SECURITIES PURCHASE AGREEMENT
EXHIBIT
10.39
SECURITIES PURCHASE AGREEMENT
(the "Agreement"), dated
as of December__, 2009, by and among Sionix Corporation, a Nevada corporation,
with headquarters located at 0000 Xxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000
(the "Company") and
each of the undersigned purchasers identified on the signature pages hereto and
the Schedule of Purchasers attached hereto (individually, a "Purchaser" and collectively,
the "Purchasers").
WHEREAS:
A. The
Company and each Purchaser is 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"), and Rule 506 of
Regulation D ("Regulation D") as
promulgated by the United States Securities and Exchange Commission (the "SEC") under the 1933
Act.
B. The
Company has authorized a new series of convertible debentures of the Company, in
the form attached hereto as Exhibit A (the "Debentures"), which Debentures
shall be convertible into the Company's common stock, par value $0.001 per share
(the "Common
Stock") at a conversion price of $0.15 per share (as converted, the
"Conversion Shares"), in
accordance with the terms of the Debentures.
C. The
Company has authorized a new series of warrants to purchase Common Stock, in the
form attached hereto as Exhibit B (the “Warrants”), which Warrants
shall be exercisable into Common Stock at an exercise price of $0.25 per share
(as exercised, the “Warrant
Shares”), in accordance with the terms of the Warrants.
D. Each
Purchaser wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, a maximum of, in the aggregate, $1,000,000
of unit securities (“Units”), at the price of
$25,000 per Unit, with each Unit consisting of (i) a Debenture in the principal
amount of $25,000 convertible into unregistered Conversion Shares, and (ii) a
Warrant to purchase 125,000 Warrant Shares (the Conversion Shares and Warrant
Shares are collectively referred to as the “Shares”). The Units,
Debentures and Shares collectively are referred to as the "Securities".
E. Each
Purchaser represents that such Purchaser has delivered a complete and executed
Subscription Application and Agreement (“Subscription Application”) to
the Company in connection with this offering.
NOW, THEREFORE, the Company
and each Purchaser hereby agree as follows:
1. PURCHASE AND SALE OF
UNITS.
(a) Purchase of
Units.
(i) Subject
to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7
below, the Company shall issue and sell to each Purchaser, and each Purchaser
severally, but not jointly, agrees to purchase from the Company on the Closing
Date (as defined below), the number of Units set forth opposite such Purchaser's
name in column (2) on the Schedule of Purchasers, which Unit(s) shall include
(x) a principal amount of Debentures as is set forth opposite such
Purchaser's name in column (3) on the Schedule of Purchasers and (y) the
Warrant exercisable into that number of Warrant Shares as is set forth opposite
such Purchaser's name in column (4) on the Schedule of Purchasers, (the "Closing").
(ii) Closing. The
date and time of the Closing (the "Closing Date") shall be 10:00
a.m., New York City time, on the date hereof (or such later date as is mutually
agreed to by the Company and each Purchaser) after notification of satisfaction
(or waiver) of the conditions to the Closing set forth in Sections 6 and 7
below.
(iii) Purchase
Price. The aggregate purchase price for the Securities to be
purchased by each such Purchaser at the Closing (the "Purchase Price") shall be the
amount set forth opposite each Purchaser's name in column (5) of the Schedule of
Purchasers. The maximum aggregate Purchase Price amount for all
Purchasers shall be $1,000,000. The minimum Purchase Price shall be
$25,000 per Purchaser, subject to the Company and Purchasers agreeing to a
lesser amount.
