CONSULTING AGREEMENT
Exhibit
10.18
This
Consulting Agreement (this “Agreement”) is made
and entered into on August 13, 2008 by and between Sahara Media, Inc., a
Delaware corporation (the “Company”), 00
Xxxxxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, XX 00000 (Fax No. 000-000-0000) and Aurelian Investments, LLC, a
Delaware limited liability company (“Consultant”), 000
Xxxx 00xx Xxxxxx,
00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Fax No.000-000-0000).
WITNESSETH
WHEREAS, The Company has
determined that it is desirable to retain the Consultant under a consulting
agreement;
WHEREAS, Consultant desires to
provide consulting services to the Company as an independent contractor in
accordance with the terms and conditions of this Agreement;
NOW THEREFORE, with reference
to the foregoing facts, the Company and Consultant agree as
follows:
1.
Engagement of
Consultant. The Company hereby engages Consultant and
Consultant hereby agrees to render independent advisory and consulting services
for the Company to the best of its ability, upon the terms and conditions
hereinafter set forth. Such consulting services shall include, but
not be limited to, consulting advice and performance of services as outlined in
Section 2 below.
2.
Services. During
the term of Consultant’s engagement, Consultant shall perform (by providing to
the Company the services of Maxim Serezhin and Xxxxxx Xxxxx),
those services related to the Company’s
business as may be reasonably requested by the Company, including but
not limited to the Consultant’s providing advice, with respect to the Company’s
business operations and developing excel spreadsheets depicting financial,
revenue and competitive pricing models in addition to market analysis on
potential strategic opportunities (collectively, the “Services” or “Work
Product”). All Work Product will be provided directly to the
Chief Executive Officer of the Company or his designeee and all Work Product
will remain the property of the Company. The Services to be rendered
by the Consultant to the Company shall under no circumstances include, directly
or indirectly, the following: (i) any activities which could be
deemed by the Securities and Exchange Commission to constitute investment
banking or any other activities required by the Consultant to register as a
broker-dealer under the Securities Exchange Act of 1934; (ii) any activities
which could be deemed to be in connection with the offer or sale of securities
in a capital-raising transaction; or (iii) any market making or promotional
activities regarding or involving the Company’s common stock.
3.
Compensation
3.1 In
consideration of the Services to be rendered by Consultant, and the performance
by Consultant of its obligations under this Agreement, within the earlier of (a)
seven days of the consummation of a transaction pursuant to which the
shareholders of the Company exchange all of their issued and outstanding shares
of common sock of the Company for shares in a corporation
(“Pubco”) whose common stock is included for quotation on the
Over-the-Counter Bulletin Board (the “Reorganization”), or (b) February 11,
2009, the Consultant shall be issued a a total of 200,000 share of the Common
Stock of Pubco (or, if the Reorganization has not been consummated as of the
date of the issuance of such shares, the Company), of which 50,000 shares shall
be issued within the earlier of (a) seven days of the consummations of the
Reorganization and (b) February 11, 2009 (the “First Stock Issuance Date”) and
thereafter the balance shall be issued as follows:
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(i)
50,000 shares of the restricted Common Stock of Pubco (or, if the Reorganization
has not been consummated, the Company) shall be issued to the Consultant six
months after the First Stock Issuance Date (the “Second Stock Issuance
Date”);
(ii)
50,000 shares of the Common Stock of Pubco (or, if the Reorganization has not
been consummated, the Company) shall be issued to Consultant six months after
the Second Issuance Date (the “Third Stock Issuance Date”);
(iii)
50,000 shares of the Common Stock of Pubco (or, if the Reorganization has not
been consummated, the Company) shall be issued to Consultant six months after
the Third Stock Issuance Date.
