EMPLOYMENT AGREEMENT Richard H. Talley President and Chief Operating Officer

Exhibit10.13

EMPLOYMENTAGREEMENT
Richard H. Talley
President and Chief Operating Officer

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made as of May 1,2006, by and among BIOSOURCE AMERICA, INC.,a Texas corporation (the “Company”), andRichard H. Talley, an individual residing in Butte, Montana (“Partner”).

W I T N E S S E T H:

WHEREAS, the Company is a wholly owned subsidiary ofNova Energy Holding, Inc., a Nevada corporation (“Nova”),and is in the business of the design, engineering, construction and operationof biodiesel refineries, as well as the production and marketing of biodieselfuel and glycerin, including without limitation fuels containing fatty acidesters, with its headquarters in Houston, Texas, offices in Butte, Montana, andactual and anticipated operations in the United States, Canada and the membercountries of the European Union, and elsewhere;

WHEREAS, Partner currently is an at will employee of theCompany;

WHEREAS, the Company and Partner desire to enter into anagreement regarding Partner’s employment with the Company pursuant to the termsand conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and the mutualcovenants contained herein, and other good and valuable consideration, thereceipt and sufficiency of which is hereby acknowledged, and intending to belegally bound hereby, the parties covenant and agree as follows:

1.    Employment. The Company hereby employs Partnerand Partner hereby accepts employment with the Company on the terms andconditions set forth in this Agreement.

2.    Term of Employment. The term of Partner’semployment hereunder (the “Term”) shallcommence May 1, 2006, (the “Commencement Date”)and shall continue (subject to termination by either the Company or Partner ashereinafter provided in Section 5) for an initial term (the “Initial Term”) expiring May 1, 2008 (the “Expiration Date”). Notwithstanding anything to the contrary,at all times Partner’s employment shall be on an “at will” basis and shall beterminable at any time and for any reason at the will of the Company, subjectto payment of the severance benefits set forth in Section 5 of thisAgreement. Upon termination of Partner’s employment, the Company shall have nofurther obligation to Partner other than payment of earned and unpaidcompensation (as hereafter defined) under Section 5, and Partner shallhave no further obligation to the Company except as set forth in Sections 6 and7.

3.    Compensation and Other Benefits.

a.           Salary.As compensation for all services rendered by Partner in performance of Partner’sduties or obligations under this Agreement, the Company shall pay Partner



a base salary in equal amounts on a bi-weekly basis, whichannualizes to the amount of $85,000 (assuming full work during the annual period). Partner shall be paid inthe manner customary for the Company, which is currently every two weeks, allappropriate deductions for taxes and the like will be made from the wagesstated herein. Partner acknowledges that heor she is being hired as a professional and is exempt from receipt of overtimepay under the Fair Labor Standards Act.

b.           Expenses.Partner shall be entitled to be reimbursed by the Company for all reasonable and necessary expenses incurred byPartner in carrying out Partner’s duties under this Agreement in accordancewith the Company’s standard policies and procedures regarding suchreimbursements.

c.           WelfareBenefit Plans. Partner shall be entitled during the Term, uponsatisfaction of all eligibility requirements, if any, to participate in allhealth, dental, disability, lifeinsurance and other welfare benefit programs now or hereafter established bythe Company which cover substantially all other of the Company’s employees andshall receive such other benefits as may be approved from time to time by theCompany, each to the extent permitted by law.

d.           Vacationand Paid Time Off. Partner shall be entitled to take 120 hours of paid vacation/personal time (proratedbased on the number of days worked in the first calendar year of employment) inaccordance with the vacation policy of the Company. This time can beused in advance of accrual, subject to repayment by Employee if, when Employee’semployment terminates, time has been used in excess of the accrual of that time.Vacation/personal time shall accrue at therate of 10 hours per month of employment, and there will be no payment forunused accrual of paid time. This vacation/personal time will not be subject tocarryover from year to year or payment for unused accrual during Partner’semployment, and such time will begin to accrue anew on January 1 of eachyear of employment. Partner also shall be entitled to paid time off withrespect to such holidays as are designated by the Company as being generallyavailable to employees in accordance with the holiday policy of the Company ineffect from time to time. Partner shall be entitled to payment for accrued andunused vacation/personal time in the given calendar year upon termination ofthis Agreement after all extensions.

