Document:

sinx_ex102.htm

EXHIBHIT 10.2

 

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO UNDER THE ACT AND APPLICABLE LAWS OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND APPLICABLE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

 

	
Certificate No. W-2012-INV-0__

	
Warrant to Purchase 2,083,333 Shares of

	
Dated: March 2, 2012

	
Common Stock (subject to adjustment)

 

WARRANT TO PURCHASE COMMON STOCK

of

SIONIX CORPORATION

 

This certifies that, for value received, RevH20 LLC, a Delaware limited liability corporation or registered assigns (the “Holder”) is entitled, subject to the terms set forth below, to purchase from Sionix Corporation, a Nevada corporation (the “Company”), up to 2,083,333 shares of its common stock, $0.001 par value (the “Common Stock”), as constituted on the date hereof (the “Warrant Issue Date”), upon surrender hereof, at the principal office of the Company referred to below, with the Notice of Exercise form annexed hereto duly executed, and simultaneous payment therefor in lawful money of the United States or otherwise as hereinafter provided, at the Exercise Price set forth in Section 2 below. The number and character of such shares of Common Stock and the Exercise Price are subject to adjustment as provided herein. The term “Warrant” as used herein shall include this Warrant and any warrants delivered in substitution or exchange therefor as provided herein.  This Warrant is being issued pursuant to the Securities Purchase Agreement, dated the date hereof, by and between the Company and the Holder (the “Purchase Agreement”), and in connection with the corresponding Subscription Application of the Holder.

 

1. Term of Warrant.  Subject to the terms and conditions set forth herein, this Warrant shall be exercisable, in whole or in part, during the term commencing on the Warrant Issue Date and ending at 5:00 p.m., Eastern Standard Time, on the three (3) year anniversary of the Warrant Issue Date (the “Term”), and shall be void thereafter.

 

2. Exercise Price.  The exercise price at which this Warrant may be exercised shall be $0.17 per share of Common Stock (the “Exercise Price”), as such Exercise Price may be adjusted from time to time pursuant to Section 11 hereof.

 

  

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3. Exercise of Warrant.

 

(a) Method of Exercise.  The purchase rights represented by this Warrant are exercisable by the Holder in whole or in part, at any time, or from time to time, during the Term, by the surrender of this Warrant and the Notice of Exercise annexed hereto duly completed and executed on behalf of the Holder, at the principal office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company), upon (i) payment (A) in cash or by check acceptable to the Company, (B) by cancellation by the Holder of indebtedness or other obligations of the Company to the Holder, or (C) by a combination of (A) and (B), of the purchase price of the shares to be purchased.

 

(b) Issuance of Shares.  This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the shares of Common Stock issuable upon such exercise shall be treated for all purposes as the holder of record of such shares as of the close of business on such date. As promptly as practicable on or after such date and in any event within ten (10) days thereafter, the Company at its expense shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of shares issuable upon such exercise. In the event that this Warrant is exercised in part, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the remaining number of shares for which this Warrant may then be exercised.

 

4. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. In lieu of any fractional share to which the Holder would otherwise be entitled (after aggregating all shares that are being issued upon such exercise), the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction.

 

5. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.

 

6. Rights of Stockholders. Subject to Sections 9 and 11 of this Warrant, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of the Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, or change of stock to no par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised as provided herein.

 

  

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7. Transfer of Warrant.

(a) Warrant Register. The Company will maintain a register (the “Warrant Register”) containing the names and addresses of the Holder or Holders.  Any Holder of this Warrant or any portion thereof may change its address as shown on the Warrant Register by written notice to the Company requesting such change.  Any notice or written communication required or permitted to be given to the Holder may be delivered or given by mail to such Holder as shown on the Warrant Register and at the address shown on the Warrant Register.  Until this Warrant is transferred on the Warrant Register of the Company, the Company may treat the Holder as shown on the Warrant Register as the absolute owner of this Warrant for all purposes, notwithstanding any notice to the contrary.

