Employment Agreement - SIONIX CORP - 1-13-2004

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Employment Agreement - SIONIX CORP - 1-13-2004 Powered By Docstoc
					EXHIBIT 10.4 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT is entered into as of the 30th day of September, 2003 by and between SIONIX CORPORATION ("Employer"), and JOAN C. HOROWITZ ("Employee"). A. Employee has been employed by Employer since 1998; B. Employer desires to be assured of the continued association and services of Employee in order to take advantage of her experience, knowledge and abilities in Employer's business and is willing to continue to employ Employee, and Employee desires to continue to be so employed, on the terms and conditions set forth in this Agreement; ACCORDINGLY, in consideration of the foregoing and the mutual covenants set forth below, the parties agree as follows: 1. TERM 1.1 The term of this Agreement shall commence on October 1, 2003 and continue until September 30, 2005, and monthly thereafter, unless sooner terminated as hereinafter provided. 1.2 This employment may be terminated immediately, without advance notice, if, during the term of employment (a) Employee shall be convicted of a crime involving dishonesty in connection with Employer's business; (b) an uncured material breach of any term of this Agreement, provided that any breach which can be cured is not promptly corrected after reasonable notice thereof; or (c) Employee is convicted of any felony involving moral turpitude. 2. SERVICES TO BE PERFORMED BY EMPLOYEE 2.1 Employee shall serve as Secretary of Employer and shall perform the duties and responsibilities specified for said position in the By-Laws of the Employer, and such other duties and responsibilities as are usually and customarily performed by the Secretary of a corporation. Employee shall work at the direction of and under the supervision of Employer's President and Chief Executive Officer. Employee shall perform such duties and acts commensurate with her position, skills and experience as may be reasonably required by Employer's Board of Directors in connection with any aspect of Employer's business. 3.COMPENSATION 3.1 Employee, during the term of employment pursuant to this Agreement, shall be compensated pursuant to the Schedule attached hereto as Exhibit "A" and by reference made a part hereof.

3.2 Employee shall be entitled to all fringe benefits offered generally to employees of Employer, including without limitation, participation in any qualified pension, profit-sharing, salary continuation, disability insurance, hospitalization insurance, major medical insurance, medical reimbursement or life insurance plan or any other benefit plan established by Employee subject to the rules and regulations in effect regarding participation in such benefit plans. 3.3 Employee shall be entitled to such business days of vacation and such business days of sick leave each year without, reduction in compensation, as shall be reasonably determined from time to time by the Employer's Board of Directors; provided, however, that Employee shall be entitled to at least 25 business days of vacation and up to ten business days of sick leave each year. 3.4 Employee shall be entitled to the following holidays and any additional days as determined by the Board of Directors: i. New Years Eve and New Years Day. ii. Memorial Day. iii. Fourth of July. iv. Labor Day. v. Thanksgiving Day and Friday after. vi. Christmas Eve and Christmas Day. vii. One Floating Holiday 4. OBLIGATIONS OF EMPLOYEE 4.1 Employee agrees to devote so much of her business time, attention, knowledge and skill as necessary to carry out the purposes and intent of this Employment Agreement, it being contemplated that Employee shall work three days per week. Notwithstanding the foregoing, Employee shall not be deemed to be in violation of this Section 4.1 if she engages in passive investment in any corporation, sole proprietorship, partnership or other entity not involved in a competing business with Employer. 4.2 Employee agrees to perform the above described services at Employer's place of business and at such other job locations as may be necessary to satisfactorily perform Employee's duties and obligations hereunder. 2

4.3 Employee shall not assign this Agreement nor any duties or obligations under this Agreement to any other person or entity. 4.4 Employee shall maintain, in good and legible condition, all materials, supplies and other property provided to Employee by Employer. These materials shall, however, remain the property of Employer. 5. OBLIGATIONS OF EMPLOYER 5.1 Employer agrees to make the payments due Employee as specified in this Agreement, in a timely fashion, and without offset or deduction (or other than employee withholding). 5.2 Employer agrees to provide Employee with adequate space, administrative support, personnel, and equipment to perform Employee's duties. 5.3 With the exception of injuries, losses, and damages attributed solely to the gross negligence or willful misconduct of Employee, Employer shall fully indemnify, defend (with counsel reasonably acceptable to Employee) and hold harmless Employee, her heirs, successors and assigns from and against all claims, loss, liability, damage or expense (including, without limitation, attorneys fees, court costs, investigative fees and expert witness fees) arising from or relating, either directly or indirectly, to the Employer and/or its business, whether occurring or accruing prior to or after the effective date hereof. Employer's obligation to indemnify, defend and hold Employee harmless shall survive the termination of this Agreement. 6. TERMINATION OF AGREEMENT 6.1 After the initial term of this Agreement, the employment provided in this Agreement shall terminate at the will of Employer or Employee, without cause, upon thirty (30) days written notice by the terminating party to the other party. This Agreement may be terminated immediately, upon written or oral notice by the terminating party, for cause, as provided in this Agreement. 6.2 This Agreement shall terminate automatically on the occurrence of any of the following events: A. Mutual agreement of both parties. B. At the election of either party, upon the bankruptcy or insolvency of either party. C. Death of Employee. D. At the election of either party, upon the disability of Employee, which renders Employee, in the opinion of Employee's treating medical practitioner, unable to substantially perform Employee's duties under this Agreement, for a period of six consecutive months. The right to terminate the employment pursuant to this Paragraph 6.2 shall accrue only after Employee has been disabled for such six consecutive months. 3

