provided, however, that the ownership of the general
partnership interest or a similar member’s interest in a limited liability
company by an Unrestricted Subsidiary shall not cause a Subsidiary of the
Company of which more than 95% of the equity interest is held by the Company or
one or more Restricted Subsidiaries to be deemed an Unrestricted Subsidiary.

Section
1.02                            Other
Definitions.

	
  Term

  	
   

  	
  Defined in

  
	
   

  	
   

  	
   

  
	
  “Agent
  Members”

  	
   

  	
  2.15

  
	
   

  	
   

  	
   

  
	
  “Business
  Day”

  	
   

  	
  11.07

  
	
   

  	
   

  	
   

  
	
  “Custodian”

  	
   

  	
  6.01

  
	
   

  	
   

  	
   

  
	
  “Depository”

  	
   

  	
  2.15

  
	
   

  	
   

  	
   

  
	
  “Event
  of Default”

  	
   

  	
  6.01

  
	
   

  	
   

  	
   

  
	
  “Legal
  Holiday”

  	
   

  	
  11.07

  
	
   

  	
   

  	
   

  
	
  “Paying
  Agent”

  	
   

  	
  2.03

  
	
   

  	
   

  	
   

  
	
  “Registrar”

  	
   

  	
  2.03

  

 

Section
1.03                            Incorporation
by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a part of this
Indenture.  The following TIA terms used
in this Indenture have the following meanings:

“Commission”
means the SEC.

“indenture securities”
means the Securities.

“indenture security holder”
means a Securityholder.

 7
 

“indenture to be qualified”
means this Indenture.

“indenture trustee”
or “institutional trustee” means the
Trustee.

“obligor” on the
indenture securities means the Company, each of the Guarantors, or any other
obligor on the Securities of a Series or any Guarantees thereof.

All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by
SEC rule have the meanings so assigned to them.

Section
1.04                            Rules
of Construction.

Unless the context otherwise requires:

(1)           a term has the meaning assigned to
it;

(2)           an accounting term not otherwise
defined has the meaning assigned to it in accordance with GAAP;

(3)           “or” is not exclusive;

(4)           words in the singular include the
plural, and in the plural include the singular; and

(5)           provisions apply to successive events
and transactions.

ARTICLE TWO

The Securities

Section
2.01                            Form
and Dating.

The aggregate principal amount of Securities that may
be issued under this Indenture is unlimited. 
The Securities may be issued from time to time in one or more
Series.  Each Series shall be created by
an Authorizing Resolution or a supplemental indenture that establishes the
terms of the Series, which may include the following:

(1)           the title of the Series;

(2)           the aggregate principal amount (or
any limit on the aggregate principal amount) of the Series and, if any
Securities of a Series are to be issued at a discount from their face amount,
the method of computing the accretion of such discount;

(3)           the interest rate or method of
calculation of the interest rate;

(4)           the date from which interest will
accrue;

(5)           the record dates for interest payable
on Securities of the Series;

 8
 

(6)           the dates when, places where and
manner in which principal and interest are payable;

(7)           the Registrar and Paying Agent;

(8)           the terms of any mandatory (including
any sinking fund requirements) or optional redemption by the Company;

(9)           the terms of any redemption at the
option of Holders;

(10)         the denominations in which Securities
are issuable;

(11)         whether Securities will be issued in
registered or bearer form and the terms of any such forms of Securities;

(12)         whether any Securities will be
represented by a global Security and the terms of any such global Security;

(13)         the currency or currencies (including
any composite currency) in which principal or interest or both may be paid;

(14)         if payments of principal or interest
may be made in a currency other than that in which Securities are denominated,
the manner for determining such payments;

(15)         provisions for electronic issuance of
Securities or issuance of Securities in uncertificated form;

(16)         any Events of Default, covenants and/or
defined terms in addition to or in lieu of those set forth in this Indenture;

(17)         whether and upon what terms Securities
may be defeased if different from the provisions set forth in this Indenture;

(18)         the form of the Securities, which,
unless the Authorizing Resolution or supplemental indenture otherwise provides,
shall be in the form of “Exhibit A” hereto;

(19)         any terms that may be required by or
advisable under applicable law;

(20)         the percentage of the principal amount
of the Securities which is payable if the maturity of the Securities is accelerated
in the case of Securities issued at a discount from their face amount;

(21)         whether any Securities will not have
Guarantees; and

(22)         any other terms in addition to or
different from those contained in this Indenture.

All Securities of one Series need not be issued at the
same time and, unless otherwise provided, a Series may be reopened for
issuances of additional Securities of such 

 9
 

Series pursuant to an Authorizing Resolution, an
Officers’ Certificate or in any indenture supplemental hereto.  The creation and issuance of a Series and the
authentication and delivery thereof are not subject to any conditions
precedent.

Section
2.02                            Execution
and Authentication.

Two Officers shall sign the Securities for the Company
by manual or facsimile signature.  The
Company’s seal shall be reproduced on the Securities.  Each Guarantor shall execute the Guarantee in
the manner set forth in Section 9.08.

If an Officer whose signature is on a Security no
longer holds that office at the time the Trustee authenticates the Security,
the Security shall nevertheless be valid.

A Security shall not be valid until the Trustee
manually signs the certificate of authentication on the Security.  The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture.

The Trustee shall authenticate Securities for original
issue upon receipt of an Officers’ Certificate of the Company.  Each Security shall be dated the date of its
authentication.

Section
2.03                            Registrar
and Paying Agent.

The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange (“Registrar”), an office or agency where Securities may be
presented for payment (“Paying Agent”)
and an office or agency where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served.  The Registrar shall keep a register of the
Securities and of their transfer and exchange. 
The Company may have one or more co-Registrars and one or more additional
paying agents.  The term “Paying Agent” includes any additional paying agent.

The Company shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture.  The agreement shall implement the provisions
of this Indenture that relate to such Agent. 
The Company shall promptly notify the Trustee in writing of the name and
address of any such Agent and the Trustee shall have the right to inspect the
Securities register at all reasonable times to obtain copies thereof, and the
Trustee shall have the right to rely upon such register as to the names and
addresses of the Holders and the principal amounts and certificate numbers
thereof.  If the Company fails to
maintain a Registrar or Paying Agent or fails to give the foregoing notice, the
Trustee shall act as such.

The Company initially appoints the Trustee as
Registrar and Paying Agent.

Section
2.04                            Paying
Agent to Hold Money in Trust.

Each Paying Agent shall hold in trust for the benefit
of Securityholders and the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities, and shall notify the
Trustee of any default by the Company in making any such payment.  If the Company or a Subsidiary acts as Paying
Agent, it shall segregate the money and hold it as a separate trust fund.  The Company at any time may require a Paying
Agent to pay all 

 10
 

money held by it to the Trustee.  Upon doing so the Paying Agent shall have no
further liability for the money.

Section
2.05                            Securityholder
Lists.

The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Securityholders.  If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
7 Business Days before each semiannual interest payment date and at such other
times as the Trustee may request in writing a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Securityholders.

Section
2.06                            Transfer
and Exchange.

Where a Security is presented to the Registrar or a
co-Registrar with a request to register a transfer, the Registrar shall
register the transfer as requested if the requirements of Section 8-401(1) of
the New York Uniform Commercial Code are met. 
Where Securities are presented to the Registrar or a co-Registrar with a
request to exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested if the same
requirements are met.  To permit
transfers and exchanges, the Trustee shall authenticate Securities at the
Registrar’s request.  The Registrar need
not transfer or exchange any Security selected for redemption, except the
unredeemed part thereof if the Security is redeemed in part, or transfer or
exchange any Securities for a period of 15 days before a selection of
Securities to be redeemed.  Any exchange
or transfer shall be without charge, except that the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto except in the case of exchanges pursuant to
2.09, 3.06, or 10.05 not involving any transfer.

Any Holder of a global Security shall, by acceptance
of such global Security, agree that transfers of beneficial interests in such
global Security may be effected only through a book entry system maintained by
the Holder of such global Security (or its agent), and that ownership of a
beneficial interest in the Security shall be required to be reflected in a book
entry.

Section
2.07                            Replacement
Securities.

If the Holder of a Security claims that the Security
has been lost, destroyed, mutilated or wrongfully taken, the Company shall
issue and, upon written request of any Officer of the Company, the Trustee
shall authenticate a replacement Security, provided in the case of a lost,
destroyed or wrongfully taken Security, that the requirements of Section 8-405
of the New York Uniform Commercial Code are met.  If any such lost, destroyed, mutilated or
wrongfully taken Security shall have matured or shall be about to mature, the
Company may, instead of issuing a substitute Security therefor, pay such
Security without requiring (except in the case of a mutilated Security) the
surrender thereof.  An indemnity bond
must be sufficient in the judgment of the Company and the Trustee to protect
the Company, the Trustee or any Agent from any loss which any of them may
suffer if a Security is replaced, including the acquisition of such Security by
a bona fide purchaser.  The Company or
the Trustee may charge for its expenses in replacing a Security.

 11
 

Section
2.08                            Outstanding
Securities.

Securities outstanding at any time are all Securities
authenticated by the Trustee except for those cancelled by it and those
described in this Section.  A Security
does not cease to be outstanding because the Company, any Guarantor or one of
their Affiliates holds the Security.  If
a Security is replaced pursuant to Section 2.07, it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser.  If the
Paying Agent holds on a redemption date or maturity date money sufficient to
pay Securities payable on that date, then on and after that date such
Securities cease to be outstanding and interest on them ceases to accrue.

Subject to the foregoing provisions of this Section,
each Security delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.

Section
2.09                            Temporary
Securities.