 

(b) Warrant Agent.  The Company may, by written notice to the Holder, appoint an agent for the purpose of maintaining the Warrant Register referred to in Section 7(a) above, issuing the Common Stock or other securities then issuable upon the exercise of this Warrant, exchanging this Warrant, replacing this Warrant, or any or all of the foregoing (the “Warrant Agent”).  Thereafter, any such registration, issuance, exchange or replacement, as the case may be, shall be made at the office of the Warrant Agent.

 

(c) Transferability and Negotiability of Warrant.  This Warrant may not be transferred or assigned in whole or in part without compliance with all applicable federal and state securities laws by the transferor and the transferee (including the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, if such are requested by the Company).  Subject to the provisions of this Warrant with respect to compliance with the Securities Act of 1933, as amended (the “Act”), title to this Warrant may be transferred by endorsement (by the Holder executing the Assignment Form annexed hereto) and delivery in the same manner as a negotiable instrument transferable by endorsement and delivery.

 

(d) Exchange of Warrant upon a Transfer.  Upon surrender of this Warrant for exchange, properly endorsed on the Assignment Form and subject to the provisions of this Warrant with respect to compliance with the Act and with the limitations on assignments and transfers contained in this Section 7, the Company at its expense shall issue to or on the order of the Holder a new warrant or warrants of like tenor, in the name of the Holder or as the Holder (on payment by the Holder of any applicable transfer taxes) may direct, for the number of shares issuable upon exercise hereof.

 

(e) Compliance with Securities Laws.

 

(i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the shares of Common Stock to be issued upon exercise hereof are being acquired for investment purposes, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Common Stock to be issued upon exercise hereof except under circumstances that will not result in a violation of the Act or any state securities laws.

 

(ii) This Warrant and all shares of Common Stock issued upon exercise hereof or conversion thereof shall be stamped or imprinted with a legend in substantially the following form (in addition to any legend required by state securities laws):

 

  

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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO UNDER SUCH ACT AND APPLICABLE LAWS OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

8. Reservation of Stock.  The Company covenants that during the Term, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the exercise of this Warrant and, from time to time and if applicable, will take all steps necessary to amend its Articles of Incorporation to provide sufficient reserves of Common Stock issuable upon exercise of this Warrant.  The Company further covenants that all shares of Common Stock that may be issued upon the exercise of rights represented by this Warrant and payment of the Exercise Price, all as set forth herein will be duly and validly authorized and issued, fully paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously therewith).  The Company agrees that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the shares of Common Stock upon the exercise of this Warrant.

 

9. Notices.

 

(a) Whenever the Exercise Price or the shares purchasable hereunder shall be adjusted pursuant to Section 11 hereof, the Company shall issue a certificate signed by its Chief Financial Officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Exercise Price and the shares purchasable hereunder after giving effect to such adjustment, and shall cause a copy of such certificate to be mailed (by first-class mail, postage prepaid) to the Holder of this Warrant.

 

(b) In case:

 

(i) the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the exercise of this Warrant) for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or

 

(ii) of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company with or into another corporation or entity, or any conveyance of all or substantially all of the assets of the Company to another corporation or entity, or

 

(iii) of any voluntary or involuntary dissolution, liquidation or winding-up of the Company,

 

  

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then, and in each such case, the Company will mail or cause to be mailed to the Holder or Holders a notice specifying, as the case may be, (A) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (B) the date on which such reorganization, reclassification, consolidation, merger, con­veyance, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such stock or securities at the time receivable upon the exercise of this Warrant) shall be entitled to exchange their shares of Common Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up. Such notice shall be mailed at least 10 days prior to the record date specified in (A) above or 20 days prior to the date specified in (B) above.

 

10. Amendments and Waivers.

 

(a) Except as provided in Section 10(b) below, this Warrant, or any provision hereof, may be amended, waived, discharged or terminated only by a statement in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.

 

(b) Any term or condition of this Warrant may be amended with the written consent of the Company and holders of a majority of the then outstanding warrant shares underlying the Warrants issued to the Purchasers (as defined in the Purchase Agreement).  Any amendment effected in accordance with this Section 10(b) shall be binding upon the Holder and each future holder of this Warrant and the Company.

