SECURITIES PURCHASE AGREEMENT
THIS
SECURITIES PURCHASE AGREEMENT
(this
“Agreement”)
is
made as of _______________, 2008 by and among Sionix Corporation, a Nevada
corporation (the “Company”),
and
the purchaser whose name and address are set forth on the signature page annexed
hereto (the “Purchaser”).
The
foregoing parties are sometimes referred to hereinafter individually as a
“Party” or collectively as the “Parties.”
RECITALS
WHEREAS,
pursuant
to the Subscription Application of the Purchaser of even date herewith (each
a
“Subscription
Application”),
and
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
“Securities
Act”),
and
Rule 506 promulgated thereunder, the Company desires to sell to the Purchaser
and the Purchaser desires to acquire from the Company that number of units
of
the Company’s securities (the “Units”)
as are
set forth on the Purchaser’s signature page annexed hereto, at a price of
$10,000 per Unit, subject to the terms and conditions of this Agreement and
the
other documents or instruments contemplated hereby; and
WHEREAS,
each
Unit consists of: (i) 100,000 shares of the Company’s $0.001 par value common
stock (the “Common
Stock”),
and
(ii) a warrant, in the form attached hereto as Exhibit
A,
to
purchase up to 200,000 shares of Common Stock at an exercise price of $0.10
per
share for a 3 year period commencing upon the Closing (collectively,
“Warrants”).
NOW,
THEREFORE,
in
consideration of the mutual covenants and agreements hereinafter set forth,
and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties do hereby covenant and agree as
follows:
AGREEMENT
Section
1. Sale
and Issuance of Units.
1.1 Subject
to the terms and conditions of this Agreement, the Company’s board of directors
has authorized the sale and issuance of up to 75 Units (the “Offering”).
At
the Closing, the Company shall sell and issue to the Purchaser, and the
Purchaser shall purchase from the Company, the number of Units set forth on
the
Purchaser’s signature page hereto. The Company intends to enter into this same
form of purchase agreement with certain other purchasers (collectively, the
“Other
Purchasers”,
and
collectively with the Purchaser, the “Purchasers”)
and
expects to complete sales of Units to them. The maximum number of Units that
the
Company may sell to the Purchasers is 75. The Purchaser’s obligations hereunder
are expressly not subject to or conditioned on the purchase of Units by any
or
all of such Other Purchasers.
1.2 The
aggregate purchase price for the Units to be purchased by the Purchaser (the
“Purchase
Price”)
shall
be the amount set forth on the Purchaser’s signature page hereto.
Section
2. The
Closing.
2.1 The
closing of the sale and issuance to the Purchaser (the “Closing”)
shall
take place on the date when the Company’s legal counsel, Xxxxxxxxxx & Xxxxx,
LLP (the “Escrow Agent”), receives all of the materials required pursuant to the
Escrow Agreement annexed hereto as Exhibit
B
(the
“Escrow
Agreement”),
including, without limitation, immediately available funds via wire transfer
or
a certified check equal to the subscription amount set forth on the Purchaser’s
signature page hereto.
2.2 At
the
Closing, the Company shall instruct its transfer agent to issue and deliver
to
the Purchaser a certificate representing the Common Stock, against receipt
by
the Escrow Agent of a certified bank check or wire transfer in an aggregate
amount equal to the Purchase Price for the Units set forth on the Purchaser’s
signature page hereto.
Section
3. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to the Purchaser as follows:
3.1 Organization.
The
Company is duly organized, validly existing and in good standing under the
laws
of the State of Nevada and is qualified to conduct its business as a foreign
corporation in each jurisdiction where the failure to be so qualified would
have
a material adverse effect on the Company.
3.2 Authorization
of Agreement, Etc.