Until definitive Securities are ready for delivery,
the Company may prepare and the Trustee shall authenticate temporary Securities.  Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. 
Without unreasonable delay, the Company shall prepare and, upon
surrender for cancellation of the temporary Security, the Company and the
Guarantors shall execute and the Trustee shall authenticate definitive
Securities in exchange for temporary Securities.  Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities authenticated and delivered hereunder.

Section
2.10                            Cancellation.

The Company at any time may deliver Securities to the
Trustee for cancellation.  The Registrar
and Paying Agent shall forward to the Trustee any Securities surrendered to
them for registration of transfer, exchange, redemption or payment.  The Trustee and no one else shall cancel and
destroy, or retain in accordance with its standard retention policy, all
Securities surrendered for registration or transfer, exchange, redemption,
paying or cancellation.  Unless the
Authorizing Resolution so provides, the Company may not issue new Securities to
replace Securities that it has previously paid or delivered to the Trustee for
cancellation.

Section
2.11                            Defaulted
Interest.

If the Company defaults in a payment of interest on
the Securities, it shall pay the defaulted interest plus any interest payable
on the defaulted interest to the persons who are Securityholders on a
subsequent special record date.  The
Company shall fix such special record date and a payment date which shall be
reasonably satisfactory to the Trustee. 
At least 15 days before such special record date, the Company shall mail
to each Securityholder a notice that states the record date, the payment date
and the amount of defaulted interest to be paid.  On or before the date such notice is mailed,
the Company shall deposit with the Paying Agent money sufficient to pay the
amount of defaulted interest to be so paid. 
The Company may pay defaulted 

 12
 

interest in any other lawful manner if, after notice
given by the Company to the Trustee of the proposed payment, such manner of
payment shall be deemed practicable by the Trustee.

Section
2.12                            Treasury
Securities.

In determining whether the Holders of the required
principal amount of Securities of a Series have concurred in any direction,
waiver, consent or notice, Securities owned by the Company, the Guarantors or
any of their respective Affiliates shall be considered as though they are not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee actually knows are so owned shall be so
considered.

Section
2.13                            CUSIP
Numbers.

The Company in issuing the Securities of any Series
may use a “CUSIP” number, and if so, the Trustee
shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders of such Securities; provided that no representation is
hereby deemed to be made by the Trustee as to the correctness or accuracy of
any such CUSIP number printed in the notice or on such Securities, and that
reliance may be placed only on the other identification numbers printed on such
Securities.  The Company shall promptly
notify the Trustee of any change in any CUSIP number.

Section
2.14                            Deposit
of Moneys.

Prior to 11:00 a.m. New York City time on each
interest payment date and maturity date with respect to each Series of
Securities, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments due on such
interest payment date or maturity date, as the case may be, in a timely manner
which permits the Paying Agent to remit payment to the Holders on such interest
payment date or maturity date, as the case may be.

Section 2.15                            Book-Entry
Provisions for Global Security.

(a)           Any global Security of a Series
initially shall (i) be registered in the name of the depository who shall be identified
in the Authorizing Resolution or supplemental indenture relating to such
Securities (the “Depository”) or the nominee of
such Depository, (ii) be delivered to the Trustee as custodian for such
Depository and (iii) bear any required legends. 
Members of, or participants in, the Depository (“Agent
Members”) shall have no rights under this Indenture with respect to
any global Security held on their behalf by the Depository, or the Trustee as
its custodian, or under the global Security, and the Depository may be treated
by the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of the global Security for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the exercise
of the rights of a Holder of any Security.

 13

(b)           Transfers of any global Security
shall be limited to transfers in whole, but not in part, to the Depository, its
successors or their respective nominees. 
Interests of beneficial owners in the global Security may be transferred
or exchanged for definitive Securities in accordance with the rules and
procedures of the Depository.  In
addition, definitive Securities shall be transferred to all beneficial owners
in exchange for their beneficial interests in a global Security if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for the global Security and a successor depository is not appointed
by the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depository to issue definitive Securities.

(c)           In connection with any transfer or
exchange of a portion of the beneficial interest in any global Security to
beneficial owners pursuant to paragraph (b), the Registrar shall (if one or
more definitive Securities are to be issued) reflect on its books and records
the date and a decrease in the principal amount of the global Security in an
amount equal to the principal amount of the beneficial interest in the global
Security to be transferred, and the Company and the Guarantors shall execute,
and the Trustee shall authenticate and deliver, one or more definitive
Securities of like tenor and amount.

(d)           In connection with the transfer of an
entire global Security to beneficial owners pursuant to paragraph (b), the
global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Company and the Guarantors shall execute, and the Trustee
shall authenticate and deliver, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in the global Security, an
equal aggregate principal amount of definitive Securities of authorized
denominations.

(e)           The Holder of any global Security may
grant proxies and otherwise authorize any person, including Agent Members and
persons that may hold interests through Agent Members, to take any action which
a Holder is entitled to take under this Indenture or the Securities of such
Series.

ARTICLE THREE

Redemption

Section
3.01                            Notices
to Trustee.

Securities of a Series that are redeemable prior to
maturity shall be redeemable in accordance with their terms and, unless the
Authorizing Resolution or supplemental indenture provides otherwise, in
accordance with this Article.

If the Company wants to redeem Securities pursuant to
Paragraph 5 of the Securities, it shall notify the Trustee in writing of the
Redemption Date and the principal amount of Securities to be redeemed.  Any such notice may be cancelled at any time
prior to notice of such redemption being mailed to Holders.  Any such cancelled notice shall be void and
of no effect.

If the Company wants to credit any Securities
previously redeemed, retired or acquired against any redemption pursuant to
Paragraph 6 of the Securities, it shall notify the 

 14
 

Trustee of the amount of the credit and it shall
deliver any Securities not previously delivered to the Trustee for cancellation
with such notice.

The Company shall give each notice provided for in
this Section 3.01 at least 30 days before the notice of any such redemption is
to be mailed to Holders (unless a shorter notice shall be satisfactory to the
Trustee).

Section
3.02                            Selection
of Securities to be Redeemed.

If fewer than all of the Securities of a Series are to
be redeemed, the Trustee shall select the Securities to be redeemed by a method
the Trustee considers fair and appropriate. 
The Trustee shall make the selection from Securities outstanding not
previously called for redemption and shall promptly notify the Company of the
serial numbers or other identifying attributes of the Securities so
selected.  The Trustee may select for
redemption portions of the principal of Securities that have denominations
larger than the minimum denomination for the Series.  Securities and portions of them it selects
shall be in amounts equal to the minimum denomination for the Series or an
integral multiple thereof.  Provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.

Section
3.03                            Notice
of Redemption.

At least 30 days but not more than 60 days before a
redemption date, the Company shall mail a notice of redemption by first-class
mail, postage prepaid, to each Holder of Securities to be redeemed.  The notice shall identify the Securities to
be redeemed and shall state:

(1)           the redemption date;

(2)           the redemption price;

(3)           the name and address of the Paying
Agent;

(4)           that Securities called for redemption
must be surrendered to the Paying Agent to collect the redemption price;

(5)           that interest on Securities called
for redemption ceases to accrue on and after the redemption date; and

(6)           that the Securities are being
redeemed pursuant to the mandatory redemption or the optional redemption
provisions, as applicable.  At the
Company’s request, the Trustee shall give the notice of redemption in the
Company’s name and at its expense; provided, however, that the Company shall
deliver to the Trustee at least 15 days prior to the date on which notice of
redemption is to be mailed or such shorter period as may be satisfactory to the
Trustee, an Officers’ Certificate requesting that the Trustee give such notice
and setting forth the information to be stated in such notice as provided in
the preceding paragraph.

Section
3.04                            Effect
of Notice of Redemption.

 15
 

Once notice of redemption is mailed, Securities called
for redemption become due and payable on the redemption date and at the
redemption price as set forth in the notice of redemption.  Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price, plus accrued interest to the
redemption date.

Section
3.05                            Deposit
of Redemption Price.

On or before the redemption date, the Company shall
deposit with the Paying Agent immediately available funds sufficient to pay the
redemption price of and accrued interest on all Securities to be redeemed on
that date.

Section
3.06                            Securities
Redeemed in Part.

Upon surrender of a Security that is redeemed in part,
the Company and the Guarantors shall execute and the Trustee shall authenticate
for each Holder a new Security equal in principal amount to the unredeemed
portion of the Security surrendered.

ARTICLE FOUR

Covenants

Section
4.01                            Payment
of Securities.

The Company shall pay the principal of and interest on
a Series on the dates and in the manner provided in the Securities of the
Series.  An installment of principal or
interest shall be considered paid on the date it is due if the Paying Agent
holds on that date money designated for and sufficient to pay the installment.

The Company shall pay interest on overdue principal at
the rate borne by the Series; it shall pay interest on overdue installments of
interest at the same rate.

Section
4.02                            Maintenance
of Office or Agency.

The Company shall maintain the office or agency
required under Section 2.03.  The Company
shall give prior written notice to the Trustee of the location, and any change
in the location, of such office or agency. 
If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the address of the Trustee.

Section
4.03                            Compliance
Certificate.

The Company shall deliver to the Trustee within 120
days after the end of each fiscal year of the Company an Officers’ Certificate
stating whether or not the signers know of any Default by the Company in
performing any of its obligations under this Indenture.  If they do know of such a Default, the
certificate shall describe the Default.

 16
 

Section
4.04                            Payment
of Taxes; Maintenance of Corporate Existence; Maintenance of Properties.

