Exhibit 10.1
 
THORIUM POWER, LTD.

CONSULTING AGREEMENT

CONSULTING AGREEMENT, dated as of January 1, 2007 (the “Agreement”), by and
between THORIUM POWER, LTD., a Nevada corporation, having its principal place of
business at 8300 Greensboro Drive, Suite 800, McLean, VA 22102 (“Company”) and
SEC Audit Prep, Inc. (“Consultant”).

BACKGROUND

Company desires to retain Consultant to perform the Services (as defined below)
and Consultant desires to perform the Services for Company subject to the terms
and conditions set forth below. This agreement supersedes the previous
consulting agreement between the Consultant and Novastar Resources Ltd.

NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, the parties hereto intending to be legally bound hereby
agree as follows:

1. THE SERVICES.

Subject to the terms of this Agreement, Consultant agrees to act as a consultant
on behalf of Company and perform the following services ( the “Services”):

The Consultant will be the Treasurer and Acting Chief Financial Officer of the
Company for a period of time until a Chief Financial Officer is appointed. After
a Chief Financial Officer is appointed, the Consultant will become the Treasurer
and Financial Consultant providing financial consulting services such as
processing all bills for payment and maintaining the company’s books and
records, preparing monthly reports for management and the Board, preparing
quarterly and annual Securities Exchange Act of 1934 reports, review significant
events and changes of accounting rules that effect the company, interface with
the auditors in answering questions and assisting them in getting their work
completed timely, participate in audit committee meetings and answer audit
committee questions, perform an internal audit function where needed, and
working to institute the highest level of corporate governance for the Company,
as well as other functions customary to the office of Treasurer. In addition,
the Consultant shall help perform the SOX 404 compliance work and prepare the
audit and quarterly review preparation binders for the external auditors and
such other similar tasks as the Company may request. Any M&A work, due diligence
work or other special projects outside the scope of the above mentioned services
will be charged at a mutually agreeable hourly rate.

2. TERM.

The initial term of this Agreement shall be for a period of two years; provided,
however, that this Agreement shall automatically be extended for additional
periods of one (1) year unless terminated by either party in accordance with
Section 5. In the event of the termination of this Agreement, Consultant shall
promptly return to Company any and all documents or materials in whatever form
or medium, and all copies made thereof, which Consultant received from Company
for purposes of this Agreement, as well as all Work Product as defined and
described in Section 6 of this Agreement.

3. FEES AND REIMBURSEMENT OF CERTAIN EXPENSES.

a.  
Company shall pay Consultant a consulting fee (the “Fee”) to SEC Audit Prep,
Inc. equal to a monthly fee of $16,000 for Services performed. The Fee shall be
payable per invoice every month, no later than the 10th business day following
the receipt by Company from the Consultant of an invoice. The Consultant shall
be paid a Fee for a minimum of $16,000 whether or not the Company still requires
the Consultant to perform all the Services mentioned above during the contract
term.

 

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b.  
The Company shall grant to the Consultant a nonqualified stock option for the
purchase of 150,000 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 of grant. The option shall vest in equal monthly installments over a
three (3) year period. If the Consultant is terminated without cause or if there
is a change of control of the Company, then the option shall vest immediately.
The term of the option shall be ten years.

c.  
Upon termination of this Agreement for any reason, Consultant expressly
understands and agrees that Company’ sole obligation shall be to pay Consultant
the Fee for Services rendered through the effective date of termination or
expiration, including any mandatory notice period.

d.  
Reimbursement of any reasonable travel expenses, if any, shall be made according
to Company’ corporate policy; provided, however, that in no event shall the Fee
be paid for travel time. Consultant shall be reimbursed for other reasonable and
necessary expenses actually incurred or paid by Consultant during the term or
any extension thereof in the performance of the Services within twenty (20)
business days of the submission and approval by Company of expense statements,
vouchers, or other supporting information reasonably acceptable to Company. Any
travel expenses in excess of $2,000 in each instance shall require prior
approval by the Company.

e.  
Consultant shall not be entitled to participate in any fringe benefits or
privileges given or extended by Company to its officers and employees, including
without limitation, medical benefits, retirement plans or stock options.
Consultant shall be responsible for the payment of all federal, state and local
taxes including, without limitation, withholding and sales taxes, and, at the
request of Company, Consultant shall provide to Company evidence that all of
such payments have been made. Such evidence may include, at Company’ option, a
written statement by Consultant that Consultant has timely and appropriately
paid and withheld all appropriate taxes. Consultant warrants and represents that
Consultant has complied with, and covenants that during the term of this
Agreement or any extension thereof, Consultant shall continue to comply with all
laws, rules and regulations required by appropriate government authorities for
independent contractors, including the appropriate withholding, reporting and
payment of all required taxes. Consultant shall indemnify and hold Company
harmless from and against any claims, damages, debts, obligations, liabilities
and expenses (including, without limitation, attorney’s fees and expenses and
court costs) arising out of Consultant’s failure to perform any covenant
contained in, or Consultant’s breach of any representation or warranty set forth
in, this Section.