(b) Form of
Payment. On the Closing Date, (i) each Purchaser, shall
deliver its Purchase Price to the Escrow Agent (as defined below) pursuant to
Section 2 of the Escrow Agreement of even date herewith, by and among the
Company, the Purchasers and Xxxxxxxxxx & Xxxxx LLP ("Escrow Agent"), in the form
attached hereto as Exhibit C (the "Escrow Agreement"), for the
Units to be issued and sold to such Purchaser at the Closing, by (i) wire
transfer of immediately available funds in accordance with the Company's written
wire instructions or (ii) by check made payable to “Xxxxxxxxxx & Xxxxx LLP
Client Trust Account – F/B/O Sionix Corporation” or (iii) by cancellation of
indebtedness, on such terms as the Company may agree to in writing with the
Purchaser. On the Closing Date, the Company shall deliver to each Purchaser the
Debentures (allocated in the principal amounts as such Purchaser shall request)
which such Purchaser is then purchasing hereunder along with the Warrants which
such Purchaser is purchasing, in each case duly executed on behalf of the
Company and registered in the name of such Purchaser or its
designee.
(c) Subsequent Sales of
Units. At any time on or before January 2, 2009 (the “Termination Date”), the
Company may sell additional securities up to a maximum raised hereby (including
the securities sold at the Closing) of $1,000,000 to such persons (the
“Additional Purchasers”) as may be approved by the Board of Directors of the
Company. All such sales made at any additional closings (each an
“Additional Closing”),
(i) shall be made on the terms and conditions set forth in this Agreement, (ii)
the representations and warranties of the Company set forth in Section 3 hereof
(and the Schedules thereto) shall speak as of the Closing and the Company shall
have no obligation to update any such disclosure, and (iii) the representations
and warranties of the Additional Purchasers in Section 2 hereof shall speak as
of such Additional Closing. This Agreement, including without
limitation, the Schedule of Purchasers, may be amended by the Company without
the consent of the Purchasers to include any Additional
Purchasers. Any Additional Purchasers shall be deemed to be
“Purchasers” for all purposes under this Agreement.
2. PURCHASER'S REPRESENTATIONS
AND WARRANTIES. Each Purchaser, severally and not jointly,
represents and warrants with respect to only itself that:
(a) No Sale or
Distribution. Such Purchaser is acquiring the Warrants, upon
exercising the Warrants will acquire the Warrant Shares, the Debentures, and
upon conversion of the Debentures will acquire the Conversion Shares issuable
upon conversion of the Debentures, as principal for its own account and not with
a view towards, or for resale in connection with, the public sale or
distribution thereof, except pursuant to sales registered or exempted under the
1933 Act; provided, however, that by making the representations herein, such
Purchaser does not agree to hold any of the Securities for any minimum or other
specific term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption under
the 1933 Act and pursuant to the applicable terms of the Transaction Documents
(as defined in Section 2(h)). Such Purchaser is acquiring the
Securities hereunder in the ordinary course of its business. Such
Purchaser
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(b) does not
presently have any agreement or understanding, directly or indirectly, with any
Person to distribute any of the Securities.
(c) Accredited Investor
Status. Such Purchaser is an "accredited investor" as that
term is defined in Rule 501(a) of Regulation D.
(d) Reliance on
Exemptions. Such Purchaser understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Purchaser's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Securities.
(e) Information. Such
Purchaser and its advisors, if any, have been furnished with all materials
relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Securities that have been requested by
such Purchaser. Such Purchaser and its advisors, if any, have been
afforded the opportunity to ask questions of the Company. Neither
such inquiries nor any other due diligence investigations conducted by such
Purchaser or its advisors, if any, or its representatives shall modify, amend or
affect such Purchaser's right to rely on the Company's representations and
warranties contained herein. Such Purchaser understands that its
investment in the Securities involves a high degree of risk and is able to
afford a complete loss of such investment. Such Purchaser has sought
such accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the
Securities.