e.           Profit Share. Partner shall be entitled to participate in a profit sharingplan as will be hereafter established by the Company or Nova (the “ProfitShare Plan”). The Profit Share Plan will be applied on a perproject basis and be based on elements of profitability, schedule andperformance criteria that, when met, will result in a distribution of moneyamongst the various project team members as determined by the administrator ofthe Profit Share Plan.

f.            EquityIncentive Plan. During the Term of this Agreement, Partner shallbe entitled to participate in the Nova Energy Holding, Inc. 2006 EquityIncentive Plan (the “Equity Incentive Plan”).To the extent not heretofore granted, no later than the Commencement Date ofthis Agreement, the Company shall grant to Partner under the Equity IncentivePlan an Award consisting of Non-Qualified Stock Options to acquire not lessthan 1,917,772 shares of common stock of Nova at an exercise price equal to theFair Market Value of such shares of common stock on the date such Stock Optionsare granted. Such Stock Options shall have a term of ten years from the date ofgrant and vest monthly in approximately equal amounts over a period of not morethan two years, provided that no Stock Options shall vest until such time asshares of common stock

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issuableupon exercise thereof have been registered on Form S-8 whereupon allStock Options that would have vested prior to such date but for this provisoshall immediately vest. Partner acknowledges that, if granted prior to June 1,2006 and the filing of a registration statement on Form S-8, suchAward will have been issued without registration under the Securities Act of1933, as amended, pursuant to an exemption therefrom and that, accordingly, theagreement evidencing such Award will bear a restrictive legend pertaining to Rule 144and that such Award and any shares of common stock obtained upon exercisethereof will not be transferable unless registered except in accordance theapplicable rules and regulations of the Securities and Exchange Commission.Partner represents that he or she is acquiring the Award for his or herown account without a view to distribution within the meaning of the SecuritiesAct; (ii) has obtained or received from Nova its filings with theSecurities and Exchange Commission and all other information that he or she hasdeemed necessary to make an informed investment decision with respect to aninvestment in Nova in general and the Award and shares of common stock obtainedupon exercise thereof in particular; (iii) is financially able to bear theeconomic risks of an investment in Nova; and (iv) has such knowledge andexperience in financial and business matters in general and with respect toinvestments of a nature similar to the securities of Nova so as to be capable,by reason of such knowledge and experience, of evaluating the merits and risksof, and making an informed business decision with regard to, the acquisition ofshares of common stock of Nova upon exercise of the Award. The Company shalluse commercially reasonable efforts to cause a registration statement on Form S-8to be filed with the Securities and Exchange Commission and to be madeeffective as soon as practicable on or after the date Nova first becomeeligible to use such form, which registration statement shall provide for theregistration of shares of common stock of Nova issuable upon exercise of suchAward or for the resale of such shares of common stock. Capitalized terms used but not defined in this Section 3.f shallhave the meaning given to such terms in the Equity Incentive Plan.

4.    Duties.

a.           Partner is employedto act as President and Chief Operating Officer. Partner shall also serve insuch other offices or positions as shall be assigned to Partner from time totime by the Company and perform such other duties, commensurate with Partner’sposition with the Company, as may be assigned by the Company from time to time.Partner shall initially be involved in the Company’s operations, activities,services and technologies relating to the production of biofuels containingfatty acid esters.

b.           Partner agrees thatduring the period of employment, Partner shall devote full-time efforts toPartner’s duties as an employee of the Company, Partner shall use his or herbest efforts to perform the duties of his or her position in an efficient andcompetent manner and shall use his or her best efforts to promote the interestsof the Company and any affiliated companies.

c.           During the period ofemployment, Partner agrees not to (i) undertake or engage in any planningfor or organization of, whether solely or jointly with others, any businessactivity competitive with the business activities of the Company, and (ii) directlyor indirectly, engage or participate in any other activities in conflict withthe best interests of the Company.