The Company will:

(a)           cause to be paid and discharged all
lawful taxes, assessments and governmental charges or levies imposed upon the
Company and its Restricted Subsidiaries or upon the income or profits of the
Company and its Restricted Subsidiaries or upon property or any part thereof
belonging to the Company and its Restricted Subsidiaries before the same shall
be in default, as well as all lawful claims for labor, materials and supplies
which, if unpaid, might become a lien or charge upon such property or any part
thereof; provided, however, that the Company shall not be required to cause to
be paid or discharged any such tax, assessment, charge, levy or claim so long
as the validity or amount thereof shall be contested in good faith by
appropriate proceedings and the nonpayment thereof does not, in the judgment of
the Company, materially adversely affect the ability of the Company and the Restricted
Subsidiaries to pay all obligations under the Indenture when due; and provided
further that the Company shall not be required to cause to be paid or
discharged any such tax, assessment, charge, levy or claim if, in the judgment
of the Company, such payment shall not be advantageous to the Company in the
conduct of its business and if the failure so to pay or discharge does not, in
its judgment, materially adversely affect the ability of the Company and the
Restricted Subsidiaries to pay all obligations under this Indenture when due;

(b)           cause to be done all things necessary
to preserve and keep in full force and effect the corporate existence of the
Company and each of its Restricted Subsidiaries and to comply with all
applicable laws; provided, however, that nothing in this subsection (b) shall
prevent a consolidation or merger of the Company or any Restricted Subsidiary
not prohibited by the provisions of Article Five, Article Nine or any other
provision or the Authorizing Resolution or supplemental indenture pertaining to
a Series, and the Company need not maintain the corporate existence of an
immaterial Restricted Subsidiary which is not a Guarantor; and

(c)           at all times keep, maintain and
preserve all the property of the Company and the Restricted Subsidiaries in
good repair, working order and condition (reasonable wear and tear excepted)
and from time to time make all needful and proper repairs, renewals,
replacements, betterments and improvements thereto, so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this subsection (c) shall
prevent the Company from discontinuing the operation and maintenance of any
such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business and not disadvantageous in any
material respect to the ability of the Company and the Restricted Subsidiaries
to pay all obligations under this Indenture when due.

Section
4.05                            Additional
Guarantors.

If the Company or any of the Guarantors transfers or
causes to be transferred, in one transaction or a series of related
transactions, any property to any Restricted Subsidiary of the Company that is
not a Guarantor, or if the Company or any of the Guarantors shall organize,
acquire or otherwise invest in another Subsidiary which becomes a Restricted
Subsidiary, then 

 17
 

such transferee or acquired or other Subsidiary shall
(i) execute and deliver to the Trustee a supplemental indenture in form reasonably
satisfactory to the Trustee pursuant to which such Subsidiary shall
unconditionally guarantee all of the Company’s obligations under the Securities
of any Series that has the benefit of Guarantees of other Subsidiaries of the
Company and this Indenture (as it relates to all such Series) on the terms set
forth in this Indenture and (ii) deliver to the Trustee an Opinion of Counsel
that such supplemental indenture has been duly authorized, executed and
delivered by such Subsidiary and constitutes a legal, valid, binding and
enforceable obligation of such Subsidiary. 
Thereafter, such Subsidiary shall be a Guarantor for all purposes of
this Indenture (as it relates to all such Series).

ARTICLE FIVE

Successor Corporation

Section
5.01                            When
Company May Merge, etc.

The Company shall not consolidate with or merge with
or into, any other corporation, or transfer all or substantially all of its
assets to, any entity unless permitted by law and unless (1) the resulting,
surviving or transferee entity, which shall be a corporation organized and
existing under the laws of the United States or a State thereof, assumes by
supplemental indenture, in a form reasonably satisfactory to the Trustee, all
of the obligations of the Company under the Securities and this Indenture and (2) immediately
after giving effect to, and as a result of, such transaction, no Default or
Event of Default shall have occurred and be continuing.  Thereafter such successor corporation or
corporations shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the “Company”
and all such obligations of the predecessor corporation shall terminate.

The Company shall deliver to the Trustee prior to the
consummation of the proposed transaction an Officers’ Certificate to the
foregoing effect and an Opinion of Counsel stating that the proposed
transaction and such supplemental indenture comply with this Indenture.  To the extent that an Authorizing Resolution
or supplemental indenture pertaining to any Series provides for different
provisions relating to the subject matter of this Article Five, the provisions
in such Authorizing Resolution or supplemental indenture shall govern for
purposes of such Series.

ARTICLE SIX

Defaults and Remedies

Section
6.01                            Events
of Default.

An “Event of Default”
on a Series occurs if, voluntarily or involuntarily, whether by operation of
law or otherwise, any of the following occurs:

(1)           the failure by the Company to pay
interest on any Security of such Series when the same becomes due and payable
and the continuance of any such failure for a period of 30 days, whether or not
such payment is prohibited by Article Twelve or Article Thirteen hereof;

 18
 

(2)           the failure by the Company to pay the
principal or premium of any Security of such Series when the same becomes due
and payable at maturity, upon acceleration or otherwise, whether or not such
payment is prohibited by Article Twelve or Article Thirteen hereof;

(3)           the failure by the Company or any
Restricted Subsidiary to comply with any of its agreements or covenants in, or
provisions of, the Securities of such Series, the Guarantees (as they relate
thereto) or this Indenture (as they relate thereto) and such failure continues
for the period and after the notice specified below (except in the case of a
default with respect to any Change of Control Provisions or Article Five (or
any replacement provisions as contemplated by Article Five), which will
constitute Events of Default with notice but without passage of time);

(4)           the acceleration of any Indebtedness
(other than Non-Recourse Indebtedness) of the Company or any Restricted
Subsidiary in an amount of $        or more,
individually or in the aggregate, and such acceleration does not cease to
exist, or such Indebtedness is not satisfied, in either case within five days
after such acceleration;

(5)           the failure by the Company or any
Restricted Subsidiary to make any principal or interest payment in an amount of
$        or more, individually or in the
aggregate, in respect of Indebtedness (other than Non-Resource Indebtedness) of
the Company or any Restricted Subsidiary within five days of such principal or
interest becoming due and payable (after giving effect to any applicable grace
period set forth in the documents governing such Indebtedness);

(6)           a final judgment or judgments in an
amount of $        or more, individually or
in the aggregate, for the payment of money having been entered by a court or
courts of competent jurisdiction against the Company or any of its Restricted
Subsidiaries and such judgment or judgments is not satisfied, stayed, annulled
or rescinded within 60 days of being entered;

(7)           the Company or any Restricted
Subsidiary that is a Significant Subsidiary pursuant to or within the meaning
of any Bankruptcy Law:

(A)          commences a voluntary case,

(B)           consents to the entry of an order for
relief against it in an involuntary case,

(C)           consents to the appointment of a
Custodian of it or for all or substantially all of its property, or

(D)          makes a general assignment for the
benefit of its creditors;

(8)           a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that:

(A)          is for relief against the Company or
any Restricted Subsidiary that is a Significant Subsidiary as debtor in an
involuntary case,

 19
 

(B)           appoints a Custodian of the Company
or any Restricted Subsidiary that is a Significant Subsidiary or a Custodian
for all or substantially all of the property of the Company or any Restricted
Subsidiary that is a Significant Subsidiary, or

(C)           orders the liquidation of the Company
or any Restricted Subsidiary that is a Significant Subsidiary, and the order or
decree remains unstayed and in effect for 60 days; or

(9)           any Guarantee of a Guarantor which is
a Significant Subsidiary ceases to be in full force and effect (other than in
accordance with the terms of such Guarantee and the Indenture) or is declared
null and void and unenforceable or found to be invalid or any Guarantor denies
its liability under its Guarantee (other than by reason of release of a
Guarantor from its Guarantee in accordance with the terms of the Indenture and
the Guarantee).

A Default as described in sub-clause (3) above will
not be deemed an Event of Default until the Trustee notifies the Company, or
the Holders of at least 25 percent in principal amount of the then outstanding
Securities of the applicable Series notify the Company and the Trustee, of the
Default and (except in the case of a default with respect to any Change of
Control Provisions or Article Five (or any replacement provisions as
contemplated by Article Five)) the Company does not cure the Default within 60
days after receipt of the notice.  The
notice must specify the Default, demand that it be remedied and state that the
notice is a “Notice of Default.” If such a
Default is cured within such time period, it ceases.

The term “Custodian”
means any receiver, trustee, assignee, liquidator, custodian or similar
official under any Bankruptcy Law.

Section
6.02                            Acceleration.

If an Event of Default (other than an Event of Default
with respect to the Company resulting from sub-clauses (7) or (8) above), shall
have occurred and be continuing under the Indenture, the Trustee by notice to
the Company, or the Holders of at least 25 percent in principal amount of the
Securities of the applicable Series then outstanding by notice to the Company
and the Trustee, may declare all Securities of such Series to be due and
payable immediately.  Upon such
declaration of acceleration, the amounts due and payable on the Securities of such
Series will be due and payable immediately. 
If an Event of Default with respect to the Company specified in
sub-clauses (7) or (8) above occurs, all amounts due and payable on the
Securities of such Series will ipso facto become and be immediately due and
payable without any declaration, notice or other act on the part of the Trustee
and the Company or any Holder.  The
Holders of a majority in principal amount of the Securities of such Series then
outstanding by written notice to the Trustee and the Company may waive any
Default or Event of Default (other than any Default or Event of Default in
payment of principal or interest) with respect to such Series of Securities
under the Indenture.  Holders of a
majority in principal amount of the then outstanding Securities of such Series
may rescind an acceleration with respect to such Series and its consequence
(except an acceleration due to nonpayment of principal or interest on the
Securities of such Series) if the rescission would not conflict with any judgment
or decree and if all existing Events of Default have been cured or waived.

