Exhibit 10.5
Employment Agreement
This Employment Agreement (“Agreement”) is made and entered into this 8th day of
November 2008 (the “Effective Date”) by and between Biogold Fuels Corporation, a
Nevada corporation and its subsidiaries (the “Company”) and James Burchetta
(“Executive”).
WHEREAS, Executive has the experience to provide services to the Company of an
extraordinary character which gives such services a unique value; and
WHEREAS, The Company desires to retain the services of Executive, and Executive
desires to be employed by the Company for the term of this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual benefits and
covenants contained herein, the parties hereto, intending to be bound, hereby
agree as follows:
1. Employment. The Company hereby employs Executive as President of the Company.
For the term of Executive’s employment, and upon the other conditions set forth
in this Agreement, Executive accepts such employment and agrees to perform
services for the Company, subject always to such resolutions as are established
from time to time by the Board of Directors of the Company.
2. Term. The term of this Agreement shall commence on the date hereof (the
“Commencement Date”) and continue for a period of three years (the “Term”). At
the end of such initial Term, this Agreement shall be extended automatically for
successive three (3) year Terms of employment, unless either the Company or the
Executive notifies the other party in writing at least one hundred and eighty
(180) days prior to the end of the incumbent Term of any intention not to renew
this Agreement, in which case this Agreement will terminate at the end of such
incumbent Term. All references herein to the “Term” shall refer to both such
initial Term and any such successive Terms. The date upon which the Term of this
Agreement expires shall be referred to herein as the “Expiration Date.”

 

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3. Position and Duties.
3.1. Services with the Company. During the term of this Agreement, Executive
agrees to perform such duties and exercise such powers related thereto as may
from time to time be assigned to him by the Company’s Board of Directors (the
“Board”). Executive shall duly and diligently perform all duties assigned to him
while in the employ of the Company. He shall be bound by and faithfully observe
and abide by all rules and regulations of the Company which are brought to his
notice or of which he should be reasonably aware.
3.2. No Conflicting Duties. During Executive’s employment, Executive shall
devote substantially all his business efforts and time to the Company. Except
upon the prior written consent of the Company, Executive will not, during the
term of this Agreement, (i) accept any other employment, or (ii) engage,
directly or indirectly, in any other business activity (whether or not pursued
for pecuniary advantage) that might interfere with Executive’s duties and
responsibilities hereunder or create a conflict of interest with the Company,
other than as Chairman of the Board of Debt Resolve, Inc., to which the Company
hereby consents. In addition, other than DRV, the Executive will not serve on
the board of directors of any company other than Biogold Fuels Corporation
without the consent of the majority of other board members of Biogold Fuels
Corporation. Notwithstanding the foregoing, Executive may serve on corporate,
civic or charitable boards or committees, deliver lectures, fulfill speaking
engagements, teach at educational institutions, or manage personal investments
without such advance written consent, provided that such activities do not
individually or in the aggregate interfere with the performance of Executive’s
duties under this Agreement.
3.3. Uniqueness of Executive’s Services. Executive hereby represents and agrees
that the services to be performed under the terms of this Agreement are of a
special, unique, unusual, extraordinary, and intellectual character that gives
them a unique value. Executive recognizes the uniqueness of the services he
provides to the Company and realizes the Company may elect to purchase a life
insurance policy to protect against Executive’s death for the benefit of the
Company. In such event, Executive shall reasonably cooperate and take all steps
necessary to assist Company in acquiring such policy or policies.

 

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4. Compensation.
4.1 Base Salary. As compensation for all services to be rendered by Executive
under this Agreement, the Company shall pay according to its normal payroll
procedures and policies to Executive a base annual salary of Two Hundred
Thousand Dollars ($200,000) (the “Base Salary”).
Executive’s Base Salary shall be reviewed at least annually; however, the
Company shall not reduce the Executive’s Base Salary at any time during this
Agreement.
4.2 Options. In addition to the annual base salary set forth in Section 4.1
above, the warrant to purchase 9,000,000 shares of the Company’s stock granted
to Employee in his Consulting Agreement, dated August 13, 2008, with the Company
are hereby fully vested, and repriced to $0.01 per share (the closing price on
November 6, 2008), and the Board may, in its sole discretion, award Executive
bonus compensation in the form of stock options or stock awards under the
Company’s then current employee stock option plan at intervals throughout the
term of this Agreement and any renewal terms.
4.3. Cash Incentive Bonus. In the sole discretion of the Board of Directors, the
Company may pay Executive an annual cash bonus (“Cash Bonus”). The Board of
Directors shall set the Cash Bonus in a fair and reasonable manner. Said Cash
Bonus may be equal to up to seventy percent (70%) of Executive’s Base Salary.
4.4 Expenses. The Company shall reimburse Executive for all reasonable
pre-approved business or travel expenses and office related expenses incurred by
Executive in the performance of his duties; including but not limited to:
airfare, motor vehicle rental, lodging, meals, telephone, copy costs, and
supplies.

