SECURITIES PURCHASE AGREEMENT
SECURITIES
PURCHASE AGREEMENT
(the
“Agreement”),
dated
as of June 18, 2007, among SIONIX CORPORATION, a corporation organized under
the
laws of the State of Nevada (“Sionix”),
and
[investors
to be identified by Southridge Investment Group, LLC] (collectively,
“Purchaser”).
WHEREAS,
Purchaser and Sionix are executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of
the
Securities Act of 1933, as amended (the “1933
Act”);
WHEREAS,
Purchaser desires to purchase, and Sionix desires to issue, upon the terms
and
conditions set forth in this Agreement, a subordinated convertible debenture
and
a common stock warrant of Sionix in consideration for the payment by Purchaser
to Sionix of up to [one
million dollars ($1,000,000.00)]
in cash;
and
NOW
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the parties agree as follows:
1. PURCHASE
AND SALE OF SUBORDINATED CONVERTIBLE
DEBENTURE.
a. Purchase
of Subordinated Convertible Debenture.
On the
Closing Date (as defined below), Sionix shall issue and deliver to Purchaser,
and Purchaser agrees to purchase from Sionix, (i) a duly executed 8%
subordinated convertible debenture in the principal amount of up to [one
million dollars ($1,000,000)]
(the
“Debenture”)
and
(ii) a stock warrant to purchase __________ [insert
number for 50% warrant coverage]
shares
of Sionix common stock (the “Warrant”)
in
consideration for $[1,000,000.00]
cash
(the “Purchase
Price”).
b. Closing
Date.
Subject
to the satisfaction (or waiver) of the conditions thereto set forth in Section
5
and Section 6 below, the date and time of the sale of the Debenture pursuant
to
this Agreement (the “Closing
Date”)
shall
be 12:00 noon New York City Time on June 18, 2007 or such other mutually agreed
upon time. The closing of the transactions contemplated by this Agreement (the
“Closing”)
shall
occur on the Closing Date at such location as may be agreed to by the
parties.
c. Form
of Payment.
On the
Closing Date, (i) Purchaser shall pay the Purchase Price in United States
dollars by wire transfer of immediately available funds to an account designated
in writing by Sionix for such purpose, against delivery of the Debenture and
the
Warrant, and (ii) Sionix shall deliver to Purchaser the Debenture and Warrant
duly executed on behalf of Sionix, against delivery of the Purchase
Price.
2. PURCHASER’S
REPRESENTATIONS AND WARRANTIES.
Purchaser represents and warrants to Sionix
that:
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a. Accredited
Purchaser; Investment Purpose.
Purchaser represents that it is an “Accredited Investor” as defined in
Regulation D under the 1933 Act. Purchaser is purchasing the Debenture for
its
own account for investment purposes only and not with a view toward, or for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempted under the 1993 Act and applicable
state
securities laws; provided,
however,
that by
making the representations herein, Purchaser does not agree to hold the
Debenture for any minimum or other specific term and reserves the right to
dispose of the Debenture at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act and applicable state
securities laws.
b. Reliance
on Exemptions.
Purchaser understands that the Debenture is being offered and sold to it in
reliance upon specific exemptions from the registration requirements of United
States federal and state securities laws and that Sionix is relying upon the
truth and accuracy of, and Purchaser’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of Purchaser set
forth herein in order to determine the availability of such exemptions and
the
eligibility of the Purchaser to acquire the Debenture.
c. Information.
Purchaser and its advisors, if any, have been furnished with materials relating
to the business, finances and operations of Sionix and materials relating to
the
offer and sale of the Debenture which have been requested by Purchaser or its
advisors. Neither such inquiries nor any other due diligence investigation
conducted by Purchaser or any of its advisors or representatives shall modify,
amend or affect Purchaser’s right to rely on Sino’s representations and
warranties contained in Section 3 below. Purchaser understands that its
investment in the Debenture involves a significant degree of risk.
d.
Governmental
Review.
Purchaser understands that no United States federal or state agency or any
other
government or governmental agency has passed upon or made any recommendation
or
endorsement of the Debenture.
e. Transfer
or Resale.
