EMPLOYMENT AGREEMENT
Exhibit
10.1
Mushakov
Employment Agreement
EMPLOYMENT
AGREEMENT, dated as of July 27, 2006 (this “Agreement”), between NOVASTAR
RESOURCES LTD., a Nevada corporation (the “Company”), and ANDREY MUSHAKOV, an
individual (the “Executive”).
BACKGROUND
The
Company is entering into a merger agreement on or about the date hereof (the
“Merger Agreement”), pursuant to which the Company is acquiring all of the
issued and outstanding capital stock of Thorium Power, Inc (“Thorium Power”).
The Executive is an Executive at Thorium Power. The execution and delivery
of
this Agreement is a condition precedent to the consummation of the transactions
contemplated by the Merger Agreement (the “Closing”).
The
Company wishes to secure the services of the Executive as the Executive Vice
President - International Nuclear Operations of the Company upon the terms
and
conditions hereinafter set forth, and the Executive wishes to render such
services to the Company upon the terms and conditions hereinafter set forth.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto, intending to
be
legally bound, agree as follows:
1. Employment
by the Company. The Company agrees to employ the Executive in the position
of Executive Vice President - International Nuclear Operations and the Executive
accepts such employment and agrees to perform the duties that are customarily
performed of an Executive Vice President of a company like the Company. Except
to the extent that the Executive deems it necessary to tend to the affairs
of
Thorium Power prior to the Closing, the Executive agrees to devote his full
business time and energies to the business of the Company and/or its
Subsidiaries and/or Affiliates and to faithfully, diligently and competently
perform his duties hereunder.
2. Term
of Employment. The term of this Employment Agreement (the "Term") shall be
for the initial period commencing on the date that the Company provides the
Executive with a certificate of insurance that indicates that the Company has
obtained directors and officers liability insurance coverage sufficient to
cover
liabilities of at least $5,000,000 and ending on the fifth anniversary of the
date thereof (provided that the provisions of Section 6 hereof shall survive
any
such termination), unless the Executive is earlier terminated as provided in
Section 4 hereof. The Term of this Agreement shall automatically be extended
for
additional one year periods following the expiration of the initial Term unless
either party notifies the other party in writing that it does not want to renew
this Agreement within 30 days prior to the expiration of the initial Term or
any
renewal Term.
3. Compensation.
As full compensation for all services to be rendered by the Executive to the
Company and/or its Subsidiaries and/or Affiliates in all capacities during
the
Term, the Executive shall receive the following compensation and
benefits:
3.1 Salary.
An
annual base salary of $160,000 (the "Base Salary") payable not less frequently
than monthly or at more frequent intervals in accordance with the then customary
payroll practices of the Company. The board of directors of the Company shall
review the Executive’s performance on an annual basis and shall suggest
increases (but not decreases) to the Executive’s Base Salary as the board of
directors of the Company deems appropriate.
3.2 Equity
Participation.
(a) As
a
signing bonus, the Company shall promptly (and in any event, within 5 business
days) issue to the Executive 1,500,000 shares of the Company’s Restricted Common
Stock. The Executive shall not directly or indirectly sell, transfer or
otherwise dispose of 750,000 of such shares for a period of one year and the
remaining 750,000 shares for a period of two years, except for sales, transfers
or other dispositions made to family members, for estate planning purposes,
or
pursuant to a qualified domestic relations order; provided that the transferee
in such instance agrees in writing to be similarly bound to such transfer
restriction. For the avoidance of doubt, all 1,500,000 shares are immediately
earned upon issuance and not subject to any vesting or repurchase right in
favor
of the Company or any other person. The shares will bear a customary restrictive
legend that refers to the aforementioned transfer restriction and applicable
transfer restrictions under the Securities Act of 1933 and the stop transfer
orders shall be imposed against the shares.
