CONSULTING AGREEMENT
This Consulting Agreement executed on and effective as of August 1,
2004 is made by and between Cobalis Corp., a Nevada corporation, with its
principal place of business located at 0000 XxXxxx Xxx, Xxxxx 000, Xxxxxx, XX
00000 (the "Company") and Xxxxxxx Vekovic, with an address at 00 xxxxxxxx #000,
Xxxxxx, XX 00000 (the "Consultant").
RECITALS: The Company desires to avail itself of the Consultant's
knowledge and expertise with respect to the business, products and operations of
the Company and has requested that the Consultant make such knowledge and
expertise available to the Company on as needed basis. The Consultant and the
Company agree that it is in their respective best interests to enter into this
Agreement whereby, for the consideration specified herein, the Consultant shall
provide the Consulting Services (as hereinafter defined) to the Company.
NOW THEREFORE, in consideration of the foregoing recitals and the
covenants and obligations set forth below and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
SECTION 1. DEFINITIONS.
"Cause" means (a) failure to follow written directives of the
President and CEO, (b) conduct by the Consultant in connection with this
Agreement or the Consulting Services that amounts to fraud or gross negligence
in the performance of its duties and responsibilities under this Agreement; or
(c) material breach of any obligation owed by the Consultant to the Company.
"Change in Control Event" means the occurrence of any of the
following events: (a) the execution of an agreement for the sale of all, or a
material portion, of the assets of the Company to an unrelated third party; or
(b) the execution of an agreement for a merger, consolidation or other
transaction constituting a business combination in which more than fifty percent
(50%) of the Company's issued and outstanding shares of voting stock are
acquired by a single entity or a group of affiliated entities that were not
previously shareholders of the Company. Notwithstanding the foregoing, a
recapitalization of the Company for the purpose of changing its state of
incorporation will not be considered a "Change in Control Event."
"Common Stock" means the common stock, $0.001 par value, of
the Company currently publicly traded on the OTC market under the ticker symbol
CLSC.
"Consulting Services" means the consulting services on as
needed basis to be performed hereunder by the Consultant for and on the
Company's behalf. The Consultant shall provide overall advice on the Management
of the Company, including but not limited to services related to corporate
governance, Marketing and Sales, and such other matters that relate thereto as
the Company may reasonably request of the Consultant by way of written
instruction or verbal communication.
SECTION 2. TERM. This Agreement shall commence on August 1, 2004 and
shall continue for a period of 12 months terminating on July 31, 2005 unless
sooner terminated as provided herein. After that period it would be
automatically renewed under same conditions as provided hereon.
SECTION 3. CONSULTING SERVICES. The Consultant hereby agrees that it
will perform the Consulting Services during the term of this Agreement. The
Consultant shall commit the resources necessary to timely and satisfactorily
perform the Consulting Services, and shall perform the Consulting Services in a
professional and workmanlike manner and in accordance with all applicable laws,
regulations and ordinances. The Consultant acknowledges that he has no authority
to act for or bind the Company or any of its affiliates without their respective
prior consent.
SECTION 4. COMPENSATION. Consultant shall be compensated by the Company
pursuant to the following formula:
(a) Monthly Retainer. Consultant shall receive, payable upon
the first day of each month, (a) $5 000 (five thousand dollars) per month for
the first five months, and (b) $15 000 (fifteen thousand dollars) per month
thereafter, for the remaining term of this Agreement, unless otherwise modified
by mutual written consent of the Consultant and the Company.
(b) Shares. The Company will issue to the Consultant a 300 000
unrestricted shares of Cobalis S-8 type of common stock at the following
schedule: 100 000 shares on the August 01, 2004, 100 000 shares on February 01,
2005 and 100 000 shares on July 31, 2005.
(c)Warrants. The Company will issue to the Consultant 600 000
warrants according to the schedule: 200 000 warrants of Cobalis on November 01,
2004, 200 000 warrants of Cobalis on May 01, 2005, and 200 000 warrants of
Cobalis on July 31, 2005. All warrants of Common Stock shall be at a purchase
price of $1.75 per share (the "Warrant Shares"), and all Warrants shall vest
respectively from the date of issue onwards.