The
execution, delivery, and performance by the Company of its obligations under
this Agreement, the Escrow Agreement, the Subscription Application, the Warrants
and each other document or instrument contemplated hereby or thereby
(collectively, the “Transaction
Documents”)
has
been duly authorized by all requisite corporate action on the part of the
Company; and this Agreement and the Transaction Documents have been duly
executed and delivered by the Company. Each of the Transaction Documents, when
executed and delivered by the Company, constitutes the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium, or other similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
3.3 Issuance
of Common Stock and Warrants.
The
Units
are duly authorized and, when paid for and issued in accordance with the
Transaction Documents, will be duly and validly issued, fully paid, and
nonassessable, free and clear of all liens.
Section
4. Representations
and Warranties of the Purchaser.
The
Purchaser hereby represents and warrants to the Company as follows:
2
4.1 Authorization
of the Documents.
The
Purchaser has all requisite power and authority (corporate or otherwise) to
execute, deliver, and perform its obligations under the Transaction Documents,
and the execution, delivery, and performance by the Purchaser of its obligations
under the Transaction Documents has been duly authorized by all requisite action
on the part of the Purchaser and each such Transaction Document, when executed
and delivered by the Purchaser, shall constitute the valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
4.2 Investment
Representations.
All
of
the representations, warranties, and information of the Purchaser as set forth
in the Purchaser’s Subscription Application are incorporated by reference
herein, shall be deemed to be a part hereof, and shall be true and correct
at
the Closing with the same force and effect as if made by the Purchaser as of
the
date thereof.
4.3 Access
to Company Information.
The
Purchaser acknowledges that it has been afforded access and the opportunity
to
obtain all financial and other information concerning the Company that such
Purchaser desires (including the opportunity to meet with the Company’s
executive officers, either in person or telephonically). The Purchaser has
reviewed copies of all reports filed by the Company (the “Filings”)
with
the Securities and Exchange Commission (the “Commission”)
under
the Securities Exchange Act of 1934, as amended (the “Exchange
Act”),
since
September 30, 2006, all of which are available for review at xxx.xxx.xxx.
The
Purchaser further acknowledges that it is familiar with the contents of the
Filings and that there is no further information about the Company that the
Purchaser desires in determining whether to acquire the Units in the
Offering.
4.4 Risk
Factors
The
Purchaser understands that an investment in the Units entails a substantial
risk
of loss. The purchaser has read and understands all of the Risk Factors set
forth in the Company’s annual report on Form 10-KSB filed with the Commission on
January 15, 2008.
Section
5. Brokers
and Finders.
The
Company shall not be obligated to pay any commission, brokerage fee, or finder’s
fee based on any alleged agreement or understanding between the Purchaser and
a
third person in respect of the transactions contemplated hereby. The Purchaser
hereby agrees to indemnify the Company against any claim by any third person
for
any commission, brokerage fee, finder’s fee, or other payment with respect to
this Agreement or the transactions contemplated hereby based on any alleged
agreement or understanding between the Purchaser and any such third person,
whether express or implied from the actions of the Purchaser or anyone acting
or
purporting to act on behalf of the Purchaser.
3
Section
6. Indemnification
By the Purchaser.
The
Purchaser hereby agrees to indemnify and defend (with counsel acceptable to
the
Company) the Company and its officers, directors, employees, and agents and
hold
them harmless from and against any and all liability, loss, damage, cost, or
expense, including costs and reasonable attorneys’ fees, incurred on account of
or arising from:
(a) any
breach of or inaccuracy in any of the Purchaser’s representations, warranties,
or agreements made herein, in any of the Transaction Documents, or in any
document or instrument contemplated hereby or thereby; and
(b) any
action, suit, or proceeding based on a claim that the Purchaser’s
representations, warranties or agreements made herein, in any of the Transaction
Documents, or in any document or instrument contemplated hereby or thereby,
were
inaccurate or misleading, or otherwise cause for obtaining damages or redress
from the Company or any current or former officer, director, employee, or agent
of the Company under the Securities Act.
