Document:

Exhibit 10.1

 

FINAL
DRAFT

 

LICENSE
AND ROYALTY AGREEMENT

7/2/15

 

This
License and Royalty Agreement is made and entered into as of the Effective Date by and between:

 

Sionix
Corporation ("SIONIX"), a public company organized under the laws of the State of Nevada, USA and having its principal
executive office at 2010 N Loop Freeway, Houston, TX 77018, hereinafter referred to as "Licensor" which expression shall
include its successors in business and permitted assignees; and

 

Sionix
Oilfield Solutions, LLC ("SOS"), a limited liability company organized under the laws of the State of Texas, USA
and having its principal executive offices at 2049 US Hwy 2, Culbertson, MT 59218 and hereinafter referred to as "Licensee"
which expression shall include its successors in business and permitted assignees.

 

(Hereinafter
Licensor and Licensee collectively shall be termed as "Parties", and individually as "Party").

 

PREAMBLE

 

WHEREAS,
Licensor is the legal owner of the Licensor's Technology ("LT") listed in Attachment A, and

 

WHEREAS,
Licensor has entered into the Letter of Intent signed July 6, 2015 ("LOT"), (attached as Attachment B) with Licensee,
and Licensee (SOS) has been organized to conduct the business of treating and remediating both produced water from existing wells
and flow back brines from fracking. The water will be treated to customer specifications for "enhanced heavy water"
for drilling and/or treated water suitable for fracking and will be marketed to customers in the SOS service area, and

 

WHEREAS,
Licensee wishes to obtain and Licensor wishes to grant to Licensee an exclusive license, to operate water treating facilities,
utilizing the LT, and to treat, remediate and market brines in the Total Bakken Oil System (North Dakota, South Dakota, Montana,
Alberta Canada and Saskatchewan Canada), and

 

WHEREAS,
Licensee wishes to obtain and Licensor wishes to grant to Licensee a license to treat, remediate and market brines in the United
States, Canada and Mexico, and

 

WHEREAS,
the Licensee wishes to purchase the Dissolved Air Flotation ("DAF") assets of Licensor in Dickinson, North Dakota and
Licensor wishes to sell the Licensor's physical assets in Dickinson, North Dakota,

 

NOW
THEREFORE, the Licensor and Licensee intending to be legally bound, agree as follows:

 

    	 	1	 

     

    

 

SECTION
1

DEFINITIONS

 

Unless
the context or otherwise require, the following terms shall have the following meanings throughout this agreement:

 

A.          "Agreement"
means this License and Royalty Agreement;

 

B.           "Confidential
Information" means any and all information or data disclosed to the other party, its employees or representatives, whether
in writing, orally or by observation, including without limitation, all scientific, technical, commercial, financial and business
information and know-how, but excluding information or data which is known to the receiving party at the time of disclosure or
is required to be disclosed by legal, regulatory, statutory or governmental process or authorities;

 

C.           "Letter
of Intent" means that general Letter of Intent attached as Attachment B signed by Licensor and Licensee as of the Effective
Date;

 

E.           "Effective
Date" shall be as of July 10, 2015;

 

F.            Licensor's
Technology means all patents and their supporting data and technology, processes and methodology, whether patents are in force
or expired; as well as all applicable "Know-How" and "Site Specific Information". The Licensor's Technology
is summarized in Attachment A;

 

G.           "Dissolved
Air Flotation ("DAF") Technology means all design and operating data for Sionix's proprietary DAF system as defined
in all patents granted to Sionix and incorporated into all DAF units manufactured by or specifically for Licensor;

 

H.           "Know-How"
means Licensor's specific information, knowledge and experience in the development, design, manufacture and operation of water
treating facilities, including any drawings, specifications or test data of which the Licensor possesses and makes available to
the Licensee;

 

I.             Site
Specific Information includes all drawings, designs, data, operating instructions, process configuration, maintenance procedures,
employee records, purchasing records, community, governmental and regulatory contacts, etc., for the Culbertson, Montana site;

 

J.             "Patent"
means following patents listed in Attachment A:

 

	 	Patents
	 	●	6,921,478
	 	●	7,033,495
	 	●	7,767,080
	 	●	7,981,287
	 	●	8,343,355

 

K.          "Related
Party" means any third party, which has common ownership with either the Licensor or the Licensee;

 

L.           "Third
Parties" means any party without common ownership or affiliation with either the Licensor or the Licensee.

 

    	 	2	 

     

    

 

SECTION
2

INTERPRETATIONS

 

In
the interpretation or construction of this Agreement, unless something else is clearly intended:

 

A.          Both
parties have consulted attorneys of their choice in the drafting of this Agreement. Accordingly, this Agreement shall not be interpreted
more harshly against one party than the other;

 

B.           This
Agreement and the Attachments contain the entire understanding of the parties with respect to the subject matter hereof. All express
or implied agreements and understandings, either oral or written, heretofore made are expressly merged into and made a part of
this Agreement and the Attachment. This Agreement may be amended, or any term hereof modified, only by a written instrument duly
executed by both parties hereto;

 

C.           If
any provision of this Agreement is deemed unenforceable, the remainder of the Agreement will not be affected and, if appropriate,
the parties will attempt to replace the unenforceable provision with a new provision that, to the extent possible, reflects the
parties' original intent. The captions and headings used in this Agreement are for reference only and are not to be construed
in any way as terms or used to interpret the provisions of this Agreement.