(b) The
Executive shall be eligible to participate in the Company's 2006 Stock Plan
(the
"Plan"). The Executive shall, upon execution of this Agreement, be granted
options to acquire 2,250,000 shares of Common Stock, $0.001 par value, of the
Company pursuant to the Plan. Upon signing of the Employment Agreement, 234,375
shares underlying the Option shall become vested. The remaining 2,015,625 shares
underlying the Option shall vest in equal monthly installments of 46,875 shares;
provided that the Option shall immediately vest upon a Change of Control (as
defined below) of the Executive, termination of the Executive by the Company
without Cause (as defined below), or the cessation by the Executive of his
employment with the Company for Good Reason (as defined below). Such options
are
intended to be nonqualified stock options, with an exercise price equal to
the
fair market value of the Company’s Common Stock on the date of grant. The term
of the option will be ten years. The Executive will receive additional option
grants in the future as may be determined by the board of directors of the
Company.
3.3 Bonus.
In
addition to the Base Salary, the Executive shall be entitled to an annual
incentive bonus of up to 50% of the Executive’s Base Salary. In making its
determination of what percentage of Base Salary the Executive will be entitled
to as a bonus, if any, the board of directors of the Company will consider
the
Company’s progress with regard to achievement of the following milestones: new
patents, government grants, appropriations, and contracts, partnering and
teaming arrangements with other companies (including the University of Texas
and
Kurchatov Institute), testing and other advancement of technology in Russia,
Europe and elsewhere, revenues, attracting other qualified key employees, and
investor relations.
2
3.4 Participation
in Employee Benefit Plans; Other Benefits.
The
Executive shall be permitted during the Term to participate in all employee
benefit plans, policies and practices now or hereafter maintained by or on
behalf of the Company commensurate with the Executive's position with the
Company. During the Term, the Company will maintain a group health and dental
program, group life insurance, short and long term disability insurance, 401(k)
plan, paid vacation, paid sick leave, paid holidays and unpaid
leave.
3.5 Expenses.
The
Company shall pay or reimburse the Executive for all reasonable and necessary
expenses actually incurred or paid by the Executive during the Term in the
performance of the Executive's duties under this Agreement, upon submission
and
approval of expense statements, vouchers or other supporting information in
accordance with the then customary practices of the Company.
3.6 Vacation.
The
Executive shall be entitled to four weeks of paid vacation time per
year.
3.7 Withholding
of Taxes.
The
Company may withhold from any benefits payable under this Agreement all federal,
state, city and other taxes as shall be required pursuant to any law or
governmental regulation or ruling.
3.8 Credit
From Thorium Power Employment Agreement.
The
Company acknowledges and agrees that the Executive is currently acting, and
will
continue to act, as an Executive at Thorium Power and that Thorium Power does,
and will continue to, compensate the Executive for the performance of such
services. The Executive shall cease receiving compensation from Thorium Power
at
the Closing. Until such time, any cash compensation actually received by the
Executive from Thorium Power for services rendered in the Executive’s capacity
as an Executive at Thorium Power shall be credited toward the cash components
of
the Executive’s compensation under this Section 3.
4. Termination.
4.1 Termination
upon Death.
If the
Executive dies during the Term, this Agreement shall terminate as of the date
of
his death.
4.2 Termination
upon Disability.
If
during the Term the Executive becomes physically or mentally disabled, whether
totally or partially, so that the Executive is unable to perform his essential
job functions hereunder for a period aggregating 180 days during any
twelve-month period, and it is determined by a physician acceptable to both
the
Company and the Executive that, by reason of such physical or mental disability,
the Executive shall be unable to perform the essential job functions required
of
him hereunder for such period or periods, the Company may, by written notice
to
the Executive, terminate this Agreement, in which event the Term shall terminate
10 days after the date upon which the Company shall have given notice to the
Executive of its intention to terminate this Agreement because of the
disability.
3
4.3 Termination
for Cause.
The
Company may at any time by written notice to the Executive terminate this
Agreement immediately and, except as provided in Section 5.2 hereof, the
Executive shall have no right to receive any compensation or benefit hereunder
on and after the date of such notice, in the event that an event of "Cause"
occurs. For purposes of this Agreement "Cause" shall mean (a) conviction of
a
felony, bad faith or willful gross misconduct that, in any case, results in
material damage to the business or reputation of the Company; (b) willful and
continued failure to perform his duties hereunder (other than such failure
resulting from the Executive’s incapacity due to physical or mental illness or
after the issuance of a notice of termination by the Executive for Good Reason)
within 30 days after the Company delivers to him a written demand for
performance that specifically identifies the actions to be performed; or (c)
a
material breach of any of the covenants set forth in the Employment Agreement.
