EXHIBIT 10.10
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the "Agreement") is made and entered
into as of the 7th day of November, 2007, and among Xxxxxx X. Xxxxxxxx, Xxxx X.
Xxxxxxxx and Xxxxxx X. Xxxxxx (the "Shareholders"), and Sionix Corporation, a
Nevada corporation ("Sionix").
Recitals:
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A. The Shareholders are all the Shareholders of RJ Metals, Inc., a
Nevada corporation engaged in the business of fabrication of precision metal
parts (the "Business");
B. Sionix desires to acquire all of the outstanding shares of capital
stock of RJ (the "RJ Shares") from the Shareholders, and the Shareholders desire
to exchange all of the Shares with Sionix, solely in exchange for newly-issued
Common Stock of Sionix, on the terms and conditions set forth herein; and
C. On February 28, 2002, Sionix entered into a letter of intent to
acquire RJ, and the parties desire to implement such letter of intent through
this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants hereinafter set forth, the parties agree as follows:
Section 1. EXCHANGE OF SHARES.
1.1 Exchange. On the terms and subject to the conditions set forth in
this Agreement, at the Closing the Shareholders shall sell, convey, transfer and
assign to Sionix, and Sionix shall purchase and accept from the Shareholders,
all right, title and interest in and to the RJ Shares, in exchange for shares of
Common Stock of Sionix, as provided herein.
1.2 Assets. As of the Closing, the assets of RJ shall consist of the
equipment, machinery, tooling, tools, molds, supplies, parts and other assets,
tangible and intangible, of RJ, wherever located, used or useful in the business
of RJ including, without limitation, the items identified on Exhibit A hereto
(collectively, the "Assets").
1.3 Closing. The consummation of the transactions described herein
shall take place concurrently with the execution of this Agreement, at the
offices of Sionix, 0000 Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx or at such
other date, time and place or manner as may be agreed upon by the parties.
Section 2. PURCHASE PRICE.
2.1 Purchase Price. In exchange for the RJ Shares, Sionix shall issue
3,400,000 shares of Common Stock of Sionix (the "Sionix Shares") to the
Shareholders, in proportion to the shares of Common Stock of RJ owned by them,
as follows:
Shareholder RJ Shares Sionix Shares
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Xxxxxx X. Xxxxxxxx 1,224,000 1,224,000
Xxxx X. Xxxxxxxx 1,326,000 1,326,000
Xxxxxx X. Xxxxxx 850,000 850,000
The Shareholders acknowledge that the Sionix Shares they receive will be
"restricted stock" as defined under the Securities Act of 1933 (the "Securities
Act"), and may be resold only if registered under the Securities Act or there is
an exemption from registration available.
2.2 PIGGYBACK REGISTRATION RIGHTS.
(i) Each time after January 1, 2008 that Sionix
proposes for any reason to register any of its Common Stock under the Securities
Act in connection with the proposed offer and sale of its Common Stock, either
for its own account or on behalf of any other security holder ("Proposed
Registration"), other than pursuant to a registration statement on Forms X-0,
X-0 or any similar forms, Sionix shall promptly give written notice of such
Proposed Registration to the Shareholders, and shall offer to the Shareholders
the right to request inclusion of his Common Stock issued pursuant to the terms
of the Agreement in the Proposed Registration.
(ii) The Shareholders shall have 15 days from the
receipt of such notice to deliver to Sionix a written request specifying the
number of shares of Common Stock that Shareholders intends to sell in the
Proposed Registration, as well as information on such Shareholders intended
method of disposition.
(iii) If the Proposed Registration by Sionix is, in
whole or in part, an underwritten public offering, Sionix shall so advise
Shareholders and any request must specify that his Common Stock be included in
the underwriting on the same terms and conditions as the shares of Common Stock
otherwise being sold through underwriters under such registration.
(iv) Upon receipt of a written request Sionix shall
promptly use its best efforts to cause all such shares of Common Stock held by
Shareholders to be registered under the Securities Act (and included in any
related qualifications or registration under blue sky laws) , to the extent
required to permit sale or disposition as set forth in the Proposed
Registration.