3.2 In
addition to the consideration to be paid to the Consultant pursuant to Section
3.1, the Consultant shall be issued options (in a form acceptable to the
Company) to purchase an aggregate of 200,000 shares of the common stock of Pubco
(or, if the Reorganization has not been consummated as of the date of the
issuance of such options, the Company) at $1.50 per share (subject to adjustment
as provided on the option), as follows:
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(i)
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An
Option to purchase 50,000 shares of the restricted common stock of Pubco
(or, if the Reorganization has not been consummated, the Company) shall be
issued to the Consultant at the earlier of (a) six months after the
consummation of the Reorganization, or (b) August 11, 2009 (the “First
Option Issuance Date”), unless this Agreement is terminated prior to the
First Option Issuance Date in which case such Option shall not be
granted;
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(ii)
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An
Option to purchase 50,000 shares of the restricted common stock of Pubco
(or, if the Reorganization has not been consummated, the Company) shall be
issued to the Consultant six months after the First Option Issuance Date
(the “Second Option Issuance Date”), unless this Agreement is terminated
prior to the Second Option Issuance Date in which case such Option shall
not be granted;
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(iii)
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An
Option to purchase 50,000 shares of the restricted common stock of Pubco
(or, if the Reorganization has not been consummated, the Company) shall be
issued to the Consultant six months after the Second Option Issuance Date
(the “Third Option Issuance Date”); unless this Agreement is terminated
prior to the Third Option Issuance Date in which case such Option shall
not be granted;
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(iv)
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An
Option to purchase 50,000 shares of the restricted common stock of Pubco
(or, if the Reorganization has not been consummated, the Company) shall be
issued to the Consultant six months after the Third Option Issuance Date
(the “Fourth Option Issuance Date”); unless this Agreement is terminated
prior to the Fourth Option Issuance Date in which case such Option shall
not be granted.
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3.3
The Company agrees to reimburse Consultant on a pre-approved basis for all
of Consultant’s reasonable out-of-pocket fees, expenses and costs (over $250.00)
incurred in connection with the performance of Consultant’s services under this
Agreement, provided the Consultant presents the Company with appropriate
receipts for such expenses. Notwithstanding anything to the contrary herein, the
Consultant hereby agrees that the Consultant will use his own materials,
including laptop, cell phone, car and blackberry in order to provide the
Services and will not be reimbursed for the use of these materials.
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4. Term. The
engagement of Consultant shall commence on August 11, 2008 and shall continue
until the earliest to occur of the following (the “Consulting
Period”):
4.1 The
earlier of eighteen month from the date of the consummation of the
Reorganization or August 11, 2011.
4.2 Upon
death or disability of Maxim Serezhin or Xxxxxx Xxxxx;
4.3 By the
Company “with cause,” effective upon delivery of written notice to Consultant
given at any time (without any necessity for prior notice) if any one or more of
the following shall occur:
4.3.1 a breach
of this Agreement by Consultant, which breach has not been cured within 5 days
after a written demand for such performance is delivered to Consultant by the
Company that reasonably identifies the manner in which the Company believes that
Consultant has breached this Agreement;
4.3.2 any act
or event which inhibits Consultant from fully performing his responsibilities to
the Company in good faith;
4.3.3 a felony
conviction of Maxim Serezhin or Xxxxxx Xxxxx;
4.3.4 breach of
the confidentiality obligations of Consultant, Maxim Serezhin and/or Xxxxxx
Xxxxx under this Agreement; or if
4.3.5 Consultant,
Maxim Serezhin, and/or Xxxxxx Xxxxx commit any act of material dishonesty,
carelessness or misconduct.
4.4 Upon
notice from the Company to Consultant other than pursuant to Section 4.2 or
4.3.
If this
Agreement is terminated prior to the end of the Consulting Period, the Company
shall pay to Consultant all fees earned and all reasonable expenses incurred
(provided such expenses were pre-approved as provided by this Agreement) as of
the time of such termination.
5. Representations and Warranties
of
Consultant.
5.1
Consultant is under no contractual restriction or other restrictions or
obligations that are inconsistent with this Agreement, the performance of its
duties and the covenants hereunder.