(f) No Governmental
Review. Such Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
(g) Transfer or
Resale. Such Purchaser understands that: (i) the Securities
have not been and are not being registered under the 1933 Act or any state
securities laws, and may not be offered for sale, sold, assigned or transferred
unless (A) subsequently registered thereunder, (B) such Purchaser shall have
delivered to the Company an opinion of counsel, in a form reasonably acceptable
to the Company, to the effect that such Securities to be sold, assigned or
transferred may be sold, assigned or transferred pursuant to an exemption from
such registration, or (C) such Purchaser provides the Company with reasonable
assurance that such Securities can be sold, assigned or transferred pursuant to
Rule 144 or Rule 144A promulgated under the 1933 Act, as amended (or a successor
rule thereto) (collectively, "Rule 144"), notwithstanding
the forgoing, the requirement to deliver a legal opinion as set out in clause
(B) above shall not apply to transfers to an affiliate of the Purchaser; (ii)
any sale of the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of the Securities under circumstances in which the seller
(or the Person (as defined in Section 3(s)) 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 the Company nor any other
Person is under any obligation to register the Securities under the 1933 Act or
any state securities laws or to comply with the terms and conditions of any
exemption thereunder. The Securities may be pledged in connection
with a bona fide margin account or other loan or financing arrangement secured
by the Securities and such pledge of Securities shall not be deemed to be a
transfer, sale or assignment of the Securities hereunder, and no Purchaser
effecting a pledge of Securities shall be required to provide the Company with
any notice thereof or otherwise make any delivery to the Company pursuant to
this Agreement or
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(h) any other
Transaction Document (as defined in Section 3(b)), including, without
limitation, this Section 2(f).
(i) Legends. Such
Purchaser understands that the certificates or other instruments representing
the Securities, except as set forth below, shall bear any legend as required by
the "blue sky" laws of any state and a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against transfer of any
such stock certificates):
[NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH
THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
The
legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if, unless otherwise required by state securities laws, (i) such
Securities are registered for resale under the 1933 Act, (ii) in connection with
a sale, assignment or other transfer, such holder provides the Company with an
opinion of a law firm reasonably acceptable to the Company (with Xxxxxxxxxx
& Xxxxx LLP being deemed acceptable), in a form reasonably acceptable to the
Company, to the effect that such sale, assignment or transfer of the Securities
may be made without registration under the applicable requirements of the 1933
Act, or (iii) such holder provides the Company with reasonable assurance that
the Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule
144A.
(j) Validity;
Enforcement. Such Purchaser has the requisite power and
authority to enter into and perform its obligations under this Agreement, the
Subscription Application, the Debenture, the Escrow Agreement, the Warrant, and
each of the other agreements entered into by the parties hereto in connection
with the transactions contemplated by this Agreement (collectively, the "Transaction Documents") This
Agreement and the Transaction Documents to which such Purchaser is a party have
been duly and validly authorized, executed and delivered on behalf of such
Purchaser and shall constitute the legal, valid and binding obligations of such
Purchaser enforceable against such Purchaser in accordance with their respective
terms, except as such enforceability may be limited by general principles of
equity or to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the
enforcement of applicable creditors' rights and remedies.
(k) No
Conflicts. The execution, delivery and performance by such
Purchaser of this Agreement and the Transaction Documents and the consummation
by such Purchaser of the transactions contemplated hereby and thereby will not
(i) result in a violation of the organizational documents of such
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(l) Purchaser
or (ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which such Purchaser is a party, or (iii)
result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws)
applicable to such Purchaser, except in the case of clauses (ii) and (iii)
above, for such conflicts, defaults, rights or violations which would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Purchaser to perform its obligations
hereunder.
(m) Residency. Such
Purchaser is a resident of that jurisdiction specified in such Purchaser’s
Subscription Application.
(n) Purchaser's Broker
Fees. Each Purchaser shall be responsible for the payment of
any placement agent's fees, financial advisory fees, or brokers' commissions for
placement agents, financial advisors and/or brokers engaged by such Purchaser
relating to or arising out of the transactions contemplated hereby.