 20
 

No such rescission shall extend to or shall affect any
subsequent Event of Default, or shall impair any right or power consequent
thereon.

Section
6.03                            Other
Remedies.

If an Event of Default on a Series occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of or interest on the Series or
to enforce the performance of any provision in the Securities or this Indenture
applicable to the Series.

The Trustee may maintain a proceeding even if it does
not possess any of the Securities or does not produce any of them in the
proceeding.  A delay or omission by the
Trustee or any Securityholder in exercising any right or remedy accruing upon
an Event of Default shall not impair the right or remedy or constitute a waiver
of or acquiescence in the Event of Default. 
No remedy is exclusive of any other remedy.  All available remedies are cumulative.

Section 6.04                            Waiver
of Existing Defaults.

Subject to Section 10.02, the Holders of a majority in
principal amount of the outstanding Securities of a Series on behalf of all the
Holders of the Series by notice to the Trustee may waive an existing Default on
such Series and its consequences.  When a
Default is waived, it is cured and stops continuing, and any Event of Default
arising therefrom shall be deemed to have been cured; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.

Section
6.05                            Control
by Majority.

The Holders of a majority in principal amount of the
outstanding Securities of a Series may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it with respect to such Series.  The Trustee, however, may refuse to follow
any direction (i) that conflicts with law or this Indenture, (ii) that, subject
to Section 7.01, the Trustee determines is unduly prejudicial to the rights of
other Securityholders, (iii) that would involve the Trustee in personal
liability or (iv) if the Trustee shall not have been provided with indemnity
satisfactory to it.

Section
6.06                            Limitation
on Suits.

A Securityholder of a Series may not pursue any remedy
with respect to this Indenture or the Series unless:

(1)           the Holder gives to the Trustee
written notice of a continuing Event of Default on the Series;

(2)           the Holders of at least a majority in
principal amount of the outstanding Securities of the Series make a written
request to the Trustee to pursue the remedy;

 21
 

(3)           such Holder or Holders offer to the
Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;

(4)           the Trustee does not comply with the
request within 60 days after receipt of the request and the offer of indemnity;
and

(5)           no written request inconsistent with
such written request shall have been given to the Trustee pursuant to this
Section 6.06.

A Securityholder may not use this Indenture to prejudice
the rights of another Securityholder or to obtain a preference or priority over
another Securityholder.

Section
6.07                            Rights
of Holders to Receive Payment.

Notwithstanding any other provision of this Indenture,
the right of any Holder to receive payment of principal of and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, is absolute and unconditional and shall not be impaired or affected
without the consent of the Holder.

Section
6.08                            Collection
Suit by Trustee.

If an Event of Default in payment of interest or
principal specified in Section 6.01(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount of principal and interest remaining
unpaid.

Section
6.09                            Trustee
May File Proofs of Claim.

The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements, and advances of the Trustee, its agents and counsel)
and the Securityholders allowed in any judicial proceedings relative to the
Company, its creditors or its property, and unless prohibited by applicable law
or regulation, may vote on behalf of the Holders in any election of a
Custodian, and shall be entitled and empowered to collect and receive any
moneys or other property payable or deliverable on any such claims and to
distribute the same and any Custodian in any such judicial proceeding is hereby
authorized by each Securityholder to make such payments to the Trustee.  Nothing herein shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder or to
authorize the Trustee to vote in respect of the claim of any Securityholder
except as aforesaid for the election of the Custodian.

Section
6.10                            Priorities.

If the Trustee collects any money pursuant to this
Article, it shall pay out the money in the following order: First: to the Trustee
for amounts due under Section 7.07; Second: to Securityholders of the Series
for amounts due and unpaid on the Series for principal and 

 22
 

interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Series for principal
and interest, respectively; and Third: to the Company or the Guarantors as
their interests may appear.

The Trustee may fix a record date and payment date for
any payment to Securityholders pursuant to this Section 6.10.

Section
6.11                            Undertaking
for Costs.

In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees, against any party litigant in the suit, having the
due regard to the merits and good faith of the claims or defenses made by the
party litigant.  This Section does not
apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or
a suit by Holders of more than 10% in principal amount of the Series.

ARTICLE SEVEN

Trustee

Section
7.01                            Duties
of Trustee.

(a)           If an Event of Default has occurred
and is continuing, the Trustee shall, prior to the receipt of directions from
the Holders of a majority in principal amount of the Securities, exercise its
rights and powers and use the same degree of care and skill in their exercise
as a prudent man would exercise or use under the circumstances in the conduct
of his own affairs.

(b)           Except during the continuance of an
Event of Default:

(1)           The Trustee need perform only those
duties that are specifically set forth in this Indenture and no others and no
implied covenants or obligations shall be read into this Indenture against the
Trustee.

(2)           In the absence of bad faith on its
part, the Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture.  The Trustee, however, shall
examine the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture but need not confirm or investigate the
accuracy of mathematical calculations or other facts or matters stated therein.

(c)           The Trustee may not be relieved from
liability for its own negligent action, its own negligent failure to act or its
own willful misconduct, except that:

(1)           This paragraph does not limit the
effect of paragraph (b) of this Section.

 23
 

(2)           The Trustee shall not be liable for
any error of judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent facts.

(3)           The Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 6.05 or any other direction
of the Holders permitted hereunder.

(d)           Every provision of this Indenture
that in any way relates to the Trustee is subject to paragraphs (a), (b) and
(c) of this Section.

(e)           The Trustee may refuse to perform any
duty or exercise any right or power unless it receives indemnity satisfactory
to it against any loss, liability or expense.

(f)            The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with the
Company.  Money held in trust by the
Trustee need not be segregated from other funds except to the extent required
by law.

(g)           None of the provisions contained in
this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if there shall be reasonable
grounds for believing that the repayment of such funds or adequate indemnity
against such liability is not reasonably assured to it.

Section
7.02                            Rights
of Trustee.

Subject to Section 7.01:

(a)           The Trustee may rely and shall be
protected in acting or refraining from acting on any document, resolution,
certificate, instrument, report, or direction believed by it to be genuine and
to have been signed or presented by the proper person.  The Trustee need not investigate any fact or
matter stated in the document, resolution, certificate, instrument, report, or
direction.

(b)           Before the Trustee acts or refrains
from acting, it may require an Officers’ Certificate or an Opinion of Counsel
or both, which shall conform to Sections 11.04 and 11.05 hereof and containing
such other statements as the Trustee reasonably deems necessary to perform its
duties hereunder.  The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers’ Certificate, Opinion of Counsel or any other direction of the
Company permitted hereunder.

(c)           The Trustee may act through agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.

(d)           The Trustee shall not be liable for
any action taken, suffered or omitted by it in good faith and believed by it to
be authorized or within the discretion or rights or powers conferred upon it by
this Indenture.

 24
 

(e)           The Trustee may consult with counsel,
and the written advice of such counsel or any Opinion of Counsel as to matters
of law shall be full and complete authorization and protection in respect of
any action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.

(f)            Unless otherwise specifically
provided in the Indenture, any demand, request, direction or notice from the
Company shall be sufficient if signed by an Officer of the Company.

(g)           For all purposes under this
Indenture, the Trustee shall not be deemed to have notice or knowledge of any
Event of Default (other than under Section 6.01(1) or 6.01(2)) unless a Trust
Officer assigned to and working in the Trustee’s corporate trust office has
actual knowledge thereof or unless written notice of any Event of Default is
received by the Trustee at its address specified in Section 11.02 hereof and
such notice references the Securities generally, the Company or this Indenture.

Section
7.03                            Individual
Rights of Trustee.

The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities and may otherwise deal with the
Company or its affiliates with the same rights it would have if it were not
Trustee.  Any Agent may do the same with
like rights.  The Trustee, however, must
comply with Sections 7.10 and 7.11.

Section 7.04                            Trustee’s
Disclaimer.

The Trustee makes no representation as to the validity
or adequacy of this Indenture, the Securities or of any prospectus used to sell
the Securities; it shall not be ac countable for the Company’s use of the
proceeds from the Securities; it shall not be accountable for any money paid to
the Company, or upon the Company’s direction, if made under and in accordance
with any provision of this Indenture; it shall not be responsible for the use
or application of any money received by any Paying Agent other than the
Trustee; and it shall not be responsible for any statement of the Company in
this Indenture or in the Securities other than its certificate of
authentication.

Section
7.05                            Notice
of Defaults.

If a Default on a Series occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to each Securityholder of
the Series notice of the Default (which shall specify any uncured Default known
to it) within 90 days after it occurs. 
Except in the case of a default in payment of principal of or interest
on a Series, the Trustee may withhold the notice if and so long as the board of
directors of the Trustee, the executive or any trust committee of such
directors and/or responsible officers of the Trustee in good faith determine(s)
that withholding the notice is in the interests of Holders of the Series.

Section
7.06                            Reports
by Trustee to Holders.

Within 60 days after each May 15 beginning with the
May 15 following the date of this Indenture, the Trustee shall mail to each
Securityholder a brief report dated as of such 

 25
 

May 15 that complies with TIA ss. 313(a) (but if no
event described in TIA ss. 313(2) has occurred within the twelve months
preceding the reporting date no report need be transmitted).  The Trustee also shall comply with TIA ss.
313(b).

A copy of each report at the time of its mailing to
Securityholders shall be delivered to the Company and filed by the Trustee with
the SEC and each national securities exchange on which the Securities are
listed.  The Company agrees to notify the
Trustee of each national securities exchange on which the Securities are
listed.

Section
7.07                            Compensation
and Indemnity.