Section
7. [Intentionally
Omitted]
Section
8. Right
of First Refusal
(a) From
the
date hereof until July 30, 2008, upon any issuance by the Company of Common
Stock or securities exercisable for or convertible into Common Stock (a
“Subsequent
Financing”),
the
Purchasers shall have the right to participate in up to 100% of the amount
of
the Subsequent Financing (the “Participation
Maximum”)
on the
same terms, conditions and price provided for in the Subsequent Financing.
(b) At
least
5 business days prior to the closing of the Subsequent Financing, the Company
shall deliver to the Purchasers a written notice of its intention to effect
a
Subsequent Financing (“Pre-Notice”),
which
Pre-Notice shall ask each Purchaser if such Purchaser wants to review the
details of such financing (such additional notice, a “Subsequent
Financing Notice”).
Upon
the request of a Purchaser, and only upon a request by such Purchaser, for
a
Subsequent Financing Notice, the Company shall promptly, but no later than
2
business days after such request, deliver a Subsequent Financing Notice to
such
Purchaser. The Subsequent Financing Notice shall describe in reasonable detail
the proposed terms of such Subsequent Financing, the amount of proceeds intended
to be raised thereunder, the person or persons through or with whom such
Subsequent Financing is proposed to be effected, and attached to which shall
be
a term sheet or similar document relating thereto.
(c) Any
Purchaser desiring to participate in such Subsequent Financing must provide
written notice to the Company by not later than 5:30 p.m. (New York City time)
on the 5th
business
day after all of the Purchasers have received the Pre-Notice that the Purchaser
is willing to participate in the Subsequent Financing, the amount of the
Purchaser’s participation, and that the Purchaser has such funds ready, willing,
and available for investment on the terms set forth in the Subsequent Financing
Notice. If the Company receives no notice from a Purchaser as of such
5th
business
day, such Purchaser shall be deemed to have notified the Company that it does
not elect to participate.
4
(d) If
by
5:30 p.m. (New York City time) on the 5th
business
day after all of the Purchasers have received the Pre-Notice, notifications
by
the Purchasers of their willingness to participate in the Subsequent Financing
(or to cause their designees to participate) is, in the aggregate, less than
the
total amount of the Subsequent Financing, then the Company may effect the
remaining portion of such Subsequent Financing on the terms and with the persons
set forth in the Subsequent Financing Notice.
(e) If
by
5:30 p.m. (New York City time) on the 5th
Business
Day after all of the Purchasers have received the Pre-Notice, the Company
receives responses to a Subsequent Financing Notice from Purchasers seeking
to
purchase more than the aggregate amount of the Participation Maximum, each
such
Purchaser shall have the right to purchase the greater of (a) their Pro Rata
Portion (as defined below) of the Participation Maximum and (b) the difference
between the Participation Maximum and the aggregate amount of participation
by
all other Purchasers. “Pro
Rata Portion”
is
the
ratio of (x) the Purchase Price of a Purchaser participating under this Section
8 and (y) the sum of the aggregate Purchase Prices paid by the Purchasers
pursuant to the Offering who are participating under this Section
8.
(f) The
Company must provide the Purchasers with a second Subsequent Financing Notice,
and the Purchasers will again have the right of participation set forth above
in
this Section 8, if the Subsequent Financing subject to the initial Subsequent
Financing Notice is not consummated for any reason on the terms set forth in
such Subsequent Financing Notice within 60 business days after the date of
the
initial Subsequent Financing Notice.
(g) Notwithstanding
the foregoing, this Section 8 shall not apply in respect of (i) an Exempt
Issuance or (ii) an underwritten public offering of Common Stock. An “Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to
employees, officers, directors or consultants of the Company pursuant to any
stock or option plan duly adopted by the board of directors of the Company
or a
committee of non-directors established for such purpose, (b) securities issued
pursuant to the Offering, including without limitation securities issuable
upon
the exercise or exchange of or conversion of any securities issued pursuant
to
the Offering, (c) securities exercisable or exchangeable for or convertible
into
shares of Common Stock issued and outstanding on the date of this Agreement,
or
(d) securities issued pursuant to acquisitions or strategic transactions duly
approved by the Company’s board of directors, provided any such issuance shall
only be to a person which is, itself or through its subsidiaries, an operating
company in a business synergistic with the business of the Company and in which
the Company receives benefits in addition to the investment of funds, but shall
not include a transaction in which the Company is issuing securities primarily
for the purpose of raising capital or to an entity whose primary business is
investing in securities.