(o) Certain Trading
Activities. Other than the transactions contemplated herein,
since the time that such Purchaser was first contacted by the Company or any
other Person regarding this investment in the Company neither the Purchaser nor
any Affiliate of such Purchaser which (x) had knowledge of the transactions
contemplated hereby, (y) has or shares discretion relating to such Purchaser's
investments or trading or information concerning such Purchaser's investments
and (z) is subject to such Purchaser's review or input concerning such
Affiliate's investments or trading (collectively, "Trading Affiliates") has
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser or Trading Affiliate, effected or agreed
to effect any transactions in the securities of the Company. Such
Purchaser hereby covenants and agrees not to, and shall cause its Trading
Affiliates not to, engage, directly or indirectly, in any transactions in the
securities of the Company or involving the Company's securities during the
period from the date hereof until (i) the later of (A) sixty (60) days after the
Closing Date and (B) such time as the transactions contemplated by this
Agreement are first publicly announced as described in Section 4(i) hereof or
(ii) such time as this Agreement is terminated in full pursuant to Section 8
hereof. Other than to other Persons party to this Agreement and those
expressly acknowledged by the Company, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction). "Short Sales" include, without
limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, short sales, swaps and
similar arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker-dealers or foreign regulated
brokers. Such Purchaser acknowledges the SEC's position set forth in
Item 65, Section 5 under Section A, of the Manual of Publicly Available
Telephone Interpretations, dated July 1997, compiled by the Office of Chief
Counsel, Division of Corporation Finance, and such Purchaser will adhere to such
position.
(p) Acknowledgement of Pending
Restatement of Financial Statements. Each Purchaser has reviewed Item
4.02 (Non-Reliance on Previously Issued Financial Statements or a Related Audit
Report or Completed Interim Review) of the Form 8-K/A filed with the Commission
by the Company on August 28, 2009, which is available for review at xxx.xxx.xxx, and
understands the contents thereof. Such Purchaser agrees that the restatements
contemplated by such Form 8-K/A, and the truth or accuracy of the initially
filed financial statements to be restated, shall not be the subject or basis of
any future claim or legal action by such Purchaser against the
Company.
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(q) OTC Three Strikes
Rule. Each Purchaser understands and acknowledges that the
Company has twice in the last 24 months filed its periodic reports with the SEC
later than the applicable due date (including any permitted extension
period). Under applicable rules of the OTC Bulletin Board, if the
Company files an SEC report late one more time, and the late filing constitutes
the third late filing in a 24 month period, then the Common Stock will cease to
be quoted by the OTC Bulletin Board and the Common Stock would instead be traded
on the Pink Sheets for a period of at least one year. Each Purchaser
hereby releases the Company from any and all liability for damages that the
Purchaser may incur as a result of such a “third strike” and removal from the
OTC Bulletin Board, and agrees that any removal from the OTC Bulletin Board as a
result of a “third strike” shall not be the basis of any future claim or legal
action by the Purchaser against the Company.
3. REPRESENTATIONS AND
WARRANTIES OF THE COMPANY. The Company represents and warrants
to each of the Purchasers that, as of the date hereof and as of the Closing
Date:
(a) Organization and
Qualification. The Company is an entity duly organized and
validly existing and in good standing under the laws of the State of Nevada, and
has the requisite power and authorization to own properties and to carry on
business as now being conducted. The Company is duly qualified as a
foreign entity to do business and, is in good standing in every jurisdiction in
which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not reasonably be expected to have a
Material Adverse Effect. As used in this Agreement, "Material Adverse Effect" means
any material adverse effect on the business, properties, assets, operations,
results of operations, condition (financial or otherwise) or prospects of the
Company, individually or taken as a whole, or on the transactions contemplated
hereby or in the other Transaction Documents or by the agreements and
instruments to be entered into in connection herewith or therewith, or on the
authority or ability of the Company to perform its obligations under the
Transaction Documents.
