WAIVER, CONSENT AND SECURITIES MODIFICATION AGREEMENT
This
Waiver, Consent and Securities Modification Agreement (this “Agreement”) is made
and entered into as of October 22, 2009 (the “Effective Date”), by
and among the undersigned investors who hold Debentures and Warrants (as defined
in the Recitals below) that were issued in the Prior Financing (as defined in
the Recitals below) (each, an “Investor”,
collectively, the “Investors”), and
Sionix Corporation, a Nevada corporation (the “Company”). Capitalized
terms used but not defined herein have the meanings ascribed to them in the
Debentures.
RECITALS
A. WHEREAS,
on July 29, 2008, the Company entered into Securities Purchase Agreements (the
“Purchase
Agreements”) with the Investors for the sale and issuance of 12%
Convertible Debentures (the “Debentures”) in an
aggregate principal amount of $1,000,000 along with five-year warrants (the
“Warrants”) to
purchase an aggregate 1,000,000 shares of the Company’s common stock (the “Prior
Financing”);
B. WHEREAS,
the Company is contemplating a new offering involving the issuance of
convertible debt securities, at one or more closings, in an aggregate principal
amount up to $1,000,000 together with common stock purchase warrants
(the “New
Financing”);
C. WHEREAS,
as long as any portion of the Debentures remains outstanding, the Debentures
prohibit the Company from incurring any indebtedness for borrowed money unless
the holder(s) of at least 60% of the principal amount of the Debentures then
outstanding provide prior written consent;
D. WHEREAS,
Section 9(j) of the Debentures provides that provisions of the Debentures may be
amended or waived with the written consent of the holder(s) of at least 60% of
the outstanding principal amount of the Debentures; and
E. WHEREAS,
Section 5(l) of the Warrants provides that provisions of the Warrants may be
amended or waived with the written consent of the holder(s) of at least 60% of
the warrant shares issuable upon exercise of all outstanding
Warrants.
NOW,
THEREFORE, in consideration of the mutual promises made herein, the parties
agree as follows:
AGREEMENT
1. Amendments to
Debentures:
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a.
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Maturity
Date. The definition of “Maturity Date” in the preamble
of Debentures is hereby amended to mean April 29,
2010.
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b.
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Conversion
Price. Section 4(b) of the Debentures is hereby amended
to read in its entirety as follows: “The conversion price in
effect on any Conversion Date shall be equal to $0.15, subject to
adjustment herein (the “Conversion
Price”).”
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c.
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Conversion In Event of
Default. Section 8(b)(ii) of the Debentures is hereby
amended to read in its entirety as follows: “Notwithstanding
the foregoing, if any Event of Default occurs the Holder shall have the
right to convert all or a portion of such principal of and accrued
interest on the Debenture into shares of Common Stock pursuant to the
terms set forth in Section 4(a) above (and to receive cash on the
principal amount Holder elects not to
convert).”
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d.
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New Principal
Amount. As of the Effective Date, the principal amount
of each Debenture shall be increased to equal the New Principal Amount set
forth in Column I opposite each Investor’s name on Schedule A
attached hereto. The “New Principal Amount” as to each
Debenture shall mean the sum of the original principal amount of such
Debenture plus all interest accrued thereon through the Effective
Date.
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2. Waiver of Events of
Default. The Investors hereby waive any and all Events of
Default that occurred or may have occurred prior to the Effective
Date.
3. Consents. Pursuant
to Section 7 of the Debentures, the Investors hereby consent to:
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a.
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the
Company’s indebtedness resulting from the New Financing, which would
otherwise be prohibited pursuant to Section 7(a) of the
Debentures;
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b.
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the
Company repaying, prior to repayment of all outstanding principal and
interest of the Debentures, up to $250,000 of the Steel Pier Note out of
the proceeds of the New Financing, which would otherwise be prohibited
pursuant to Section 7(e) of the Debentures; provided, however, that
such repayment of the Steel Pier Note may occur only if the New Financing
is in an amount of at least
$500,000.
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4. Issuance of Corrected
Warrants, Additional Cashless Warrants and New Warrants to
Investors.