Section
9. Successors
and Assigns.
This
Agreement shall bind and inure to the benefit of the Company, the Purchaser,
and
their respective successors and assigns.
5
Section
10. Entire
Agreement.
This
Agreement and the other writings and agreements referred to in this Agreement
or
delivered pursuant to this Agreement contain the entire understanding of the
Parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, whether written or verbal, among the Parties
with
respect thereto.
Section
11. Notices.
All
notices, demands and requests of any kind to be delivered to any Party in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given if personally delivered or if sent by internationally-recognized
overnight courier or by registered or certified mail, return receipt requested
and postage prepaid, addressed as follows:
if
to the
Company, to:
Sionix
Corporation
0000
Xxxxxxxxx Xxxxx
Xxxxx
000
Xxxxxx,
XX 00000
Attention:
Chief Executive Officer
with
a
copy to:
Xxxxxxxxxx
& Xxxxx LLP
The
Chrysler Building
000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention
Xxxxx Xxxxxxxxx
if
to the
Purchaser, to:
at
the
address of the Purchaser set forth on the Purchaser’s signature page
hereto;
or
to
such other address as the Party to whom notice is to be given may have furnished
to the other Parties to this Agreement in writing in accordance with the
provisions of this Section. Any such notice or communication shall be deemed
to
have been received (i) in the case of personal delivery, on the date of such
delivery, (ii) in the case of internationally-recognized overnight courier,
on
the next business day after the date when sent and (iii) in the case of mailing,
on the third business day following that on which the piece of mail containing
such communication is posted.
Section
12. Amendments.
This
Agreement may not be modified or amended, nor may any provision of this
Agreement be waived, except as evidenced by a written agreement duly executed
by
Purchasers who hold at least 66% of the Common Stock and shares of Common Stock
underlying Warrants acquired in the Offering.
6
Section
13. Governing
Law; Waiver of Jury Trial.
All
questions concerning the construction, interpretation, and validity of this
Agreement shall be governed by and construed and enforced in accordance with
the
domestic laws of the State of New York without giving effect to any choice
or
conflict of law provision or rule (whether in the State of New York or any
other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York. In furtherance of the foregoing, the internal
law of the State of New York will control the interpretation and construction
of
this Agreement, even if under such jurisdiction’s choice of law or conflict of
law analysis, the substantive law of some other jurisdiction would ordinarily
or
necessarily apply.
Section
14. Submission
to Jurisdiction.
Any
legal
action or proceeding with respect to this Agreement may be brought in the courts
of the State of New York and the United States of America located in the City
of
New York, New York, Borough of Manhattan, and, by execution and delivery of
this
Agreement, the Company hereby accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The
Purchaser hereby irrevocably waives, in connection with any such action or
proceeding, any objection, including, without limitation, any objection to
the
venue or based on the grounds of forum
non conveniens,
which
it may now or hereafter have to the bringing of any such action or proceeding
in
such respective jurisdictions. The Purchaser hereby irrevocably consents to
the
service of process of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at its address as set forth herein.
Section
15. Severability.
It
is the
desire and intent of the Parties that the provisions of this Agreement be
enforced to the fullest extent permissible under the law and public policies
applied in each jurisdiction in which enforcement is sought. Accordingly, in
the
event that any provision of this Agreement would be held in any jurisdiction
to
be invalid, prohibited, or unenforceable for any reason, such provision, as
to
such jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of
such
provision in any other jurisdiction. Notwithstanding the foregoing, if such
provision could be more narrowly drawn so as not to be invalid, prohibited,
or
unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so
narrowly drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
Section
16. Independence
of Agreements, Covenants, Representations and Warranties.