Purchaser understands that (i) the sale or resale of the Debenture and the
Warrant and any underlying conversion shares of common stock has not been and
is
not being registered under the 1933 Act or any applicable state securities
laws,
and the Debenture and the Warrant may not be transferred unless (a) the
Debenture, the Warrant and the common stock, par value $0.001 per share, of
Sionix, issuable upon conversion of the Debenture (the “Conversion
Shares”)
and
upon exercise of the Warrant (the “Warrant
Shares”)
are
sold pursuant to an effective registration statement under the 1933 Act, (b)
the
Debenture, the Warrant, the Conversion Shares and the Warrant Shares are sold
or
transferred pursuant to an exemption from such registration, (c) the Debenture,
the Warrant, the Conversion Shares and the Warrant Shares are sold or
transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933
Act (or a successor rule) (“Rule
144”))
of
Purchaser who agrees to sell or otherwise transfer the Debenture or the Warrant
only in accordance with this Section 2(e) and who is an Accredited Investor,
or
(d) the Debenture, the Warrant, the Conversion Shares and the Warrant Shares
are
sold pursuant to Rule 144, if such Rule is available; (ii) any sale of such
Debenture, Warrant, Conversion Shares and Warrant Shares made in reliance on
Rule 144 may be made only in accordance with the terms of said Rule and further,
if said Rule is not applicable, any resale of such Debenture, Warrant,
Conversion Shares and Warrant Shares under circumstances in which the seller
(or
the person through whom the sale is made) may be deemed to be an underwriter
(as
that term is defined in the 0000 Xxx) may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the SEC thereunder;
and (iii) neither Sionix nor any other person is under any obligation to comply
with the terms and conditions of any exemption under the 1933 Act.
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f. Legends.
Purchaser understands that the Debenture, the Warrant, the Conversion Shares
and
the Warrant Shares shall bear a restrictive legend in the following
form:
“NEITHER
THIS SECURITY NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE BEEN
REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THE SECURITIES ARE RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED
OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR
EXEMPTION OR SAFE HARBOR THEREFROM.”
g. Authorization;
Enforcement.
This
Agreement has been duly and validly authorized by Purchaser. This Agreement
has
been duly executed and delivered on behalf of Purchaser, and this Agreement
constitutes a valid and binding agreement of Purchaser enforceable in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws
relating to, or affecting generally, the enforcement of creditors’ rights and
remedies or by other equitable principles of general application.
h. No
Brokers.
Purchaser has taken no action which would give rise to any claim by any person
for brokerage commissions, finder’s fees or similar payments relating to this
Agreement or the transactions contemplated hereby.
3. REPRESENTATIONS
AND WARRANTIES OF SIONIX.
Sionix
represents and warrants to Purchaser that:
a. Authorization;
Enforcement.
(i)
Sionix has all requisite corporate power and authority to enter into and perform
this Agreement and to consummate the transactions contemplated hereby and to
sell the Debenture and the Warrant in accordance with the terms hereof, (ii)
the
execution and delivery of this Agreement by Sionix and the consummation by
it of
the transactions contemplated hereby (including without limitation, the sale
of
the Debenture to Purchaser) have been duly authorized by Sionix and no further
consent or authorization of Sionix or its shareholders is required, (iii) this
Agreement has been duly executed and delivered by Sionix, and (iv) this
Agreement constitutes a legal, valid and binding obligation of Sionix
enforceable against Sionix in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and remedies or by
other equitable principles of general application
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b. No
Conflicts.
The
execution, delivery and performance of this Agreement by Sionix and the
consummation by Sionix of the transactions contemplated hereby (including,
without limitation, the sale of the Debenture and Warrant to Purchaser) will
not
(i) conflict with or result in a violation of any provision of its certificate
of formation or other organizational documents, or (ii) violate or conflict
with, or result in a breach of any provision of, or constitute a default (or
an
event which with notice or lapse of time or both could become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, note, bond, indenture or other instrument to
which Sionix is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations and regulations of any self-regulatory organizations to
which Sionix is subject) applicable to Sionix or by which any property of Sionix
are bound or affected. Except as specifically contemplated by this Agreement
and
as required under the 1933 Act and any applicable federal and state securities
laws, Sionix is not required to obtain any consent, authorization or order
of,
or make any filing or registration with, any court, governmental agency,
regulatory agency, self regulatory organization or stock market or any third
party in order for it to execute, deliver or perform any of its obligations
under this Agreement in accordance with the terms hereof. Except for filings
that may be required under applicable federal and state securities laws in
connection with the issuance and sale of the Debenture and the Warrant, all
consents, authorizations, orders, filings and registrations which Sionix is
required to obtain pursuant to the preceding sentence have been obtained or
effected on or prior to the date hereof.
c. No
Brokers.