For purposes of this Section 4.3, no act or failure to act by the Executive
shall be considered “willful” if such act is done by the Executive in the good
faith belief that such act is or was to be beneficial to the Company or one
or
more of its businesses, or such failure to act is due to the Executive’s good
faith belief that such action would be materially harmful to the Company or
one
of its businesses. Cause shall not exist unless and until the Company has
delivered to the Executive a copy of a resolution duly adopted by the board
of
directors (excluding the Executive for purposes of adoption) at a meeting of
the
board of directors of the Company called and held for such purpose after
reasonable (but in no event less than thirty days’) notice to the Executive and
an opportunity for the Executive, together with his counsel, to be heard before
the board, finding that in the good faith opinion of the board that “Cause”
exists and specifying the particulars thereof in detail. This Section 4.3 shall
not prevent the Executive from challenging in any court of competent
jurisdiction the board of directors’ determination that Cause exists or that the
Executive has failed to cure any act (or failure to act) that purportedly formed
the basis for the board of directors’ determination.
4.4 Termination
without Cause.
The
Company may terminate this Employment Agreement at any time, without cause,
upon
30 days' written notice by the Company to the Executive and, except as provided
in Section 5.1 hereof, the Executive shall have no right to receive any
compensation or benefit hereunder after such termination.
4
4.5 Termination
for Good Reason.
The
Executive may terminate his employment for Good Reason after giving the Company
detailed written notice thereof, if the Company shall have failed to cure the
event or circumstance constituting Good Reason within 30 business days after
receiving such notice. “Good Reason” shall mean the occurrence of any of the
following without the written consent of the Executive: (a) the assignment
to
the Executive of duties inconsistent with this Agreement or a change in his
titles or authority; (b) any failure by the Company to comply with Section
3
hereof in any material way; (c) the requirement of the Executive to relocate
to
a location that is more than [50] miles from the Executive’s work location on
the effective date of this Agreement, (d) any material breach of this Agreement
by the Company, or (e) a “Change of Control”. The Executive’s right to terminate
his employment hereunder for Good Reason shall not be affected by his incapacity
due to physical or mental illness. The Executive’s continued employment shall
not constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason. For purposes of this Agreement, a
“Change of Control” shall be deemed to have occurred if (i) a tender offer shall
be made and consummated for the ownership of more than 50% of the outstanding
voting securities of the Company, (ii) the Company shall be merged or
consolidated with another corporation or entity and as a result of such merger
or consolidation less than 50% of the outstanding voting securities of the
surviving or resulting corporation or entity shall be owned in the aggregate
by
former shareholders of the Company, as the same shall have existing immediately
prior to such merger or consolidation, (iii) the Company shall sell, lease,
or
otherwise dispose of, all or substantially all of its assets to another
corporation or entity which is not a wholly-owned subsidiary, or (iv) a person,
within the meaning of Section 3(a)(9) or Section 13(d)(3) (as in effect on
the
date hereof) of the Securities Exchange Act of 1934 shall acquire more than
50%
of the outstanding voting securities of the Company (whether directly,
indirectly, beneficially, or of record). Notwithstanding the foregoing, the
transactions contemplated by the Merger Agreement shall not constitute a Change
of Control.
4.6 Without
Good Reason.
The
Executive shall have the right to terminate his employment hereunder without
Good Reason by providing the Company with 30 days advance written notice of
termination.
5. Severance
Payments.
5.1 Certain
Severance Payments.
If
during the Term this Agreement is terminated pursuant to any of Sections 4.1,
4.2, 4.4 or 4.5, all compensation payable to the Executive under Section 3
hereof shall cease as of the date of termination specified in the Company's
notice (the "Termination Date"), and the Company shall pay to the Executive,
subject to Section 6 hereof, the following sums: (i) the Base Salary on the
Termination Date for six (6) months (the "Severance Period"), payable in monthly
installments; (ii) benefits under group health, dental and life insurance plans
and such other plans referred to in Section 3.2 that the Executive may continue
to participate in as a non-employee through the Severance Period; and (iii)
all
previously earned, accrued, and unpaid benefits from the Company and its
employee benefit plans, including any such benefits under the Company's pension,
disability, and life insurance plans, policies, and programs. If, prior to
the
date on which the Company's obligations under clause (i) of this Section 5.1
cease, the Executive violates Section 6 hereof, then the Company shall have
no
obligation to make any of the payments that remain payable by the Company under
clauses (i) and (ii) of this Section 5.1 on or after the date of such
violation.