 

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4.5 Mobile Telephone. The Company will provide Executive with the exclusive use
of a mobile (cellular and/or digital) telephone. Such use shall be reasonable in
nature and will be predominately for business purposes.
4.7 Stock and Option Registration Rights. In the event the Company conducts a
public offering of the Company’s shares, the Company shall provide Executive
with registration rights to all shares, warrants and options which Executive
then holds or otherwise directly or constructively owns.
5. Vacation, Sick Leave and Insurance
5.1 Annual Vacation. Executive shall be entitled to fifteen (15) days vacation
time each year without loss of compensation. In the event that Executive is
unable for any reason to take the total amount of vacation time authorized
herein during any year, any unused vacation time shall carry over from year to
year. Vacation days will accrue at the rate of one and one quarter (1.25) days
per each month of service rendered, which accrual shall start effective
January 1, 2009. Any earned but unused vacation time will be paid to Executive
based upon his annual rate of all compensation paid in the previous twelve
months (12) upon termination or expiration of this Agreement.
5.2. Sick Leave. Executive shall be entitled to twelve (12) days sick leave each
year without loss of compensation. In the event that Executive is unable for any
reason to take the total amount of vacation time authorized herein during any
year, any unused vacation time shall carry over from year to year. Sick leave
days will accrue at the rate of one (1) day per each month of service rendered.
Any earned but unused sick leave will be paid to Executive based upon his annual
rate of all compensation paid in the previous twelve months upon termination or
expiration of this Agreement.
5.3. Health Insurance. The Company shall provide Executive and his immediate
family members with comprehensive PPO or POS health insurance benefits which
shall cover medical, dental and vision.

 

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6. Compensation Upon the Termination of Executive’s Employment.
6.1 Compensation Upon Termination Not For Cause or for Good Reason. If, during
the term of this Agreement, the Company terminates Executive’s Employment for
any reason other than Cause, death or Permanent Disability, then, in addition to
the amounts payable in accordance with Section 5(b), the Company shall pay
Executive severance pay at a rate equal to your Base Salary in effect at the
time of termination for a period of 12 months following the termination of
Employment (the “Continuation Period”). Such severance pay shall be paid in
accordance with the Company’s standard payroll procedures on the Company’s
payroll dates and shall be subject to all applicable withholdings; provided
that, if the Company’s stock becomes is publicly traded on an established
securities market at the time of termination, such severance pay shall be paid
in a single lump-sum cash payment on the 12 month anniversary of the employment
termination date to the extent required by Code section 409A.
Any other provision of this Agreement notwithstanding, subsection 6.1 shall not
apply unless and until (i) Executive has executed (and does not revoke) a full
and complete general release of all claims in a form provided by the Company
without alteration and (ii) Executive has returned all Company property.
The benefits provided for in this provision are exclusive of any other rights or
remedies which Executive would possess in the event the Company terminates the
Agreement without cause. The Company agrees that in the event it terminates
Executive=s employment without cause, Executive retains all rights and remedies
available under the law, and the Company will not urge or otherwise argue or
assert in any legal, including judicial or arbitration, proceeding that any
provision of this Agreement as constitutes a waiver of rights by Executive.
6.2 Compensation Upon Termination Upon Death. In the event that Executive’s
employment is terminated pursuant to section 10.2, Executive’s beneficiary or
beneficiary designated by Executive in writing to the Company, or in the absence
of such beneficiary, Executive’s estate, shall be entitled to receive
Executive’s then current Base Salary through three hundred and sixty-five
(365) days after the date of his death.