5.2
Consultant has had the opportunity to ask questions of, and to receive answers
from, appropriate executive officers of the Company with respect to the terms
and conditions of the transactions contemplated hereby and with respect to the
business, affairs, financial condition and results of operations of the
Company.
5.3 Consultant acknowledges that the
acquisition of the securities to be issued pursuant to this Agreement (the
“Securities”) involves a high degree of risk including, but not limited to, the
following: (a) the Company remains a development stage business with a limited
operating history; (b) an investment in the Securities and Pubco is highly
speculative, and only investors who can afford the loss of their entire
investment should consider investing in Pubco and the Securities; (c) the
Consultant may not be able to liquidate the Securities; (d) transferability of
the Securities is extremely limited; and (e) the Company and Pubco may issue
additional securities in the future which have rights and preferences that are
senior to those of the Securities.
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5.4
Consultant represents that the Securities that the Consultant will acquire
pursuant to this Agreement will be acquired for investment, and not with a view
to the resale or distribution of any part thereof, and that the Consultant has
no present intention of selling, granting any participation in, or otherwise
distributing the same. Consultant further represents that the Consultant does
not presently have any contract, undertaking, agreement or arrangement with any
person to sell or transfer to such person or to any third person, with respect
to any of the Securities.
5.5
Consultant acknowledges that the Common Stock and Option being issued
pursuant to this Agreement and the shares of common stock issuable upon exercise
of the Option have not been, and will not when issued be, registered under the
Securities Act of 1933, as amended (the “Securities Act”). The
Consultant acknowledges that the Securities will be when issued “restricted
securities” under applicable U.S. federal and state securities laws and that,
pursuant to these laws, the Consultant must hold the Securities indefinitely
unless they are registered with the Securities and Exchange Commission and
qualified by state authorities or an exemption from such registration and
qualification requirements is available. The Consultant acknowledges
that the Company (and Pubco) has no obligation to register or qualify the
Securities for resale. The Consultant further acknowledges that if an
exemption from registration or qualification is available, it may be conditioned
on various requirements including, but not limited to, the time and manner of
sale, the holding period for the Securities, and on requirements relating to the
Pubco which are outside of the Company’s control, and which the Company and
Pubco are under no obligation and may not be able to
satisfy. Consultant acknowledges that no market now exists for the
common stock of the Company, and a very limited public market now exists for the
common stock of Pubco, and that the Company has made no assurances that a public
market will ever exist for the common stock of Pubco or the
Company.
5.6
Unless the Securities being issued to the Consultant pursuant to this Agreement
are registered under the Securities Act, all certificates representing
securities issued pursuant to this Agreement shall bear legends in substantially
the following form:
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THESE
SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE
SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE
SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE
SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS
THEREFROM.
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and/or
such other legend or legends as the Company and/or Pubco and their counsel deem
necessary or appropriate. Appropriate stop transfer instructions with respect to
the Securities have been placed with the Company's transfer agent
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6.
Independent
Contractor. It is expressly agreed that Consultant is acting
as an independent contractor in performing its services hereunder, and this
Agreement is not intended to, nor does it create, an employer-employee
relationship nor shall it be construed as creating any joint venture or
partnership between the Company and Consultant. Consultant shall be
responsible for all applicable federal, state and other taxes related to
Consultant’s consulting fee and the Company shall not withhold or pay any such
taxes on behalf of Consultant, including without limitation social security,
federal, state and other local income taxes. Since Consultant is
acting solely as an independent contractor under this Agreement, Consultant
shall not be entitled to insurance or other benefits normally provided by
Company to its employees. Consultant shall be relying upon the
Company to supply accurate data and information without independent
verification.
7. Assignment. The
Company is entering into this Agreement in reliance upon and in consideration of
the skills and qualifications of Consultant. Consultant may not
assign or delegate any of its rights or obligations under this Agreement without
the prior written consent of the Company, which consent may be withheld for any
reason.
8.