(b) Authorization; Enforcement;
Validity. The Company has the requisite corporate power and
authority to enter into and perform its obligations under the Transaction
Documents and to issue the Securities in accordance with the terms hereof and
thereof. The execution and delivery of the Transaction Documents by
the Company and the consummation by the Company of the transactions contemplated
hereby and thereby, including, without limitation, the issuance of the Warrants
and the Debentures, the reservation for issuance and the issuance of the
Conversion Shares and Warrants Shares issuable upon conversion
of the Debentures or exercise of the Warrants have been duly authorized by the
Company's Board of Directors and, subject to obtaining the Stockholder Approval
(as defined below) and except as set forth in Section 3(c), no further filing,
consent, or authorization is required by the Company, its Board of Directors or
its stockholders. This Agreement and the other Transaction Documents
of even date herewith have been duly executed and delivered by the Company, and
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of applicable creditors'
rights and remedies.
(c) No
Conflicts. Except as set forth on Schedule 3(c), the
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the issuance of the Warrants and the
issuance of Debentures, reservation for issuance and issuance of the Conversion
Shares and the Warrant Shares) will not (i) result in a violation of any
articles of incorporation, articles of formation, any certificate of
designations or other constituent documents of the Company or any of its
Subsidiaries, any capital stock of the Company or any of its Subsidiaries or
bylaws of the Company or any of its Subsidiaries or (ii) conflict with, or
constitute a default (or an event which with notice or lapse
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(d) of time
or both would become a default) in any respect under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including foreign, federal and state
securities laws and regulations and the rules and regulations of the OTC
Bulletin Board (the "Principal
Market") applicable to the Company or any of its Subsidiaries or by which
any property or asset of the Company or any of its Subsidiaries is bound or
affected.
(e) Consents. Except
as set forth on Schedule 3(d),
neither the Company nor any of its Subsidiaries is required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court, governmental agency or any regulatory or self-regulatory agency or any
other Person in order for it to execute, deliver or perform any of its
obligations under or contemplated by the Transaction Documents, in each case in
accordance with the terms hereof or thereof. The Company is not in
violation of the listing requirements of the Principal Market and has no
knowledge of any facts that would reasonably lead to delisting or suspension of
the Common Stock in the foreseeable future.
(f) Acknowledgment Regarding
Purchaser's Purchase of Securities. The Company acknowledges
and agrees that each Purchaser is acting solely in the capacity of an arm's
length purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby and that no Purchaser is (i) an officer or
director of the Company, (ii) an "affiliate" of the Company or any of its
Subsidiaries (as defined in Rule 144 of the 0000 Xxx) or (iii) to the knowledge
of the Company, a "beneficial owner" of more than 10% of the shares of Common
Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of
1934, as amended (the "1934
Act")). The Company further acknowledges that no Purchaser is
acting as a financial advisor or fiduciary of the Company or any of its
Subsidiaries (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated hereby and thereby, and any advice
given by a Purchaser or any of its representatives or agents in connection with
the Transaction Documents and the transactions contemplated hereby and thereby
is merely incidental to such Purchaser's purchase of the
Securities. The Company further represents to each Purchaser that the
Company's decision to enter into the Transaction Documents has been based solely
on the independent evaluation by the Company and its
representatives.
(g) No General Solicitation; No
Placement Agent's Fees. Neither the Company, nor any of its
Subsidiaries or affiliates, nor any Person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the
Securities. The Company shall be responsible for the payment of any
placement agent's fees, financial advisory fees, or brokers' commissions (other
than for persons engaged by any Purchaser or its investment advisor) relating to
or arising out of the transactions contemplated hereby. Neither the
Company nor any of its Subsidiaries has engaged any placement agent or other
agent in connection with the sale of the Securities.
(h) No Integrated
Offering. None of the Company, its Subsidiaries, any of their
affiliates, and any Person acting on their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any
security, under circumstances that would require registration of any of the
Securities under the 1933 Act or cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of the 1933 Act or
any applicable stockholder approval provisions, including, without limitation,
under the rules and regulations of any exchange or automated quotation system on
which any of the securities of the Company are listed or
designated. None of the Company, its Subsidiaries, their affiliates
and any Person acting on their behalf will take any action or steps referred to
in the preceding sentence that would require registration of any of the
Securities under the 1933 Act or cause the offering of the Securities to be
integrated with other offerings.
