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Exhibit 10.22 CONSULTING AGREEMENT This Consulting Agreement (Agreement),is made effective and entered into as of April
1,2003, by and between Save the World Air, Inc., a Nevada corporation (the Company),and John
Kostic (Consultant)with reference to the following facts: RECITALS A. The Company has developed proprietary technologies for reducing harmful emissions from
fuel combustion engines and improving fuel efficiency, among other benefits. The development of
these proprietary technologies and enhancements to them, as well as the anticipated manufacturing,
distribution and sale of products derived from them, are sometimes referred to below as the
Companys ~~Business. The Companys current products are known as the ZEFSdevice, as described
in the Companys patent applications which are pending in various countries (the ZEFS Product).
The Company is currently engaged in research and development for next-generation products and
enhancements for use with diesel engines (Diesel Product),multiport or multipoint electronic
fuel injection (EFI Product),each of which may consist of a device that is attached to an
engine or to a component that is attached to the engine or a technology that is incorporated into
an engine or a component attached to an engine. The ZEFS Products, Diesel Products and EFI
Products are sometimes referred to collectively in this Agreement as the Products. B. The parties hereto anticipate that the Products will be based on the ZEFS Product or new
technologies developed pursuant to this Agreement and certain related consulting agreements being
entered into between the Company and certain others who are part of the Companys R&D team. C. The Company desires to engage the services of Consultant to assist the Company in
research and development and to provide other services and assistance to the Company in matters
relating to the Companys business, as they may arise from time to time, upon the terms and
conditions contained herein. . D. Consultant desires to provide services to the Company upon the terms and
conditions contained herein. NOW, THEREFORE, the Company and Consultant hereby mutually agree as


     follows: Section 1. Scope of Services to Be Provided.Consultant shall provide to the
Company, on an as needed basis, assistance, advice and support relating to the Companys business,
including project management and supporting the project lead and development team, as the Company
may request from time to time. Without limiting the generality of the foregoing, Consultant shall: (a) R&D.Consultant shall undertake and perform the tasks outlined on Annex Ahereto and such
additional or other responsibilities as may be reasonably assigned to Consultant from time to time
by the Companys Chief Executive Officer, President, Chief Operating Officer or Director of R&D.




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(b) Reports.Consultant shall provide regular monthly reports to the Company on the efforts
expended and undertaken on each project assigned to or undertaken by Consultant. Consultant shall
maintain and make available to the Company upon request complete records for purchases, products,
prices, analyses, testing and test results, contacts, drawings and such other matters as the
Company may request from time to time. (c) Potential Customers.Consultant shall use its best efforts to actively and diligently
identify and provide to the Company potential customers and, when requested by the Company,
demonstrate the Companys products for potential customers and others to demonstrate the
products operation and capabilities. (d) Procedures for Maintaining Proprietary Information.Consultant shall keep and maintain
such procedures as may be customary and appropriate and as may be specified by the Company to
protect, maintain and keep confidential any proprietary or confidential information of the
Company, including without limitation all know how and information that may constitute a trade
secret or otherwise confer strategic or competitive advantages to the Company, by use of
passwords, locked cabinets, identification of such information and materials as Confidential
and other limits on access as may be customary or appropriate or set forth in Company policies. (e) Travel.The Company may require Consultant to travel at Company expense to its U.S.
offices and facilities at least twice per year and internationally from time to time as may be
reasonably required to fulfill Consultants assigned duties and responsibilities, provided that
each such trip shall not exceed two weeks without Consultants consent. Section 2. Non-Disclosure Obligations.Concurrently with the parties execution of this
Agreement, Consultant shall execute and deliver to the Company the Confidentiality Agreement
attached hereto as Annex B(the Confidentiality Agreement),the provisions of which are
incorporated herein by this reference. Section 3. Consultants Representations and Covenants.Consultant represents, warrants
and covenants to the Company that: (a) Consultant shall devote such time, energy, interest, ability, and skill as may be
fairly and reasonably necessary to provide to the Company the services described in Section 1
above. (b) The Company may require Consultant to travel to its U.S. offices and facilities at the
Companys expense at least twice per year and internationally from time to time as may be
reasonably required to fulfill Consultants assigned duties and responsibilities, provided that
each such trip shall not exceed two weeks without Consultants consent. (c) Consultant shall not, during the term of this Agreement, directly or indirectly, promote,
participate, or engage in any business activity that would materially interfere with the
performance of Consultants duties under this Agreement or which is competitive with the Companys
or any Company Affiliates business, including, without limitation, any involvement as a
shareholder, director, officer, employee, partner, joint venturer, consultant, advisor, individual
proprietor, lender, or agent of any business, without the prior written consent of the Company.
The term Affiliateshall mean, with respect to any person or entity, any other Consulting Agreement  J Kostic v7 - 2