(v) If the offering is to be an underwritten
offering, and Shareholders proposes to distribute its shares of Common Stock
through such underwritten offering, Shareholders agrees to enter into an
underwriting agreement with the underwriter or underwriters selected for such
underwriting by Sionix. The Shareholders may withdraw his Common Stock from such
offering at any time until the day prior to the effective date by written notice
to Sionix and the managing underwriter.
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Notwithstanding the foregoing, if in its good faith judgment the managing
underwriter determines and advises Sionix in writing that the inclusion of the
Common Stock issued to Shareholders pursuant to the Agreement in the
underwritten public offering, together with any Common Stock offered by Sionix,
would interfere with the successful marketing of such securities, the managing
underwriter may exclude the Common Stock owned by the Shareholders from the
Proposed Registration..
(vi) Preparation and Filing. If and whenever Sionix is under
an obligation pursuant to this Agreement to use its best efforts to effect the
registration of any shares of its Common Stock, Sionix shall, as expeditiously
as practicable:
(a) prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement for such securities, and
use its best efforts to cause such registration statement to become and remain
effective in accordance with Section 2(b) hereof;
(b) prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective until the earlier of (A) the sale of all Common Stock
covered thereby or (B) three months after the effective date of the registration
statement, and to comply with the provisions of the Securities Act with respect
to the sale or other disposition of all Common Stock covered by such
registration statement;
(c) furnish to the Shareholders such number of copies
of any prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as such holder may
reasonably request, to facilitate the public sale or other disposition of such
shares of Common Stock issued to Shareholders pursuant to this Agreement;
(d) at any time when a prospectus required to be
delivered under the Securities Act, notify Shareholders of the happening of any
event as a result of which the prospectus included in such registration, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing and, at the
request of such holder, as promptly as practicable prepare, file and furnish to
such holder a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;
(e) if Sionix has delivered preliminary or final
prospectuses to Shareholders and after having done so the prospectus is amended
to comply with the requirements of the Securities Act, Sionix shall promptly
notify Shareholders and Shareholders , if requested, shall immediately cease
making offers of his Common Stock and return all prospectuses to Sionix. Sionix
shall promptly provide Shareholders with revised prospectuses and, following
receipt of the revised prospectuses, Shareholders shall be free to resume making
offers of the Common Stock.
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(vii) Expenses. Sionix shall pay all expenses incurred in
complying with this Section 2.2, including, without limitation, all registration
and filing fees (including all expenses incident to filing with the NASD
Regulation, Inc.), fees and expenses of complying with securities and blue sky
laws, printing expenses, and fees and disbursements of Sionix's counsel;
provided, however, that all underwriting discounts and selling commissions,
attorneys' fees of Shareholders, if any, and selling expenses applicable to the
Common Stock issued to Shareholders and covered by registration effected
pursuant to this Section 2.2 hereof, shall be borne by the Shareholders.
(viii) Expiration. The obligations of Sionix under this Section
2.2 shall expire on the third anniversary of the Effective Date.
Section 3. REPRESENTATIONS AND WARRANTIES.
3.1 Shareholders' Representations and Warranties. The Shareholders
hereby jointly and severally represent and warrant to Sionix as follows, all of
which representations and warranties shall be true, complete, and correct in all
respects as of the date hereof and will be as of the Closing Date, as follows:
(a) Organization and Qualification. RJ is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. RJ has all requisite power and authority to
own those properties and conduct those businesses presently owned or conducted
by it, and is duly qualified to do business as it is now being conducted and is
in good standing as a foreign corporation in each other jurisdiction where the
property owned, leased or used by it or the conduct of its business makes such
qualification necessary. The copies of the articles of incorporation and bylaws
of RJ, which have been delivered to Sionix, are complete and correct and are in
full force and effect at the date hereof.
(b) Authorization; No Restrictions, Consents or Approvals. The
Shareholders have full power and authority to enter into and perform this
Agreement. This Agreement has been duly executed by the Shareholders and
constitutes the legal, valid, binding and enforceable obligation of the
Shareholders, enforceable against the Shareholders in accordance with its terms.