7. TRADE SECRETS, CONFIDENTIAL INFORMATION AND NONSOLICITATION 7.1 During the term of her employment, Employee will have access to, and become familiar with, various trade secrets and proprietary and confidential information of the Employer ("Confidential Information"), including customer names or lists, pricing structures, customer order or preference information, marketing and strategic plans, financial information, training manuals, operating manuals and sales techniques. Employee acknowledges that the Employer's business requires strict confidentiality and secrecy in connection with its practices, procedures, and methods of operation. Employee further acknowledges that information of this nature is confidential and is owned, and shall continue to be owned, exclusively by the Employer. During the Employment Period and for three years after employment terminates, except as reasonably necessary to perform her duties and responsibilities as an employee of the Employer, Employee shall not use the Confidential Information for any purpose or divulge the Confidential Information to any person or entity other than the Employer, unless the Confidential Information already has become generally known to the public (except to the extent that such information has become generally known to the public by means of Employee's breach of this Agreement). 7.2 Except as reasonably necessary to perform her duties and responsibilities as an employee of the Employer, Employee shall not remove from the Employer's office any of the Employer's books, records, documents, customer lists, or any copies (in any form) of documents without the Employer's written permission. Employee shall not make any copies of these books, records, documents, or customer lists for use outside of the Employer's office, except as specifically authorized in writing by the Employer. All such documents and copies in the possession or control of Employee must be returned to the Employer by Employee immediately upon the termination of her employment. 7.3 Employee agrees that, during her employment and for a period of one year immediately following the termination of employment, except to the extent necessary to carry out her duties and responsibilities as an employee, she will not, directly or indirectly, for himself or on behalf of any other person or entity, solicit, divert away, take away or attempt to solicit, divert or take away, any Customer of the Employer for the purpose of selling or providing to such Customer, provided the Employer is then still engaged in the sale or provision of that type of good or service. For purposes of this Agreement, the term "Customer" means any individual or entity to whom the Employer provided goods or services and with whom Employee had material contact during the twelve months prior to the termination of her employment. 4

7.4 Employee agrees that she will not, during her employment and for a period of one year immediately thereafter, solicit or induce, or attempt to solicit or induce, any employee or contractor of the Employer to terminate his relationship with the Employer and/or to enter into an employment or agency relationship with Employee or with any other person or entity with whom Employee is affiliated in any way. 7.5 Employee acknowledges and agrees that the covenants and promises contained in this Section 7 are a reasonable and necessary means of protecting and preserving the Employer's goodwill and its interest in the confidentiality and/or proprietary value of its trade secrets and confidential information. Employee further acknowledges that said covenants and promises are a reasonable and necessary means of protecting the Employer from unfair competition by Employee. Employee agrees that any breach of these covenants or promises will leave the Employer with no adequate remedy at law and will cause the Employer to suffer irreparable damage and injury. Employee further agrees that any breach of these covenants and promises will entitle the Employer to injunctive relief in any court of competent jurisdiction without the necessity of posting any bond. Employee also agrees that any such injunctive relief shall be in addition to any damages that may be recoverable by the Employer as a result of such breach. 8. GENERAL CONDITIONS 8.1 Cooperation. Each of the parties hereto agree to execute any and all additional documents, and take all additional actions, deemed reasonably necessary to give full force and effect to the intent of this Agreement. 8.2 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors, assigns, heirs, executors and administrators. 8.3 Interpretation. This Agreement shall be interpreted under and pursuant to the laws of the State of California. 8.4 Entire Agreement. This Agreement, and any other documents executed pursuant hereto, contains the entire agreement of the parties hereto, and supersedes all prior agreements, whether written or oral, with respect to the subject matters covered hereby, including the Employment Agreement. No oral representation, agreement, statement or promise made by any party hereto or by any employee or agent of any party hereto, which is not contained herein, shall be binding or valid. 8.5 No Continuing Waiver. No waiver of any breach of any of the terms, conditions and covenants of this Agreement shall be construed as a waiver of any succeeding breach of the same or other terms, covenants and conditions hereof. 5

