Unassociated Document


    

      Exhibit
        10.3

      Graham
        Employment Agreement

    

     

    EMPLOYMENT
      AGREEMENT

    


    EMPLOYMENT
      AGREEMENT, dated as of July 27, 2006 (this “Agreement”), between NOVASTAR
      RESOURCES LTD., a Nevada corporation (the “Company”), and THOMAS GRAHAM, JR., an
      individual (the “Executive”).

    


     

    BACKGROUND

    


    The
      Company wishes to secure the services of the Executive as the Chairman of the
      Board of Directors for the Company (and to serve as Corporate Secretary until
      this position is filled permanently with a suitable candidate) 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 as Chairman of the Board of Directors
      (and to serve as Corporate Secretary until this position is filled permanently
      with a suitable candidate) and the Executive accepts such employment. The
      Executives’ responsibilities will be those customary duties for Executives at
      similar companies. The Executive shall be employed on a part-time basis working
      on average approximately three full days per week (24 hours per week).


     

    2.  Term
      of
      Employment. The term of this Employment Agreement (the "Term") shall be for
      the
      initial period commencing on the date hereof and ending on the first anniversary
      of the date thereof (provided that the provisions of Section 5 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.
      Beginning as of April 2, 2006, an annual base salary of $130,000 (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 in its sole discretion
      deems appropriate. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.2  Equity
      Participation.
      

     

    (a)  The
      Company shall grant to the Executive stock options for the purchase of 1,500,000
      shares of the Company’s Common Stock. The Option’s exercise price will be equal
      to the fair market value of the Company’s Common Stock on
      the
      date that the Employment Agreement is entered into. The options shall vest
      in
      equal monthly installments over a three-year period. If the Employee is
      terminated without cause, then the options shall vest immediately.

     

    3.3  Participation
      in Employee Benefit Plans; Other Benefits.
      The
      Executive shall not be permitted during the Term to participate in employee
      benefit plans now or hereafter maintained by or on behalf of the
      Company.

     

    3.4  Vacation.
      The
      Executive shall be entitled to four (4) weeks of paid vacation time per year
      which shall accrue monthly on a pro-rata basis. 

     

    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  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.

     

    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. The Executive shall have no right to receive any compensation or
      benefit under this Employment Agreement following the termination of this
      Employment Agreement as set forth above due to 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 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) the willful commission by the Executive of acts that are
      dishonest and demonstrably or materially injurious to the Company, monetarily
      or
      otherwise; (c) 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 (d) 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. 

     

    4.4  Termination
      without Cause.
      The
      Company may terminate this Employment Agreement at any time, without cause,
      upon
      60 days' written notice by the Company to the Executive and the Executive shall
      have no right to receive any compensation or benefit hereunder after such
      termination.

     

    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 diminution 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 (8300 Greensboro Drive, Suite 800, McLean,
      VA
      22102), or (d) any material breach of this Agreement by the Company. 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.
      The
      Executive shall have no right to receive any compensation or benefit hereunder
      on and after the date of termination.

     

    4.6  Without
      Good Reason.
      The
      Executive shall have the right to terminate his employment hereunder without
      Good Reason by providing the Company with 60 days advance written notice of
      termination. The Executive shall have no right to receive any compensation
      or
      benefit hereunder on and after the date of termination.

     

    
      
        
        

      

      
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    5.  Certain
      Covenants of the Executive.

     

    5.1  Covenants.
      The
      Executive acknowledges that: (i) his work for the Company and its Subsidiaries
      and Affiliates, will bring him into close contact with many confidential
      affairs, documents, and information not readily available to the public; and
      (ii) the covenants contained in this Section 5 will not involve a substantial
      hardship upon his future livelihood. In order to induce the Company to enter
      into this Employment Agreement, the Executive covenants and agrees
      that:

     

    5.2  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, 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
      or
      invention for use in the Company's Business on behalf of any person or entity
      other than the Company, its Subsidiaries and Affiliates.

     

    5.3  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).

     

    5.4  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.

     

    
      
        
        

      

      
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    5.5  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.

     

    5.6  Rights
      and Remedies Upon Breach.
      If the
      Executive breaches, or threatens to commit a breach of, any of the provisions
      of
      Section 5 hereof (collectively, the "Restrictive Covenants"), the Company and
      its Subsidiaries and Affiliates shall, in addition to the rights set forth
      this
      Employment Agreement, 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.

     

    5.7  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.

     

    5.8  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.

     

    
      
        
        

      

      
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    6.  Indemnification. 

     

    6.1  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 Agreement, 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. 

     

    6.2  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.

     

    6.3  Enforcement.
      If a
      claim or request under this Section 6 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.

     

    6.4  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.

     

    
      
        
        

      

      
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    6.5  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.

     

    6.6  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.

     

    6.7  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 6
      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.

     

    7.  Other
      Provisions.

     

    7.1  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.

     

    
      
        
        

      

      
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    7.2  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. 

     

    7.3  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.

     

    7.4  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.

     

    7.5  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 7.6 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.

     

    7.6  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.

     

    7.7  Definitions.
      For
      purposes of this Agreement:

     

    (a)  "Affiliate"
      shall
      mean a person that, directly or indirectly, controls or is controlled by, or
      is
      under common control with the Company;

     

    (b)  “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.

     

    
      
        
        

      

      
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    7.8  D&O
      Insurance.
      During
      the term of this Agreement, the Company shall maintain D&O insurance with
      the level of coverage of at least $5 million.

     

    7.9  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.

     

    7.10  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.

     

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

    


    


    
      	 	 	NOVASTAR RESOURCES LTD.. 
	 	 	 
	 	 	By:  /s/
              Seth Grae  
	 	 	
              Seth
                Grae 

            
	 	 	
              Chief
                Executive Officer  

            
	 	 	 
	 	 	Address:    8300
              Greensboro Drive, Suite 800  
	 	 	
              McLean,
                VA 22102 

            
	 	 	 
	 	 	EXECUTIVE: 
	 	 	 
	 	 	/s/ Thomas Graham,
              Jr. 
	 	 	Thomas Graham, Jr. 
	 	 	Address: 
               c/o
              8300 Greensboro Drive, Suite 800  
	 	 	
              McLean,
                VA 22102  

            


    

     

    


    


    
      
        
        

      

      
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