 

(c) No waivers of, or exceptions to, any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

 

11. Adjustments. The Exercise Price and the shares purchasable hereunder are subject to adjustment from time to time as follows:

 

(a) Merger, Sale of Assets, etc.  If at any time while this Warrant is outstanding and unexpired there shall be (i) a reorganization (other than a combination, reclassification, exchange or subdivision of shares otherwise provided for herein), (ii) a merger or consolidation of the Company with or into another corporation in which the Company is not the surviving entity, or (iii) a sale or transfer of the Company’s properties and assets as, or substantially as, an entirety to any other corporation or other entity, then, as a part of such reorganization, merger, consolidation, sale or transfer, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares of stock or other securities or property of the successor corporation or other entity resulting from such reorganization, merger, consolidation, merger, sale or transfer that a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such reorganization, consolidation, merger, sale or transfer if this Warrant had been exercised immediately before such reorganization, merger, consolidation, sale or transfer, all subject to further adjustment as provided in this Section 11.  The foregoing provision of this Section 11(a) shall similarly apply to successive reorganizations, consolidations, mergers, sales and transfers and to the stock or securities of any other corporation or other entity that are at the time receivable upon the exercise of this Warrant.  In all events, appropriate adjustment (as determined in good faith by the Company’s Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after the transaction, to the end that the provisions of this Warrant shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant.

 

  

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(b) Reclassification, etc.  If the Company, at any time while this Warrant remains outstanding and unexpired, by reclassification of securities or otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change and the Exercise Price therefor shall be appropriately adjusted, all subject to further adjustment as provided in this Section 11.

 

(c) Split, Subdivision or Combination of Shares.  If the Company at any time while this Warrant remains outstanding and unexpired shall split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, the Exercise Price for such securities shall be proportionately decreased in the case of a split or subdivision or proportionately increased in the case of a combination and the number of such securities shall be proportionately increased in the case of a split or subdivision or proportionately decreased in the case of a combination.

 

(d) Adjustments for Dividends in Stock or other Securities or Property.  If while this Warrant remains outstanding and unexpired, the holders of the securities as to which purchase rights under this Warrant exist (including without limitation securities into which such securities may be converted) at the time shall have received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefor, other or additional stock or other securities or property (other than cash) of the Company by way of dividend, then and in each case, this Warrant shall represent the right to acquire, in addition to the number of shares of the security receivable upon exercise of this Warrant, and without payment of any additional consideration therefor, the amount of such other or additional stock or other securities or property (other than cash) of the Company that such holder would hold on the date of such exercise had it been the holder of record of the security receivable upon exercise of this Warrant (or upon such conversion) on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and/or all other additional stock available by it as aforesaid during such period, giving effect to all adjustments called for during such period by the provisions of this Section 11.

 

(e) Calculations.  All calculations under this Section 11 shall be made to the nearest four decimal points.

 

  

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(f) No Impairment. The Company will not, by amendment of its charter or through reorganization, consolidation, merger, dissolution, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment.

 

12. Saturdays, Sundays and Holidays.  If the last or appointed day for the taking of any action or the expiration of any right granted herein shall be a Saturday, Sunday or legal holiday, then (notwithstanding anything herein to the contrary) such action may be taken or such right may be exercised on the next succeeding day that is not a Saturday, Sunday or legal holiday.

 

13. Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of California applicable to agreements made and to be performed entirely within such State, without regard to the conflicts of law principles of such State.

 

14. Binding Effect.  The terms of this Warrant shall be binding upon and inure to the benefit of the Company and the Holder and their respective successors and assigns.

 

[SIGNATURE PAGE FOLLOWS]

 

  

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IN WITNESS WHEREOF, Sionix Corporation has caused this Warrant to be executed by its officers thereunto duly authorized.