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person or entity which, directly or indirectly through one or more intermediaries, is in
control of, is controlled by or is under common control with, such person or entity. Control of,
controlled byand under common control withmean the possession, directly or indirectly, of
the power to direct or cause the direction of the management policies of a person or entity, by
contract or credit arrangement, as trustee or executor, or otherwise. The term Affiliate
includes, but is not limited to, each and every subsidiary of the Company. (d) During the term of this Agreement and for a period of one year after the termination of
this Agreement, Consultant shall not solicit, attempt to solicit, or cause to be solicited any
customers of the Company for purposes of promoting or selling products or services which are
competitive with those of the Company, nor shall Consultant solicit, attempt to solicit, or cause
to be solicited any employees, agents, or other independent contractors of the Company to cease
their relationship with the Company. (e) Consultant does not have any agreements with or commitments to any other person or entity
which conflict with any of Consultants obligations to the Company arising under this Agreement. (f) Consultant shall maintain any and all licenses and permits as may be required for
Consultant to provide the consulting services contemplated hereby. In the event Consultant shall
utilize the services or shall acquire any products in order to render the consulting services
contemplated hereby, Consultant shall be solely responsible for the payment for such services and
products, except to the extent reimbursable by the Company in accordance with Section 7 below.
Consultant shall be solely responsible for any and all income and other taxes that may be due to
any state, local or federal governmental authorities in respect of the compensation to Consultant
pursuant to this Agreement. Consultant acknowledges that the Company shall not make any
withholdings from payments to Consultant hereunder. (g) Except upon the express written consent of the Company, Consultant shall have no
authority, and shall not represent, suggest or imply that Consultant has the authority,
express or implied: (1) to bind the Company to any agreements or arrangements, written or
oral; (2) to make an offer or accept an offer on behalf of the Company; or (3) to make
representations, warranties, guaranties, commitments or covenants on behalf of
Company. Section 4.
Ownership. (a) The compensation payments set forth herein shall be full and complete compensation
both for all obligations assumed by Consultant hereunder and for any and all Creations (as
defined in the Confidentiality Agreement) assigned under this Agreement. (b) The Company shall retain the exclusive right to use or distribute, at its sole
discretion, any and all Creations. Consultant shall make no claim on any consideration received
by the Company for the sale, lease or use of the Creations. (c) The Company shall include Consultants profile on its Company website with other members
of the R&D team and may include such information as it deems appropriate in the Companys Product
and marketing materials. Consulting Agreement  J Kostic v7 - 3