 
4. DUTIES AND EXTENT OF SERVICES

Upon the execution of this Agreement and throughout its term or any extension
thereof, Consultant shall assume the position of Treasurer and Financial
Consultant to Company and the Consultant shall be available at all times
necessary or appropriate in order for Consultant to effectively perform the
Services. Consultant shall exert Consultant’s best efforts and attention to the
affairs of Company. Consultant shall notify Company promptly of any other
engagement or commitment which could reasonably be expected to interfere or
conflict with the performance of Services hereunder.

The work performed above will be done on an as-needed hourly basis, which limits
our involvement and knowledge of the daily operations of the company. Because of
this, there is a risk that material errors, irregularities, or illegal acts,
including fraud or defalcation, may exist and may not be detected by us. By
signing below the company acknowledges this fact and agrees to indemnify us
should any of the above situations occur.

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5. TERMINATION

Consultant’s engagement hereunder shall terminate at the end of the term or any
extension thereof as set forth in Section 2 hereof or sooner upon the occurrence
of any of the following events:

a.  
The termination of Consultant hereunder by Company at its option, for any reason
or no reason, to be exercised by 270 days written notice from Company to
Consultant.

b.  
Consultant’s death.

c.  
Upon delivery of written notice by Company to Consultant if Consultant
materially breaches this Agreement; provided that the Company gives the
Consultant a description of the material breach and at least twenty days to cure
the breach.

6. LIMITED LIABILITY 

Consultant shall not be liable to the Company, or to anyone who may claim any
right due to its relationship with the Company, for any acts or omissions on the
part of the Consultant or the agents or the employees of the Consultant in the
performance of Consultant’s services under this agreement. THORIUM POWER, LTD.
shall hold Consultant free and harmless from any obligations, costs, claims,
judgments, attorney’s fees, or attachments arising from or growing out of the
services rendered to the Company.

7. INDEMNIFICATION

THORIUM POWER, LTD. Agrees to indemnify and save harmless the Consultant, as
well as Consultant’s officers, employees, and agents from all suits, actions,
losses, damages, claims, or liability of any character, type or description,
including without limiting the generality of the foregoing all expenses of
litigation, court costs, and attorney’s fees arising out of or occasioned by the
acts of THORIUM POWER, LTD., its agents or employees, or occasioned by the acts
of Consultant in the execution or performance of the services provided by the
Consultant, at any time from the execution date of this Agreement until such
time after any pertinent limitations period expires after he termination of this
Agreement.

As a part of this indemnification, THORIUM POWER, LTD. agrees to defend and hold
harmless Consultant from and against any and all liabilities, excluding gross
negligence on the part of the Consultant, arising from the consulting agreement.
As such, Consultant shall not be liable to THORIUM POWER, LTD., or anyone who
may claim any right due to its relationship with THORIUM POWER, LTD., for any
acts or omissions, other than gross negligence, on the part of the Consultant or
the agents or employees of the Consultant in the performance of Consultant’s
services under this Agreement. THORIUM POWER, LTD. shall hold Consultant free
and harmless from any obligation, costs, claims, judgments, attorney’s fees, or
attachments arising from or growing out of the services rendered to the Company.