8.6 Notices. Any notices required or permitted to be given hereunder shall be in writing and may be given by personal delivery or by certified mail, return receipt requested, addressed to each party at the address appearing on the Company's books and records. Any party may, by written notice to another party, specify a different address for notice purposes. 8.7 Remedies Cumulative. No remedy or election hereunder shall be deemed exclusive but shall, whenever possible, be cumulative with all other remedies provided by agreement, at law, or in equity. 8.8 Invalidity in Part. In the event any provision of this Agreement shall be held to be illegal, unenforceable or inoperative as a matter of law, the remaining provisions shall remain in full force and effect unless such construction shall substantially frustrate the purpose and intent of this Agreement. 8.9 Assignment. This Agreement shall not be assigned, either directly or indirectly, by any of the parties without the prior written consent of the other party. Each party agrees to reasonably consent to any request for transfer or assignment by another party to a revocable "estate planning" type trust in which the transferring party is a trustor and a principal beneficiary. 8.10 Attorneys Fees. In the event of litigation concerning this Agreement, the prevailing party shall be entitled to recover reasonable attorneys fees from the other party. Executed at Irvine, California, effective on the date and year first above written. EMPLOYER: SIONIX CORPORATION
BY: /S/ JAMES J. HOUTZ ----------------------------James J. Houtz, President

BY: /S/ ROBERT E. MCCRAY ----------------------------Robert E. McCray, Chief Financial Officer

EMPLOYEE:
/S/ JOAN C. HOROWITZ ----------------------------Joan C. Horowitz

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EXHIBIT "A" SCHEDULE OF COMPENSATION Employee shall receive compensation, during the term of this Agreement, and during any extensions or renewals of this Agreement, as follows, or as hereafter mutually agreed between the parties, in writing: 1. BASE COMPENSATION. $2,438.82 per month, payable one-half on the 15th and one-half on the last day of each month during the term of employment, to be increased by 8% on October 1, 2004, and annually thereafter. 2. Disability insurance providing disability benefits to Employee in an amount equal to 50% of Employee's base salary for a period until Employee reaches age 65 years. EMPLOYER: JH EMPLOYEE: JH 7

EXHIBIT 10.5 September 30, 2003 Sionix Corporation 9272 Jeronimo Road, Suite 108 Irvine, CA 92618 Re: STOCK RESTRICTION AGREEMENT; CANCELLATION OF SHARES Dear Sirs: This is to confirm that, pursuant to a Stock Restriction Agreement between the undersigned and Sionix Corporation (the "Agreement"), during 1999 and 2000 Sionix Corporation awarded an aggregate of 6,917,650 shares of Common Stock (the "Award Shares") to the undersigned. The Agreement provided that the Award Shares were subject to substantial restrictions, and could not be sold or transferred until certain conditions were met. Since the conditions in the Agreement have not been met, we have agreed that the Award Shares will be cancelled immediately. Accordingly, accompanying this letter are certificates representing all of the Award Shares for cancellation. The undersigned hereby transfers the Award Shares to you for cancellation, and agrees to execute any Stock Assignment or Stock Power you may request. Please instruct your Transfer Agent to cancel the certificates, remove the shares from the stock register, and return the shares to the status of authorized but unissued shares on its records. Very truly yours,
/S/ JAMES J. HOUTZ -----------------James J. Houtz

Agreed and accepted: Sionix Corporation By JAMES J. HOUTZ

EXHIBIT 10.6 September 30, 2003 Sionix Corporation 9272 Jeronimo Road, Suite 108 Irvine, CA 92618 Re: STOCK RESTRICTION AGREEMENT; CANCELLATION OF SHARES Dear Sirs: This is to confirm that, pursuant to a Stock Restriction Agreement between the undersigned and Sionix Corporation (the "Agreement"), during 1999 and 2000 Sionix Corporation awarded an aggregate of 237,160 shares of Common Stock (the "Award Shares") to the undersigned. The Agreement provided that the Award Shares were subject to substantial restrictions, and could not be sold or transferred until certain conditions were met. Since the conditions in the Agreement have not been met, we have agreed that the Award Shares will be cancelled immediately. Accordingly, accompanying this letter are certificates representing all of the Award Shares for cancellation. The undersigned hereby transfers the Award Shares to you for cancellation, and agrees to execute any Stock Assignment or Stock Power you may request. Please instruct your Transfer Agent to cancel the certificates, remove the shares from the stock register, and return the shares to the status of authorized but unissued shares on its records. Very truly yours,
/S/ ROBERT E. MCCRAY -------------------Robert E. McCray

Agreed and accepted: Sionix Corporation By JAMES J. HOUTZ

EXHIBIT 10.7 September 30, 2003 Sionix Corporation 9272 Jeronimo Road, Suite 108 Irvine, CA 92618 Re: STOCK RESTRICTION AGREEMENT; CANCELLATION OF SHARES Dear Sirs: This is to confirm that, pursuant to a Stock Restriction Agreement between the undersigned and Sionix Corporation (the "Agreement"), during 1999 and 2000 Sionix Corporation awarded an aggregate of 194,394 shares of Common Stock (the "Award Shares") to the undersigned. The Agreement provided that the Award Shares were subject to substantial restrictions, and could not be sold or transferred until certain conditions were met. Since the conditions in the Agreement have not been met, we have agreed that the Award Shares will be cancelled immediately. Accordingly, accompanying this letter are certificates representing all of the Award Shares for cancellation. The undersigned hereby transfers the Award Shares to you for cancellation, and agrees to execute any Stock Assignment or Stock Power you may request. Please instruct your Transfer Agent to cancel the certificates, remove the shares from the stock register, and return the shares to the status of authorized but unissued shares on its records. Very truly yours,
/S/ JOAN HOROWITZ ----------------Joan Horowitz