 

	Dated: March 2, 2012	 	
SIONIX CORPORATION

	 
	 	 	 	 	 
	HOLDER: REVH20 LLC	 	 	 	 
	 	 	 	 	 
	By:	
 /s/: E. David Kailbourne

	 	
By: 

	
/s/: David R. Wells 

	 
	 	
Name: E. David Kailbourne

	 	 	
Name: David R. Wells

	 
	 	
Its: Chief Executive Officer

	 	 	
Title: President and CFO

	 
	 	 	 	 	 	 

 

8sinx_ex101.htm

EXHIBIT 10.1

 

 

Water Treatment Agreement

 

This Water Treatment Agreement (hereinafter, the “WTA”) between Sionix Corporation, a Nevada corporation domiciled at 914 Westwood Blvd., Box 801, Los Angeles, CA 90024 (“Sionix”) and McFall, Incorporated, a Washington corporation domiciled at 5050 326th Place, Carnation, WA 98014 (“McFall”) is entered into this 21st day of February, 2012 and endorsed by Mark Twogood contracted representative of Continental Resources, Inc. (hereinafter, the “Continental Representative”) as of the same date.

 

Preamble

 

Sionix designs, fabricates, assembles, installs, and operates proprietary, patent protected Mobile Water Treatment Systems (“MWTS”) for application in a number of vertical markets, including oil and gas operations in non-conventional shale plays in the continental United States as well as a number of other geographic locations worldwide.

McFall operates a logistics operation in the Williston Basin of North Dakota (hereinafter, the “Williston”) and performs such services as drilling rig placement, set-up and tear down; retention of operations personnel, general site maintenance and operations; and other tasks as may reasonably be assigned to McFall by Continental Resources, Inc. (“Continental”) in accordance with the Master Services Agreement (“MSA”) currently in effect between McFall and Continental.

McFall wishes to retain Sionix under the authority of their MSA with Continental to provide mobile water treatment services in conjunction with drilling activities undertaken by a specifically designated drilling rig to treat water contaminated by drilling activities in the Williston at the point of contamination.

Sionix wishes to undertake this engagement, as properly endorsed by the Continental Representative, and agrees to deploy a standard MWTS (flow rates of approximately 400,000 gallons/day) to the designated location in the Williston, properly configured to accept contaminated influent water from the onsite drilling activities, and to treat same in accordance with standards established by the Continental Representative at their sole and exclusive expense for a contracted price not less than $8/barrel or more than $30/barrel (standard oil industry barrel at 42 gallons/barrel), all dependent upon site specific chemical, hydrological and geographical conditions.

In order to memorialize the wishes of the parties to this WTA and fulfill the water treatment requirements imposed by the Continental Representative, the parties hereto have entered into the following:

  

 

  

 

Agreement

Conditions Precedent.  (1) McFall agrees to provide samples (consisting of five [5] gallon buckets in each location) of contaminated water from a like drilling activity in the Williston consisting of water from the first 2,200 feet of vertical drilling, the subsequent 10,000 feet of vertical drilling, and from at least one of any horizontal (or lateral) drilling off the vertical shaft at its earliest possible convenience after the execution of this WTA.  (2) Sionix, at its own expense, will test the provided samples for purposes of configuring the designated MWTS and providing guidelines and suggestions to the Continental Representative for testing standards and testing protocols that verify treatment results (an example of Influent/Effluent Standards is attached hereto as Annex “A”).  Results of said testing will be provided to McFall and the Continental Representative within twenty-four (24) hours after receipt from the independent testing laboratory, with a confirmation/attestation from Sionix that it will achieve treatment results based upon such testing compliant with standards established by the Continental Representative.

Contemplated Process.

McFall and/or the Continental Representative will issue a Notification to Proceed on a specified drilling project at a specified drilling site.

Prior to the initial installation and start-up, but not less than two (2) weeks prior to initial operation, a Sionix representative will visit a current drilling site to determine “hook-up” requirements for power, influent and effluent waters, as well as review any and all safety and operational procedures and guidelines promulgated by Continental, McFall, or the Continental Representative (as the case may be) for onsite operations, reporting and oversight to assure compliance and timely start-up of treatment operations.  Said Sionix representative will have authority to execute any site specific requirements that are consistent with this WTA or governmental health and safety oversight conditions.