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d.           Partner agrees thatduring the period of employment Partner shall refer to the Company allopportunities in the Company’s industry to which Partner might become exposedin carrying out his or her duties and responsibilities hereunder.

5.    Terminationof Employment.

a.           Termination by the Company for Cause.The Company may terminate Partner’s employment for Cause without thereby givingrise to a breach of this Agreement solely as a result of such termination. “Cause” means the commission of an act of fraud, theft,wrongful diversion of funds or dishonesty against the Company; conviction forany felony; willful or repeated tardiness or absenteeism; insubordination;self-dealing; willful or repeated violation of Company policy; willful or repeatednon-performance or substandardperformance of duties; willful violation of this Agreement or the PartnerConfidentiality and Invention Assignment Agreement between the Company andPartner in the form separately provided to Partner (the “EmployeeConfidentiality Agreement”); or violation of any state or federallaws, rules or regulation in connection with or during performance ofwork.

b.           Termination by the Company without Cause.The Company may terminate Partner’s employment hereunder without Cause at anytime upon thirty (30) days notice to Partner without thereby giving rise to abreach of this Agreement solely as a result of such termination. In the eventof receipt of such notice, Partner may elect to terminate Partner’s employmentimmediately. Upon termination of Partner’s employment without Cause pursuant tothis Section 5.b, the Company shall pay Partner his or her base salaryaccrued through the date of termination plus a severance benefit equal to theper diem rate of base salarymultiplied by the number of calendar days between such date of termination ofemployment and the Expiration Date and, until the Expiration Date, Partnershall continued to be entitled to participate in any Company welfare benefitplans that Partner was entitled to participate in prior to such termination ofemployment to the extent permitted by such applicable law or the terms of suchplan.

c.           Death. Partner’s employmenthereunder shall be terminated (without thereby giving rise to a breach of thisAgreement solely as a result of such termination) automatically upon Partner’sdeath during the Term. In the event of such termination, the Company shall pay to Partner’s estatewithin 60 days after the date of Partner’s death, all benefits and compensationaccrued hereunder prior to the date of Partner’s death.

d.           Disability.Partner’s employment hereunder shall be terminated (without thereby giving riseto a breach of this Agreement solely as a result of such termination)automatically upon Partner’s Total Disability during the Term. In the event ofsuch termination, the Company shall pay to Partner within 60 days after thedate of termination under this Paragraph 5.d, all benefits and compensationaccrued hereunder prior to the date of such termination plus a severancebenefit equal to the per diem rateof base salary multiplied by 30 days. “Total Disability”means the physical or mental inability (excludinginfrequent and temporary absences due to ordinary illness) to perform Partner’sduties under this Agreement as determined by the President of the Company uponthe advice of a qualified physician. Before making any termination decisionpursuant to this Section 5.d, the Company shall determine whether

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thereis any reasonable accommodation (within the meaning of the Americans withDisabilities Act) which would enable Partner to perform the essential functionsof Partner’s position under this Agreement despite the existence of any suchdisability. If such a reasonable accommodation is possible, the Company shallmake that accommodation and shall not terminate Partner’s employment hereunderbased on such disability. Partner shall submit to such medicalexaminations as the Company may request to determine whether a Total Disabilityexists and shall authorize his or her physician or physicians to discuss his orher physical or mental condition, test results, medical records, diagnosis andprognosis with such representatives of the Company as the President maydesignate, subject to the agreement of the Company to maintain the confidentialityof such information pursuant to applicable law.

6.    Inventionsand Creations Belong to the Company; Non-Disclosure of ConfidentialInformation; Non-Solicitation of Employees. In connection withthe execution of this Agreement and in consideration of becoming or remainingemployed by the Company and the Company’s entering into this Agreement andproviding the benefits hereunder, Partner shall, to the extent not alreadydone, enter into the Employee Confidentiality Agreement and Partner agrees tocomply with all terms and conditions of such Employee ConfidentialityAgreement.