Agreed and accepted: Sionix Corporation
By: /S/ JAMES J. HOUTZ ------------------

PRIVATE LABEL MANUFACTURING AGREEMENT This Private Label Manufacturing Agreement is entered into as of January 8, 2004 by and between Sionix Corporation, a Nevada corporation ("Sionix") and EPD Wearnes (USA) Inc. ("EPD"). RECITALS: A. Sionix is engaged in the design and development of water treatment equipment and systems for drinking water and wastewater treatment for municipalities, and industries; B. EPD manufactures water filtration systems and components; and C. Sionix wishes to engage EPD to manufacture certain of its filter products for Sionix under a private label arrangement, in accordance with the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual covenants, warranties and representations contained herein, the parties hereby agree as follows: ARTICLE 1. CERTAIN DEFINITIONS Certain of the terms referred to in this Agreement shall be defined as set forth in this Article 1. 1.1 PRIVATE LABEL PRODUCTS. The term "Private Label Products" shall mean all filtration systems, products and components set forth in Exhibit A of this Agreement. 1.2 SPECIFICATIONS. The term "Specifications" means the specifications for the Private Label Products set forth in Exhibit B, as such specifications may be changed from time to time by mutual written agreement of the parties. 1.3 TERRITORY. The term "Territory" means the geographical areas specified on Exhibit C to this Agreement. ARTICLE 2. MANUFACTURING AND SUPPLY 2.1 PURCHASE AND SUPPLY. Subject to the other terms and conditions set forth herein, EPD shall manufacture the Private Label Products in accordance with the Specifications, and shall supply Sionix with Private Label Products, and Sionix shall purchase the Private Label Products from EPD, at such prices as may be agreed between the parties from time to time, and which shall be set forth on purchase orders. Sionix is under no obligation to purchase a minimum quantity of Private Label Products under this Agreement. Page 1 of 14

2.2 ORDER PROCEDURE. Sionix shall, from time to time, submit purchase orders to EPD for the quantities of Private Label Products desired. Such purchase orders shall constitute the only authorization for EPD to provide Private Label Products to Sionix. 2.3 DELIVERY. EPD shall deliver the Private Label Products in the quantities and on the dates specified in Sionix's purchase orders, F.O.B. shipping point via Sionix's designated freight carrier, third party direct bill. 2.4 CHANGES. Sionix shall have the right to make changes to purchase order quantities and delivery dates, provided the changes are not within the Firm Lead-Time as established under Section 2.6. 2.5 SUPPLY RISK MANAGEMENT. In order to minimize supply risk to Sionix, in the event of a material interruption in supply of the Private Label Products, whether because of natural disaster, labor problems, or inability of EPD to supply the Private Label Products on a timely basis, EPD grants to Sionix a non-exclusive, royalty-free license to manufacture the Private Label Products, or sublicense a responsible third party to do the same. Upon such occurrence, EPD shall immediately provide to Sionix written detailed information and technical assistance sufficient for Sionix or a third party to manufacture the Private Label Products, including, but not limited to: 1) approved raw material vendor list, 2) raw material specifications, 3) quality control procedures and, 4) detailed manufacturing instructions (collectively the "Detailed Manufacturing Instructions") Sionix shall reimburse EPD for labor costs actually incurred by EPD in training any third party to manufacture the Private Label Products under this Section. If EPD can resume supplying Private Label Products to Sionix's requirements, Sionix or a third party shall discontinue manufacturing the Private Label Products following production restart, where EPD warrants that EPD has the capacity and capability of satisfying Sionix's full demand for Private Label Products. In such case the manufacturing license with Sionix and any sublicense with a third party shall terminate and all Detailed Manufacturing Instructions shall be promptly returned to EPD. Sionix and any sublicensee shall hold all Detailed Manufacturing Instructions as confidential information under this Agreement. 2.6 FIRM LEAD-TIME. Firm lead-time for Private Label Products shall be as set forth on the purchase order applicable to such products.. Sionix may not make changes to purchase orders within the Firm Lead-Time without the consent of EPD. Should EPD not have Private Label Products in the quantities ordered, ready for shipment on the requested purchase order date, where Sionix has provided the Firm Lead-Time stated above, then if expedited freight is required by Sionix to meet production needs, EPD shall be financially responsible for any incremental shipping cost associated with such expedited freight. Page 2 of 14

