MUTUAL SETTLEMENT AGREEMENT AND RELEASE RE: CASE NO. 06CC03923 ORANGE COUNTY SUPERIOR COURT
Exhibit
4.16
RE:
CASE NO. 06CC03923
ORANGE
COUNTY SUPERIOR COURT
This
Mutual Settlement Agreement and Release (the “Agreement”)
is
entered into by and between XXXXXXX VEKOVIC an individual (“Vekovic”) and
COBALIS CORPORATION, a Nevada Corporation (“Cobalis”). This Agreement is made in
settlement of existing litigation between the parties, Orange County Superior
Court Case No. 06CC03923 (the “Litigation”).
RECITALS
| A. |
WHEREAS,
Vekovic filed the Litigation against Cobalis on March 9, 2006 in
Orange
County Superior Court; and
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| B. |
WHEREAS,
Cobalis has filed an answer denying all of the allegations in Vekovic’s
complaint; and
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| C. |
WHEREAS,
Cobalis filed a cross complaint against Vekovic, as to which Vekovic
filed
an answer denying all of the allegations, and which was subsequently
dismissed by Cobalis, without prejudice;
and
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| D. |
WHEREAS,
the parties have reached a settlement of the Litigation settling
all
matters between them; and
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| E. |
WHEREAS,
Cobalis is in the process of registering shares of Cobalis with an
S-8
filing and represents that it is using its best efforts to have said
S-8
Filing filed with the SEC by the beginning of April 2007;
and
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| F. |
WHEREAS,
the parties are entering into this agreement to effectuate the settlement
between them which includes the issuance of
50,000
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shares
of
the referenced S-8 filing to Vekovic and the issuance of 25,000 warrants of
Cobalis common stock (at a price of $1.75 per share);
The foregoing recitals are hereinafter referred to as “Recitals.”
SETTLEMENT
AGREEMENT
Now,
therefore, in consideration of the foregoing Recitals (which are incorporated
by
reference as if fully set forth herein) and the mutual agreements and covenants
set forth herein, the parties hereto agree as follows:
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1. No
Admission.
By
entering into this Agreement, no party to this Agreement is admitting to
the
sufficiency of the Litigation, or to any claims, allegations, assertions,
contentions or positions of either party hereto, or to the sufficiency of
any
defenses to any such litigation claims, allegations, assertions, contentions
or
positions. This Agreement effects the settlement of claims in the Complaint
and
Cross-Complaint, which are denied and contested. The parties merely desire
to
resolve the Litigation. The parties have entered into this Agreement in good
faith and with the desire to forever settle among them the issues involved
in
this Agreement as set forth below.
2. Settlement
of Litigation.
The
parties agree as follows:
2.1 Cobalis
agrees to issue to Vekovic 50,000 shares of registered stock (S-8 shares)
as
soon as possible, on or before April 15, 2007 (the “S-8 Shares”). The Shares, to
be registered in the name of Xxxxxxx Vekovic shall be delivered to Xxxx Xxxxxx
Xxxxx, Attorney for Vekovic, at 0000 XxxXxxxxx Xxxx, Xxxxx 000, Xxxxxxx Xxxxx,
XX 00000 on the same business day as other shares of the Cobalis are first
delivered to any other person or entity receiving similar shares and no later
than 5:00 p.m. April 15, 2007. In the event the S-8 share certificate is
not
delivered to Xx. Xxxxx by 5:00 p.m. on April 15, 2007, Cobalis shall pay
a
$5,000 late fee made out to “Xxxx Xxxxxx Xxxxx, Esq., on behalf of Xxxxxxx
Vekovic,” as liquidated damages for the late issuance of the S-8 Shares.
Furthermore, Cobalis shall pay an additional $5,000 liquidated damages amount
if
the S-8 Shares are not delivered by April 30, 2007, plus an additional
liquidated damages $5,000 amount on the 15th
and the
last day of each following month, if any, until the S-8 shares are delivered.
Upon delivery of the S-8 Shares, Vekovic agrees that he (or anyone acting
on his
behalf) will not sell more than 5,000 of the S-8 Shares on any one trading
day
(unless Vekovic receives prior written approval from Cobalis). In the event
that
Vekovic (or anyone acting on his behalf) sells more than 5,000 of the S-8
Shares
on any one trading day, Vekovic shall be liable to Cobalis for any and all
damages proximately caused by such breach of this agreement, subject to proof,
with a minimum liability of $5,000.00.