5
Notwithstanding
the foregoing, if, based on Internal Revenue Service guidance available as
of
the date the payment or provision of any amount or other benefit is specified
to
be made under this Agreement or elsewhere, the Company reasonably determines
that the payment or provision of such amount or other benefit at such specified
time may potentially subject the Executive to “additional tax” under Section
409A(a)(1)(B) of the Code (together with any interest or penalties imposed
with
respect to, or in connection with, such tax, a “409A Tax”) with respect to the
payment of such amount or the provision of such benefit, and if payment or
provision thereof at a later date would likely avoid any such 409A Tax, then
the
payment or provision thereof shall be postponed to the earliest business day
on
which the Company reasonably determines such amount or benefit can be paid
or
provided without incurring any such 409A Tax, but in no event later than the
first business day after the six-month anniversary of the Executive’s
termination date (the “Delayed Payment Date”). In addition, if the Company
reasonably determines that such 409A Tax with respect to the provision of a
benefit can likely be avoided by replacing the benefit with the payment of
an
amount in cash equal to the cost of a substantially equivalent benefit then,
in
lieu providing such benefit, the Company may make such cash payment, subject
to
the preceding sentence. The Company and the Executive may agree to take other
actions to avoid the imposition of 409A Tax at such time and in such manner
as
permitted under Section 409A. In the event that a delay of any payment is
required under this provision, such payment shall be accumulated and paid in
a
single lump sum on the Delayed Payment Date together with interest for the
period of delay, compounded monthly, equal to the prime or base lending rate
then used by CitiBank, N.A., in New York City and in effect as of the date
the
payment would otherwise have been provided.
5.2 Payments
upon Termination for Cause or Termination without Good Reason.
If this
Employment Agreement is terminated by the Company pursuant to Section 4.3 hereof
or by the Executive pursuant to Section 4.6 hereof, the Executive shall receive
only the amounts specified in clause (iii) of Section 5.1 hereof.
6. Certain
Covenants of the Executive.
6.1 Covenants.
The
Executive acknowledges that: (i) he is one of the limited number of persons
who
will develop the business of the Company (the "Company's Current Lines of
Business"); (ii) the Company conducts its business on a nationwide basis; (iii)
his work for the Company has brought him and, from and after the Closing, his
work for the Company and its Subsidiaries and Affiliates, will continue to
bring
him into close contact with many confidential affairs not readily available
to
the public; (iv) the Company would not consummate the transactions contemplated
by the Merger Agreement but for the agreements and covenants of the Executive
contained herein; and (v) the covenants contained in this Section 6 will not
involve a substantial hardship upon his future livelihood. In order to induce
the Company to execute and deliver the Merger Agreement and to induce the
Company to enter into this Employment Agreement, the Executive covenants and
agrees that:
6
6.2 Non-Compete.
During
the Term and for a period of twelve (12) months following the termination of
the
Executive's employment with the Company or any of its Subsidiaries or Affiliates
(the "Restricted Period"), the Executive shall not, directly or indirectly,
(i)
in any manner whatsoever engage in any capacity with any business competitive
with the Company's Current Lines of Business or any business then engaged in
by
the Company, any of its Subsidiaries or any of its Affiliates (the "Company's
Business") for the Executive's own benefit or for the benefit of any person
or
entity other than the Company or any Subsidiary or Affiliate; or (ii) have
any
interest as owner, sole proprietor, shareholder, partner, lender, director,
officer, manager, employee, consultant, agent or otherwise in any business
competitive with the Company's Business; provided,
however,
that
the Executive may hold, directly or indirectly, solely as an investment, not
more than two percent (2%) of the outstanding securities of any person or entity
which are listed on any national securities exchange or regularly traded in
the
over-the-counter market notwithstanding the fact that such person or entity
is
engaged in a business competitive with the Company's Business. In addition,
during the Restricted Period, the Executive shall not develop any property
for
use in the Company's Business on behalf of any person or entity other than
the
Company, its Subsidiaries and Affiliates.