2.7 PRODUCT QUALITY. EPD shall be responsible for all product quality issues and must be able and capable of answering specific technical questions related to the Private Label Products. 2.8 EXCLUSIVITY. EPD hereby grants to Sionix the exclusive right to market, distribute and sell its filters, including the Private Label Products (collectively, the "Exclusive Products"), in the Territory for drinking water processing, industrial and commercial water processing , and related testing or treatment (the "Exclusive Market"). Exclusivity will remain in effect for a period of one year from the date of this agreement. At the end of the one year period EPD and Sionix together will review actual and prospective sales to determine if exclusivity will remain in effect. If it is agreed by both Sionix and EPD that in the existence of an active and potentially profitable market, Sionix has not made all reasonable attempts to present the products and pursue sales, Exclusivity shall be forfeit. During the term of this Agreement, EPD shall not (i) appoint or engage any other distributor, agent or sales representative to sell or distribute the Exclusive Products in the Territory for the Exclusive Market, or (ii) sell, distribute or otherwise deliver Exclusive Products to customers in the Territory or who are likely to re-sell the Exclusive Products in the Territory to the Exclusive Market. EPD shall use its best efforts to prevent its distributors or sales agents from selling or distributing Exclusive Products in or to the Exclusive Market in the Territory, directly or indirectly. Without the prior written approval of Sionix, EPD shall not manufacture, market, sell, distribute, or otherwise dispose of Private Label Products except on behalf of Sionix in accordance with the terms of this Agreement. 2.9 CAPACITY. EPD is an independent contractor and is not authorized to waive any right or to incur, assume or create any debt, obligation, contract, or release of any kind whatsoever in the name of or on behalf of Sionix. 2.10 REPURCHASE OF CERTAIN ITEMS. In the event that EPD purchases raw materials or components for the purpose of manufacturing Private Label Products under this Agreement, and such materials or components are not utilized within a reasonable time thereafter, then upon demand by EPD Sionix shall purchase such raw materials and components from EPD for an amount equal to EPD's actual cost plus overhead specifically applicable to such materials and components. 2.11 TERMS OF PAYMENT. The terms of payment shall be Net 45 days. Special terms if needed shall be mutually agreed upon and stated on individual purchase orders. ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF EPD EPD represents and warrants to Sionix as follows: 3.1 AUTHORITY. EPD has all the requisite right, legal capacity and authority, corporate or otherwise, to enter into, deliver, and perform this Agreement, to manufacture the Private Label Products and to consummate the transactions contemplated herein. This Agreement has been duly and validly Page 3 of 14

authorized by all necessary action, corporate or otherwise, which authorizations remain in full force and effect, and no other proceedings are required for the authorization, delivery, or performance of this Agreement by EPD. This Agreement constitutes a legal, valid, and binding obligation of EPD enforceable in accordance with its terms. 3.2 CONSENTS. No authorizations, consents, licenses, or approvals of any public body or authority of California or of any other jurisdiction is necessary for the execution, delivery, or performance of this Agreement by EPD. 3.3 NO VIOLATIONS. Neither the execution and delivery of this Agreement, nor consummation by EPD of the transactions contemplated herein, nor compliance with any of the provisions hereof, will conflict with or result in a breach or violation of, a default under, any of the terms, conditions, or provisions of any note, license, lease, or other agreement or other instrument or obligation to which EPD is a party or by which it is bound; 3.4 LICENSES. EPD holds all licenses, franchises, permits and authorizations necessary for the lawful conduct of its business, and has not violated, and is not in violation of, any applicable statutes, laws, ordinances, rules and regulations of all federal, state and local governmental bodies, agencies and subdivisions having, asserting or claiming jurisdiction over it or over any part of its operations. 3.5 DISCLOSURE. There is no fact which materially and adversely affects this Agreement or the business prospects, conditions, affairs, or operations of EPD or Sionix, or any of their respective properties or assets, which has not been fully described in this Agreement or in any written materials delivered to Sionix. ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SIONIX Sionix represents and warrants to EPD as follows: 4.1 AUTHORITY. Sionix has all the requisite right, legal capacity and authority, corporate or otherwise, to enter into, deliver, and perform this Agreement, and to consummate the transactions contemplated herein. This Agreement has been duly and validly authorized by all necessary action, corporate or otherwise, which authorizations remain in full force and effect, and no other proceedings are required for the authorization, delivery, or performance of this Agreement by Sionix. This Agreement constitutes a legal, valid, and binding obligation of Sionix, enforceable in accordance with its terms. 4.2 CONSENTS. No authorizations, consents, licenses, or approvals of any public body or authority of California or of any other jurisdiction are necessary for the execution, delivery, or performance of this Agreement by Sionix. Page 4 of 14