8. WORK FOR HIRE

a.  
The parties acknowledge and agree that all rights, including without limitation
ownership, patent and copyright, in any software, materials, reports (including,
without limitation, report books, reference materials and other literature
relating to Company’ products or services or otherwise related to the Services),
memoranda, graphics, logos or other work product prepared by Consultant pursuant
to the terms of this Agreement, or otherwise for Company (hereinafter the “Work
Product”) vest in Company. The parties expressly acknowledge that the Work
Product was specially ordered or commissioned by Company and further agree that
it shall be considered a “Work Made for Hire” within the meaning of the
copyright laws of the United States and that Company is entitled, as sole
author, to the copyright and all other rights therein, throughout the world,
including but not limited to, the right to make such changes therein and such
uses thereof, as it may determine in its sole and absolute discretion. If, for
any reason, the Work Product is not considered a “work made for hire” under the
copyright laws of the United States as aforesaid, then Consultant hereby grants
and assigns to Company, its successors and assigns, all of Consultant’s right,
title and interest in the Work Product, including, but not limited to, the
copyright therein throughout the world (and any renewal, extension or reversion
copyright now or hereafter provided), and all other rights therein of any nature
whatsoever, whether now known or hereafter devised including, but not limited
to, the right to make changes therein, and such uses thereof, as Company may
determine in its absolute discretion. Consultant also agrees to keep necessary
records, made alone or with others during the course of performing Services
pursuant to this Agreement, and agrees to furnish Company, upon request, with
all such records.

 

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b.  
If Company is unable, after reasonable effort, to secure Consultant’s signature
on any application for patent, copyright, trademark or other analogous
registration or other documents regarding any legal protection relating to a
Work Product, whether because of Consultant’s physical or mental incapacity or
for any other reason whatsoever, Consultant hereby irrevocably designates and
appoints Company and its duly authorized officers and agents as Consultant’s
agent and attorney-in-fact, to act for and in Consultant’s behalf and stead to
execute and file any such application or applications or other documents and to
do all other lawfully permitted acts to further the prosecution and issuance of
patent, copyright or trademark registrations or any other legal protection
thereon with the same legal force and effect as if executed by Consultant.

 9. PROPRIETARY INFORMATION

a.  
For purposes of this Agreement, “proprietary information” means information
relating to the business of Company or any affiliated or subsidiary entity and
shall include (but shall not be limited to) information encompassed in all Work
Product, specifications, drawings, graphics, logos, designs, computer programs,
source code, object code, models, methodologies, algorithms, user documentation,
plans, formulas, proposals, marketing and sale plans, financial information,
costs, pricing information, customer information, and all methods, concepts or
ideas in or reasonably related to the business of Company or information of
customers or clients of Company which Company is required to maintain as
confidential.

b.  
Consultant agrees to regard and preserve as confidential, all proprietary
information, whether or not it has such information in writing, other physical
or magnetic form or such information is contained in Consultant’s memory or the
memory of any of Consultant’s agents or employees. Consultant shall not, without
written authority from Company to do so, directly or indirectly, use for the
benefit or purpose, nor disclose to any other person or entity, either during
the term of Consultant’s engagement hereunder or thereafter, except as required
by the conditions of Consultant’s engagement hereunder, any proprietary
information.

c.  
Consultant shall not disclose any reports, recommendations, conclusions or other
results of the Services or the existence or the subject matter of this contract
without the prior written consent of Company. In Consultant’s performance
hereunder, Consultant shall comply with all legal obligations Consultant may now
or hereafter have regarding the information or other property of any other
person, firm or corporation.

d.  
The foregoing obligations of this Paragraph shall not apply to any part of the
information that (i) has been disclosed in publicly available sources of
information, (ii) is, through no fault of Consultant, hereafter disclosed in
publicly available sources of information, (iii) can be demonstrated to Company’
satisfaction that it is now in the possession of Consultant without any
obligation of confidentiality, or (iv) has been or is hereafter lawfully
disclosed to Consultant by a third party, but only to the extent that the use or
disclosure thereof has been or is rightfully authorized by that third party.

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10. NO SOLICITATION AND COVENANT NOT TO COMPETE

a.  
During the period commencing on the date hereof and ending two (2) years after
the termination of Consultant’s engagement for any reason (the “Restricted
Period”), Consultant shall not directly or indirectly induce, solicit, persuade
or entice or attempt to induce, solicit, persuade or entice any of the
employees, consultants or agents of Company to leave the employment of Company
or to terminate the consultancy or agency relationship with Company, as the case
may be.

b.  
During the Restricted Period, Consultant shall not, without the written consent
of a duly authorized officer of Company: (i) directly or indirectly, whether as
principal, agent, stockholder, or in any other capacity, have a financial
interest in any company or enterprise which is in competition with any business
actively conducted by Company or any of its subsidiaries or affiliates;
provided, however, that this shall not be deemed to preclude Consultant from
owning not more than 1% of the stock or securities of any corporation, the
shares of which are registered under Section 12 of the Securities Exchange Act
of 1934, as amended or (ii) directly or indirectly, whether as principal, agent,
stockholder, employee, consultant or in any other capacity, provide any services
to any company or enterprise which would result in competition with the
services, products and technologies sold, licensed or being developed or planned
or otherwise contemplated by Company or any of its subsidiaries or affiliates at
the time of the termination of this Agreement.