6.3 Confidential
Information.
During
the Restricted Period, the Executive shall not, directly or indirectly, disclose
to any person or entity who is not authorized by the Company or any Subsidiary
or Affiliate to receive such information, or use or appropriate for his own
benefit or for the benefit of any person or entity other than the Company or
any
Subsidiary or Affiliate, any documents or other papers relating to the Company's
Business or the customers of the Company or any Subsidiary or Affiliate,
including, without limitation, files, business relationships and accounts,
pricing policies, customer lists, computer software and hardware, or any other
materials relating to the Company's Business or the customers of the Company
or
any Subsidiary or Affiliate or any trade secrets or confidential information,
including, without limitation, any business or operational methods, drawings,
sketches, designs or product concepts, know-how, marketing plans or strategies,
product development techniques or plans, business acquisition plans, financial
or other performance data, personnel and other policies of the Company or any
Subsidiary or Affiliate, whether generated by the Executive or by any other
person, except as required in the course of performing his duties hereunder
or
with the express written consent of the Company; provided,
however,
that
the confidential information shall not include any information readily
ascertainable from public or published information, or trade sources (other
than
as a direct or indirect result of unauthorized disclosure by the
Executive).
6.4 Employees
of and Consultants to the Company.
During
the Restricted Period, the Executive shall not, directly or indirectly (other
than in furtherance of the business of the Company), initiate communications
with, solicit, persuade, entice, induce or encourage any individual who is
then
or who has been within the 12-month period preceding the Executive’s termination
of employment with the Company, an employee of or consultant to the Company
or
any of its Subsidiaries or Affiliates to terminate employment with, or a
consulting relationship with, the Company or such Subsidiary or Affiliate,
as
the case may be, or to become employed by or enter into a contract or other
agreement with any other person, and the Executive shall not approach any such
employee or consultant for any such purpose or authorize or knowingly approve
the taking of any such actions by any other person.
6.5 Solicitation
of Customers.
During
the Restricted Period, the Executive shall not, directly or indirectly, initiate
communications with, solicit, persuade, entice, induce, encourage (or assist
in
connection with any of the foregoing) any person who is then or has been within
the 12-month period preceding the Executive’s termination of employment with the
Company a customer or account of the Company or its Subsidiaries or Affiliates,
or any actual customer leads whose identity the Executive learned during the
course of his employment with the Company, to terminate or to adversely alter
its contractual or other relationship with the Company or its Subsidiaries
or
Affiliates.
7
6.6 Rights
and Remedies Upon Breach.
If the
Executive breaches, or threatens to commit a breach of, any of the provisions
of
Section 6 hereof (collectively, the "Restrictive Covenants"), the Company and
its Subsidiaries and Affiliates shall, in addition to the rights set forth
in
Section 5.1 hereof, have the right and remedy to seek from any court of
competent jurisdiction specific performance of the Restrictive Covenants or
injunctive relief against any act which would violate any of the Restrictive
Covenants, it being acknowledged and agreed that any such breach or threatened
breach will cause irreparable injury to the Company and its Subsidiaries and
Affiliates and that money damages will not provide an adequate remedy to the
Company and its Subsidiaries and Affiliates.
6.7 Severability
of Covenants.
If any
of the Restrictive Covenants, or any part thereof, is held by a court of
competent jurisdiction or any foreign, federal, state, county or local
government or other governmental, regulatory or administrative agency or
authority to be invalid, void, unenforceable or against public policy for any
reason, the remainder of the Restrictive Covenants shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and such
court, government, agency or authority shall be empowered to substitute, to
the
extent enforceable, provisions similar thereto or other provisions so as to
provide to the Company and its Subsidiaries and Affiliates, to the fullest
extent permitted by applicable law, the benefits intended by such
provisions.
6.8 Enforceability
in Jurisdictions.
The
parties intend to and hereby confer jurisdiction to enforce the Restrictive
Covenants upon the courts of any jurisdiction within the geographical scope
of
such Covenants. If the courts of any one or more of such jurisdictions hold
the
Restrictive Covenants wholly invalid or unenforceable by reason of the breadth
of such scope or otherwise, it is the intention of the parties that such
determination not bar or in any way affect the Company's right to the relief
provided above in the courts of any other jurisdiction within the geographical
scope of such Restrictive Covenants, as to breaches of such Restrictive
Covenants in such other respective jurisdictions, such Restrictive Covenants
as
they relate to each jurisdiction being, for this purpose, severable into diverse
and independent covenants.