The Company shall pay to the Trustee or predecessor
trustee from time to time reasonable compensation for their respective services
subject to any written agreement between the Trustee and the Company.  The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred by it.  Such expenses shall include the reasonable
compensation and expenses of the Trustee’s agents and counsel.  The Company shall indemnify the Trustee and
each predecessor trustee, its officers, directors, employees and agents and
hold it harmless against any loss, liability or expense incurred or made by or
on behalf of it in connection with the administration of this Indenture or the
trust hereunder and its duties hereunder including the costs and expenses of
defending itself against or investigating any claim in the premises.  The Trustee shall notify the Company promptly
of any claim for which it may seek indemnity. 
The Company need not reimburse any expense or indemnify against any loss
or liability incurred by the Trustee through the Trustee’s, or its officers’,
directors’, employees’ or agents’ negligence or bad faith.

To ensure the Company’s payment obligations in this
Section, the Trustee shall have a claim prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay
principal of or interest on particular Securities.  When the Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 6.01 or in
connection with Article 6 hereof, the expenses (including the reasonable fees
and expenses of its counsel) and the compensation for services in connection
therewith are to constitute expenses of administration under any bankruptcy
law.

Section
7.08                            Replacement
of Trustee.

The Trustee may resign by so notifying the
Company.  The Holders of a majority in
principal amount of the outstanding Securities may remove the Trustee by so
notifying the removed Trustee in writing and may appoint a successor trustee
with the Company’s consent.  Such
resignation or removal shall not take effect until the appointment by the
Securityholders or the Company as hereinafter provided of a successor trustee
and the acceptance of such appointment by such successor trustee.  The Company may remove the Trustee and any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor trustee for any or no reason,
including if:

(1)           the Trustee fails to comply with
Section 7.10 after written request by the Company or any bona fide
Securityholder who has been a Securityholder for at least six months;

(2)           the Trustee is adjudged a bankrupt or
an insolvent;

 26
 

(3)           a receiver or other public officer
takes charge of the Trustee or its property; or (4) the Trustee becomes
incapable of acting.

If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall promptly
appoint a successor trustee.  If a
successor trustee does not take office within 45 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or any Holder
may petition any court of competent jurisdiction for the appointment of a
successor trustee.

A successor trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Company.  Immediately after that, the retiring Trustee
shall transfer all property held by it as Trustee to the successor trustee, the
resignation or removal of the retiring Trustee shall become effective, and the
successor trustee shall have all the rights, powers and duties of the Trustee
under this Indenture.  A successor
trustee shall mail notice of its succession to each Securityholder.

Section
7.09                            Successor
Trustee by Merger, etc.

If the Trustee consolidates with, merges with or into
or converts into, or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation without any further
act shall be the successor trustee.

Section
7.10                            Eligibility;
Disqualification.

This Indenture shall always have a Trustee who
satisfies the requirements of TIA ss. 310(a)(1).  The Trustee shall have a combined capital and
surplus of at least $10,000,000 as set forth in its most recent published
annual report of condition.  The Trustee
shall comply with TIA ss. 310(b).

Section
7.11                            Preferential
Collection of Claims Against Company.

The Trustee shall comply with TIA ss. 311(a),
excluding any creditor relationship listed in TIA ss. 311(b).  A Trustee who has resigned or been removed
shall be subject to TIA ss. 311(a) to the extent indicated therein.

ARTICLE EIGHT

Discharge of
Indenture

Section
8.01                            Defeasance
upon Deposit of Moneys or U.S. Government Obligations.

(a)           The Company may, at its option and,
subject to the provisions of Article Twelve and Article Thirteen hereof, at any
time, elect to have either paragraph (b) or paragraph (c) below be applied to
the outstanding Securities of any Series upon compliance with the applicable
conditions set forth in paragraph (d).

(b)           Upon the Company’s exercise under
paragraph (a) of the option applicable to this paragraph (b), the Company and
the Guarantors shall be deemed to have been released 

 27
 

and discharged from their respective obligations with
respect to the outstanding Securities of a Series on the date the applicable
conditions set forth below are satisfied (hereinafter, “Legal  Defeasance”).  For this purpose, such Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Securities of a Series, which shall
thereafter be deemed to be “outstanding” only for the purposes of the Sections
and matters under this Indenture referred to in (i) and (ii) below, and to have
satisfied all its other obligations under such Securities and this Indenture
insofar as such Securities are concerned, except for the following which shall
survive until otherwise terminated or discharged hereunder: (i) the rights of
Holders of outstanding Securities of a Series to receive solely from the trust
fund described in paragraph (d) below and as more fully set forth in such
paragraph, payments in respect of the principal of and interest on such
Securities when such payments are due and (ii) obligations listed in Section 8.02,
subject to compliance with this Section 8.01. 
The Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) below with
respect to such Securities.

(c)           Upon the Company’s exercise under
paragraph (a) of the option applicable to this paragraph (c), the Company and
the Guarantors shall be released and discharged from the obligations under any
covenant contained in Article Five, Section 4.05 and any other covenant
contained in the Authorizing Resolution or supplemental indenture relating to
such Series to the extent provided for therein, on and after the date the
conditions set forth below are satisfied (hereinafter, “Covenant
Defeasance”), and the Securities of such Series shall thereafter be
deemed to be not “outstanding” for the purpose of any direction, waiver,
consent or declaration or act of Holders (and the consequences of any thereof)
in connection with such covenants, but shall continue to be deemed “outstanding”
for all other purposes hereunder.  For
this purpose, such Covenant Defeasance means that, with respect to the
outstanding Securities of a Series, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference
in any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01(3), but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby.

(d)           The following shall be the conditions
to application of either paragraph (b) or paragraph (c) above to the
outstanding Securities of the applicable Series:

(1)           The Company shall have irrevocably
deposited in trust with the Trustee, pursuant to an irrevocable trust and
security agreement in form and substance reasonably satisfactory to the
Trustee, money in U.S. dollars or U.S. government obligations or a combination
thereof in such amounts and at such times as are sufficient, in the opinion of
a nationally recognized firm of independent public accountants, to pay the
principal of and interest on the outstanding Securities of such Series to
maturity or redemption; provided, however, that the Trustee (or other
qualifying trustee) shall have received an irrevocable written order from the
Company instructing the Trustee (or other qualifying trustee) to apply such
money or the proceeds of such U.S. government obligations to said payments with
respect to the Securities of such Series to maturity or redemption;

 28

(2)           No Default or Event of
Default shall have occurred and be continuing on the date of such deposit;

(3)           Such deposit will not
result in a Default under this Indenture or a breach or violation of, or
constitute a default under, any other material instrument or agreement to which
the Company or any of any of their Subsidiaries is a party or by which it or
any of their property is bound;

(4)           (i) In the event the
Company elects paragraph (b) hereof, the Company shall deliver to the Trustee
an Opinion of Counsel in the United States, in form and substance reasonably
satisfactory to the Trustee, to the effect that (A) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling or
(B) since the Issue Date pertaining to such Series, there has been a change in
the applicable federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall state that, or (ii) in the event
the Company elects paragraph (c) hereof, the Company shall deliver to the
Trustee an Opinion of Counsel in the United States, in form and substance
reasonably satisfactory to the Trustee, to the effect that, in the case of
clauses (i) and (ii), Holders of the Securities of such Series will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and the defeasance contemplated hereby and will be subject to
federal income tax in the same amounts and in the same manner and at the same
times as would have been the case if such deposit and defeasance had not
occurred;

(5)           The Company shall have
delivered to the Trustee an Officers’ Certificate, stating that the deposit
under clause (1) was not made by the Company with the intent of preferring the
Holders of the Securities of such Series over any other creditors of the
Company or with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company or others;

(6)           The Company shall have
delivered to the Trustee an Opinion of Counsel, reasonably satisfactory to the
Trustee, to the effect that, (A) the trust funds will not be subject to the
rights of Holders of Indebtedness of the Company other than the Securities of
such Series and (B) assuming no intervening bankruptcy of the Company between
the date of deposit and the 91st day following the deposit and that no Holder
of Securities of such Series is an insider of the Company, after the 91st day
following the deposit, the trust funds will not be subject to any applicable
bankruptcy, insolvency, reorganization or similar law affecting creditors’
rights generally; and

(7)           The Company has
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that all conditions precedent specified herein relating to the
defeasance contemplated by this Section 8.01 have been complied with.  In the event all or any portion of the
Securities of a Series are to be redeemed through such irrevocable trust, the
Company must make arrangements satisfactory to the Trustee, at the time of such
deposit, for the giving of the notice of such redemption or redemptions by the
Trustee in the name and at the expense of the Company.

(e)           In addition to the
Company’s rights above under this Section 8.01, the Company may terminate all
of its obligations under this Indenture with respect to a Series, and

 29
 

the obligations of the Guarantors shall terminate with
respect to such Series (subject to Section 8.02), when:

(1)           All Securities of such
Series theretofore authenticated and delivered (other than Securities which
have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.07 and Securities for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust) have been
delivered to the Trustee for cancellation or all such Securities not
theretofore delivered to the Trustee for cancellation have become due and
payable and the Company has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust solely for that purpose an amount of
money sufficient to pay and discharge the entire Indebtedness on the Securities
not theretofore delivered to the Trustee for cancellation, for principal of and
interest;

(2)           The Company has paid or
caused to be paid all other sums payable hereunder by the Company;

(3)           The Company has
delivered irrevocable instructions to the Trustee to apply the deposited money
toward the payment of the Securities at maturity or redemption, as the case may
be; and

(4)           The Company has
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
stating that all conditions precedent specified herein relating to the
satisfaction and discharge of this Indenture have been complied with.