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Section 5. Term.This Agreement shall terminate on March 31, 2005, unless earlier
terminated in accordance with this Section 5. In addition, this Agreement shall terminate
automatically upon the death of Consultant, or the mental or physical incapacity of Consultant
for a period of 60 consecutive days. Either party hereto may terminate this Agreement upon a
material breach of this Agreement by the other party; and the Company may terminate this
Agreement upon a material breach of the Confidentiality Agreement by Consultant. Section 6. Compensation.Consultants compensation for his consulting services. hereunder
shall be as set forth on AnnexC hereto. Section 7. Reimbursement of Business Expenses.To the extent Consultant is authorized by the
Company to order equipment and supplies or make other expenditures to carry
out Consultants duties hereunder, the Company shall reimburse Consultant for the actual costs
thereof, subject to receipt of such documentation and other information as the Company may
reasonably request or require in accordance with its policies, and subject further to any
limitations on the amount that Consultant may be authorized to incur in ordering such equipment
and supplies or making other expenditures on the Companys behalf. Reimbursement for each
qualifying expense shall be made on the last day of the calendar month following the month in
which a receipt for payment by Consultant of such expense item and any and all other documentation
which the Company may reasonably require regarding the expense item was submitted to Company. Section 8. Independent Contractor.Consultant shall be retained by the Company only for the
purposes and to the extent set forth in this Agreement, and his relation to the Company, during
the term of this Agreement, shall be that of an independent contractor. Consultant shall not be
considered as having an employee status. Section 9. Injunctive Relief.Remedies at law shall be deemed to be inadequate for any breach
of any of the covenants of this Agreement, and the Company shall be entitled to injunctive relief
in addition to any other remedies it may have in the even! of such breach. Section 10. Indemnification.If Consultant becomes a defendant in, or is threatened to be
made a party to, a Claim by reason of (or arising in part out of) an Indemnifiable Event, the
Company shall indemnify, defend and hold harmless Consultant against any and all Expenses,
judgments, fines, penalties and amounts paid in settlement (including all interest, assessments
and other charges paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties or amounts paid in settlement) of any Claim, subject to any
limitations set forth herein below. For purposes of this section, the following terms shall
have the meanings set forth below: (a) Claim shall mean any threatened, pending or completed action, suit or proceeding
against Consultant, whether civil, criminal, administrative, investigative or other. (b) Expenses shall mean attorneys fees and all other costs, expenses and obligations
paid or incurred by Consultant arising from defense of a Claim. (c) Indemnifiable Event shall mean any act or omission of Consultant in carrying out
Consultants duties under this Agreement that is (i) other than a criminal act and (ii) within the Consulting Agreement  J Kostic v7 - 4




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scope of Consultants services to the Company under this Agreement, including without
limitation Claims alleging facts based on theories of negligence; violation of securities laws in
connection with the offer and sale of the Companys securities; that the Consultant is or was an
agent, employee or fiduciary of the Company; or that Consultant is or was serving at the request
of the Company as a director, officer,. employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, or
relating to anything done or not done by the Consultant in any such capacity. Section 11. Amendments; Consents.No amendment, modification, supplement, termination, or
waiver of any provision in this Agreement, and no consent to any departure therefrom, shall be
effective unless in writing and signed by both Consultant and the Company and then only in the
specific instance and for the specific purpose given. Section 12. Notices.Any notices required or permitted to be given in writing will be deemed
received when personally delivered or, if earlier, ten (10) days after mailing by registered or
certified United States mail, postage prepaid, and return receipt requested. Notice to the Company
is valid if sent to the Companys principal place of business and notice to Consultant is valid if
sent to Consultant at Consultants address as it appears in the Companys records. The Company or
Consultant may change their address only by notice given to the other in the manner set forth
herein. Section 13. Counterparts; Facsimile ,Signatures.This Agreement may be executed in two or
more counterparts, and the counterparts, taken together, shall constitute one original. Executed
copies of this Agreement and any amendments or modifications thereto may be delivered by
facsimile transmission in lieu of an original. Section 14. Binding Effect; Assignment.This Agreement shall be binding upon and inure to the
benefit of Consultant and the Company and their respective permitted successors and assigns. This
Agreement, including the rights and obligations hereunder, shall not be assigned, delegated or
transferred by Consultant without the prior written consent of the Company. Section 15. Integration; Construction.This Agreement (together with the appendices thereof)
shall comprise the complete and integrated agreement of the Company and Consultant and shall
supersede all prior agreements, written or oral, on the subject matter hereof. Neither party
hereto shall have a provision construed against it by reason of such party having drafted the
same. Section 16. Survival.The rights and obligations provided in Section 3( c), Section 4,
Section 9, Section 10, Section 14, Section 20 and paragraph (c) of Annex C hereto shall survive
termination of this Agreement. Section 17. Governing Law.This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of California. Section 18. Severability of Provisions.Any provision in this Agreement that is held to be
inoperative, unenforceable, or invalid in any jurisdiction shall be, as to that jurisdiction only,
inoperative, unenforceable, or invalid without affecting the remaining provisions in that Consulting Agreement  J Kostic v7 - 5