4.3 NO VIOLATIONS. Neither the execution and delivery of this Agreement, nor consummation by Sionix of the transactions contemplated herein, nor compliance with any of the provisions hereof, will conflict with or result in a breach or violation of, a default under, any of the terms, conditions, or provisions of any note, license, lease, or other agreement or other instrument or obligation to which Sionix is a party or by which it is bound; 4.4 LICENSES. Sionix holds all licenses, franchises, permits and authorizations necessary for the lawful conduct of its business, and has not violated, and is not in violation of, any applicable statutes, laws, ordinances, rules and regulations of all federal, state and local governmental bodies, agencies and subdivisions having, asserting or claiming jurisdiction over it or over any part of its operations. 4.5 DISCLOSURE. There is no fact which materially and adversely affects this Agreement or the business prospects, conditions, affairs, or operations of EPD or Sionix, or any of their respective properties or assets, which has not been fully described in this Agreement or in any written materials delivered to EPD. ARTICLE 5. PRIVATE LABELING; PROPRIETARY TECHNOLOGY 5.1 LABELING OF PRODUCTS. EPD shall place Sionix data plate, labels, logos and artwork supplied by Sionix on the Private Label Products and on associated manuals, blueprints and specification sheets, in the size, format and location specified by Sionix (the "Sionix Marks"). Sionix hereby grants EPD a limited license to utilize and reproduce the Sionix Labels for the Private Label Products manufactured under this Agreement. EPD shall not use the Sionix Marks for any other purpose, without the prior written consent of Sionix. Upon expiration or termination of this Agreement, the foregoing limited license shall automatically be terminated without further action by either party hereto. 5.2 PROPRIETARY RIGHTS. It is understood and agreed that all patents and patent rights, designs, plans, engineering details, technical data, and other proprietary rights in and with respect to the Sionix Private Label Products and their underlying technology and designs are and will remain exclusively the property of EPD. During the term of this Agreement Sionix shall not, directly or indirectly, obtain or attempt to obtain any right, title, or interest in or to the patents, designs or other proprietary rights owned or used by EPD. Sionix shall no action to jeopardize, limit, or interfere in any manner with EPD's ownership of and right to utilize its patents, designs, or other proprietary rights. ARTICLE 6. OPERATIONS 6.1 PACKAGING. Sionix shall furnish EPD with sufficient quantities of product cartons, inserts, instructions for use and labels to permit EPD to package and label the Sionix Private Label Products prior to shipment. Page 5 of 14

6.2 PRODUCT REJECTION. Any Sionix Private Label Products delivered to Sionix or a customer of Sionix by EPD which do not conform to the Specifications shall be promptly replaced by EPD in accordance with its warranty obligations as set forth on Exhibit D. 6.3 FACILITIES AND PERSONNEL. EPD represents and warrants that it has, and agrees that throughout the term of this Agreement that it will maintain, the facilities, equipment, and competent personnel necessary to assure the proper and prompt manufacture and delivery of Sionix Private Label Products, while maintaining Sionix's quality standards for materials and workmanship. EPD shall permit Sionix and its prospective customers to visit and inspect any EPD facility at which the Private Label Products or components thereof are fabricated or stored, during regular business hours, upon at least 24 hours notice. EPD may impose reasonable restrictions on such inspections, including identification of all visitors and confidentiality agreements. 6.4 SIONIX ASSISTANCE IN OBTAINING SUPPLY CONTRACTS. EPD represents and warrants that it has the ability to obtain all supplies and materials necessary to perform its obligations hereunder. However, when requested by EPD, and when feasible for Sionix to do so, Sionix shall assist EPD in negotiating agreements with Sionix's current suppliers, sub-suppliers, and subcontractors for continued materials supply to, or performance of contract work for, EPD. 6.5 QUALITY ASSURANCE PROGRAMS. EPD shall implement and maintain quality assurance programs and testing that are approved by Sionix in order to maintain Sionix's quality standard for materials and workmanship. 6.6 EPD REPORTS AND ASSISTANCE. EPD shall maintain complete and accurate manufacturing records with respect to the Sionix Private Label Products, in accordance with accepted industry standards. EPD shall ensure that all Sionix Private Label Products are manufactured, packaged, labeled and sold to Sionix in accordance with all applicable laws, rules and regulations.

ARTICLE 7. WARRANTIES AND INDEMNIFICATIONS 7.1 PRODUCT WARRANTY. EPD warrants the Private Label Products in accordance with the Warranty set forth on Exhibit D hereto. , 7.2 EPD INDEMNIFICATION. EPD shall indemnify, defend, and hold Sionix harmless from and against any claims, demands, causes of action or suits (including reasonable attorneys' fees) that the Private Label Products infringe any United States patent or the proprietary rights of others. 7.3 SIONIX INDEMNIFICATION. Sionix shall indemnify, defend, and hold EPD harmless from and against any claims, demands, causes of action or suits (including reasonable attorneys' fees) arising out of or relating to any breach of this Agreement by Sionix. Page 6 of 14