2.2 In
addition, Cobalis, contemporaneously with the execution of this agreement
agrees
that Vekovic shall immediately acquire the rights of
warrants of Cobalis to purchase 25,000 (twenty-five thousand) restricted
shares
of the Cobalis’ common stock, $.0001 par value, (the “Common Stock”) at $1.75
per share ,
exercisable at any time up to 5:00 p.m. on December 31, 2009 (the “Warrants”).
Within ten (10) business days of the execution of this Agreement, Cobalis
shall
issue a separate written document to Vekovic that memorializes Vekovic’s
Warrants and his warrant rights and obligations. . The Warrants may be exercised
by Vekovic at any time before the expiration date, regardless of whether
the
separate written document has been provided to Vekovic. Cobalis agrees to
use
its best efforts to register the Warrants and the underlying shares as a
“piggy
back” to any SB2 registration of Cobalis warrants/shares in the future, subject
to any objection by the “lead party” that no other registrants be included in
such future SB2 registration. Cobalis has no obligation under this Agreement
to
commence an SB2 registration where Vekovic is the “lead party.” In other words,
Cobalis agrees to include Vekovic’s Warrants in any future SB2 registration, if
feasible (i.e., if the “lead party” does not object to the inclusion of other
registrants or warrants). As noted above, this Agreement, by itself, grants
Vekovic the right to exercise the Warrants at any time before the December
31,
2009 expiration date. The further written documentation of the actual Warrants,
as referenced above, shall be delivered to Xxxx Xxxxxx Xxxxx, Esq., at the
earliest opportunity and, in no event, not later than ten (10) business days
after the execution of this Agreement.
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2.3 Based
upon the agreement of Cobalis’ counsel, Xxxxxx Xxxxxxx, of Xxxxxxx &
Xxxxxxx, counsel for Vekovic has already filed a Conditional Notice of
Settlement of the Litigation with the Orange County Superior Court, stating
that
the case will be dismissed by July 1, 2007, or soon as possible after the
completion, of the terms and conditions of this Agreement have been carried
out.
2.4 Within
two (2) business days of the execution of this Agreement, Cobalis will re-file
its Request for Dismissal of the Cross-Complaint, which shall be dismissed
with
prejudice.
3. Mutual
Releases.
3.1 Vekovic
does hereby fully and forever release, remise, acquit and discharge Cobalis
and
each of their present and former members, agents, servants, officers, directors,
employees, shareholders, principals, predecessors, alter egos, partners,
parents, subsidiaries, insurers, re-insurers, sureties, attorneys, heirs,
executors, administrators, trustees, successors and assigns from any and
all
claims, demands, damages, rights, and cause or causes of action heretofore
or
hereafter, arising out of or directly or indirectly related to the Litigation
and/or the matters set forth in the above Recitals.
3.2 Cobalis
does hereby
fully and forever release, remise, acquit and discharge Vekovic and each
of his,
alter egos, partners, parents, subsidiaries, insurers, re-insurers, sureties,
attorneys, heirs, executors, administrators, trustees, successors and assigns
from any and all claims, demands, damages, rights, and cause or causes of
action
heretofore or hereafter, arising out of or directly or indirectly related
to the
Litigation and/or the matters set forth in the above Recitals.
4. Waiver
of Civil Code Section 1542.
As to
the matters released in Paragraph 3, above, and in addition thereto, both
Cobalis and Vekovic specifically waive the benefits and provisions of Section
1542 of the Civil Code of the State of California, and of any comparable
provision of law whether by statute or decision. California Civil Code Section
1542 provides as follows:
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“A
general release does not extend to claims which the creditor
does not know
or suspect to exist in his favor at the time of executing
the release,
which if known by him must have materially affected his
settlement with
the debtor.”
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5. Attorneys’
Fees.
Each
party to this Agreement shall bear hers, his, or its own attorney’s fees, costs
and expenses.
6. Warranty
of Authority to Settle.
Cobalis
represents, acknowledges, warrants and agrees that at the time of signing
this
Agreement, Cobalis has the sole and absolute authority to settle, dismiss
or
discharge the Dispute and that the person signing this Agreement on behalf
of
Cobalis has been authorized by the Cobalis Board of Directors or has been
previously authorized by the Cobalis Board of Directors to enter into this
Agreement.
7. General
Representations and Warranties.