7. Indemnification.
7.1 General.
The
Company agrees that if the Executive is made a party or is threatened to be
made
a party to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), other than a Proceeding
initiated by the Company to enforce its rights under this Agreeemnt, by reason
of the fact that the Executive is or was a trustee, director or officer of
the
Company, or any predecessor to the Company or any of their Affiliates or is
or
was serving at the request of the Company, any predecessor to the Company,
or
any of their affiliates as a trustee, director, officer, member, employee or
agent of another corporation or a partnership, joint venture, limited liability
company, trust or other enterprise, including, without limitation, service
with
respect to employee benefit plans, whether or not the basis of such Proceeding
is alleged action in an official capacity as a trustee, director, officer,
member, employee or agent while serving as a trustee, director, officer, member,
employee or agent, the Executive shall be indemnified and held harmless by
the
Company to the fullest extent authorized by Nevada law, as the same exists
or
may hereafter be amended, against all Expenses incurred or suffered by the
Executive in connection therewith, and such indemnification shall continue
as to
the Executive even if the Executive has ceased to be an officer, director,
trustee or agent, or is no longer employed by the Company and shall inure to
the
benefit of his heirs, executors and administrators. Notwithstanding the
foregoing, the Executive shall not be entitled to indemnification by the Company
in respect of, and to the extent that, any Expenses arising as a result of
the
bad faith, willful misconduct or gross negligence of the Executive, or the
Executive’s conviction of a felony.
8
7.2 Expenses.
As used
in this Agreement, the term "Expenses" shall include, without limitation,
damages, losses, judgments, liabilities, fines, penalties, excise taxes,
settlements, and costs, attorneys' fees, accountants' fees, and disbursements
and costs of attachment or similar bonds, investigations, and any expenses
of
establishing a right to indemnification under this Agreement.
7.3 Enforcement.
If a
claim or request under this Section 7 is not paid by the Company or on its
behalf, within thirty (30) days after a written claim or request has been
received by the Company, the Executive may at any time thereafter bring suit
against the Company to recover the unpaid amount of the claim or request and
if
successful in whole or in part, the Executive shall be entitled to be paid
also
the expenses of prosecuting such suit. All obligations for indemnification
hereunder shall be subject to, and paid in accordance with, applicable
Nevada law.
7.4 Partial
Indemnification.
If the
Executive is entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of any Expenses, but not, however, for
the
total amount thereof, the Company shall nevertheless indemnify the Executive
for
the portion of such Expenses to which the Executive is entitled.
7.5 Advances
of Expenses.
Expenses incurred by the Executive in connection with any Proceeding shall
be
paid by the Company in advance upon request of the Executive that the Company
pay such Expenses, but only in the event that the Executive shall have delivered
in writing to the Company (i) an undertaking to reimburse the Company for
Expenses with respect to which the Executive is not entitled to indemnification
and (ii) a statement of his good faith belief that the standard of conduct
necessary for indemnification by the Company has been met.
7.6 Notice
of Claim.
The
Executive shall give to the Company notice of any claim made against him for
which indemnification will or could be sought under this Agreement. In addition,
the Executive shall give the Company such information and cooperation as it
may
reasonably require and as shall be within the Executive's power and at such
times and places as are convenient for the Executive.
9
7.7 Defense
of Claim.
With
respect to any Proceeding as to which the Executive notifies the Company of
the
commencement thereof:
(a) The
Company will be entitled to participate therein at its own expense;
(b) Except
as
otherwise provided below, to the extent that it may wish, the Company will
be
entitled to assume the defense thereof, with counsel reasonably satisfactory
to
the Executive, which in the Company's sole discretion may be regular counsel
to
the Company and may be counsel to other officers and directors of the Company
or
any subsidiary. The Executive also shall have the right to employ his own
counsel in such action, suit or proceeding if he reasonably concludes that
failure to do so would involve a conflict of interest between the Company and
the Executive, and under such circumstances the fees and expenses of such
counsel shall be at the expense of the Company.