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jurisdiction or the operation, enforceability, or validity of those provisions in
any other jurisdiction, and to this end the provisions of this Agreement shall be
severable. Section 19. Headings.Headings of this Agreement are included for convenience only and shall
not be considered a part of this Agreement for any other purpose. Section 20. Attorneys Fees.In the event of any litigation or other dispute arising as a
result of or by reason of this Agreement, the prevailing party in any such litigation or other
dispute shall be entitled to, in addition to any other damages assessed, its reasonable attorneys
fees, and all other costs and expenses incurred in connection with settling or resolving such
dispute. The attorneys fees which the prevailing party is entitled to recover shall include fees
for prosecuting or defending any appeal and shall be awarded for any supplemental proceedings
until the final judgment is satisfied in full. In addition to the foregoing award of attorneys
fees to the prevailing party, the prevailing party in any lawsuit on this Agreement shall be
entitled to its reasonable attorneys fees incurred in any post judgment proceedings to collect or
enforce the judgment. This attorneys fees provision is separate and several and shall survive the
merger of this Agreement into any judgment. Section 21. Waiver; Rights and Remedies.Neither Consultants nor the Companys failure to
exercise any right under this Agreement shall constitute a waiver of any other term or condition
of this Agreement with respect to any other preceding, concurrent, or subsequent breach, nor
shall it constitute a waiver by the Company or Consultant of its rights at any time thereafter to
require exact and strict compliance with any of the terms of this Agreement. The rights and
remedies set forth in this Agreement shall be in addition to any other rights or remedies which
may be granted by law. Consulting Agreement  J Kostic v7 - 6




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IN WITNESS WHEREOF, the parties hereto have executed or caused their respective duly
authorized officer to execute this Agreement as of the date first set forth above. CONSULTANTBy
    
    /s/ JOHN KOSTICName:
    
    John KosticSAVE THE WORLD AIR, INC.By
    
    /s/ EUGENE E. EICHLERName:
    
    Eugene E. EichlerTitle:
    
    Chief Operating Officer




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ANNEX A CONSULTANTS DUTIES AND RESPONSIBILITIES
  
    Manage operations and business development.
    All Australian administrative work and Australian public relations work.
    Communication with Australian shareholders.
    Arranging meetings and overseeing general operations of Company in Australia. Coordinate product testing and demonstrations. Consulting Agreement  J Kostic v7




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ANNEX B CONFIDENTIALITY AGREEMENT This
Confidentiality Agreement (Agreement) dated as of
April 1, 2003, is entered into by and
between the individual whose name appears on the signature page of the related Consulting Agreement
(Consultant), on the one hand, and Save the World Air, Inc., a Nevada corporation (the
Company), on the other, with reference to the following facts: RECITALS  A.
    This Agreement is being entered into pursuant to that certain Consulting
Agreement of even date herewith, between the Company and Consultant (Consulting
Agreement).B.
    The Company has retained the services of Consultant to provide Policies and
Procedures and other services as called upon from time to time.C.
    The Company desires to protect various proprietary and confidential information
that it uses in its business. Therefore, the parties hereto do hereby agree as follows: 1. Definition of Confidential Information. (a) For the purposes of this Agreement, the term Confidential Information shall mean
information, material and trade secrets (i) proprietary to the Company or to any Affiliate (as
defined below) of the Company or (ii) designated as confidential by the Company, whether or not
owned or developed by the Company, which Consultant may obtain knowledge of or access to, through
or as a result of, Consultants relationship with the Company or with any Affiliate of the Company. (b) Without limiting the generality of the foregoing, Confidential Information shall include,
but is not limited to, the following types of information and other information of a similar nature
(whether or not reduced to writing or still in development): (i) The Technology, which means:  (1)
    Any and all Creations as defined below; and(2)
    any and all enhancements thereto. (ii) Economic and financial analyses, marketing techniques and materials, marketing and
development plans, customer names and other information related to customers, price lists,
pricing policies, financial information and Consultant files. (iii) Information constituting a trade secret as defined in California Civil Code
Section 3426.1.