 

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6.3 Compensation Upon Termination Upon Disability. In the event that Executive’s
employment is terminated pursuant to section 10.1, Executive shall be entitled
to receive Executive’s then current Base Salary through three hundred sixty five
(365) days after the date of his disability, less any amounts received by
Employee from State or private disability insurance.
6.4. Change of Control. If there is a Change of Control (as defined below), and
subsequent thereto the Executive’s employment with the Company terminates at any
time within three (3) years after such Change of Control for reasons other than
as provided in Section 7(b)(i), then the Executive shall be paid pursuant to
this Agreement an amount equal to three (3) years’ salary at the Executive’s
then current compensation (pursuant to Section 3(a)) at the date of termination.
A Change of Control shall be deemed to have occurred at such time as any person,
other than the Company, its existing shareholders or any of its or their
affiliates on the date hereof, purchases the “beneficial ownership” (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of 50% or more of the combined voting power of voting securities
then ordinarily having the right to vote for directors of the Company.
7. Proprietary Matter. Except as permitted or directed by the Company, Executive
shall not during the term of his employment or at any time thereafter divulge,
furnish, disclose, or make accessible (other than in the ordinary course of the
business of the Company) to anyone for use in any way any confidential, secret,
or proprietary knowledge or information of the Company (“Proprietary Matter”)
which Executive has acquired or become acquainted with or will acquire or become
acquainted with, whether developed by himself or by others, including, but not
limited to, any trade secrets, confidential or secret designs, processes,
formulae, software or computer programs, plans, devices or material (whether or
not patented or patentable, copyrighted or copyrightable) directly or indirectly
useful in any aspect of the business of the Company, any confidential customer,
distributor or supplier lists of the Company, any confidential or secret
development or research work of the Company, or any other confidential, secret
or non-public aspects of the business of the Company. Executive acknowledges
that the Proprietary Matter constitutes a unique and valuable asset of the
Company acquired at great time and expense by the Company, and that any
disclosure or other use of the Proprietary Matter other than for the sole
benefit of the Company would be wrongful and would cause irreparable harm to the
Company. Both during and after the term of this Agreement, Executive will
refrain from any acts or omissions that would reduce the value of Proprietary
Matter to the Company. The foregoing obligations of confidentiality, however,
shall not apply to any knowledge or information which is now published or which
subsequently becomes generally publicly known, other than as a direct or
indirect result of the breach of this Agreement by Executive.

 

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8. Ventures. If, during the term of this Agreement, Executive is engaged in or
associated with the planning or implementing of any project, program, or venture
involving the Company and a third party or parties, all rights in the project,
program, or venture shall belong to the Company and shall constitute a corporate
opportunity belonging exclusively to the Company. Except as expressly approved
in writing by the Company, Executive shall not be entitled to any interest in
such project, program, or venture or to any commission, finder’s fee or other
compensation in connection therewith, other than the compensation to be paid to
Executive as provided in this Agreement.
9. Solicitation of Employees.
9.1. Agreement Not to Solicit Employees. During his employment by the Company
hereunder and for the one (1) year period following the termination of such
employment for any reason, Executive shall not, either directly or indirectly,
on his own behalf or in the service or on behalf of others solicit, divert or
hire away, or attempt to solicit, divert or hire away any employees,
consultants, and customers of the Company.
10. Termination Prior to Expiration of the Term.
10.1 Disability. Executive’s employment shall terminate upon Executive becoming
totally or permanently disabled for a period of six (6) months or more. For
purposes of this Agreement, the term “totally or permanently disabled” or “total
or permanent disability” means Executive’s inability on account of sickness or
accident, whether or not job related, to engage in regularly or to perform
adequately his assigned duties under this Agreement. Prior to terminating the
Agreement pursuant to this provision, the Company shall engage and consult one
or more physicians as may be reasonable.

