CONSULTING AGREEMENT
This
Consulting Agreement (“Agreement”) is made as of
February 21, 2008 by and between JOHN FOSTER, an individual
whose address is c/o Department
of Geological Sciences, MH 204 California State University,
Fullerton, Fullerton, CA 92834 (the
“Consultant”), and SIONIX CORPORATION, a Nevada
corporation whose address is 2082
Michelson Drive, Suite 306, Irvine CA 92612
(the
“Company”), in reference to the following:
RECITALS
A. The
Company is in the business of developing water purification
technology.
B. The
Consultant is an engineering geology professional who has been
providing advisory board and consulting services to the Company
since October 1, 2004 (the “Service Commencement
Date”).
C. The
Company wishes to retain the Consultant, and the Consultant wishes
to be retained by the Company, to assist the Company in its efforts
to develop and market its water purification
technology.
NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Consultant agree
as follows:
AGREEMENT
1.
Term. The
Company retains the Consultant and the Consultant accepts this
appointment with the Company for a period of 12 months, beginning
as of January 1, 2008 and ending on January 1, 2009 unless sooner
terminated pursuant to section 5 (the
“Term”).
2.
Duties of Consultant.
The
Consultant agrees to perform the consulting services set forth on
Exhibit “A” to this Agreement and made a part of it
(the “Services”). The Consultant will report to the
Company’s Chief Executive Officer but will determine the
method, details and means of performing the Services. The
Consultant may, at the Consultant’s own expense, use
employees or other subcontractors to assist the Consultant with the
performance of the Services.
3.
Compensation.
(a)
The
Company shall pay to the Consultant, as compensation for the
Services:
(i)
upon
the Company raising at least $250,000 in gross proceeds from
an equity financing or series of equity financings occurring
on or after December 31, 2007 and before the end of the Term,
for Services performed from January 1 until June 1, 2008,
$10,000 per month payable on the first day of each month
during such period; and
(ii)
upon
the Company raising at least $500,000 in gross proceeds
(including the $250,000 referred to in section 3(a)) from an
equity financing or series of equity financings occurring on
or after December 31, 2007 and before the end of the Term: (i)
a one time payment of $30,000 for services performed from
October 1, 2007 through December 31, 2007, and (ii) for
services performed from July 1 until December 31, 2008,
$10,000 per month payable on the first day of each month
during such period; and
(iii)
upon
the date of this Agreement, a fully vested 5-year option to
purchase 2,880,000 shares of the Company’s common stock
at a price of $0.25 per share, pursuant to a Notice of Grant
of Stock Option in the form attached hereto as Exhibit
“B” and a Stock Option Agreement in the form
attached thereto as Exhibit A.
(b)
In
consideration of the Consultant’s efforts in bringing
about a definitive licensing, manufacturing, distribution,
purchase order or substantially similar agreement between the
Company and Primon or any of its affiliates (the “Primon
Agreement”) during the Term or within six months
thereafter, the Consultant will receive, regardless of the
termination of this Agreement, 2.5% of the royalty payments or
other amounts received by the Company from Primon pursuant to
the Primon Agreement (collectively, the “Consultant
Commissions”), until the Consultant has received
$2,500,000 pursuant to this provision, after which the Company
shall have no further obligation to pay Consultant
Commissions. The Company will be obligated to pay the
Consultant Commissions within 30 days of each date on which it
receives royalty payments or other amounts from Primon
pursuant to the Primon Agreement.
Notwithstanding
the foregoing, the Consultant understands and agrees that in
no event will the Company be obligated to pay any person or
persons more than an aggregate of 10% of the royalty payments
or other amounts received by the Company from Primon pursuant
to the Primon Agreement (the “10% Threshold”). In
the event any third party other than Richard Laton
demonstrates a valid claim for royalties or similar payments
from the Company resulting from the Primon Agreement which
causes the Company’s total obligation to pay commissions
in connection therewith to exceed the 10% Threshold, then the
Consultant Commissions shall be ratably reduced in an amount
equal to 33.33% of the amount exceeding the 10% Threshold.
Regardless of any reduction in the Consultant Commissions
pursuant to this paragraph, the Consultant may continue to
earn the Consultant Commissions at the reduced rate until he
has earned the maximum $2,500,000 as provided in the preceding
paragraph.
(c)
The
Company agrees to carry forward the debt incurred to the
Consultant in the amount of $144,000 for services rendered
during the time the Consultant served as a member of the Board
of Advisors, which will be payable at the earlier of September
30, 2010 or the date on which the Company shows on its balance
sheet as filed with the SEC at least $1.5 million in working
capital and the closing price of its common stock has been at
least $1.25 for at least 15 consecutive trading days. For the
purpose hereof, “working capital” shall mean the
difference between the Company’s total current assets
and total current liabilities. The obligation set forth in
this Section 3(c) shall survive the termination of this
Agreement.
4.
Nondisclosure.
4.1
Property Belonging to Company. The
Consultant agrees that all developments, ideas, devices,
improvements, discoveries, apparatus, practices, processes,
methods, concepts and products (collectively the
“Inventions”) developed by the Consultant from and
after the Service Commencement Date until the end of the Term are
the exclusive property of the Company and shall belong to the
Company. The Consultant agrees to assign the Inventions to the
Company,
provided, however, notwithstanding
the foregoing, the Consultant shall not be required to assign his
rights in any invention which the Consultant developed entirely on
his own time without using the Company’s equipment, supplies,
facilities or trade secret information except for those inventions
that either:
(i)
Relate
at the time of conception or reduction to practice of the
invention to the Company’s business, or actual or
demonstrably anticipated research or development of the
Company; or
(ii)
Result
from any work performed by the Consultant for the
Company.
The
Consultant understands that he bears the full burden of
proving to the Company that an invention qualifies fully under
this section 4.1.
4.2
Access to Confidential Information. The
Consultant agrees that from the Service Commencement Date until the
end of the Term, , the Consultant has had and will have access to
and become acquainted with confidential proprietary information
(“Confidential Information”) which is owned by the
Company and is regularly used in the operation of the
Company’s business. The
Consultant agrees that the term “Confidential
Information” as used in this Agreement is to be broadly
interpreted and includes (i) information that has, or could have,
commercial value for the business in which the Company is engaged,
or in which the Company may engage at a later time, and (ii)
information that, if disclosed without authorization, could be
detrimental to the economic interests of the Company.
The
Consultant agrees that the term “ Confidential
Information” includes, without limitation, any patent, patent
application, copyright, trademark, trade name, service mark,
service name, “know-how,” negative
“know-how,” trade secrets, customer and supplier
identities, characteristics and terms of agreement, details of
customer or consultant contracts, pricing policies, operational
methods, marketing plans or strategies, product development
techniques or plans, business acquisitions plans, science or
technical information, ideas, discoveries, designs, computer
programs (including source codes), financial forecasts, unpublished
financial information, budgets, processes, procedures, formulae,
improvements or other proprietary or intellectual property of the
Company, whether or not in written or tangible form, and whether or
not registered, and including all memoranda, notes, summaries,
plans, reports, records, documents and other evidence
thereof. The
Consultant acknowledges that all Confidential Information, whether
prepared by the Consultant or otherwise acquired by the Consultant
in an
|