7.    LimitedNon-Competition Covenant.

Partner acknowledges that, although Partneris an at will employee, the Company is hereby providing Partner with anemployment agreement for a definite Initial Term and restricting its ability toterminate Partner during this Initial Term, has agreed to grant PartnerAwards under the Equity Incentive Plan, and also has provided, will provide and herebyagrees to provide Partner with access to Confidential Information of theCompany throughout the Term of this Agreement’ each in reliance uponPartners’ agreement to enter into and comply with the limited non-competitioncovenant set forth in this Section 7. Partner acknowledges that the Company has legitimateinterests in protecting such information and its investment in the Partnerthrough the imposition of a limited covenant not to compete. Partneracknowledges that the limited non-competition covenant set forth herein is theleast restrictive and most reasonable covenant available to adequately protectthe Company’s interest.

“Subject Client” means any person orentity who is an existing client of the Company as of the date Partner’semployment with the Company terminates for any reason and (i) with whomPartner has had personal contact during the term of Partner’s employment withthe Company, or (ii) as to whom Partner has received ConfidentialInformation during the term of Partner’s employment with the Company. A clientof the Company shall be considered “existing” from the date of initiation ofany business relationship with the Company, including a request for bid, untilsuch time as the client has notified the Company that such businessrelationship has been terminated, regardless of whether the client’s actual useof the Company’s services has temporarily ceased.

“Covenant Term” means a period commencingon the date hereof and expiring two (2) years after the date Partner’semployment with the Company terminates, regardless of the reason (subject tobeing extended due to Partner’s breach under Section 7(f) below).

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“Competitive Services or Activities”means engaging in the design, engineering, or construction or operation ofrefineries for biofuels containing or derived from fatty acid esters, or engagingin the marketing or production of biodiesel fuel and glycerin containing orderived from fatty acid esters, or engaging in consulting with regard to theforegoing.

“Territory” means the area within eachcity, county and parish of each state and territory of the United States andthe District of Columbia, each province and territory of Canada and the membercountries of the European Union.

a.           Partner agrees thatPartner will not, during the term of Partner’s employment with the Company orduring the Covenant Term, individually or as an employee, owner, employer,consultant, agent, principal, partner, stockholder, director, officer, lender,or any other individual or representative capacity for another, call upon,solicit, offer, sell or provide Competing Services or Activities, or assistwith calling upon, soliciting, offering, selling or providing CompetingServices or Activities to, any Subject Client located in whole or in part inthe Territory.

b.           Partner agrees thatPartner will not, during the term of Partner’s employment with the Company orduring the Covenant Term, whether individually or as an employee, owner,employer, consultant, agent, principal, partner, stockholder, director,officer, lender, or any other individual or representative capacity foranother, approach any Subject Client for the purpose of soliciting employmentor accept employment with any Subject Client to the extent such employmentinvolves performing or providing Competing Services or Activities in theTerritory, unless Partner obtains prior written permission from the Board ofDirectors of the Company.

c.           Partner agrees thatPartner will not, during the term of Partner’s employment with the Company orduring the Covenant Term, individually or as an employee, owner, employer,consultant, agent, principal, partner, stockholder, director, officer, lender,or any other individual or representative capacity for another, engage in anyCompeting Services or Activities in the Territory or provide services to anyperson or entity engaged in any Competing Services or Activities in theTerritory.

d.           Partner agrees thatPartner will not, during the term of Partner’s employment with the Company orduring the Covenant Term, whether individually or as an employee, employer,consultant, agent, principal, partner, stockholder, lender, corporate officeror other representative of another, receive any remuneration in any form as aresult of any conduct described in Section 7(a), (b) or (c) above.

e.           The ownership byPartner of stock of any company listed on a national securities exchange shallnot be deemed a violation of this Agreement provided Partner and Partner’sassociates (as that term is defined in Regulation 14A of the SecuritiesExchange Act of 1934 as in effect on the date hereof) collectively do not ownmore than 1% of the stock of such company.

f.            If Partner violatesany covenant contained in this Section and the Company brings legal actionfor injunctive or other relief, the Company shall not, as a result of the timeinvolved in obtaining the relief, be deprived of the benefit of the full periodof any such covenant.