Disclaimer of Responsibility for Acts
of Company. The obligations of the Consultant described in
this Agreement consist solely of the Services to Company. In no event
shall Consultant be required by this Agreement to act as the agent of Company or
otherwise to represent or make decisions for Company. All final
decisions with respect to acts of Company or its affiliates, whether or not made
pursuant to or in reliance on information or advice furnished by Consultant
hereunder, shall be those of the Company or such affiliates and Consultant shall
under no circumstances be liable for any expense incurred or loss suffered by
the Company as a consequence of such decisions.
9.
Indemnity. Each
party agrees to indemnify, defend and hold the other party (and its directors,
officers, employees and agents) harmless against any and all claims, loss, cost,
liability, or expense (including, without limitation, reasonable attorneys’ fees
and costs) incurred, sustained and/or paid by such other party arising out of
(a) any breach by such party of any of its representations, warranties or
covenants made under or in connection with this Agreement, or (b) the gross
negligence or willful misconduct of such party in its performance under this
Agreement.
10. Confidentiality. Confidential
Information. In
consideration of the compensation and benefits to be paid or provided to the
Consultant by the Company under this Agreement, the Consultant, Maxim Serezhin,
and Xxxxxx Xxxxx each covenants as follows:
(a) Confidentiality.
(i) During
and following the Consulting Period, the Consultant, Maxim Serezhin, and Xxxxxx
Xxxxx will each hold in confidence the Confidential Information and will not
disclose it to any person except with the specific prior written consent of the
Company or except as otherwise expressly permitted by the terms of this
Agreement.
(ii) Any
trade secrets of the Company will be entitled to all of the protections and
benefits under any applicable law. If any information that the Company deems to
be a trade secret is found by a court of competent jurisdiction not to be a
trade secret for purposes of this Agreement, such information will,
nevertheless, be considered Confidential Information for purposes of this
Agreement. The Consultant, Maxim Serezhin, and Xxxxxx Xxxxx each hereby waive
any requirement that the Company submits proof of the economic value of any
trade secret or posts a bond or other security.
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(iii) None
of the foregoing obligations and restrictions applies to any part of the
Confidential Information that the Consultant, Maxim Serezhin, and Xxxxxx Xxxxx
demonstrate was or became generally available to the public other than as a
result of a disclosure by the Consultant, Maxim Serezhin, and/or Xxxxxx
Xxxxx.
(iv) The
Consultant, Maxim Serezhin, and Xxxxxx Xxxxx will not remove from the Company’s
premises (except to the extent such removal is for purposes of the performance
of the Consultant's duties at home or while traveling, or except as otherwise
specifically authorized by the Company) any document, record, notebook, plan,
model, component, device, or computer software or code, whether embodied in a
disk or in any other form (collectively, the "Proprietary Items"). The
Consultant, Maxim Serezhin, and Xxxxxx Xxxxx each recognize that, as between the
Company and them, all of the Proprietary Items, whether or not developed by the
Consultant, Maxim Serezhin, or Xxxxxx Xxxxx, are the exclusive property of the
Company. Upon termination of this Agreement by either the Company or Consultant
or upon the request of the Company, the Consultant, Maxim Serezhin and Xxxxxx
Xxxxx will return to the Company all of the Proprietary Items in their
possession or subject to the their control, and they shall not retain any
copies, abstracts, sketches, or other physical embodiment of any of the
Proprietary Items.
