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 ”), 75 Franklin Street, 2 nd Floor, New York, NY 10013 (Fax No. 212-226-7451) and Aurelian Investments, LLC, a Delaware limited liability company (“ Consultant ”), 146 West 57 th Street, 50 th Floor, New York, New York 10019 (Fax No.646-224-8086).
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 Andrey Zouev), 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.
3.1 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:
(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:
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.
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 Andrey Zouev;
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 Andrey Zouev;
4.3.4 breach of the confidentiality obligations of Consultant, Maxim Serezhin and/or Andrey Zouev under this Agreement; or if
4.3.5 Consultant, Maxim Serezhin, and/or Andrey Zouev 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.
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