Unassociated Document


    Exhibit
      10.1

    Mushakov
      Employment Agreement


    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. 

     


    
      
         

      

      
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    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. 

     


    
      
         

      

      
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    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.

     


    
      
         

      

      
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    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.

     

    


     


    
      
         

      

      
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    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:

     


    
      
         

      

      
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    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.

     


    
      
         

      

      
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    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. 

     


    
      
         

      

      
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    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.

     


    
      
         

      

      
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    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. 

     


    
      
         

      

      
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    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:

     


    
      
         

      

      
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    (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]


    
      
         

      

      
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    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date first
      above written.

    


    


    
      	 	
              NOVASTAR
                RESOURCES LTD.

            
	 	 
	 	 
	 	 
	 	
              By:
                /s/ Seth Grae

            
	 	
              Name:
                Seth Grae

            
	 	
              Title:
                Chief Executive Officer

            
	 	 
	 	
              Address:   
                8300 Greensboro Drive

            
	 	
              Suite
                800

            
	 	
              McLean,
                VA 22102

            
	 	 
	 	
              EXECUTIVE:

            
	 	 
	 	 
	 	 
	 	
              /s/
                Andrey Mushakov

            
	 	
              Name:
                Andrey Mushakov

            
	 	
              Address: 
                 1701 East West Hwy., Apt. 401

            
	 	
              Silver
                Spring, MD 20910

            


    

    


    


    
      
         

      

      
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