The execution and delivery of this Agreement, the exchange of Shares and the
consummation by RJ of the transactions contemplated herein, do not and will not
on the Closing Date (i) conflict with or violate any of the terms of the
articles of incorporation and bylaws of RJ or any applicable law relating to the
Shareholders or RJ, (ii) conflict with, or result in a breach of any of the
terms of, or result in the acceleration of any indebtedness or obligations
under, any agreement, obligation or instrument by which the Shareholders RJ is
bound or to which any property of the Shareholders or RJ is subject, or
constitute a default thereunder, (iii) result in the creation or imposition of
any lien on any of the assets of the Shareholders or RJ, (iv) constitute an
event permitting termination of any agreement or instrument to which the
Shareholders or RJ is a party or by which any property or asset of the
Shareholders or RJ is bound or affected, pursuant to the terms of such agreement
or instrument, or (v) conflict with, or result in or constitute a default under
or breach or violation of or grounds for termination of, any license, permit or
other governmental authorization to which the Shareholders or RJ is a party or
by which the Shareholders or RJ may be bound, or result in the violation by the
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Shareholders or RJ of any laws to which the Shareholders or RJ may be subject,
which would materially adversely affect the transactions contemplated herein. No
authorization, consent or approval of, notice to, or filing with, any public
body or governmental authority or any other person is necessary or required in
connection with the execution and delivery by the Shareholders of this Agreement
or the performance by the Shareholders of their respective obligations
hereunder.
(c) Capitalization. The authorized capitalization of RJ
consists of 7,500,000 shares of common stock, $ .01 par value, 3,400,000 of
which are issued and outstanding and owned by the Shareholders in the amounts
specified in Section 2.1 above. All of the issued and outstanding Shares are
duly authorized, validly issued, fully paid, nonassessable and free of all
preemptive rights. There are no (i) options, warrants, subscriptions or
commitments of any character relating to shares of Common Stock or other capital
stock of Sionix, (ii) outstanding securities or other instruments convertible
into or exchangeable for shares of Common Stock or other capital stock of RJ and
no commitments to issue such securities or instruments and (iii) rights of first
refusal, preemptive right, subscription right or similar right with respect to
any shares of Common Stock or other capital stock of RJ.
(d) Assets. RJ has good and marketable title to the Assets,
free and clear of any liens, claims or encumbrances. All personal property owned
by Sionix is in good operating condition and repair, subject only to ordinary
wear and tear, has been operated, serviced and maintained properly within the
recommendations and requirements (if any) of the manufacturers thereof and is
suitable and appropriate for the use thereof made by RJ in its business and
operations. Such Assets are not subject to any contracts or agreements other
than those listed on Exhibit B (the "Contracts").
(e) Employees. Exhibit C is a true and complete list of all
employees of RJ, together with details regarding annual, hourly and other
applicable rules of compensation, bonus entitlement, if any, and description of
any applicable benefits. Except as described, there are no contracts,
agreements, plans, arrangements, commitments or understandings pertaining to
terms of employment, compensation, bonuses, profit sharing, commissions or other
compensation. As of the Closing, there will be no amounts due to any of the
employees.
(f) Intellectual Property. The conduct of the Business by RJ does
not violate the proprietary rights of any other person, and no claims have been
asserted by any person with respect to the use of the Assets or the conduct of
the Business by RJ.
(g) Litigation. There is no (i) outstanding judgment, order,
decree, award, stipulation, injunction of any governmental entity or arbitrator
against or affecting any officer, director or employee of RJ, (ii) action or
proceeding pending or threatened against RJ or its properties, assets or
business, (iii) action or proceeding pending or threatened against the
Shareholders, or any of them.
(h) Compliance with Law. RJ has not violated, has not conducted
its business or operations in violation of, and has not used or occupied its
properties or assets in violation of, any statute, law, ordinance, rule,
regulation, permit, order, writ, judgment, injunction, decree or award issued,
enacted or promulgated by any governmental entity.
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(i) Investment Intent. The Shareholders will acquire the Sionix
Shares for their own account, for investment purposes only and not with a view
to their resale or distribution. Each of the Shareholders covenants that if the
Sionix Shares or any part thereof are sold or distributed in the future, he will
sell or distribute them pursuant to the requirements of the Securities Act and
applicable state securities laws. The Shareholders agree that Sionix may place a
restrictive legend on the certificates representing the Sionix Shares,
containing substantially the following language:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and have not
been registered under any state securities laws. They may not be sold,
offered for sale, or transferred in the absence of either an effective
registration under the Securities Act of 1933, as amended, or an
exemption from registration."