Sionix
has taken no action which would give rise to any claim by any person for
brokerage commissions, finder’s fees or similar payments relating to this
Agreement or the transactions contemplated hereby except as disclosed in this
Section 3(c):
Southridge
Investment Group LLC is entitled to those cash and equity fees as provided
for
in that certain Investment Banking Engagement Letter dated as of February 12,
2007, as modified by that certain Investment Banking Engagement Letter Addendum
dated as of May 29, 2007.
d. Issuance
of Securities.
The
issuance of the Debenture and the Warrant are duly authorized and upon issuance
in accordance with the terms hereof shall be free from all taxes, liens and
charges with respect to the issue thereof. As of the Closing, a number of shares
of Common Stock shall have been duly authorized and reserved for issuance which
equals or exceeds 130% of the aggregate of the maximum number of shares of
Common Stock issuable (i) upon conversion of the Debenture and (ii) upon
exercise of the Warrant. Upon conversion or exercise in accordance with the
Debenture or the Warrant, as the case may be, the Conversion Shares and the
Warrant Shares, respectively, will be validly issued, fully paid and
nonassessable and free from all preemptive or similar rights, taxes, liens
and
charges with respect to the issue thereof, with the holders being entitled
to
all rights accorded to a holder of Common Stock. Assuming the accuracy of each
of the representations and warranties set forth in Section 2 of this Agreement,
the offer and issuance by the Company of the Debenture and the Warrant is exempt
from registration under the 1933 Act.
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4. COVENANTS.
a. Best
Efforts.
The
parties shall use their best efforts to satisfy timely each of the conditions
described in Section 5 and Section 6 of this Agreement.
b. Financial
Reporting. Subsequent
to Closing Date, Sionix will take no action which would adversely affect
Purchaser’s ability to use Rule 144. Sionix shall make
and
keep public information available, as those terms are understood and defined
in
Rule 144 and shall file with the SEC in a timely manner all reports and other
documents required of Sionix
under
the 1933 Act and the Securities Exchange Act of 1934, as
amended.
c. Reservation
of Shares.
Sionix
shall
take
all action necessary to at all times have authorized, and reserved for the
purpose of issuance, no less than 130% of the sum of the number of shares of
Common Stock issuable (i) upon conversion of the Debenture issued at the Closing
and (ii) upon exercise of the Warrant issued at the Closing (without taking
into
account any limitations on the conversion of the Debenture or exercise of the
Warrant set forth in the Debenture and Warrant, respectively).
5. CONDITIONS
TO SIONIX’S OBLIGATION TO SELL.
The
obligation of Sionix hereunder to sell and deliver the Debenture and the
Warrant
to Purchaser at the Closing is subject to the satisfaction, at or before
the
Closing Date of each of the following conditions thereto, provided that these
conditions are for Sionix’s sole benefit and may be waived by Sionix at any time
in its sole discretion:
a. Purchaser
shall have executed this Agreement and delivered the same to
Sionix.
b. Purchaser
shall have delivered the Purchase Price in accordance with Section 1(c)
above.
c. Purchaser
shall have executed the Registration Rights Agreement between Sionix and
Purchaser, dated as of the date of the Closing, in substantially the form of
Exhibit
A
attached
to this Agreement (the “Registration Rights Agreement”), and delivered the same
to Sionix.
d. The
representations and warranties of Purchaser shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as
of a
specific date), and Purchaser shall have performed, satisfied and complied
in
all material respects with the covenants, agreements and conditions required
by
this Agreement to be performed, satisfied or complied with by Purchaser at
or
prior to the Closing Date.
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e. No
litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or
in
any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.
6. CONDITIONS
TO PURCHASER’S OBLIGATION TO PURCHASE.
The
obligation of Purchaser hereunder to purchase the Debenture at the Closing
is
subject to the satisfaction, at or before the Closing Date of each of the
following conditions, provided that these conditions are for Purchaser’s sole
benefit and may be waived by Purchaser at any time in its sole
discretion.
a. Sionix
shall have executed this Agreement and delivered the same to
Purchaser.
b. Sionix
shall have delivered to Purchaser duly executed Debenture and Warrant (in such
denominations as Purchaser shall reasonably request) in accordance with Section
1(c) above.
c. Sionix
shall have executed the Registration Rights Agreement and delivered the same
to
Purchaser.
d. The
representations and warranties of Sionix shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at such time (except for representations and warranties that speak as
of a
specific date) and Sionix shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by
this
Agreement to be performed, satisfied or complied with by Sionix at or prior
to
the Closing Date.
e. No
litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or
in
any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.