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Accordingly,in the event the Company brings legal action for injunctive or other relief toenforce the rights granted under this Section 7, the Covenant Term shallbe extended by the period of time specified as the Covenant Term from the laterof (i) the date of the termination of Partner’s employment with theCompany, or (ii) the date of entry by a court of competent jurisdiction ofa final judgment enforcing the covenants of Partner in this Section 7.

g.           Partner acknowledgesthat in the event Partner willfully or intentionally breaches the provisions ofthis Section 7 or otherwise renders services for any organization,or engages directly or indirectly in any business, that is or becomescompetitive with Nova, the Company or any subsidiary of Nova, such action shall constitute “DetrimentalActivity” pursuant to the Equity Incentive Plan and, if such event occurs priorto or within two years after any exercise, payment or delivery of an Awardunder such Equity Incentive Plan, such exercise, payment or delivery maybe rescinded by the Company within two years thereafter. In the event of anysuch rescission, Partner shall pay to the Company the amount of any gainrealized or payment received as a result of the rescinded exercise, payment ordelivery, in such manner and on such terms and conditions as may be required,and the Company shall be entitled to set-off against the amount of any suchgain any amount owed to Partner by the Company or any subsidiary of theCompany.

h.           Partner acknowledgesthat this Section 7ontains independent covenants that shall be operativeregardless of the reasons for termination of his employment or the performanceor nonperformance of any obligations of the Company.

8.    Partner’sAcknowledgement. It is the express intention of Partner and theCompany to comply with the laws of the State of Texas and Montana, and the lawsof any other jurisdiction in which Partner may engage in activities prohibitedby this Agreement and the Employee Confidentiality Agreement, with regard tonon-competition agreements in effect as of the date of execution hereof. Partnerstipulates that the provisions of this Agreement and the EmployeeConfidentiality Agreement are not oppressive or overly burdensome to Partnerand will not prevent Partner from earning an income following termination ofthis Agreement. Partner warrants and represents that:

a.           Partner is familiarwith non-compete and non-solicitation covenants;

b.           Partner has discussedor acknowledges the opportunity to discuss the provisions of the non-competeand non-solicitation covenants contained herein with Partner’s attorney and hasconcluded that such provisions (including, without limitation, the right to equitablerelief and the length of time provided for herein) are fair, reasonable andjust under the circumstances;

c.           Partner is fullyaware of the obligations, limitations and liabilities included in thenon-compete and non-solicitation covenants contained in this Agreement and theEmployee Confidentiality Agreement;

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d.           The scope ofactivities covered hereby are substantially similar to those activities to beperformed by Partner under this Agreement and the Employee ConfidentialityAgreement;

e.           The non-compete andnon-solicitation periods are reasonable restrictions, giving consideration tothe following factors:  (1) Partnerand the Company reasonably anticipate that this Agreement and the EmployeeConfidentiality Agreement, although terminable under certain provisions, willcontinue in effect for sufficient duration to allow Partner to attain superiorbargaining strength and an ability for unfair competition with respect to thecustomers covered hereby; (2) the duration of such periods are reasonablynecessary period to allow the Company to restore its position of equivalentbargaining strength and fair competition with respect to those customerscovered hereby; and (3) historically, employees of all types have remainedwith Partner for a duration of longer than the duration of the non-compete andnon-solicitation periods; and

f.            The limitationscontained in this Agreement with respect to geographic area, duration and scopeof activity are reasonable; however, if any court shall determine that thegeographic area, duration or scope of activity of any restriction contained inthis Agreement is unenforceable, it is the intention of the parties that suchrestrictive covenants set forth herein shall not thereby be terminated, butshall be deemed amended to the extent required to render such covenants validand enforceable.