(j) Disclosure. No statement, representation or warranty by
the Shareholders in this Agreement, including the Exhibits, contains any untrue
statement of material fact, or omits to state a material fact, necessary to make
such statements, representations and warranties not misleading. There is no fact
known to the Shareholders which has specific application to the Assets, and, so
far as the Shareholders can reasonably foresee, materially threatens in the
future, the Assets which has not been set forth in this Agreement.
3.2 REPRESENTATIONS AND WARRANTIES OF SIONIX. Sionix hereby represents
and warrants to the Shareholders as follows, all of which representations and
warranties are true, complete, and correct in all respects as of the date hereof
and will be as of the Closing Date:
(a) Organization and Qualification. Sionix is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Sionix has all requisite power and authority
to own those properties and conduct those businesses presently owned or
conducted by it, and is duly qualified to do business as it is now being
conducted and is in good standing as a foreign corporation in each other
jurisdiction where the property owned, leased or used by it or the conduct of
its business makes such qualification necessary, except in any case where a
failure so to qualify would not have a material adverse effect on Sionix.
The copies of the articles of incorporation and bylaws of Sionix, which have
been delivered to the Shareholders, are complete and correct and are in full
force and effect at the date hereof.
(b) Authorization; No Restrictions, Consents or Approvals.
Sionix has full power and authority to enter into and perform this Agreement and
all corporate action necessary to authorize the execution and delivery of this
Agreement and the performance its obligations hereunder has been duly taken.
This Agreement has been duly executed by Sionix and constitutes the legal,
valid, binding and enforceable obligation of Sionix, enforceable against Sionix
accordance with its terms.
(c) Disclosure. No statement by Sionix in the documents
described in the receipt attached hereto, contains any untrue statement of a
material fact, or omits to state any material fact, necessary to make such
statements, in the light of the circumstances under which they were made, not
misleading. Sionix knows of no material fact which specifically applies to
Sionix and (so far as Sionix can reasonably foresee) materially threatens Sionix
or its business, which has not been disclosed in such documents, or disclosed to
the Shareholders.
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Section 4. CERTAIN EXCLUDED MATTERS; ACTIONS PRIOR TO CLOSING.
4.1 Distribution of Assets to Shareholders. Immediately prior to
Closing, RJ shall distribute to the Shareholders all of RJ's cash equivalents
and accounts receivable.
4.2 Assumption of Payables. The Shareholders, jointly and severally,
agree to pay and discharge all trade payables, debts, liabilities, and
obligations, fixed or contingent, of whatever character, incurred prior to the
Closing, including without limitation, all contracts and agreements to which RJ
is a party, except for the Contracts identified on Exhibit B hereto.
Section 5 THE CLOSING
5.1 The Shareholders' Closing Documents. At the Closing, each of the
Shareholders shall deliver to Sionix, in form and substance reasonably
satisfactory to Sionix, all appropriate documents to effect or evidence the
sale, conveyance, assignment and transfer to Sionix of the RJ Shares, including
the original stock certificates representing the RJ Shares, duly endorsed for
transfer or accompanied by a stock power or assignment separate from
certificate.
5.2 Sionix Closing Documents. At the Closing, Sionix shall deliver to
the Shareholders a copy of an irrevocable instruction to the Transfer Agent for
the Sionix Common Stock, directing the Transfer Agent to issue the Sionix Shares
to the Shareholders, as described in Section 2.1 above.
Section 6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
6.1 Survival of Representations and Warranties and Covenants. The
representations, warranties, covenants, and obligations of Sionix and the
Shareholders set forth in this Agreement and in any certificate, agreement, or
instrument delivered in connection with the transactions contemplated hereby,
shall survive the Closing.