7. GOVERNING
LAW; MISCELLANEOUS.
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a. Governing
Law; Jurisdiction.
THIS
AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITH SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.
THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED
STATES FEDERAL COURTS LOCATED IN THE CITY OF NEW YORK, NEW YORK WITH RESPECT
TO
ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN
CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH
PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT ANY PARTY’S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. THE PARTIES AGREE THAT A FINAL NON-APPEALABLE
JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED
IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER.
THE PARTIES HEREBY WAIVE A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER IN
RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT.
b. Attorneys’
Fees.
At the
Closing, Sionix shall reimburse the Purchaser for its reasonable counsel’s fees,
incurred in connection with the preparation of this Agreement and the other
agreements related hereto, and the investigation of and the consummation of
the
transactions contemplated hereby, in a sum not to exceed $10,000, which fee
may
be disbursed directly at Closing from escrow.
c. Counterparts;
Signatures by Facsimile.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original but all of which shall constitute one and the same agreement
and shall become effective when counterparts have been signed by each party
and
delivered to the other party. This Agreement, once executed by a party, may
be
delivered to the other party hereto by facsimile transmission or electronic
mail
transmission of a copy of this Agreement bearing the signature of the party
so
delivering this Agreement. A
facsimile or electronic mail transmission of this signed Agreement shall be
legal and binding on all parties hereto.
d. Headings.
The
headings of this Agreement are for convenience of reference only and shall
not
form part of, or affect the interpretation of, this Agreement.
e. Severability.
In the
event that any provision of this Agreement is invalid or enforceable under
any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof
which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.
f. Entire
Agreement; Amendments.
This
Agreement and the instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither Sionix nor Purchaser
makes any representation, warranty, covenant or undertaking with respect to
such
matters. No provision of this Agreement may be waived or amended other than
by
an instrument in writing signed by the party to be charged with
enforcement.
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g. Notices.
Any
notices required or permitted to be given under the terms of this Agreement
shall be sent by certified or registered mail (return receipt requested) or
delivered personally or by courier (including a recognized overnight delivery
service) or by facsimile or by electronic mail either in the text of an email
message or attached in a commonly readable format, and shall be effective five
days after being placed in the mail, if mailed by regular United States mail,
or
upon receipt, if delivered personally, by courier (including a recognized
overnight delivery service) or by facsimile, or one day after electronically
mailed if the sender has received no generated notice that the email message
has
not been successfully delivered, in each case addressed to a party. The
addresses for such communications shall be:
If
to
Sionix:
0000
Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attention:
_______________
Facsimile:
(000)
000-0000
Email:
with
a
copy to:
____________________
____________________
____________________
Attention:
Facsimile:
Email:
If
to
Purchaser:
____________________
____________________
____________________
Attention:
Facsimile:
Email:
with
a
copy to:
Xxxxxxx
Savage LLP
000
Xxxxxxxxx Xxxxxx, 0xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxx X. Xxxxxxxxx, Esq.
Facsimile:
(000) 000-0000
Email:
xxxxxxxxxx@xxxxxxxxxxxxx.xxx
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Each
party shall provide notice to the other party of any change in
address.
h. Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns. Neither Sionix nor Purchaser shall assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the other. Notwithstanding the foregoing, subject to Section 2(e),
Purchaser may assign its rights hereunder to any person that purchases the
Debenture, the Warrant, any Conversion Shares or any Warrant Shares in a private
transaction from Purchaser or to any of its “affiliates,” as that term is
defined under the 1933 Act, without the consent of Sionix.
i. Third
Party Beneficiaries.
This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.
j. Further
Assurances.
Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
k. No
Strict Construction.
The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent, and no rules of strict construction
will
be applied against any party.
[Remainder
of page intentionally left blank.]
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IN
WITNESS WHEREOF,
Purchaser and Sionix have caused this Securities Purchase Agreement to be duly
executed as of the date first above written.
| PURCHASER: | ||
| |
|
[_________________] |
| By: | ||
|
Name:
|
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|
Title:
|
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| SIONIX: | ||
| |
|
SIONIX CORPORATION |
| By: | ||
|
Name:
|
||
|
Title:
|
||
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Exhibit
A
[Form
of Registration Rights Agreement]
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