Sionix will deploy its MWTS to the site and connect with 480/3 Phase/4 Wire power source, influent source, and effluent source.  Lab tests will be performed on influent water to determine consistency with initial test samples for adjustment of treatment regimen if required.

Influent water in excess of 300 gallons/minute (‘gpm”) will be temporarily contained in a retention pond (provided by Continental) until influent flow rates stabilize at or below 300 gpm.

All treated effluent will be returned for recycling to the driller or stored in a clear well until influent flow and effluent flow rates are equalized, which cycles shall be maintained during the anticipated twenty-five (25) day drilling cycle.

Periodic testing, as prescribed by the Continental Representative, will be conducted to assure maintenance of effluent quality.

After completion of each project, the MWTS will be removed with all the drilling equipment to a subsequent location and the steps listed above will be repeated.

During the course of the treatment operations by the Sionix MWTS, Sionix shall issue weekly invoices to McFall, but in any case, not more frequently the prescribed in the MSA between McFall and Continental.  It is understood by Sionix that Continental, as a general practice, issues payment in ninety (90) days.  To the extent that McFall marks-up the Sionix invoice to Continental, Sionix and McFall will discuss and agree on the extent and amount of such mark-up.  Sionix will not unreasonably withhold approval of the mark-up between McFall and Continental.

 

  

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Project Funding.  To the extent that Sionix may require financing to fund project cash flow, McFall shall agree to subrogate Sionix billing subsequently billed to Continental by McFall to a factoring source or asset based lender of Sionix’ choice, but in no event will a factored or collateralized amount be greater than the invoice value, less McFall markup times seventy-five percent (75%).

 

Capacity Utilization.  McFall (and/or the Continental Representative, as the case may be) shall make best efforts to provide the following:  (1) for so long as Sionix performs to the conditions of the WTA and maintains the agreed upon quality of treated effluent, McFall will use its best efforts under the circumstances to assist in the deployment the Sionix MWTS for operations in the Williston for target deployments between two hundred (200) days and two hundred and seventy-five (275) days per year, with the understanding that force majeure conditions could modify such target deployment days; and (2)  influent to the MWTS shall be not less than two hundred thousand (200,000) gallons/day and not more than four hundred thousand (400,000) gallons, except to the extent that influent to the MWTS is in excess of the maximum, either McFall (and/or Continental, as the case may be) shall provide appropriate in-ground storage in accordance with local regulations or Sionix may provide an additional MWTS, whichever is most appropriate under the circumstances.

Benefit and Assignment.  It is understood and specifically agreed that this WTA shall inure to the benefit of the parties hereto and that no assignment, conveyance, pledge or hypothecation of this WTA shall be made without the express prior written consent of the non-assigning party; provided, however, Sionix will assign and convey this WTA to an affiliate company, currently under formation, for purposes of operating this particular MWTS in the Williston and McFall consents to such assignment.  Sionix will furnish a notification to McFall, and/or the Continental Representative for information purposes, with all relevant details about the assignment.

Term and Termination.  This WTA shall be in full force and effect for five (5) years from the date of execution, which provisions for yearly automatic renewal after the initial term, unless notified ninety (90) days prior to expiration of the initial or any renewal term by either party to this WTA that they do not intend to renew.

This WTA may only be terminated for cause, which is defined as a willful and repeated violation of the terms and conditions of the WTA, gross negligence, or an inability to provide effluent water by Sionix in accordance with agreed upon treatment standards as defined in the clause “Capacity Utilization” above.  Defaults or violations of this WTA must be noticed to the violating party who will have ten (10) days to cure the default or violation; provided, however, any violation of the Confidentiality/Non-Disclosure Clause of this WTA below, shall permit immediate cancellation upon issuance of notice.

Termination “not-for-cause” is strictly prohibited by this WTA.