c.  
During the Restricted Period, the Consultant shall not, directly or indirectly,
induce, solicit, persuade or entice or attempt to induce, solicit persuade or
entice any person who is then or has been within the preceding 12-month period a
customer or account of Company or any of its affiliates, or any actual customer
leads whose identity the Consultant learned of during the term of this Agreement
or any extension thereof , to terminate or to adversely alter its contractual or
other relationship with Company or any of its affiliates.

d.  
During the term or any extension thereof the Consultant shall promptly disclose
to Company any business idea or opportunity which falls within Company’ line of
business or any logical extension thereof, which business idea or opportunity
shall become the sole property of Company.

e.  
Consultant hereby agrees that each provision herein shall be treated as a
separate and independent clause, and the unenforceability of any one clause
shall in no way impair the enforceability of any of the other clauses of the
Agreement. Moreover, if one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to scope,
activity, subject or otherwise so as to be unenforceable at law, such provision
or provisions shall be construed by the appropriate judicial body by limiting or
reducing it or them so as to be enforceable to the maximum extent compatible
with the applicable law as it shall then appear. Consultant hereby further
agrees that the language of all parts of this Agreement shall in all cases be
construed as a whole according to its fair meaning and not strictly for or
against either of the parties.

11. INJUNCTIVE RELIEF

Consultant acknowledges that the injury to Company resulting from any violation
by Consultant of any of the covenants contained in this Agreement will be of
such a character that Company cannot be adequately compensated by money damages,
and, accordingly, Company may, in addition to pursuing its other remedies,
obtain an injunction from any such violation; and no bond or other security
shall be required in connection with such injunction.

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12. NOTICES

Any notice of 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 set forth in the preamble of this Agreement, 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.
 
13. NO RESTRICTIONS

Consultant represents to Company, which relies on such representation, that
Consultant is free to enter into this Agreement in that Consultant is not under
any restrictions from a former employer or business that would preclude
Consultant’s from making these agreements. Consultant understands that Company
does not want Consultant to disclose to it any confidential information that
Consultant may have obtained from a former employer, although Consultant is free
to use Consultant’s general knowledge and past experience in the performance of
the Services.

14. GENERAL CONDITIONS

a.  
The terms and conditions of Paragraphs 3E, 6, 7, 8, 9, 10, 11 and 12 hereof
shall survive the termination of this Agreement or completion of the Services as
the case may be.

b.  
Consultant shall not assign this Agreement or delegate Consultant’s duties
hereunder and shall not subcontract any of the Services to be performed
hereunder without the prior written consent of Company. The Consultant may,
however, provide Services hereunder through SEC Audit Prep, Inc., an entity
controlled by the Consultant, and in such case, Fee payments shall be made to
such entity; provided, however, that in such event, the Consultant shall
continue to be the primary provider of the Services.

c.  
Consultant shall perform the Services as an independent contractor and shall not
be considered an employee of Company or partner, joint venture or otherwise
related to Company for any purpose. Accordingly, Consultant may not bind Company
to any contract, agreement or arrangement.

d.  
Consultant shall not trade the Company’s stock on insider information the
Consultant may learn in the course of performing his services under this
Agreement. The Consultant agrees to disclose in writing to the Company any
changes in the Consultant’s ownership position with respect to the Company’s
stock within five (5) business days after an event involving acquisition or
disposition of the Company’s stock occurs.

e.  
This Agreement shall be governed by the laws of the State of New York, without
regard to its conflicts of laws.

f.  
This Agreement constitutes the entire understanding between the Consultant and
Company respecting the Services described herein.

g.  
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.

 

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h.  
Facsimile execution and delivery of this Agreement is legal, valid and binding
execution and delivery for all purposes.

i.  
The Consultant shall be primarily based in New York; however, the Consultant
will travel back and forth to the Washington, DC area, where the executive
offices of the Company are based, on an as needed basis. The Consultant expects
to travel to Washington, DC at least one time per month.

 
[signature page follows]
 

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

Thorium Power, LTD.
 
Treasurer and Financial Consultant
 
 
 
 sethgrae logo [sethgrae.jpg]
 
Larry Goldman
     
By: /s/ Seth Grae

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Name: SETH GRAE
 
By: /s/ Larry Goldman

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Name: SEC Audit Prep, Inc.
Title: President and Chief Executive Officer
 
Title: President

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