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(i) Dilutive
Effect. The Company acknowledges that its obligation to issue
Conversion Shares upon conversion of the Debentures in accordance with this
Agreement and the Debentures and its obligation to
issue the Warrant Shares upon exercise of the Warrants in accordance with this
Agreement and the Warrants, the Warrants and the Debentures is, in each case,
absolute and unconditional, following the Authorized Share Increase Effective
Date (as defined in Section 4(p)) and the filing of the amended and
restated Articles of Incorporation (which the Company shall file with the
Secretary of State of the State of Nevada immediately following the Authorized
Share Increase Effective Date), regardless of the dilutive effect that such
issuance may have on the ownership interests of other stockholders of the
Company.
4. COVENANTS.
(a) Best
Efforts. Each party shall use its best efforts timely to
satisfy each of the conditions to be satisfied by it as provided in Sections 6
and 7 of this Agreement.
(b) Form D and Blue
Sky. The Company agrees to file a Form D with respect to the
Securities as required under Regulation D. The Company shall, on or
before the Closing Date, take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for or to qualify the
Securities for sale to the Purchasers at the Closing pursuant to this Agreement
under applicable securities or "Blue Sky" laws of the states of the United
States (or to obtain an exemption from such qualification), and shall provide
evidence of any such action so taken to the Purchasers on or prior to the
Closing Date. The Company shall make all filings and reports relating
to the offer and sale of the Securities required under applicable securities or
"Blue Sky" laws of the states of the United States following the Closing
Date.
(c) Use of
Proceeds. The Company will use the proceeds from the sale of
the Securities for general working capital and expenses including but not
limited to accounting fees, attorney fees, consulting fees and such other
general corporate purposes as the Company deems appropriate.
(d) Stockholder
Approval.
(i) The
Company shall provide each stockholder entitled to vote at a special or annual
meeting of stockholders of the Company ("Stockholder Meeting"), which
shall be promptly called and held as soon as commercially and legally
practicable after the Closing Date, a proxy statement, at the expense of the
Company, soliciting each such stockholder's affirmative vote at the Stockholder
Meeting for approval of resolutions (the "Resolutions") providing for
the increase in the authorized Common Stock to a number sufficient to enable the
conversion in full of the Debentures and exercise in full of the Warrants (such
approval being referred to herein as the "Stockholder Approval" and the
date such approval is duly obtained being referred to as the “Stockholder Approval Date”),
and the Company shall use its reasonable best efforts to solicit its
stockholders' approval of the Resolutions and to cause the Board of Directors of
the Company to recommend to the stockholders that they approve the
Resolutions. Upon receiving Stockholder Approval and the Company
filing with the Nevada Secretary of State an appropriate Certificate of
Amendment to the Company’s Certificate of Incorporation effectuating an increase
of the Company’s authorized Common Stock, the Debentures shall be eligible for
conversion into the Conversion Shares and the Warrants shall be exercisable into
the Warrant Shares. If, despite the Company's reasonable best efforts
the Stockholder Approval is not obtained at the Stockholder Meeting, the
Debentures will not be convertible into the Conversion Shares and the Warrants
will not be exercisable into the Warrant Shares until such time as Stockholder
Approval is later obtained.
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(ii) REGISTER; TRANSFER AGENT
INSTRUCTIONS.
(e) Register. The
Company shall maintain a register for the Debentures in which the Company shall
record the name and address of the Person in whose name the Debentures have been
issued (including the name and address of each transferee), the principal amount
of Debentures held by such Person, and the number of Conversion Shares issuable
upon conversion of the Debentures by such Person.
(f) Transfer Agent
Instructions. The Company shall issue instructions to its
transfer agent, and any subsequent transfer agent, to issue certificates or
credit shares to the applicable balance accounts at The Depository Trust Company
("DTC"), registered in
the name of each Purchaser or its respective nominee(s), for the Conversion
Shares upon conversion of the Debentures upon receiving Stockholder
Approval.