(b) Consultant
Inventions. Each Consultant Invention will belong exclusively
to the Company. The Consultant, Maxim Serezhin, and Xxxxxx Xxxxx each
acknowledge that all of the Consultant's writing, works of authorship, and other
Consultant Inventions made during the term of this Agreement are works made for
hire and the property of the Company, including any copyrights, patents, or
other intellectual property rights pertaining thereto. If it is
determined that any such works are not works made for hire, the Consultant,
Maxim Serezhin, and Xxxxxx Xxxxx hereby assign to the Company all of the their
respective rights, title, and interests, including all rights of copyright,
patent, and other intellectual property rights, to or in such Consultant
Inventions. The Consultant, Maxim Serezhin, and Xxxxxx Xxxxx
covenants that it or he, as the case may be, will promptly:
(i) disclose
to the Company in writing any Consultant Invention;
(ii) assign
to the Company or to a party designated by the Company, at the Company’s request
and without additional compensation, all of the Consultant's right to the
Consultant Invention for the United States and all foreign
jurisdictions;
(iii) execute
and deliver to the Company such applications, assignments, and other documents
as the Company may request in order to apply for and obtain patents or other
registrations with respect to any Consultant Invention in the United States and
any foreign jurisdictions;
(iv) sign
all other papers necessary to carry out the above obligations; and
(v) give
testimony and render any other assistance in support of the Company's rights to
any Consultant Invention.
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(c) Disputes or
Controversies. The
Consultant, Maxim Serezhin, and Xxxxxx Xxxxx each recognize that should a
dispute or controversy arising from or relating to this Agreement be submitted
for adjudication to any court, arbitration panel, or other third party, the
preservation of the secrecy of Confidential Information may be jeopardized. All
pleadings, documents, testimony, and records relating to any such adjudication
will be maintained in secrecy and will be available for inspection by the
Company, the Consultant, and their respective attorneys and experts, who will
agree, in advance and in writing, to receive and maintain all such information
in secrecy, except as may be limited by them in writing.
(d) Definitions.
(a) For
the purposes of this Section, "Confidential Information" shall mean any and
all:
(i) trade
secrets concerning the business and affairs of the Company, product
specifications, data, know-how, formulae, compositions, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions and ideas, past,
current, and planned research and development, current and planned manufacturing
or distribution methods and processes, customer lists, current and anticipated
customer requirements, price lists, market studies, business plans, computer
software and programs (including object code and source code), computer software
and database technologies, systems, structures, and architectures (and related
formulae), compositions, processes, improvements, devices, know-how, inventions,
discoveries, concepts, ideas, designs, methods and information, and any other
information, however documented, that is a trade secret;
(ii) information
concerning the business and affairs of the Company (which includes historical
financial statements, financial projections and budgets, historical and
projected sales, capital spending budgets and plans, the names and backgrounds
of key personnel, personnel training and techniques and materials), however
documented; and
(iii) notes,
analysis, compilations, studies, summaries, and other material prepared by or
for the Company containing or based, in whole or in part, on any information
included in the foregoing.
(b) For the
purposes of this Section, "Consultant Invention" shall mean any idea, invention,
technique, modification, process, or improvement (whether patentable or not),
any industrial design (whether registerable or not), any mask work, however
fixed or encoded, that is suitable to be fixed, embedded or programmed in a
semiconductor product (whether recordable or not), and any work of authorship
(whether or not copyright protection may be obtained for it) created, conceived,
or developed by the Consultant , Maxim Serezhin, and/or Xxxxxx Xxxxx either
solely or in conjunction with others, during the Consulting Period, or a period
that includes a portion of the Consulting Period, that relates in any way to, or
is useful in any manner in, the business then being conducted or proposed to be
conducted by the Company, and any such item created by the
Consultant, Maxim Serezhin, and/ or Xxxxxx Xxxxx either solely or in
conjunction with others that is based upon or uses Confidential
Information.
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(e)
Publication and Release of Information: Consultant, Maxim Serezhin, and Xxxxxx
Xxxxx shall not disseminate, publish or publicly release any press release or
other document regarding the Company that has not been approved in advance by
the Company in writing.
11.
Company
Information. The Consultant is not entitled to receive or be
privileged to any information regarding the Company or the Company’s business
unless it directly and materially relates to the Services he is providing at the
time.
12.