(d) Expenses. The Consultant shall be reimbursed by the
Company for reasonable out- of-pocket expenses incurred in the performance of
the Consulting Services.
(e) Health Insurance. The Company agrees to reimburse the
Consultant for the cost of executive level health and dental insurance for the
term of this Agreement for the Consultant and his family.
(f) Liability. Taxes & Social Security. The Company will not
be liable for any debts, accounts, obligations or other liabilities of the
Consultant, including without limitation, the Consultant's obligation to
withhold social security and income taxes.
SECTION 5. TERMINATION.
(a) Termination for Cause. The Company may terminate this
Agreement for Cause immediately upon written notice to the Consultant.
(b) Other Termination. The Company may terminate this
Agreement without Cause upon 90 days prior written notice to the Consultant. The
Consultant may terminate this agreement upon 30 days prior written notice to the
Company. This Agreement shall terminate automatically upon the death or
disability of the Consultant. In the event that termination is made pursuant to
this section, all unvested warrants and shares will immediately vest provided
such termination is not made by the Consultant.
(c) Change in Control Event. In the event of a Change in
Control Event occurring during the term of this Agreement, all pays and unvested
warrants and shares due by this contract will immediately vest to the full
extent of this contract.
SECTION 6. OPTION REGISTRATION. The Company will exert good faith
efforts to immediately issue shares of Common stock of Cobalis, and register all
the Warrants that are being granted in Section 4 (b,c) of this Agreement so as
to enable the Warrants to be free trading securities immediately upon exercise.
SECTION 7. MISCELLANEOUS.
(a) Severability, Fees and Costs. The Parties agree that each
of the provisions included in this Agreement is separate, distinct and severable
from the other provisions of this Agreement, and that the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of any other provision of this Agreement. Further, if any
provision of this Agreement is ruled invalid or unenforceable by a court of
competent jurisdiction because of a conflict between the provision and any
applicable law or public policy, the provision shall be redrawn to make the
provision consistent with and valid and enforceable under the law or public
policy. Furthermore, in the event of a dispute under this Agreement, the
prevailing party shall be entitled to fees and costs, including reasonable
attorney's fees, in the enforcement of this Agreement.
(b) No Assignment. This Agreement and the rights and
obligations of the Parties stated in this Agreement may not be assigned without
the prior written approval of the other party. The rights and obligations of the
Parties will inure to the benefit of and will be binding on the Parties' lawful
successors and assigns.
(c) Strict Performance Waiver. The failure of either party to
insist on strict performance by the other party of any provision of this
Agreement or to exercise any right under this Agreement shall not be construed
as a waiver or relinquishment of such party's right to assert or rely on any
such provision or right in that or any other instance; rather, same shall be and
remain in full force and effect. A waiver by either party of any breach of this
Agreement by the other party shall not be effective unless in writing, and no
waiver shall operate or be construed as a waiver of the same or another breach
on a subsequent occasion.
(d) Amendments. This Agreement embodies the entire agreement
of the Parties on the subject matter stated in the Agreement. No amendment or
modification of this Agreement shall be valid or binding unless made in writing
and signed by both Parties. All prior understandings and agreements relating to
the subject matter of this Agreement are hereby expressly terminated.
(e) Notices. Any notice required or permitted to be given
hereunder must be given in writing and personally delivered or mailed to the
other party by certified mail, return receipt requested, by personal delivery or
by facsimile if the receiving party acknowledges in writing the receipt of such
fax transmission. Notices shall be given at the addresses set forth on the
signature page to this Agreement.
(f) Independent Contractors. The Parties are independent
contractors, and nothing in this Agreement shall be construed to constitute
either party as a partner, joint venturer, employee, employer or agent of the
other.
(g) Choice of Law Forum. This Agreement shall be governed by
and construed in accordance with the laws of the State of California. The
Parties consent to the personal jurisdiction and venue of the federal and state
courts having jurisdiction with respect to Irvine, California with respect to
all matters and disputes which may arise out of or result from this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first written above.
The Company (Cobalis, Corp.) The Consultant (Xxxxxxx Vekovic)
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Chaslav Xxxxxxxx Xxxxxxx Vekovic
President/CEO