5. CONDITIONS TO THE COMPANY'S
OBLIGATION TO SELL.
The
obligation of the Company hereunder to issue and sell the Warrants and the
Debentures to each Purchaser 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 the Company's sole benefit and may be waived by the
Company at any time in its sole discretion by providing each Purchaser with
prior written notice thereof:
(i) Such
Purchaser shall have executed each of the Transaction Documents to which it is a
party and delivered the same to the Company.
(ii) Such
Purchaser and each other Purchaser shall have delivered to the Escrow Agent the
Purchase Price being purchased by such Purchaser at the Closing by wire transfer
of immediately available funds pursuant to the wire instructions provided by the
Company or by check made payable to “Xxxxxxxxxx & Xxxxx LLP Client Trust
Account – F/B/O Sionix Corporation.”
(iii) The
representations and warranties of such Purchaser shall be true and correct in
all material respects (except for those representations and warranties that are
qualified by materiality or a material adverse effect, which shall be true and
correct in all 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, which shall be true and correct as of such specified
date), and such 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 such Purchaser at or
prior to the Closing Date.
6. CONDITIONS TO EACH
PURCHASER'S OBLIGATION TO PURCHASE.
The
obligation of each Purchaser hereunder to purchase the Debentures and the
Warrants 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 each Purchaser's sole benefit and may be waived by such Purchaser at any
time in its sole discretion by providing the Company with prior written notice
thereof:
(i) The
Company shall have duly executed and delivered (physically or by electronic
copy) to such Purchaser (i) each of the Transaction Documents and (ii) the
Warrants, and (iii) the Debentures (allocated in such principal amounts as
such Purchaser shall request), being purchased by such Purchaser at the Closing
pursuant to this Agreement.
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(ii) The
representations and warranties of the Company shall be true and correct in all
material respects (except for those representations and warranties that are
qualified by materiality or material adverse effect, which shall be true and
correct in all 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, which shall be true and correct as of such specified
date) and the Company shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Closing Date.
7. TERMINATION. In
the event that the Closing shall not have occurred with respect to a Purchaser
on or before fifteen (15) Business Days from the date hereof due to the
Company's or such Purchaser's failure to satisfy the conditions set forth in
Sections 6 and 7 above (and the nonbreaching party's failure to waive such
unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party; provided, however, that if this
Agreement is terminated pursuant to this Section 8, the Company shall remain
obligated to reimburse the non-breaching Purchasers for the expenses described
in Section 4(g) above.
8. MISCELLANEOUS.
(a) Governing Law; Jurisdiction;
Jury Trial. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of California, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of
California or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of California. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of Los Angeles, California for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by
law. EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(b) Counterparts. This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature or delivery of “PDF” copies of signatures
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original
signature.
(c) Headings. The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
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(d) Severability. If
any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
(e) Entire Agreement;
Amendments. This Agreement and the other Transaction Documents
supersede all other prior oral or written agreements between the Purchasers, the
Company, their affiliates and Persons acting on their behalf with respect to the
matters discussed herein, and this Agreement, the other Transaction Documents
and the instruments referenced herein and therein 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 the
Company nor any Purchaser makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the holders of at least 60% of the outstanding principal amount of
the Debentures, and any amendment to this Agreement made in conformity with the
provisions of this Section 9(e) shall be binding on all Purchasers and holders
of Securities as applicable. No provision hereof may be waived other
than by an instrument in writing signed by the party against whom enforcement is
sought. No such amendment shall be effective to the extent that it
applies to less than all of the holders of the applicable Securities then
outstanding. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of the
Transaction Documents unless the same consideration also is offered to all of
the parties to the Transaction Documents. The Company has not,
directly or indirectly, made any agreements with any Purchasers relating to the
terms or conditions of the transactions contemplated by the Transaction
Documents except as set forth in the Transaction Documents. Without
limiting the foregoing, the Company confirms that, except as set forth in this
Agreement, no Purchaser has made any commitment or promise or has any other
obligation to provide any financing to the Company or otherwise.