Release. Consultant,
Maxim Serezhin, and Xxxxxx Xxxxx each hereby fully and forever waives, releases,
acquits and discharges Company and its successors, agents and assigns and all
others acting by, through or in concert with it (collectively, the “Released
Parties”), from any and all claims, liabilities, obligations, payments, causes
of action, rights, damages, debts, penalties, forfeitures, judgments, costs
(including attorney’s fees), or executions of any nature whatsoever, whether
known or unknown, that now exist, may arise from, relate to or by virtue or by
virtue of any matter, cause, event or thing arising from the beginning of the
world to the date of this Agreement, and any unasserted claims which Consultant,
Maxim Serezhin, and Xxxxxx Xxxxx, as applicable, may possess against the
Released Parties.
13.
Complete
Agreement. This Agreement supersedes any and all of the other
agreements, either oral or in writing, between the Company and the Consultant
with respect to the subject matter hereof and contains all of the covenants and
agreements between the parties with respect to such subject matter in any manner
whatsoever. Each party to this Agreement acknowledges that no representations,
inducements, promises or agreements, oral or otherwise, have been made by any
party, or anyone herein, and that no other agreement, statement or promise not
contained in this Agreement shall be valid or binding.
14. Amendment. No
amendment to this Agreement shall be valid unless such amendment is in writing
and is signed by authorized representatives of both parties to this
Agreement.
15. Waiver. Any of the
terms and conditions of this Agreement may be waived at any time and from time
to time in writing by the party entitled to the benefit thereof, but a waiver in
one instance shall not be deemed to constitute a waiver in any other
instance. A failure to enforce any provision of this Agreement shall
not operate as a waiver of this provision or of any other provision
hereof.
16.
Notices. All
notices, requests, demands and other communications (collectively, “Notices”) given pursuant to
this Agreement shall be in writing, and shall be delivered by personal service,
facsimile transmission or by over night courier, addressed to the party at the
address set forth in the introductory paragraph of this Agreement and, in the
case of the Company, with a copy to Xxxx Xxxx, Esq., Sichenzia Xxxx
Xxxxxxxx Xxxxxxx LLP 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (000) 000-0000
(fax). Any Notice shall be effective when sent. Any party may from
time to time change its address for further Notices hereunder by giving notice
to the other party in the manner prescribed in this Section.
17. Severability. In
the event that any provision of this Agreement shall be held to be invalid,
illegal or unenforceable in any circumstances, the remaining provisions shall
nevertheless remain in full force and effect and shall be construed as if the
unenforceable portion or portions were deleted.
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18. Assignment. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns. Any attempt by
either party to assign any rights, duties or obligations which may arise under
this Agreement without the prior written consent of the other party shall be
void.
19.
Governing Law This Agreement
shall be interpreted and performed in accordance with the laws of the State of
New York, and the parties agree, notwithstanding the principles of conflicts of
law, that the internal laws of the State of New York shall govern and control
the validity, interpretation, performance, and enforcement of this
Agreement. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in the State of
New York. The parties and the individuals executing this Agreement
and other agreements referred to herein or delivered in connection herewith on
behalf of the Company agree to submit to the jurisdiction of such courts and
waive trial by jury.
20.
Counterparts. This
Agreement may be executed in any number of counterparts, each of which may be
deemed an original and all of which together will constitute one and the same
instrument.
21. Headings. The
section headings in this Agreement are solely for convenience of reference and
shall be given no effect in the construction or interpretation of this
Agreement.
IN
WITNESS WHEREOF, the parties execute this Agreement as of the date first above
written.
| Company: | |||
| SAHARA MEDIA, INC. | |||
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By:
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/s/ Xxxxxxxx Xxxxxxxx XX | |
| Name: Xxxxxxxx Xxxxxxxx XX | |||
| Title: President and Chief Executive Officer | |||
| Consultant: | |||
| Aurelian Investments, LLC | |||
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By:
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/s/ Maxim Serezhim | |
| BY: Maxim Serezhin, Managing Partner | |||
| Solely with respect to Section 10 and Section 12: | |||
| /s/ Maxim Serezhin | |||
| Solely with respect to Section 10 and Section 12: | |||
| /s/ Xxxxxx Xxxxx | |||
| Xxxxxx Xxxxx | |||
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