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Save the World Air, Inc. (iv) Any information described above which Company obtains from another party and which
Company treats as proprietary or designates as Confidential Information, whether or not
owned or developed by the Company. (c) The term Creations shall mean any and all discoveries, ideas, inventions, concepts,
software in various states of development, designs, drawings, specifications, techniques, models,
data, source code, object code, documentation, diagrams, flow charts, research, developments,
processes, procedures, know-how, any enhancements to the foregoing and Consultants files that
may be conceived or developed by Consultant, either alone or with others, during the term of this
Agreement, whether or not conceived or developed during Consultants working hours, that relate to
the Products or the Companys Business (each as defined in the Consulting Agreement) or to the
Companys actual or demonstrably anticipated research and development, orthat result from any
services rendered by Consultant for the Company. (d) The term Affiliate shall mean, with respect to any person or entity, any other person or
entity which, directly or indirectly through one or more intermediaries, is in control of, is
controlled by or is under common control with such person or entity. Control of, controlled by
and under common control with mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management policies of a person or entity, by contract or credit
arrangement, as trustee or executor or otherwise. The term Affiliate includes, but is not
limited to, each and every subsidiary of the Company, if any. (e) INFORMATION PUBLICLY KNOWN THAT IS GENERALLY EMPLOYED BY THE TRADE AT OR AFTER THE TIME
CONSULTANT FIRST LEARNS OF SUCH INFORMATION, OR GENERIC INFORMATION OR KNOWLEDGE WHICH CONSULTANT
WOULD HAVE LEARNED IN THE COURSE OF SIMILAR SERVICES OR EMPLOYMENT ELSEWHERE IN THE TRADE, SHALL
NOT BE DEEMED PART OF THE CONFIDENTIAL INFORMATION. (f) Any capitalized terms used and not otherwise defined herein shall have the meanings, if
any, ascribed to them in the Consulting Agreement. 2. Confidential Treatment. Consultant hereby agrees, during the term of his
consulting arrangement with Company and at all times thereafter, to hold in confidence and not to
directly or indirectly reveal, report, publish, disclose or transfer any of the Confidential
Information to any person or entity, or utilize any of the Confidential Information for any
purpose, except in the course of Consultants services for Company, without the prior written
consent of the chief executive officer of Company. Consultant agrees that, as between Consultant
and Company, Company owns all of the Confidential Information, and Consultant hereby agrees to
regard and preserve as confidential all Confidential Information. Consultant hereby agrees not to
take, retain or copy, without the prior written consent of the chief executive officer of Company,
any or all of the Confidential Information. Without limiting the generality of the foregoing,
during the term hereof and after termination of Consultants employment with the Company,
Consultant shall not use, build, reverse-engineer, decompile, modify for use or disassemble any of
the Technology. 3. Ownership. The Technology including without limitations any and all Creations
shall be the sole and exclusive property of the Company. At any time upon the request of the
Company, Consultant shall: (i) assign, without charge to the Company, all his rights, title, and
interests in any of the Creations to the Company; (ii) execute, acknowledge, and deliver any and 2