ARTICLE 8. PROPRIETARY AND CONFIDENTIAL INFORMATION 8.1 CONFIDENTIAL INFORMATION. EPD and Sionix each agrees not to disclose information of the other acquired hereunder or in connection herewith except as authorized in writing. EPD and Sionix shall each keep, and shall require its officers, directors, employees, independent contractors, and suppliers to keep, confidential such information, including but not limited to all manuals, customer lists, copyrighted materials, technical or business information, manufacturing techniques, software and other proprietary information. EPD will not disseminate confidential information to any person or entity other than those employees, officers, and directors of EPD who are directly involved in the manufacturing of Private Label Products. Each party will use the same degree of diligence and effort to protect the confidential and proprietary information of the other party from disclosure to third parties as it uses to protect its own confidential and proprietary information. 8.2 RIGHTS TO INJUNCTIVE AND EQUITABLE RELIEF. The parties hereto mutually agree that the obligations under this Article 8 are of a special and unique character which gives them a peculiar value and that each party cannot be reasonably or adequately compensated in damages in an action at law in the event the other party breaches such obligations. Therefore, the parties agree that each shall be entitled to injunctive and other equitable relief without bond or other security in the event of such breach or threatened breach in addition to any other rights or remedies they may possess. ARTICLE 9. TERM AND RENEWAL 9.1 TERM. This Agreement shall be effective for the period commencing on the date hereof and ending on the second anniversary of the date hereof, unless sooner terminated in accordance with the provisions of Article 9. 9.2 RENEWAL. After the expiration of the initial period set forth in Section 9.1, this Agreement shall be automatically renewed for successive additional one-year periods if neither party has notified the other prior to the expiration of the initial term or any renewal term of such notifying party's intention not to renew this Agreement. ARTICLE 10. DEFAULT, TERMINATION, AND EXPIRATION 10.1 EVENTS OF TERMINATION. Either party may terminate this Agreement at any time upon thirty days notice to the other party upon the occurrence of any of the following: (i) If the other party breaches any term or condition of this Agreement and such breach is not cured within the foregoing thirty day notice period; or Page 7 of 14

(ii) If at any time the other party shall file bankruptcy, generally not pay its debts as they become due or shall admit in writing its inability to pay its debts, or shall make a general assignment for the benefit of creditors. 10.2 EFFECT ON RIGHTS AND TERMINATION PAYMENTS. Termination of this Agreement by either party shall not act as a waiver of any breaches of this Agreement and shall not act as a release of either party from any liability for breaches of this agreement. 10.3 UNFILLED ORDERS. Termination of this Agreement shall cancel all unfilled orders for Private Label Products. Termination shall not be deemed waived if EPD ships Private Label Products at Sionix's request to avoid imposing hardship on any of Sionix's customers. 10.4 PROHIBITION ON FURTHER USE OF NAME. Upon termination or expiration of this Agreement, EPD shall immediately discontinue the use of any trade names, trademarks, symbols or designations associated with Sionix or the Private Label Products. 10.5 RETURN OF PRODUCT MATERIALS AND PROPRIETARY INFORMATION. In the event of termination or expiration of this Agreement, EPD shall immediately return to Sionix all labels, inserts, manuals, parts identification data, instructions, catalogs, descriptions, price lists, order forms, technical data and designs, and other similar materials that bear the Sionix Marks. Following such termination or expiration, Sionix shall refrain from use of proprietary designs of EPD, and shall not manufacture proprietary products of EPD. ARTICLE 11. GENERAL PROVISIONS 11.1 NOTICES. All notices, demands, requests, consents, approvals or other communications (collectively "Notices") required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and may be personally served, given by fax, or deposited in the United States mail, registered or certified, return receipt requested, postage prepaid, addressed as set forth below or such other address as such party shall have specified most recently by written notice.
To Sionix: Sionix Corporation 9272 Jeronimo Road, Suite 108 Irvine, CA 92618 EPD (Wearnes) USA Inc. 10730 Bell Court Rancho Cucamonga, CA 91730

To EPD:

Page 8 of 14

11.2 COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute but one and the same instrument. 11.3 GOVERNING LAW. This Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California applicable to agreements made and to be performed wholly within the State of California. 11.4 ENTIRE AGREEMENT. The terms of this Agreement are intended by the parties as a final expression of their agreement with respect to such terms as are included in this Agreement and may not be contradicted by evidence of any prior or contemporaneous agreement. The parties further intend that this Agreement constitutes the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial proceeding, if any, involving this Agreement. 11.5 MODIFICATIONS AND AMENDMENTS. This Agreement may not be modified, changed or supplemented, nor may any obligations hereunder be waived or extensions of time for performance granted, except by written instrument signed by the party to be charged or by its agent duly authorized in writing or as otherwise expressly permitted herein. 11.6 WAIVERS AND EXTENSIONS. No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof or of any other agreement or provision herein contained. No extension of time for performance of any obligations or acts shall be deemed an extension of the time for performance of any other obligations or acts. 11.7 ATTORNEYS' FEES. Should either party institute any action or proceeding to enforce this Agreement or any provision hereof, or for damages by reason of any alleged breach of this Agreement or of any provision hereof, or for a declaration of rights hereunder, the prevailing party in any such action or proceeding shall be entitled to receive from the other party all costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party in connection with such action or proceeding. 11.8 FURTHER ASSURANCES. The parties agree to do such further acts and things and to execute and deliver such additional agreements and instruments as the other may reasonably required to consummate, evidence or confirm the agreements contained herein in the manner contemplated hereby. 11.9 ASSIGNMENTS. This Agreement and the rights, duties, and obligations hereunder may not be assigned or delegated by any party without the prior written consent of the other party. Any assignment of rights or delegation of duties or obligations hereunder made without the written consent of the other party hereto shall be void and be of no effect. Notwithstanding the foregoing, Sionix may assign its rights or delegate its duties hereunder to any affiliated person or entity which controls, is controlled by, or is under common control with Sionix. Page 9 of 14