Section
8.02                            Survival
of the Company’s Obligations.

Notwithstanding the satisfaction and discharge of the
Indenture under Section 8.01, the Company’s obligations in paragraph 9 of the
Securities and Sections 2.03 through 2.07, 4.01, 7.07, 7.08, 8.04 and 8.05,
however, shall survive until the Securities of an applicable Series are no
longer outstanding.  Thereafter, the
Company’s obligations in paragraph 9 of the Securities of such Series and
Sections 7.07, 8.04 and 8.05 shall survive (as they relate to such Series).

Section
8.03                            Application
of Trust Money.

The Trustee shall hold in trust money or U.S.
government obligations deposited with it pursuant to Section 8.01.  It shall apply the deposited money and the
money from U.S. government obligations in accordance with this Indenture to the
payment of principal of and interest on the Securities of the defeased Series.

Section
8.04                            Repayment
to the Company.

The Trustee and the Paying Agent shall promptly pay to
the Company upon request any excess money or securities held by them at any
time.  The Trustee and the Paying Agent
shall pay to the Company upon request any money held by them for the payment of
principal or interest that remains unclaimed for two years, provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of

 30
 

the Company cause to be published once in a newspaper
of general circulation in the City of New York or mail to each such Holder
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication
or mailing, any unclaimed balance of such money then remaining will be repaid
to the Company.  After payment to the
Company, Securityholders entitled to the money must look to the Company or any
Guarantor for payment as general creditors unless applicable abandoned property
law designates another person and all liability of the Trustee or such Paying
Agent with respect to such money shall cease.

Section
8.05                            Reinstatement.

If the Trustee is unable to apply any money or U.S.
government obligations in accordance with Section 8.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company’s and each Guarantor’s obligations under this Indenture and the
Securities relating to the Series shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.01 until such time as the Trustee is
permitted to apply all such money or U.S. government obligations in accordance
with Section 8.01; provided, however, that (a) if the Company has made any
payment of interest on or principal of any Securities of the Series because of
the reinstatement of their obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
or U.S. government obligations held by the Trustee and (b) unless otherwise
required by any legal proceeding or any order or judgment of any court or
governmental authority, the Trustee shall return all such money or U.S.
government obligations to the Company promptly after receiving a written
request therefor at any time, if such reinstatement of the Company’s
obligations has occurred and continue to be in effect.

ARTICLE NINE

Guarantees

Section
9.01                            Unconditional
Guarantees.

Subject to any other provisions set forth in the
Authorizing Resolution or supplemental indenture relating to a particular
Series, each Guarantor hereby unconditionally, jointly and severally,
guarantees (each such guarantee to be referred to herein as the “Guarantee”) to each Holder of Securities of such Series
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, that: (i) the principal of and interest on the
Securities of such Series will be promptly paid in full when due, subject to
any applicable grace period, whether at maturity, by acceleration or otherwise
and interest on the overdue principal, if any, and interest on any interest of
the Securities of such Series and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder, except obligations to pay
principal and interest in any other Series not so guaranteed, will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (ii) in case of any ex tension of time of payment or renewal of any
Securities of such Series or of any such other obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, subject to any applicable grace period, whether at

 31
 

stated maturity, by acceleration or otherwise,
subject, however, in the case of clauses (i) and (ii) above, to the limitations
set forth in Section 9.04.  Each
Guarantor hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Securities of
such Series or this Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder of the Securities of such Series with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor.  Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that, subject to Section 9.03, this Guarantee will not
be discharged except by complete performance of the obligations contained in
the Securities of the applicable Series, this Indenture and in this
Guarantee.  If any Holder or the Trustee
is required by any court or otherwise to return to the Company, any Guarantor,
or any custodian, trustee, liquidator or other similar official acting in
relation to the Company or any Guarantor, any amount paid by the Company or any
Guarantor to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.  Each Guarantor further agrees that, as
between each Guarantor, on the one hand, and the Holders and the Trustee, on
the other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article Six, such
obligations (whether or not due and payable) shall forthwith become due and
payable by each Guarantor for the purpose of this Guarantee.

Section
9.02                            Severability.

In case any provision of this Guarantee shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

Section
9.03                            Release
of a Guarantor.

Upon the sale or disposition (whether by merger, stock
purchase, asset sale or otherwise) of a Guarantor (or all or substantially all
its assets) to an entity which is not a Restricted Subsidiary and which sale or
disposition is otherwise in compliance with the terms of this Indenture, or,
unless the Company elects otherwise, if any Guarantor is designated as an
Unrestricted Subsidiary in accordance with the terms of this Indenture, then
such Guarantor (in the event of a sale or other disposition of Capital Stock of
such Guarantor or a designation as an Unrestricted Subsidiary) or the Person
acquiring such assets (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) shall be deemed
automatically and unconditionally released and discharged from all obligations
under this Article Nine without any further action required on the part of the
Trustee or any Holder.

An Unrestricted Subsidiary that is a Guarantor shall
be deemed automatically and unconditionally released and discharged from all
obligations under this Article Nine upon notice

 32
 

from the Company to the Trustee to such effect,
without any further action required on the part of the Trustee or any Holder.

The Trustee shall deliver an appropriate instrument
evidencing any such release upon receipt of a request by the Company
accompanied by an Officers’ Certificate and Opinion of Counsel certifying as to
the compliance with this Section 9.03.

Any Guarantor not released in accordance with this
Section 9.03 remains liable for the full amount of principal of and interest on
the Securities as provided in this Article Nine.

Section
9.04                            Limitation
of a Subsidiary Guarantor’s Liability.

Each Guarantor and by its acceptance hereof each
Holder hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law.  To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all
other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under its
Guarantee or pursuant to Section 9.06, result in the obligations of such
Guarantor under the Guarantee not constituting such fraudulent transfer or conveyance.

Section
9.05                            Guarantors
May Consolidate, etc., on Certain Terms.

Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of a Guarantor with or
into the Company or another Restricted Guarantor, or shall prevent any sale of
assets or conveyance of the property of a Subsidiary Guarantor as an entirety
or substantially as an entirety to the Company or another Guarantor that is a
Restricted Subsidiary of the Company. 
Upon any such consolidation, merger, sale or conveyance, the Guarantee
given by such Guarantor shall no longer have any force or effect.

Section
9.06                            Contribution.

In order to provide for just and equitable
contribution among the Guarantors, the Guarantors agree, inter se, that in the
event any payment or distribution is made by any Guarantor (a “Funding Guarantor”) under the Guarantee, such Funding
Guarantor shall be entitled to a contribution from all other Guarantors in a
pro rata amount based on the Adjusted Net Assets of each Guarantor (including
the Funding Guarantor) for all payments, damages and expenses incurred by that
Funding Guarantor in discharging the Company’s obligations with respect to any
Securities or any other Guarantor’s obligations with respect to the
Guarantee.  “Adjusted Net
Assets” of such Guarantor at any date shall mean the lesser of the
amount by which (x) the fair value of the property of such Guarantor exceeds
the total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date and after giving effect to any collection from
any other Subsidiary of the Guarantor in respect of the obligations of its
Guarantee), but excluding liabilities under the Guarantee, of such Guarantor at
such date and (y) the present fair

 33
 

salable value of the assets of such Guarantor at such
date exceeds the amount that will be required to pay the probable liability of
such Guarantor on its debts (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date and after giving effect
to any collection from any other Subsidiary of the Company in respect of the
obligations of such Guarantor under its Guarantee), excluding debt in respect
of the Guarantee of such Guarantor, as they become absolute and matured.

Section
9.07                            Waiver
of Subrogation.

Until all guaranteed obligations under this Indenture
and with respect to all Securities of an applicable Series are paid in full,
each Guarantor hereby irrevocably waives any claim or other rights which it may
now or hereafter acquire against the Company that arise from the existence,
payment, performance or enforcement of such Guarantor’s obligations under the
Guarantee and this Indenture, including, without limitation, any right of
subrogation, reimbursement, exoneration, indemnification, and any right to
participate in any claim or remedy of any Holder of Securities of the
applicable Series against the Company, whether or not such claim, remedy or
right arises in equity, or under contract, statute or common law, including,
without limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights.  If any amount shall be paid to any Guarantor
in violation of the preceding sentence and the Securities of the applicable
Series shall not have been paid in full, such amount shall have been deemed to
have been paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Holders of the Securities of the applicable Series, and shall
forthwith be paid to the Trustee for the benefit of such Holders to be credited
and applied upon the Securities of the applicable Series, whether matured or
unmatured, in accordance with the terms of this Indenture.  Each Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
9.07 is knowingly made in contemplation of such benefits.

Section
9.08                            Execution
of Guarantee.

To evidence their guarantee to the Holders set forth
in this Article Nine, the Guarantors hereby agree to execute the Guarantee in
substantially the form included in Exhibit A or in any such other form
set forth in the Authorizing Resolution or supplemental indenture pertaining to
the applicable Series, which shall be endorsed on each Security ordered to be
authenticated and delivered by the Trustee. 
Each Guarantor hereby agrees that its Guarantee set forth in this
Article Nine shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation of such Guarantee.  Each such Guarantee shall be signed on behalf
of each Guarantor by two Officers, or an Officer and an Assistant Secretary or
one Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to such Guarantee prior to the authentication of the
Security on which it is endorsed, and the delivery of such Security by the
Trustee, after the authentication thereof hereunder, shall constitute due
delivery of such Guarantee on behalf of such Guarantor.  Such signatures upon the Guarantee may be by
manual or facsimile signature of such officers and may be imprinted or
otherwise reproduced on the Guarantee, and in case any such officer who shall
have signed the Guarantee shall cease to be such officer before the Security on
which such Guarantee is endorsed shall have been

 34
 

authenticated and delivered by the Trustee or disposed
of by the Company, such Security nevertheless may be authenticated and
delivered or disposed of as though the person who signed the Guarantee had not
ceased to be such officer of the Guarantor.