(f) Notices. Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered: (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one Business Day after deposit with an overnight courier
service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications
shall be:
If
to the Company:
Sionix
Corporation
0000 Xxxx
Xxxxx Xxxxx
Xxxxxxx,
XX 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxx
Xxxxxxxx, CEO
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Copy
to:
Xxxxxxxxxx
& Xxxxx LLP
00000
Xxxxxxxx Xxxx., 0xx Xxxxx
Xxx
Xxxxxxx, XX 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxx
Xxxxxxxxx
If
to the Transfer Agent:
American
Registrar & Transfer Co.
000 Xxxx
000 Xxxxx
Xxxx Xxxx
Xxxx, XX 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
If to a Purchaser:
To the Purchaser’s address and
facsimile number set forth
on the Subscription Application and
Agreement.
or to
such other address and/or facsimile number and/or to the attention of such other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
(g) Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, including
any purchasers of the Debentures. A Purchaser may assign some or all of its
rights hereunder without the consent of the Company, in which event such
assignee shall be deemed to be a Purchaser hereunder with respect to such
assigned rights
(h) No 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.
(i) Survival. Unless
this Agreement is terminated under Section 8, the representations and warranties
of the Company and the Purchasers contained in Sections 2 and 3, and
the
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(j) agreements
and covenants set forth in Sections 4, 5 and 9 shall survive the
Closing. Each Purchaser shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.
(k) 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
any 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.
(l) 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.
(m) Remedies. Each
Purchaser and each holder of the Securities shall have all rights and remedies
set forth in the Transaction Documents and all rights and remedies which such
holders have been granted at any time under any other agreement or contract and
all of the rights which such holders have under any law. Any Person
having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law. Furthermore, the Company
recognizes that in the event that it fails to perform, observe, or discharge any
or all of its obligations under the Transaction Documents, any remedy at law may
prove to be inadequate relief to the Purchasers. The Company
therefore agrees that the Purchasers shall be entitled to seek temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages and without posting a bond or other security.
(n) Payment Set
Aside. To the extent that the Company makes a payment or
payments to the Purchasers hereunder or pursuant to any of the other Transaction
Documents or the Purchasers enforce or exercise their rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any
bankruptcy law, foreign, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.
(o) Independent Nature of
Purchasers' Obligations and Rights. The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance of the obligations of any other Purchaser under any
Transaction Document. Nothing contained herein or in any other
Transaction Document, and no action taken by any Purchaser pursuant hereto or
thereto, shall be deemed to constitute the Purchasers as, and the Company
acknowledges that the Purchasers do not so constitute, a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group,
and the Company will not assert any such claim with respect to such obligations
or the transactions contemplated by the Transaction Documents and the Company
acknowledges that the Purchasers are not acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction
Documents. The Company acknowledges and each Purchaser confirms that
it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and
advisors. Each Purchaser shall be entitled to independently protect
and enforce its rights, including, without limitation, the rights arising out of
this
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(p) Agreement
or out of any other Transaction Documents, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such
purpose.
[Signature
Page Follows]
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IN WITNESS WHEREOF, each
Purchaser and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
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COMPANY:
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SIONIX
CORPORATION
By:________________________
Name:
Xxxxxx Xxxxxxxx
Title: CEO
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IN WITNESS WHEREOF, each
Purchaser and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
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PURCHASERS:
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By:______________________________________
Name:____________________________________
Title:_____________________________________
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Address:
________________________________________
________________________________________
________________________________________
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SCHEDULE
OF PURCHASERS
|
(1)
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(2)
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(3)
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(4)
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(6)
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Purchaser
|
Number
of Units
|
Aggregate
Principal
Amount
of
Debentures
|
Number
of Warrant Shares
|
Total
Purchase Price
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EXHIBITS
Exhibit
A Form
of Debentures
Exhibit
B Form
of Warrants
Exhibit
C Form
of Escrow Agreement