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Save the World Air, Inc. all instruments necessary to confirm the Companys complete ownership of the Creations; and
(iii) perform all other reasonable acts which may be necessary to perfect and to protect the
Companys ownership rights in the Creations. Consultant hereby assigns to the Company all of his
right, title and inters in and to the Creations. Consultant shall disclose promptly and only to the
Company, and shall make an adequate record of, any and all Creations conceived or developed by
Consultant (either alone or jointly with others) during the term of this Agreement and within one
year thereafter, whether or not the property of the Company. 4. Return of Materials and Copies. All notes, data, reference materials, sketches,
drawings, memoranda, documentation and records in any way incorporating or reflecting any of the
Confidential Information and all proprietary rights therein, including copyrights, shall belong
exclusively to Company, and Consultant hereby agrees to turn over promptly all copies of such
materials in Consultants control to Company upon Companys request or upon termination of
Consultants employment by Company. 5. Non-Competition and Non-Solicitation. During the Companys employment of
Consultant and for a period of two (2) years following the term of the Consulting Agreement,
Consultant shall not assist, become employed by or engage in any consulting or other services for
any person or entity that is engaged in any business or other activity in competition with the
Company, nor solicit or entice any of the Companys employees to do any of the foregoing. During
the Companys employment of Consultant and for a period of two (2) years following the term of the
Consulting Agreement, Consultant shall not set up or take preliminary steps to set up or engage in
any business enterprise that would be in competition with the Company and Consultant shall disclose
to the Company, any and all competitive plans that Consultant may have, without regard to
Consultants intent to act or not act on such plans. 6. Fiduciary Obligations. Nothing in this Agreement is intended to limit Consultants
obligations to Company in any capacity, and Consultant shall be bound by all fiduciary and other
obligations to Company which may arise by reason of Consultants employment, capacity or other
duties to the Company. 7. Injunctive Relief. Due to the unique nature of the Confidential Information,
Consultant understands and hereby agrees that Company will suffer irreparable harm in the event
that Consultant fails to comply with any of Consultants obligations under Section 2 or 3 above and
that monetary damages will be inadequate to compensate Company for such breach. Accordingly,
Consultant hereby agrees that Company will be entitled, in addition to any other remedies available
to it at law or in equity, to injunctive relief to enforce the terms of Sections 2 and 3 above. 8. Amendments; Consents. No amendment, modification, supplement, termination or
waiver of any provision in this Agreement, and no consent to any departure therefrom, shall be
effective unless in writing and signed by both Consultant and Company and then only in the specific
instance and for the specific purpose given. 9. Notice. Any notices required or permitted to be given in writing and will be
deemed received when personally delivered or, if earlier, ten (10) days after mailing by registered
or certified United States mail, postage prepaid, and with return receipt requested. Notice to the
Company is valid if sent to the Companys principal place of business and notice to Consultant is
valid if sent to Consultant at Consultants address as it appears in the Companys records. 3