ARTICLE TEN

Amendments, Supplements and Waivers

Section
10.01                     Without
Consent of Holders.

The Company, the Guarantors and the Trustee may amend
or supplement this Indenture or the Securities of a Series without notice to or
consent of any Securityholder of such Series:

(1)           to cure any ambiguity,
omission, defect or inconsistency;

(2)           to comply with Article
Five;

(3)           to provide that
specific provisions of this Indenture shall not apply to a Series not
previously issued;

(4)           to create a Series and
establish its terms;

(5)           to provide for
uncertificated Securities in addition to or in place of certificated
Securities;

(6)           to make any other
change that does not adversely affect the rights of Securityholders; and

(7)           to remove a Guarantor
in respect of any Series which, in accordance with the terms of this Indenture
applicable to the particular Series, ceases to be liable in respect of its
Guarantee.

After an amendment under this Section 10.01 becomes
effective, the Company shall mail notice of such amendment to the
Securityholders.

Section
10.02                     With
Consent of Holders.

The Company, the Guarantors and the Trustee may amend
or supplement this Indenture or the Securities of a Series without notice to
any Securityholder of such Series but with the written consent of the Holders
of at least a majority in principal amount of the outstanding Securities of
each such Series affected by the amendment. 
Each such Series shall vote as a separate class. The Holders of a
majority in principal amount of the outstanding Securities of any Series may
waive compliance by the Company with any provision of the Securities of such
Series or of this Indenture relating to such Series without notice to any
Securityholder.  Without the consent of
each Securityholder of a Series affected, however, an amendment, supplement or
waiver, including a waiver pursuant to Section 6.04, may not:

 35
 

(1)           reduce the amount of
Securities of such Series whose Holders must consent to an amendment,
supplement or waiver;

(2)           reduce the rate of or
change the time for payment of interest, including defaulted interest, on any
Security;

(3)           reduce the principal of
or change the fixed maturity of any Security or alter the provisions (including
related definitions) with respect to redemption of Securities pursuant to
Article Three hereof or with respect to any obligations on the part of the
Company to offer to purchase or to redeem Securities of a Series pursuant to
the Authorizing Resolution or supplemental indenture pertaining to such Series;

(4)           modify the ranking or
priority of the Securities of any Series or the Guarantee thereof;

(5)           release any Guarantor
from any of its obligations under its Guarantee or this Indenture otherwise
than in accordance with the terms of this Indenture;

(6)           make any change in
Sections 6.04, 6.07 or this 10.02;

(7)           waive a continuing
Default or Event of Default in the payment of the principal of or interest on
any Security; or

(8)           make any Security
payable at a place or in money other than that stated in the Security, or
impair the right of any Securityholder to bring suit as permitted by Section
6.07.

An amendment of a provision included solely for the
benefit of one or more Series does not affect the interests of Securityholders
of any other Series.

It shall not be necessary for the consent of the
Holders under this Section to approve the particular form of any proposed
supplement, but it shall be sufficient if such consent approves the substance
thereof.

Section
10.03                     Compliance
with Trust Indenture Act.

Every amendment to or supplement of this Indenture or
the Securities shall comply with the TIA as then in effect.

Section
10.04                     Revocation
and Effect of Consents.

A consent to an amendment, supplement or waiver by a
Holder shall bind the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder’s
Security, even if notation of the consent is not made on any Security.  Subject to the following paragraph, any such
Holder or subsequent Holder, however, may revoke the consent as to his Security
or portion of a Security.  Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective.

 36
 

The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders of Securities of any
Series entitled to consent to any amendment, supplement or waiver, which record
date shall be at least 10 days prior to the first solicitation of such
consent.  If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date.  No such consent shall be
valid or effective for more than 90 days after such record date.

After an amendment, supplement or waiver becomes
effective, it shall bind every Holder, unless it makes a change described in
any of clauses (1) through (8) of Section 10.02, in which case, the amendment,
supplement or waiver shall bind only each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder’s Security;
provided that any such waiver shall not impair or affect the right of any
Holder to receive payment of principal of and interest on a Security, on or
after the respective due dates expressed in such Security, or to bring suit for
the enforcement of any such payment on or after such respective dates without
the consent of such Holder.

Section
10.05                     Notation
on or Exchange of Securities.

If an amendment, supplement or waiver changes the
terms of a Security, the Company may require the Holder of the Security to
deliver it to the Trustee, at which time the Trustee shall place an appropriate
notation on the Security about the changed terms and return it to the
Holder.  Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms.

Section
10.06                     Trustee
to Sign Amendments, etc.

Subject to Section 7.02(b), the Trustee shall sign any
amendment, supplement or waiver authorized pursuant to this Article if the
amendment, supplement or waiver does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. 
If it does, the Trustee may but need not sign it.  In signing or refusing to sign such amendment
or supplemental indenture, the Trustee shall be entitled to receive and shall
be fully protected in relying upon, an Officers’ Certificate and an Opinion of
Counsel as conclusive evidence that such amendment or supplemental indenture is
authorized or permitted by this Indenture, that it is not inconsistent
herewith, and that it will be valid and binding upon the Company in accordance
with its terms.

ARTICLE ELEVEN

Miscellaneous

Section
11.01                     Trust
Indenture Act Controls.

If any provision of this Indenture limits, qualifies
or conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.

 37
 

Section
11.02                     Notices.

Any order, consent, notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by first
class mail, postage prepaid, addressed as follows: if to the Company or to any
Guarantor:

Nova Biosource Fuels, Inc.

2777 Allen Parkway, Suite 860

Houston, Texas 77019

Attention: President

if to the Trustee:

Attention:

The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.

Any notice or communication mailed to a Securityholder
shall be mailed to him by first class mail at his address as it appears on the
registration books of the Registrar and shall be sufficiently given to him if
so mailed within the time prescribed.

Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its sufficiency with
respect to other Securityholders.  If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it except that notice to the
Trustee shall only be effective upon receipt thereof by the Trustee.

If the Company mails notice or communications to the
Securityholders, it shall mail a copy to the Trustee at the same time.

Section
11.03                     Communications
by Holders with Other Holders.

Securityholders may communicate pursuant to TIA ss.
312(b) with other Securityholders with respect to their rights under this
Indenture or the Securities.  The
Company, the Trustee, the Registrar and anyone else shall have the protection of TIA ss. 312(c).

Section
11.04                     Certificate
and Opinion as to Conditions Precedent.

Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company shall furnish to
the Trustee:

(1)           an Officers’
Certificate (which shall include the statements set forth in Section 11.05)
stating that, in the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with; and

 38
 

(2)           an Opinion of Counsel
(which shall include the statements set forth in Section 11.05) stating that,
in the opinion of such counsel, all such conditions precedent and covenants,
compliance with which constitutes a condition precedent, if any, provided for
in this Indenture relating to the proposed action or inaction, have been
complied with and that any such section does not conflict with the terms of the
Indenture.

Section
11.05                     Statements
Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall include:

(1)           a statement that the
person making such certificate or opinion has read such covenant or condition;

(2)           a brief statement as to
the nature and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion are based;

(3)           a statement that, in
the opinion of such person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and

(4)           a statement as to
whether or not, in the opinion of such person, such condition or covenant has
been complied with.

Section
11.06                     Rules
by Trustee and Agents.

The Trustee may make reasonable rules for action by or
a meeting of Securityholders.  The
Registrar or Paying Agent may make reasonable rules for its functions.

Section
11.07                     Legal
Holidays.

A “Legal Holiday”
is a Saturday, a Sunday, a legal holiday or a day on which banking institutions
in Houston, Texas and New York, New York are not required to be open.  If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period.  A “Business Day”
is any day other than a Legal Holiday.

Section
11.08                     Governing
Law.

THIS
INDENTURE, THE SECURITIES OF EACH SERIES AND THE GUARANTEES AND ALL DISPUTES OR
CONTROVERSIES ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OF
EACH SERIES AND THE GUARANTEES OR THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO THE LAWS OF ANY OTHER JURISDICTION THAT MIGHT BE
APPLIED BECAUSE OF PRINCIPLES OF CONFLICTS OF LAWS.

 39

Section 11.09                     No Adverse
Interpretation of Other Agreements.

This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or a Subsidiary.  Any such indenture, loan or debt agreement
may not be used to interpret this Indenture.

Section
11.10                     No
Recourse Against Others.

All liability described in paragraph 13 of the
Securities of any director, officer, employee or stockholder, as such, of the
Company is waived and released.

Section
11.11                     Successors
and Assigns.

All covenants and agreements of the Company in this
Indenture and the Securities shall bind its successors and assigns.  All agreements of the Trustee in this
Indenture shall bind its successors and assigns.

Section
11.12                     Duplicate
Originals.

The parties may sign any number of copies of this
Indenture.  Each signed copy shall be an
original, but all of them together represent the same agreement.

Section
11.13                     Severability.

In case any one or more of the provisions contained in
this Indenture or in the Securities of a Series shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Indenture or of such Securities.

 40
 

SIGNATURES

IN WITNESS WHEREOF, the
parties have caused this Indenture to be duly executed, all as of the date
first above written.

	
  Dated:

  	
   

  	
   

  	
   

  	
  NOVA BIOSOURCE FUELS, INC.:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
  [LIST OF GUARANTORS]:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
                                   ,
  as Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

(SEAL)

 41
 

EXHIBIT
A

	
  No.