6.2 Indemnification by the Shareholders. In addition to and not in
limitation of the Shareholders' indemnification obligations set forth elsewhere
in this Agreement, each of the Shareholders shall, defend, indemnify, and hold
harmless the Sionix, and its affiliates and respective officers, directors,
agents and employees (the "Sionix Indemnitees"), from and against any and all
claims, losses, deficiencies, liabilities, obligations, damages, penalties,
punitive damages, costs, and expenses (including, without limitation, reasonable
legal fees), whether or not resulting from third party claims (collectively,
"Losses"), suffered by a Sionix Indemnitee, which arise out of or result from:
(a) any inaccuracy or misrepresentation in or breach of any of
the representations, warranties, covenants or agreements made by the
Shareholders in this Agreement or in any document, certificate or affidavit
delivered by the Shareholders pursuant to the provisions of this Agreement;
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(b) any obligation, liability, debt or commitment of RJ
incurred prior to the Closing or relating to the conduct of the Business prior
to the Closing; and
(c) any other matter related to the use or ownership of the
Assets or the conduct of the Business prior to the Closing (including, but not
limited to, all acts, omissions and conditions existing or occurring prior to
the Closing for which any of the Company Indemnitees is alleged to be liable
pursuant to any successor or similar theory of liability).
6.3 Indemnification By Sionix. Sionix shall defend, indemnify and hold
harmless, the Shareholders from and against any and all Losses, suffered by the
Shareholders, which arise out of or result from any inaccuracy or
misrepresentation in or breach of any of the representations, warranties,
covenants or agreements made by Sionix in this Agreement or in any document,
certificate or affidavit delivered by Sionix pursuant to the provisions of this
Agreement.
6.4 Procedure for Third Party Claims.
(a) Notice to the indemnifying party shall be given promptly
after receipt by the Shareholders or Sionix Indemnitee of actual knowledge of
the commencement of any action or the assertion of any claim that will likely
result in a claim by it for indemnity pursuant to this Agreement. Such notice
shall set forth in reasonable detail the nature of such action or claim to the
extent known, and include copies of any written correspondence or pleadings from
the party asserting such claim or initiating such action. The indemnified party
shall be entitled, at its own expense, to assume or participate in the defense
of such action or claim. If the indemnifying party assumes the defense of such
action or claim, it shall be conducted by counsel chosen by such party and
approved by the party seeking indemnification, which approval shall not be
unreasonably withheld.
(b) For actions where the indemnifying party does not exercise
its right to assume the defense, the party seeking indemnification shall assume
and control the defense of and contest such action with counsel chosen by it and
approved by the indemnifying party, which approval shall not be unreasonably
withheld. The indemnifying party shall be entitled to participate in the defense
of such action, the cost of such participation to be at its own expense. The
indemnifying party shall pay the reasonable attorneys' fees and expenses of the
party seeking indemnification to the extent that such fees and expenses relate
to claims as to which indemnification is payable, as such expenses are incurred.
(c) Both the indemnifying party and the indemnified party
shall cooperate fully with one another in connection with the defense,
compromise, or settlement of any such claim or action, including, without
limitation, by making available to the other all pertinent information and
witnesses within its control.
(d) No indemnified party shall have the right to settle any
action brought against it without the consent of the indemnifying party. The
indemnifying party shall have the right to settle any action brought against an
indemnified party as long as the indemnified party has been delivered a complete
release as a condition of the settlement.
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6.5 Remedies Cumulative. The remedies provided for herein shall be
cumulative and shall not preclude assertion by any party of any other rights or
the seeking of any other remedies against any other party.
7. MISCELLANEOUS.
7.1 GOVERNING LAW. This Agreement shall be construed and
interpreted under the laws of the State of Nevada.
7.2 REMEDIES. The parties shall have all the remedies
available to them for breach of this Agreement at law or in equity. The parties
further agree that in addition to all other remedies available at law or in
equity, the parties will be entitled to specific performance of the obligations
of each party to this Agreement and immediate injunctive relief. The parties
also agree that if an action is brought in equity to enforce a party's
obligations, no party will assert as a defense that there is an adequate remedy
at law.
7.3 SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions shall remain in full force and effect and shall in no
way be affected, impaired or invalidated.
7.4 BINDING ON SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon, and shall inure to the benefit of and be enforceable by the
parties hereto and their successors and assigns.
7.5 ATTORNEYS' FEES. In the event of any litigation concerning
this Agreement between the parties to this Agreement the prevailing party will
be entitled, in addition to any other relief that may be granted, to reasonable
attorneys' fees.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
/S/ XXXXXX X. XXXXXXXX
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Xxxxxx L/. Xxxxxxxx
/S/ XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx
/S/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
(the "Shareholders")
Sionix Corporation
By: /S/ XXXXX X. XXXXX
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PRESIDENT
("Sionix")
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