 

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10.2 Death of Executive. Executive’s employment shall terminate immediately upon
the death of Executive.
10.3 Termination for Cause. The Company may terminate Executive’s employment for
“Cause” (as hereinafter defined). No termination for “Cause” may be invoked by
Company without first providing Executive with at least thirty (30) days written
notice to correct any breach, default or causation. Such written notice shall
set forth with reasonable specificity the Company’s basis for such notice of
termination and Executive shall have thirty (30) days to correct the condition
set forth in the notice.
10.3.1. Cause Defined. For all purposes of this agreement, “Cause” shall mean:
(i) the commission, conviction of, or a plea of “guilty” or “no contest” to, a
felony under the laws of the United States or any state by Executive;
(ii) Executive’s failure to perform his duties and responsibilities to the
Company;
(iii) Executive’s commission of any act of fraud, embezzlement, dishonesty,
misrepresentation, misappropriation or any other willful misconduct that has
caused or is reasonably expected to result in injury to the Company (or a
successor, if appropriate);
(iv) Executive’s unauthorized use or disclosure of any proprietary information
or trade secrets of the Company (or a successor, if appropriate) or any other
party to whom Founder owes an obligation of nondisclosure as a result of
Founder’s relationship with the Company (or a successor, if appropriate);

 

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(v) Executive’s breach of a fiduciary duty owed to the Company;
(vi) Executive’s breach of his duty not to engage in any transaction that
represents, directly or indirectly, self-dealing with the Company which has not
been approved by a majority of the disinterested directors of the Company’s
Board of Directors, if such material breach remains
uncured after the lapse of 30 days following the date that the Company has given
the Executive written notice thereof;
(vii) Executive’s violation of any Company policy pertaining to ethics,
wrongdoing or conflicts of interest which would include that Executive cannot
provide services to any other entity, other than as approved by the Company’s
Board of Directors, provided that Executive shall have the right to become an
outside advisor to other companies where such a role does not conflict with
Executive’s obligations to the Company;
(viii) Executive’s death or disability; or
(ix) Any other gross or willful misconduct by Executive.
10.5 Voluntary Termination of Employment By Executive For Other than Good
Reason. Executive may voluntarily terminate his employment with the Company upon
30 days prior written notice for other than Good Reason. Executive shall not be
entitled to any further payments of compensation beyond Executive’s resignation
date if Executive voluntarily resigns under this Section 10.5.
10.6. Surrender of Records and Property. Upon termination of his employment with
the Company, Executive shall deliver promptly to the Company all records,
electronic media, manuals, books, blank forms, documents, letters, memoranda,
notes, notebooks, reports, data, tables, and calculations or copies thereof,
which are the property of the Company and which relate in any way to the
business, products, practices or techniques of the Company, and all other
property (keys, office equipment, computers, mobile phones, credit cards, etc.)
of the Company and Proprietary Matter, including but not limited to, all
documents which in whole or in part contain any trade secrets or confidential
information of the Company, which in any of these cases are in his possession or
under his control.

 

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11. Assignment/Successors. This Agreement shall not be assignable, in whole or
in part, by either party without the written consent of the other party except
that Company may, without the consent of Executive, assign its rights and
obligations under this Agreement to any corporation, firm or other business
entity (i) with or into which the Company may merge or consolidate, or (ii) to
which the Company may sell or transfer all or substantially all of its assets or
of which fifty percent (50%) or more of the equity investment and of the voting
control is owned, directly or indirectly, by, or is under common ownership with,
the Company. After any such assignment by the Company and such written agreement
by the assignee, the Company shall be discharged from all further liability
hereunder and such assignee shall thereafter be deemed to be the Company for the
purposes of all provisions of this Agreement including this section.
This Agreement shall be binding upon, and inure to the benefit of, both parties
and their respective successors and assigns, including any corporation or other
entity with which, or into which, the Company may be merged or which may succeed
to its assets or business, provided, however, that the obligations of Executive
are personal and shall not be assigned by Executive.
12. Indemnification. The company shall indemnify Executive as provided in the
Nevada Private Corporations Law, Company Articles or Company’s Bylaws in effect
at the commencement of this Agreement. The scope of indemnification to which
Executive is entitled shall not be diminished, but may be expanded by the
Company, by amendment of the Company’s Bylaws, Articles of Incorporation or
otherwise. Executive shall indemnify and hold the Company harmless from all
liability for loss, damages or injury resulting from the negligence or
misconduct of Executive. The Parties are concurrently entering into a separate
indemnification agreement to provide indemnification for the Executive, attached
hereto at Exhibit A (the “Indemnification Agreement”).