All
agreements and covenants hereunder shall be given independent effect so that
if
a certain action or condition constitutes a default under a certain agreement
or
covenant, the fact that such action or condition is permitted by another
agreement or covenant shall not affect the occurrence of such default, unless
expressly permitted under an exception to such covenant. In addition, all
representations and warranties hereunder shall be given independent effect
so
that if a particular representation or warranty proves to be incorrect or is
breached, the fact that another representation or warranty concerning the same
or similar subject matter is correct or is not breached will not affect the
incorrectness of or a breach of a representation and warranty hereunder. The
exhibits and any schedules annexed hereto are hereby made part of this Agreement
in all respects.
7
Section
17. Counterparts.
This
Agreement may be executed in any number of counterparts, and each such
counterpart of this Agreement shall be deemed to be an original instrument,
but
all such counterparts together shall constitute but one agreement. Facsimile
counterpart signatures to this Agreement shall be acceptable and
binding.
Section
18. Headings.
The
section and paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of
this Agreement.
Section
19. Expenses.
Each
Party shall pay its own fees and expenses incurred in connection with the
negotiation, execution, delivery and performance of this Agreement, the
Transaction Documents and any document or instrument contemplated hereby or
thereby.
Section
20. Preparation
of Agreement.
The
Company prepared this Agreement and the Transaction Documents solely on its
behalf. Each Party to this Agreement acknowledges that: (i) the Party had the
advice of, or sufficient opportunity to obtain the advice of, legal counsel
separate and independent of legal counsel for any other Party hereto; (ii)
the
terms of the transactions contemplated by this Agreement are fair and reasonable
to such Party; and (iii) such Party has voluntarily entered into the
transactions contemplated by this Agreement without duress or coercion. Each
Party further acknowledges that such Party was not represented by the legal
counsel of any other Party hereto in connection with the transactions
contemplated by this Agreement, nor was he or it under any belief or
understanding that such legal counsel was representing his or its interests.
Each Party agrees that no conflict, omission, or ambiguity in this Agreement,
or
the interpretation thereof, shall be presumed, implied, or otherwise construed
against any other Party to this Agreement on the basis that such Party was
responsible for drafting this Agreement.
Section
21. Use
of
Proceeds.
The
Company shall use the net proceeds from the Offering for general working capital
purposes and not for the repayment of any Company indebtedness, provided that
the Company shall use $50,000 of the proceeds to pay outstanding legal fees
to
its counsel. The term “Company indebtedness” shall not include trade payables
incurred in the ordinary course of business or accrued but unpaid wages or
consulting fees.
8
*
* * *
*
[SIGNATURE
PAGES FOLLOW]
9
IN
WITNESS WHEREOF,
each of
the undersigned has duly executed this Securities Purchase Agreement as of
the
date first written above.
| COMPANY: | ||
| SIONIX CORPORATION | ||
| By: | ||
|
Name: Xxxxxxx X. Xxxxxxxx |
||
| Title: Chief Executive Officer | ||
[PURCHASER’S
SIGNATURE PAGE FOLLOWS]
[PURCHASER
SIGNATURE PAGE TO SIONIX CORPORATION
|
PURCHASER:
|
|
|
_____________________________________________
|
_____________________________________________
|
|
Name
of Purchaser (Individual or Institution)
|
Name
of Individual representing
|
|
|
Purchaser
(if an Institution)
|
|
_____________________________________________
|
_____________________________________________
|
|
Title
of Individual representing
|
Signature
of Individual Purchaser or
|
|
Purchaser
(if an Institution)
|
Individual
representing Purchaser
|
|
Address:
|
|
|
Telephone:
|
|
|
Facsimile:
|
|
|
_____________________________________________
|
|
|
Number
of Units
|
|
|
_____________________________________________
|
|
|
Aggregate
Purchase Price
|
EXHIBIT
A
Form
of Warrant
EXHIBIT
B
Escrow
Agreement