Moratorium.  During the course of the first full year of the WTA, Sionix and any permitted assigns (as disclosed under the Benefit and Assignment clause above), pledges and agrees that it (they) shall not solicit or accept any engagement, directly or indirectly, that will place additional MWTS products under control of any drilling or hydraulic fracturing operation of Continental in the Williston.  If McFall is able to place five (5) additional MWTS products in other Continental operations in the Williston during the course of the first year of this WTA, Sionix will convey exclusive representation rights to McFall for Continental operations in the Williston.  Other potential representation agreements will also be granted for clients other than Continental in the Williston with like conditions.

 

  

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Disclosure.  Sionix is a fully reporting public company (OTC: BB) and governed by the Securities Exchange Commission rules.  Certain events and transactions could require public disclosure under these rules.   To the extent disclosure is required, as determined by Sionix securities counsel, McFall acknowledges that these disclosures can occur without their prior consent.

Confidentiality/Non-Disclosure.  With the exception of mandatory disclosures described in the Disclosure section above, the Press Release(s) described below, disclosures between each party to this WTA and their legal and accounting representatives, and certain investors and/or investment banking engagements, the parties hereto are bound by the Mutual Confidentiality/Non-Disclosure Agreement attached to this Agreement as Annex “B,” and incorporated herein by reference.

Press Release(s).  To the extent legal or securities advisors believe advisable or necessary, the parties to this WTA hereby consent to a press release or releases announcing the execution of this WTA and a description of the events contemplated herein.

Good Faith Negotiations.  The parties to this WTA acknowledge that the contemplated transaction involves complex scientific and technical issues and during the term of this WTA, many issues may need to be discussed and agreed upon prior to the completion of this WTA or prior to the execution and implementation of subsequent agreements.  To that end, both parties agree and unequivocally commit to deal fairly between them and in complete and total transparency.

Representations and Warranties.  Each party hereto represents and warrants that:  (1) it has the requisite corporate authority to enter into this WTA; (2) that it has entered into no other agreement that would prevent or preclude performance under this WTA; (3) Sionix owns all the proprietary and patented intellectual property associated with the construction and operation of the MWTS; and (4) McFall is party to a MSA with Continental that does not prohibit them from entering into this WTA or agreeing to any of the terms and conditions contained herein.

Insurance.  XYZ shall maintain casualty insurance (minimum of $2,000,000) on the Sionix MWTS for such amounts and against such hazards as Sionix may require, with losses under the policies payable to Sionix or its assigns and liability insurance (minimum of $1,000,000) for personal injuries, death and/or property damages on terms satisfactory to Sionix, in each case naming Sionix as an additional insured.

 

Site Visitation.  Subject to a twenty-four (24) hour notice, Sionix reserves the right to demonstrate the functionality and efficacy of the Sionix MWTS in operation at any current drilling site to potential clients for purposes of promoting the sale of Sionix Water Treatment Services to other potential users.

 

Indemnification.  Each party to this WTA shall indemnify, defend and hold harmless the other party from any claims, demands or damages, including reasonable attorneys’ fees, arising out of or connected with any act or omission attributable to the other party’s performance as contemplated by this WTA.

Survivability.  The clause herein related to Confidentiality/Non-Disclosure and Representations and Warranties shall survive the expiration or termination of this WTA for any reason, including lapse of time.

  

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Dispute Resolution.  In the event of any dispute between the parties hereto over any provision of this WTA, the parties agree to submit the matter to a third party mediator to resolve the dispute without recourse to legal action.

Governing Law/Venue.  The laws of the State of Delaware shall govern this WTA.  Exclusive personal jurisdiction of the federal court sitting in the immediate area of the non-complaining party will be the only venue available to the complaining party.

IN WITNESS WHEREOF, the authorized signatories of each party affixes their seal and signature hereto as of the date first written above.

 

	SIONIX CORPORATION 	 	 	MCFALL INCORPORATED	 
	 	 	 	 	 
	
/s/ James R. Currier

	 	 	
/s/ Steve McFall 

	 
	
James R. Currier 

	 	 	
Steve McFall

	 
	
Chairman/Chief Executive Officer 

	 	 	
President/Chief Executive Officer

	 

 

 

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