11.10 SUCCESSORS AND PERMITTED ASSIGNS. This Agreement and the provisions hereof shall be binding upon each of the parties, their successors and permitted assigns. IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first written above. SIGNATURE PAGE FOLLOWS THIS PAGE. Page 10 of 14

SIGNATURE PAGE Sionix Corporation By: EPD Wearnes (USA) Inc. By: Page 11of 14

EXHIBIT A PRIVATE LABEL PRODUCTS 1. Pressure Filtration Systems in packaged and component form. 2. Water Pretreatment equipment including but not limited to Clarifiers (incline plate and tube type), Flocculation and Sedimentation and Flotation equipment as well as strainer and screening devices. 3. Ion exchange equipment 4. Back wash water reclamation equipment including but not limited to Static mixers, flash mixers, Decant pumps and controls. 5. Pressure vessels configured for contact vessels, contact media and filtration media. Page 12 of 14

EXHIBIT B SPECIFICATIONS EXHIBIT C TERRITORY 1. The Middle East, including, without limitation, Afghanistan, Oman, Azerbaijan, Pakistan, Bahrain, Qatar, Cyprus, Saudi Arabia, Iraq, Syria, Iran, Tajikistan, Israel, Turkey, Jordan, United Arab Emirates, Kazakhstan, Yemen, Kuwait, Lebanon 2. Africa 3. Oceania 4. Non Exclusive right to pursue sales in Central and South America. 5. Non Exclusive right to pursue sales in North America, except for those areas currently covered by an appointed distributor of EPD. 6. Non exclusive right to pursue sales in India. Page 13 of 14

EXHIBIT D WARRANTY EPD warrants its products to be free from defects in materials and workmanship under normal conditions of service, from date of delivery, for the following periods of time: FILTER SYSTEMS: 20 Years Prorated, Steel and Composite* Tanks Only 10 Years Prorated, Internal and External Non-Electrical Components First 3 Years - 100% Tank & Internal Components First Year Only - On Site Warranty
ELECTRONIC: First Year Only - 100% on Electrical Components

PRO RATA SCHEDULE TANKS Years 4 5 6 7 8 9 10 Discount % 70 65 60 55 50 45 40 COMPONENTS Years 11 12 13 14 15 16 17-20 Discount % 35 30 25 20 15 10 5 Years 2 3 4 5 6 7 8 9 10 Discount % 80 75 70 60 50 40 30 20 10

This limited warranty shall repair or replace defects arising only from normal usage and does not cover damage or failure resulting from shipping, installation, misuse, abuse, neglect, alteration, modification, abnormal working conditions, water damage to electrical components or repairs by other than EPD. EPD shall in no event be liable to Sionix for indirect or consequential damages of any kind or character. *EPD Composite Tanks are pressure vessels and to be exposed to vacuum greater than 4 in.Hg. will be considered improper operation and warranty will be void. Call EPD or your distributor for vacuum relief application. Page 14 of 14

EXHIBIT 31.1 CERTIFICATION I, James J. Houtz, certify that: 1. I have reviewed this annual report on Form 10-KSB of Sionix Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act rules 13a-14 and 15d-14) for the registrant and we have: a. Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b. Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date") and c. Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: January 13, 2004 /S/ JAMES J. HOUTZ -----------------James J. Houtz, President

EXHIBIT 31.2 CERTIFICATION I, Robert McCray certify that: 1. I have reviewed this annual report on Form 10-KSB of Sionix Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act rules 13a-14 and 15d-14) for the registrant and we have: a. Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b. Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date") and c. Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: January 13, 2004 /S/ ROBERT MCCRAY ----------------Robert McCray, Chief Financial Officer

EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 The undersigned hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to their knowledge, the Annual Report on Form 10-KSB for the year ended September 30, 2003 of Sionix Corporation (the "COMPANY") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in such report.
Date: January 13, 2004 /S/JAMES J. HOUTZ ----------------President /s/ ROBERT E. MCCRAY -------------------Chief Financial Officer