(c) The
Company shall not be liable to indemnify the Executive under this Agreement
for
any amounts paid in settlement of any action or claim effected without its
written consent. The Company shall not settle any action or claim in any manner
which would impose any penalty that would not be paid directly or indirectly
by
the Company or limitation on the Executive without the Executive's written
consent. Neither the Company nor the Executive will unreasonably withhold or
delay their consent to any proposed settlement.
(d) Non-exclusivity.
The
right to indemnification and the payment of expenses incurred in defending
a
Proceeding in advance of its final disposition conferred in this Section 7
shall
not be exclusive of any other right which the Executive may have or hereafter
may acquire under any statute or certificate of incorporation or by-laws of
the
Company or any subsidiary, agreement, vote of shareholders or disinterested
directors or trustees or otherwise.
8. Other
Provisions.
8.1 Notices.
Any
notice or other communication required or which may be given hereunder shall
be
in writing and shall be delivered personally, telecopied, telegraphed or
telexed, or sent by certified, registered or express mail, postage prepaid,
to
the parties at the addresses specified on the signature page hereto, or at
such
other addresses as shall be specified by the parties by like notice, and shall
be deemed given when so delivered personally, telecopied, telegraphed or
telexed, or if mailed, two days after the date of mailing, to the addresses
specified on the signature page hereto, or, in the case of the Company, to
such
other address as the Company may specify as the address for its executive
offices in any reports filed by the Company with the Securities and Exchange
Commission.
8.2 Entire
Agreement.
This
Agreement contains the entire agreement between the parties with respect to
the
subject matter hereof and supersedes all prior contracts and other agreements,
written or oral, with respect thereto.
10
8.3 Waivers
and Amendments.
This
Agreement may be amended, modified, superseded, cancelled, renewed or extended,
and the terms and conditions hereof may be waived, only by a written instrument
signed by the parties or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any right, power
or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver
on
the part of any party of any right, power or privilege hereunder, nor any single
or partial exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, power
or
privilege hereunder.
8.4 Governing
Law.
This
Agreement shall be governed by, and construed in accordance with and subject
to,
the laws of the State of Nevada applicable to agreements made and to be
performed entirely within such state.
8.5 Binding
Effect; Benefit.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and any successors and assigns permitted or required by Section 8.6 hereof.
Nothing in this Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto or such successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this
Agreement.
8.6 Assignment.
This
Agreement, and the Executive's rights and obligations hereunder, may not be
assigned by the Executive. The Company may assign this Agreement and its rights,
together with its obligations, hereunder in connection with any sale, transfer
or other disposition of all or substantially all of its assets or business,
whether by merger, consolidation or otherwise.
8.7 Definitions.
For
purposes of this Agreement:
11
(a) "Affiliate"
shall
mean a person that, directly or indirectly, controls or is controlled by, or
is
under common control with the Company;
(b) "control"
(including, with correlative meaning, the terms "controlled by" and "under
common control with") as used with respect to any person or entity, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person or entity, whether
through ownership of voting securities or by contract or other agreement or
otherwise; and
(c) “Subsidiary"
shall
mean any person or entity as to which the Company, directly or indirectly,
owns
or has the power to vote, or to exercise a controlling influence with respect
to, fifty percent (50%) or more of the securities of any class of such person,
the holders of which class are entitled to vote for the election of directors
(or persons performing similar functions) of such person.
8.8 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original but all of which together shall constitute one and the same
instrument.
8.9 Headings.
The
headings in this Agreement are for reference purposes only and shall not in
any
way affect the meaning or interpretation of this Employ-ment
Agreement.
[Signature
Page Follows]
12
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
|
By:
/s/ Seth Grae
|
|
|
Name:
Seth Grae
|
|
|
Title:
Chief Executive Officer
|
|
|
Address:
0000 Xxxxxxxxxx Xxxxx
|
|
|
Xxxxx
000
|
|
|
XxXxxx,
XX 00000
|
|
|
EXECUTIVE:
|
|
|
/s/
Andrey Mushakov
|
|
|
Name:
Andrey Mushakov
|
|
|
Address:
0000 Xxxx Xxxx Xxx., Xxx. 000
|
|
|
Xxxxxx
Xxxxxx, XX 00000
|
13