8.    Remedies;Injunction. In the event of a breach or threatened breach byPartner of any of the provisions of this Agreement, Partner agrees that theCompany, in addition to and not in limitation of any other rights, remedies ordamages available to the Company at law or in equity, shall be entitled totemporary and permanent injunctive orders without the necessity of provingactual monetary loss, in order to prevent or restrain any such breach byPartner or by Partner’s partners, agents, representatives, servants, employeesand/or any and all persons directly or indirectly acting for or with Partnerand without the necessity of posting any bond with respect to such injunctiverelief. It is expressly understood between the parties that this injunctive orother equitable relief shall not be the Company’s exclusive remedy for anybreach of this Agreement, and the Company shall be entitled to seek any otherrelief or remedy which it may have by contract, statute, law or otherwise forany breach hereof.

9.    Notices.Any notice, demand or request which may be permitted, required or desired to begiven in connection therewith shall be given in writing and directed to theCompany and Partner as follows:

If to the Company, at:                                                  Biosource America, Inc.
600 Dewey Boulevard
Butte, Montana  59701
Attn:  Dick Talley
Facsimile No. (406) 494-6645



with a copy to:                                                                                      Bohreer & Zucker LLP
2777 Allen Parkway, Suite 865
Houston, Texas 77019

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                                                                                                                                          160;                          Attention: E. Michelle Bohreer
Facsimile No.:  (713) 526-8100

or,if to Partner, at the address and facsimile number indicated on the signature page hereof.

Noticesshall be deemed properly delivered and received when and if either:  (i) personally delivered; (ii) deliveredby nationally-recognized overnight courier; (iii) when deposited in theU.S. Mail, by registered or certified mail, return receipt requested, postageprepaid; or (iv) sent via facsimile transmission with confirmation mailedby regular U.S. mail. Any party may change its notice address for purposeshereof to any address within the continental United States by giving writtennotice of such change to the other parties hereto at least fifteen days priorto the intended effective date of such change.

10.  Severability.If any provision of this Agreement is rendered or declared illegal orunenforceable by reason of any existing or subsequently enacted legislation orby decree of a court of last resort, the Company and Partner shall promptlymeet and negotiate substitute provisions for those rendered or declared illegalor unenforceable, but all the remaining provisions of this Agreement shallremain in full force and effect.

11.  Assignment.This Agreement may not be assigned by any party without the prior writtenconsent of the Company.

12.  Binding Agreement.This Agreement shall be binding upon and shall inure to the benefit of theparties hereto, and their respective legal representatives, heirs, successorsand permitted assigns.

13.  GoverningLaw. This Agreement shall be governed by and construed inaccordance with the laws of the State of Texas without regard to principles ofconflicts of law that would apply any other law. Partner agrees that thenon-exclusive venue and jurisdiction for litigation or arbitration of any disputesrelating to this Agreement shall be Houston, Harris County, Texas, and Partnerirrevocably consents to personal jurisdiction of the Courts in Houston, Texas,and waives any forum non convenience rights. Notwithstanding the foregoing, theCompany shall have the right, at its election, to bring litigation orarbitration relating to Partner’s non-competition, non-solicitation andconfidentiality obligations in any forum having personal jurisdiction overemployee.

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14.  AgreementRead, Understood and Fair. Partner has carefully read andconsidered all provisions of this Agreement, agrees that all of therestrictions set forth are fair and reasonable and are reasonably required forthe protection of the interests of the Company and understands and will faithfullycomply with all such provisions.

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

EMPLOYER:

 

 

 

BIOSOURCE AMERICA, INC.,

 

a Texas corporation

 

 

 

By:

/s/ Leon van Kraayenburg

 

 

 

 

Printed Name: Leon van Kraayenburg

 

 

 

Title: Secretary

 

 

 

PARTNER:

 

 

 

 

 

/s/ Richard H. Talley

 

Richard H. Talley

 

 

 

 

 

Address for Notices:

 

 

 

231 Terra Verde

 

Butte, MT 59701

 

Facsimile:

 

 

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