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Save the World Air, Inc. 10. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, and all such counterparts when taken together shall be
deemed to be but one and the same instrument. 11. Binding Effect; Assignment. This Agreement shall be binding upon and inure to the
benefit of Consultant and Company and their respective permitted successors and assigns. This
Agreement, including the rights and obligations hereunder, shall not be assigned or transferred by
Consultant without the prior written consent of Company. 12. Integration; Construction. This Agreement (together with the Consulting
Agreement) shall comprise the complete and integrated agreement of the Company and Consultant and
shall supersede all prior agreements, written or oral, on the subject matter hereof. Neither party
hereto shall have a provision construed against it by reason of such party having drafted the same. 13. Governing Law. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of California. 14. Severability of Provisions. Any provision in this Agreement that is held to be
inoperative, unenforceable or invalid in any jurisdiction shall be, as to that jurisdiction only,
inoperative, unenforceable or invalid without affecting the remaining provisions in that
jurisdiction or the operation, enforceability or validity of those provisions in any other
jurisdiction, and to this end the provisions of this Agreement shall be severable. 15. Headings. Headings of this Agreement are included for convenience only and shall
not be considered a part of this Agreement for any other purpose. 16. Attorneys Fees. In the event of any litigation or other dispute arising as a
result of or by reason of this Agreement, the prevailing party in any such litigation or other
dispute shall be entitled to, in addition to any other damages assessed, its reasonable attorneys
fees, and all other costs and expenses incurred in connection with settling or resolving such
dispute. The attorneys fees which the prevailing party is entitled to recover shall include fees
for prosecuting or defending any appeal and shall be awarded for any supplemental proceedings until
the final judgment is satisfied in full. In addition to the foregoing award of attorneys fees to
the prevailing party, the prevailing party in any lawsuit on this Agreement shall be entitled to
its reasonable attorneys fees incurred in any post judgment proceedings to collect or enforce the
judgment. This attorneys fees provision is separate and several and shall survive the merger of
this Agreement into any judgment. 17. Waiver; Rights and Remedies. Neither Consultants nor Companys failure to
exercise any right under this Agreement shall constitute a waiver of any other term or condition of
this Agreement with respect to any other preceding, concurrent or subsequent breach, nor shall it
constitute a waiver by the Company or Consultant of its rights at any time thereafter to require
exact and strict compliance with any of the terms of this Agreement. The rights and remedies set
forth in this Agreement shall be in addition to any other rights or remedies which may be granted
by law. (Signature page follows) 4




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Save the World Air, Inc. IN WITNESS WHEREOF, the parties hereto have executed or caused their respective duly
authorized officer to execute this Agreement as of the date first set forth above. SAVE THE WORLD AIR, INC.By
    
    /s/
EUGENE E. EICHLEREugene E. Eichler
Its Chief Operating Officer
 CONSULTANTBy
    
    /s/ JOHN KOSTICName John KosticAddress:
 5




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ANNEX C CONSULTANTS COMPENSATION Pursuant to Section 6 of the Agreement to which this Annex is attached, and into which the
provisions of this Annex are incorporated, and subject to the terms and conditions contained in
the Agreement, the Company shall pay and deliver to Consultant the following: (a) Consulting Fees.The Company shall pay Consultant compensation equal to AU$6,000 per
month, payable semi-monthly in accordance with the Company usual payroll practices. Such
consulting fees shall be payable to Consultant by no later than the twenty-fifth (25th) day of
each calendar month, provided the Company shall have received from Consultant (i) a reasonably
detailed accounting of consulting services rendered by Consultant during the immediately preceding
month by no later than the fifth day of the calendar month, together with (ii) any supporting
documentation for such accounting as the Company may reasonably request from Consultant by no
later than five Business Days following the date of such request. The term Business Dayas used
herein shall mean any day other than a Saturday, Sunday or a day on which banks in Los Angeles,
California are authorized or required to be closed. (b) Equity Incentives.Subject to compliance with applicable securities laws, the Company
shall grant and/or issue to Consultant Common stock awards for 200,000 shares of Company common
stock, as follows: Type of shares:
    
    Common Stock.Number of shares:
    
    Grant 1:
    
    
    100,000Grant 2:
    
    
    100,000
 Award
vesting:Grant1:
    
    On the first anniversary of this AgreementGrant 2:
    
    On the second anniversary of this Agreement.Other:
    
    
    
    Upon vesting of Grant 1 or Grant 2, the Company
shall promptly deliver stock certificates to
Consultant evidencing the number of shares having
then vested. Consultant must be engaged or
employed by the Company at the time of the award;
providedthat the award shall vest automatically
if Consultant is terminated without cause prior to
expiration of the term of the Agreement. The
Company shall provide Consultant with a separate
Notice of Stock Grant.
 Consulting Agreement  J Kostic v7




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(c) Other Incentives.The Company shall pay and/or provide to Consultant the following: A royalty of US$0.10 per unit or ZEFS device sold by
the Company (after allowance for any returns and
return reserves). The royalty shall be payable 30 days
after the close of each quarter in arrears.Royalties shall be payable 30 days after the close
of each quarter in arrears.
 Consulting Agreement  J Kostic v7