 

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13. Miscellaneous.
13.1 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
The City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
13.2 Entire Agreement. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof and supersedes all prior
agreements and understandings with respect to such subject matter with the
exception of the Indemnification Agreement which is incorporated by reference,
and the parties hereto have made no agreements, representations or warranties
relating to the subject matter of this Agreement which are not set forth herein.

 

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13.3 Withholding Taxes. The Company may withhold from any benefits payable under
this Agreement all federal, state, city or other taxes as shall be required
pursuant to any law or governmental regulation or ruling.
13.4 Amendments. No amendment or modification of this Agreement shall be deemed
effective unless made in writing signed by the parties hereto.
13.5 No Wavier. No term or condition of this Agreement shall be deemed to have
been waived nor shall there be any estoppel to enforce any provisions of this
Agreement, except by a statement in writing signed by the party against whom
enforcement of the waiver or estoppel is sought. Any written waiver shall not be
deemed a continuing waiver unless specifically stated, shall operate only as to
the specific term or condition waived and shall not constitute a waiver of such
term or condition for the future or as to any act other than that specifically
waived.
13.6 Severability. To the extent any provision of this Agreement shall be
invalid or unenforceable, it shall be considered deleted here from and the
remainder of such provision and of this Agreement shall be unaffected and shall
continue in full force and effect.
13.7 Survival. Sections 4.7, 7, 8, and 9 shall survive termination of this
Agreement.
13.8 Notices. Any and all notices, requests or other communications required or
permitted in or by any provision of this Agreement shall be in writing and may
be delivered personally or by certified mail directed to the addressee at such
person=s or entity=s last known post office address, and if given by certified
mail, shall be deemed to have been delivered when deposited in such, mail
postage prepaid.
13.9 Legal Proceedings. In the event of legal proceedings, including arbitration
as set forth in Section 13.2 above, the prevailing party shall be entitled, in
addition to such relief as is deemed to be appropriate, to recover such costs
and reasonable attorneys= fees as are incurred therein.

 

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13.10 Section 409A. Unless otherwise expressly provided, any payment of
compensation by Company to Executive, whether pursuant to this Agreement or
otherwise, shall be made within two and one-half months (21/2 months) after the
later of the end of the calendar year of the Company’s fiscal year in which
Executive’s right to such payment vests (i.e., is not subject to a “substantial
risk of forfeiture” for purposes of Code Section 409A of the Internal Revenue
Code of 1986, as amended (“Code”)). To the extent that any severance payments
(including payments on termination for “good reason”) come within the definition
of “involuntary severance” under Code Section 409A, such amounts up to the
lesser of two times the Executive’s annual compensation for the year preceding
the year of termination or two times the 401(a)(17) limit for the year of
termination, shall be excluded from “deferred compensation” as allowed under
Code Section 409A, and shall not be subject to the following Code Section 409A
compliance requirements. All payments of “nonqualified deferred compensation”
(within the meaning of Section 409A) are intended to comply with the
requirements of Code Section 409A, and shall be interpreted in accordance
therewith. Neither party individually or in combination may accelerate any such
deferred payment, except in compliance with Code Section 409A, and no amount
shall be paid prior to the earliest date on which it is permitted to be paid
under Code Section 409A. In the event that Executive is determined to be a “key
employee” (as defined in Code Section 416(i) (without regard to paragraph
(5) thereof)) of Company at a time when its stock is deemed to be publicly
traded on an established securities market, payments determined to be
“nonqualified deferred compensation” payable following termination of employment
shall be made no earlier than the earlier of (i) the last day of the sixth (6th)
complete calendar month following such termination of employment, or
(ii) Executive’s death, consistent with the provisions of Code Section 409A. Any
payment delayed by reason of the prior sentence shall be paid out in a single
lump sum at the end of such required delay period in order to catch up to the
original payment schedule. Notwithstanding anything herein to the contrary, no
amendment may be made to this Agreement if it would cause the Agreement or any
payment hereunder not to be in compliance with Code Section 409A.
[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

          Biogold Fuels Corporation:   Executive:
 
       
By:
  /s/ Steve Racoosin   /s/ James Burchetta
 
       
 
      James Burchetta
Name:
  Steve Racoosin    
 
       
 
       
Title:
  CEO    
 
       

 

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Exhibit A
Indemnification Agreement

 

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