Each of
the parties to this Agreement represents, warrants and agrees as to it/him
as
follows:
7.1. Each
party has received independent legal advice from its/his attorneys, with
respect
to the advisability of making the settlement provided for herein, with respect
to the advisability of executing this Agreement, and with respect to the
meaning
of California Civil Code Section 1542.
7.2. Each
party has read this Agreement and understands the contents hereof and has
full
authority to execute the agreement on whose behalf she/he so
signed.
7.3. Each
party has not heretofore assigned, transferred, or granted, or purported
to
assign, transfer, or grant, any of the claims, demands, and cause or causes
of
action disposed of by this Agreement.
7.4. Each
term
of this Agreement is contractual and not merely a recital.
7.5. The
parties will execute all such further and additional documents as shall be
reasonable, convenient, necessary or desirable to carry out the provisions
of
this Agreement.
7.6. Each
party warrants and represents that (i) this Agreement in its reduction to
final
written form is a result of extensive good faith negotiations between the
parties through their respective counsel; (ii) said counsel have carefully
reviewed and examined this Agreement for execution by said parties, or any
of
them; and (iii) any statute or rule of construction that ambiguities are
to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement.
8. Indemnity.
8.1 Cobalis
shall, save, defend, indemnify and keep harmless Vekovic
and each of his present and former members, agents, servants, officers,
directors, employees, shareholders, principals, predecessors, alter egos,
partners, parents, subsidiaries, insurers, re-insurers, sureties, attorneys,
heirs, executors, administrators, trustees, successors and assigns and each
of
them against any and all liability, claims, costs, attorneys’ fees, judgments,
or demands, arising directly or indirectly from any breach by
Cobalis.
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8.2 Vekovic
shall, save, defend, indemnify and keep harmless Cobalis and each of its
present
and former members, agents, servants, officers, directors, employees,
shareholders, principals, predecessors, alter egos, partners, parents,
subsidiaries, insurers, re-insurers, sureties, attorneys, heirs, executors,
administrators, trustees, successors and assigns and each of them against
any
and all liability, claims, costs, attorneys’ fees, judgments, or demands,
arising directly or indirectly from any breach by Vekovic.
9. Confidentiality.
The
Parties recognize that since Cobalis is a public company the terms of this
Agreement cannot remain fully confidential.
10. Miscellaneous.
10.1 This
Agreement shall be deemed to have been executed and delivered within the
State
of California, County of Orange, and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with, and governed
by,
the laws of the State of California. Further, in the event of litigation
or any
other action or dispute resolution proceeding relating to or arising out
of this
Agreement, whether in contract or in tort (collectively “Proceeding”),
the
Proceeding shall be held in the County of Orange, State of
California.
10.2. This
Agreement is the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous oral and
written discussions. This Agreement may only be amended by duly executed
writing
signed by all parties hereto.
10.3. This
Agreement is binding upon and shall inure to the benefit of the parties hereto
and their respective agents, attorneys, officers and directors, heirs,
successors and assigns.
10.4. In
the
event of any Proceeding relating to or arising out of this Agreement, the
prevailing party in such Proceeding (whether at trial or appeal) shall be
awarded, in addition to such other relief as may be granted, its/his costs
and
expenses of participation in such Proceeding, including but not limited to
its/his reasonable attorneys’ fees.
10.5. This
Agreement may be executed in counterparts, by either original or facsimile
signature, either of which shall constitute an “original”. When each party has
signed and delivered at least one such counterpart, each counterpart shall
be
deemed an original and, when taken together with other signed counterparts,
shall constitute one agreement which shall be binding upon and effective
as to
all parties. No counterparts shall be effective until all parties hereto
have
executed a counterpart hereof.
10.6. If
a
provision of this Agreement is held to be illegal or invalid by a court of
competent jurisdiction, such provision shall be deemed to be severed and
deleted. Such severance and deletion shall not affect the validity of the
remaining provisions.
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FOR
AND ON BEHALF OF
COBALIS
CORPORATION BY
| DATED | |||
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| DATED | |||
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XXXXXXX VEKOVIC |
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APPROVED
AS TO FORM ONLY:
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Law
Offices of Xxxxxxx & Xxxxxxx, a Law
Partnership
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Xxxx Xxxxxx Xxxxx, a Prof. Corp. | ||
| By: /s/ | By: /s/ | ||
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Xxxxxx
Xxxxxxx, Esq.,
Attorneys
for Cobalis Corporation
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Xxxx Xxxxxx Xxxxx, Esq., Attorney
for Xxxxxxx Vekovic
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