(a) Upon
execution of this Agreement, the Investors shall return to the Company for
cancellation the original Warrants currently held by the Investors, which were
issued bearing an incorrect number of Warrant shares, and in lieu of such
incorrect Warrants the Company shall issue to each Investor a corrected Warrant,
in the same form as the original Warrants and bearing an original issue date of
July 29, 2008, for the number of shares of common stock, after giving effect to
the anti-dilution adjustment required by Section 3(b) of the Warrants, set forth
opposite each Investor’s name in Column II on Schedule A attached
hereto (the “Corrected
Warrants”). The Corrected Warrants shall be exercisable until
July 29, 2013 and shall have an exercise price of $0.15 per share, which is the
adjusted exercise price required as a result of Section 3(b) of the
Warrants.
(b) In
addition to the Corrected Warrants, the Company shall issue to each
Investor:
(i) a
warrant, bearing an issue date of October 22, 2009, to purchase the number of
shares of common stock set forth opposite such Investor’s name in Column III on
Schedule A
attached hereto (the “Additional Cashless
Warrants”). The Additional Cashless Warrants shall be
exercisable until July 29, 2013, shall have an exercise price of $0.15 per
share, subject to adjustment for stock splits and dividends, and shall be
exercisable for cash or on a cashless basis in the manner provided in the
original Warrants; and
(ii) a
warrant to purchase the number of shares of common stock set forth opposite such
Investor’s name in Column IV on Schedule A attached
hereto (the “New
Warrants”). The New Warrants shall be exercisable for cash
only, shall have a five year term from the Effective Date and an exercise price
of $0.15 per share, subject to adjustment for stock splits and
dividends.
(c) The
Investors understand and agree that the Corrected Warrants, the Additional
Cashless Warrants and the New Warrants shall not be exercisable until the
Company has increased its authorized common stock to a number sufficient to
allow their full exercise.
5. Application of Agreement to
All Debentures and Warrants. The amendments, waivers and
consents provided herein shall apply to all of the Debentures and Warrants so
long as the holder(s) of at least 60% of the outstanding principal amount of the
Debentures and shares underlying the Warrants outstanding on the Effective Date
shall execute this Agreement.
6. Full Force and
Effect. The parties hereto acknowledge and agree that, except
as expressly provided herein, the provisions of the Debentures and the Warrants
shall remain unmodified and in full force and effect
7. Counterparts. This
Agreement may be executed in two or more counterparts and by facsimile signature
or email delivery of a “PDF”, and each of such counterparts shall be deemed an
original and all of such counterparts together shall constitute one and the same
agreement.
8. Successors and
Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors, heirs and assigns of the parties
hereto.
9. Governing Law;
Venue. This Agreement shall be governed by the laws of the
State of New York. Any legal action under this Agreement shall be
brought in the state or federal courts located in the City of New York, New
York.
[SIGNATURES
FOLLOW]
IN
WITNESS WHEREOF, the undersigned have duly executed this Waiver, Consent and
Securities Modification Agreement as of the Effective Date.
INVESTORS:
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$
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750,000
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75
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%
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|||
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Xxxxxx
Xxxxxxx
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Principal
of Debenture
as
of the Effective Date
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Percentage
as of
the
Effective Date
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||||
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$
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250,000
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25
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%
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|||
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Xxxxxxx
Xxxxxxxxx
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Principal
of Debenture
as
of the Effective Date
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Percentage
as of
the
Effective Date
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||||
COMPANY:
Sionix
Corporation
______________________________
By:
Xxxxxx Xxxxxxxx
Its:
Chief Executive Officer
SCHEDULE
A
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Column I
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Column II
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Column III
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Column IV
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|||||||||||||
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Investor Name
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New
Principal
Amount
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Corrected Original
Warrant with Anti-
Dilution Adjustment
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Additional
Cashless
Warrant
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New Warrants
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||||||||||||
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Xxxxxxx
Xxxxxx
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$ | 865,937.50 | 1,500,000 | 1,000,000 | 2,500,000 | |||||||||||
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Xxxxxxx
Xxxxxxxxx
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$ | 288,645.83 | 500,000 | 333,333 | 833,333 | |||||||||||