  	
   

  	
  CUSIP No.:

  

 

[Title of
Security]

NOVA
BIOSOURCE FUELS, INC., a Nevada
corporation promises to pay to or registered assigns the principal sum of
                                          
[Dollars](1) on

[Title of Security]

Interest Payment, Dates:  and

Record Dates: and

Authenticated:                                                                     Dated:

	
  

  	
   

  	
  NOVA BIOSOURCE FUELS, INC.:

  
	
   

  	
   

  	
  (Seal)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

                                     ,
as Trustee, certifies that this is one of the Securities referred to in the
within mentioned Indenture.

	
  

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

(1) Or other
currency.  Insert corresponding
provisions on reverse side of Security in respect of foreign currency
denomination or interest payment requirement.

 42
 

NOVA
BIOSOURCE FUELS, INC.

[Title of Security]

1.                                      Interest.

NOVA BIOSOURCE FUELS,
INC. (the “Company”), a Nevada corporation,
promises to pay interest on the principal amount of this Security at the rate
per annum shown above.  The Company will
pay interest semiannually on                                
and
                               of
each year until the principal is paid or made available for payment.  Interest on the Securities will accrue from
the most recent date to which interest has been paid or duly provided for or,
if no interest has been paid, from                              ,
20   , provided that, if there is no existing default in the
payment of interest, and if this Security is authenticated between a record
date referred to on the face hereof and the next succeeding interest payment
date, interest shall accrue from such interest payment date.  Interest will be computed on the basis of a
360-day year of twelve 30-day months.

2.                                      Method
of Payment.

The Company will pay interest on the Securities
(except defaulted interest, if any, which will be paid on such special payment
date to Holders of record on such special record date as may be fixed by the
Company) to the persons who are registered Holders of Securities at the close
of business on the [Insert record dates]. 
Holders must surrender Securities to a Paying Agent to collect principal
payments.  The Company will pay principal
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts.

3.                                      Paying
Agent and Registrar.

Initially,                                    (the
“Trustee”) will act as Paying Agent and
Registrar.  The Company may change or
appoint any Paying Agent, Registrar or co-Registrar without notice.  The Company or any of its Subsidiaries may
act as Paying Agent, Registrar or co-Registrar.

4.                                      Indenture.

The Company issued the Securities under an Indenture
dated as of                            ,
      (“Indenture”)
among the Company, the Guarantors and the Trustee.  The terms of the Securities and the
Guarantees include those stated in the Indenture (including those terms set
forth in the Authorizing Resolution or supplemental indenture pertaining to the
Securities of the Series of which this Security is a part) and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (“TIA”) as in effect on the date of the Indenture.  The Securities and the Guarantees are subject
to all such terms, and Securityholders are referred to the Indenture and the
Act for a statement of them.

The Company will furnish to any Securityholder upon
written request and without charge a copy of the Indenture and the applicable
Authorizing Resolution or supplemental indenture.  Requests may be made to: Nova Biosource
Fuels, Inc., 2777 Allen Parkway, Suite 860, Houston, Texas 77019, Attention:
President.

 43
 

5.                                      Optional
Redemption.(1)

The Company may redeem the Securities at any time on
or after                              ,
      , in whole or in part, at the following
redemption prices(expressed as a percentage of their principal amount) together
with interest accrued and unpaid to the date fixed for redemption:

If redeemed during the Twelve-Month period commencing
on                              and
ending on                            in
each of the following years Percentage [Insert provisions relating to
redemption at option of Holders, if any]

Notice of redemption will be mailed at least 30 days
but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part.  On and after the redemption date interest
ceases to accrue on Securities or portions of them called for redemption,
provided that if the Company shall default in the payment of such Security at
the redemption price together with accrued interest, interest shall continue to
accrue at the rate borne by the Securities.

6.                                      Mandatory
Redemption.(2)

The Company shall redeem % of the aggregate principal
amount of Securities originally issued under the Indenture on each of, which
redemptions are calculated to retire % of the Securities originally issued
prior to maturity.  Such redemptions
shall be made at a redemption price equal to 100% of the principal amount thereof,
together with accrued interest to the redemption date.  The Company may reduce the principal amount
of Securities to be redeemed pursuant to this Paragraph 6 by the principal
amount of any Securities previously redeemed, retired or acquired, otherwise
than pursuant to this Paragraph 6, that the Company has delivered to the
Trustee for cancellation and not previously credited to the Company’s
obligations under this Paragraph 6.

Each such Security shall be received and credited for
such purpose by the Trustee at the redemption price and the amount of such
mandatory redemption payment shall be reduced accordingly.

7.                                      Denominations,
Transfer, Exchange.

The Securities are in registered form without coupons
in denominations of $1,000 and integral multiples of $1,000.  A Holder may transferor exchange Securities
by presentation of such Securities to the Registrar or a co-Registrar with a
request to register the transfer or to exchange them for an equal principal
amount of Securities of other denominations.  The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture.  The Registrar need not transfer or exchange
any Security selected for redemption, except the unredeemed part thereof if the
Security is redeemed in part, or transfer or exchange any Securities for a
period of 15 days before a selection of Securities to be redeemed.

(1) If applicable
[Insert provisions relating to redemption at option of Holders, if any]

(2)
If applicable.  Insert different or
additional denomination and multiples.

 44
 

8.                                      Persons
Deemed Owners.

The registered Holder of this Security shall be
treated as the owner of it for all purposes.

9.                                      Unclaimed
Money.

If money for the payment of principal or interest
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Company at its request. 
After that, Holders entitled to the money must look to the Company for
payment unless an abandoned property law designates another person.

10.                               Amendment,
Supplement, Waiver.

Subject to certain exceptions, the Indenture or the
Securities may be amended or supplemented with the consent of the Holders of at
least a majority in principal amount of the outstanding Securities of each
Series affected by the amendment, and any past default or compliance with any
provision relating to any Series of the Securities may be waived in a
particular instance with the consent of the Holders of a majority in principal
amount of the outstanding Securities of such Series.(3) Without the consent of
any Securityholder, the Company and the Trustee may amend or supplement the
Indenture or the Securities to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Securities in addition to or in place of
certificated Securities, to create a Series and establish its terms, to remove
a Guarantor in respect of any Series which, in accordance with the terms of the
Indenture, ceases to be liable in respect of its Guarantee, or to make any
other change, provided such action does not adversely affect the rights of any
Securityholder.

11.                               Successor
Corporation.

When a successor corporation assumes all the
obligations of its predecessor under the Securities and the Indenture, the
predecessor corporation will be released from those obligations.

12.                               Trustee
Dealings With Company.

                                                                    ,
the Trustee under the Indenture, in its individual or any other capacity, may
make loans to, accept deposits from, and perform services for the Company or
its affiliates, and may otherwise deal with the Company or its affiliates, as
if it were not Trustee.

13.                               No
Recourse Against Others.

A director, officer, employee or stockholder, as such,
of the Company shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation.  Each

(3) If different terms apply, insert a brief summary
thereof.

 45
 

Securityholder by accepting a Security waives and
releases all such liability.  The waiver
and release are part of the consideration for the issue of the Securities.

14.                               Discharge
of Indenture.

The Indenture contains certain provisions pertaining
to defeasance, which provisions shall for all purposes have the same effect as
if set forth herein.

15.                               Authentication.

This Security shall not be valid until the Trustee
signs the certificate of authentication on the other side of this Security.

16.                               Abbreviations.

Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

 46
 

ASSIGNMENT
FORM

	
  If you the Holder want to
  assign this Security, fill in the form below:

  
	
   

  
	
  I or we assign
  and transfer this Security to

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Insert assignee’s social security or tax ID number)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Print or type assignee’s name, address, and zip
  code)

  
	
   

  
	
  and irrevocably appoint

  
	
   

  
	
   

  
	
  agent to transfer this Security on the books of the Company.  

  
	
   

  
	
  The agent may substitute another to act for him.

  
	
   

  
	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  	
  Your signature:

  	
   

  	
   

  
	
   

  	
  (Sign exactly as your name appears on the

  other side of this Security)

  
	
   

  
	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
								

 

 47
 

[FORM OF
NOTATION ON SECURITY RELATING TO GUARANTEE]

GUARANTEE

[List of Guarantors] (the “Guarantors”)
have unconditionally guaranteed, jointly and severally (such guarantee by each
Guarantor being referred to herein as the “Guarantee”) (i)
the due and punctual payment of the principal of and interest on the
Securities, whether at maturity, by acceleration or otherwise, the due and
punctual payment of interest on the overdue principal and interest, if any, on
the Securities, to the extent lawful, and the due and punctual performance of
all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms set forth in Article Nine of the Indenture and (ii)
in case of any extension of time of payment or renewal of any Securities or any
of such other obligations, that the same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise.

No past, present or future stockholder, officer,
director, employee or incorporator, as such, of any of the Guarantors shall
have any liability under the Guarantee by reason of such person’s status as
stockholder, officer, director, employee or incorporator.  Each holder of a Security by accepting a
Security waives and releases all such liability.  This waiver and release are part of the
consideration for the issuance of the Guarantees.  Each holder of a Security by accepting a
Security agrees that any Guarantor named below shall have no further liability
with respect to its Guarantee if such Guarantor otherwise ceases to be liable
in respect of its Guarantee in accordance with the terms of the Indenture.

The Guarantee shall not
be valid or obligatory for any purpose until the certificate of authentication
on the Securities upon which the Guarantee is noted shall have been executed by
the Trustee under the Indenture by the manual signature of one of its
authorized officers.

	
  

  	
   

  	
  [LIST OF GUARANTORS]:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 48

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