 

SECTION
3

GRANT
OF LICENSE

 

A.            The
Licensor hereby grants to the Licensee, and the Licensee hereby accepts from the Licensor an exclusive license (hereinafter referred
to as the "License") to operate water treating facilities, utilizing the LT, and to treat, remediate and market brines
in the Total Bakken Oil System (North Dakota, South Dakota, Montana, Alberta Canada and Saskatchewan Canada);

 

B.            The
Licensee shall have no right to assign the License or grant any sub-license without prior written approval of the Licensor which
shall not be unreasonably withheld;

 

C.            The
License shall commence on the Effective Date. The terms of this Agreement shall continue in effect as part of a permanent, paid
up License Agreement. Licensor will receive a fifty-one percent equity interest at no cost in the total business of SOS.

 

SECTION
4

CONSIDERATION
FOR THE LICENSE

 

A.           Licensor
shall acquire a 51% (fifty-one percent) equity interest in SOS. This equity interest will survive the term of this Agreement and
will continue, subject to the same terms and conditions as other equity interests in SOS.

 

B.            Licensee
will purchase the DAF assets of Licensor for an amount of $100,000.

 

C.           There
will be no ongoing licensing or royalty payments of any kind from SOS to SIONIX.

 

    	 	3	 

     

    

 

SECTION
5

INDEMNITY

 

A.           To
the fullest extent permitted by law, the Licensor expressly agrees to Defend (at Licensor's expense and with legal counsel
approved by Licensee), Indemnify, and Hold Harmless the Licensee, its parents, affiliates, directors, officers and
employees from any claims, suits, causes of action or losses attacking the intellectual property or the right to use that property
that is the basis of the License.

 

B.            To
the fullest extent permitted by law, Licensee expressly agrees to Defend (at Licensee's expense and with legal counsel
approved by Licensor), Indemnify, and Hold Harmless the Licensor, its parents, affiliates, directors, officers and
employees from any claims, suits, cause of action or losses emanating from actions of Licensee which are not authorized hereunder.

 

SECTION
6

ROYALTIES

 

A.            The
License is granted with no royalty obligations.

 

SECTION
7 

IMPROVEMENTS
AND DEVELOPMENTS

 

A.           All
subsequent technical innovations or improvements to the Licensed Technology that is developed by Licensor after the Effective
Date of this Agreement shall automatically be incorporated into the Licensed Technology.

 

B.            All
improvements and developments based upon the Licensed Technology and any patents based upon the Licensed Technology, which come
into existence during the term hereof and which are derived from work done by or for Licensee, with or without any contribution
by Licensor, shall be shared with Licensor. All such improvements and developments shall be licensed from Licensee to Licensor,
on a worldwide, royalty-free, paid-up basis.

 

SECTION
8

REPRESENTATION/WARRANTIES

 

A.           Licensor
represents and warrants that it is duly organized, validly existing and in good standing under the laws of the State of Nevada,
that it has full power and authority to enter into this Agreement and to carry out their provisions, and that there are no outstanding
agreements, assignments or encumbrances in existence that are inconsistent with the provisions of this Agreement.

 

B.            Licensee
represents and warrants that it is duly organized, validly existing and in good standing under the laws of the State of Texas,
that it has full power and authority to enter into this Agreement and to carry out its provisions, and that there are no outstanding
agreements, assignments or encumbrances in existence that are inconsistent with the provisions of this Agreement.

 

    	 	4	 

     

    

 

C.           LIMITATION
OR WARRANTIES: Except for the express Warranties in this Section 8, neither party makes any Warranties express or implied, in
fact or by operation of law, statutory or otherwise.

 

SECTION
9

INFRINGEMENT

 

A.           Each
party shall give the other written notice if one of them becomes aware of any infringement by a third party of any Patent. Upon
notice of any such infringement, the parties shall promptly consult with one another to determine an agreed course of action to
be pursued.

 

B.           Licensee
shall have the first right, but not the obligation, to institute and prosecute an action or proceeding to abate such infringement
and to resolve such matter by settlement or otherwise.

 

C.           If
Licensee elects not to exercise such first right, Licensor shall have the right, at its discretion, to institute and prosecute
an action or proceedings to abate such infringement and to resolve such matter by settlement or otherwise. Licensee shall cooperate
fully if joining as a party plaintiff in Licensee's own discretion and also if reasonably requested to do so by Licensor.

 

SECTION
10

GENERAL
PROVISIONS

 

	A.	Confidentiality

 

Through
the date of termination of this Agreement, both the Parties shall keep strictly secret and confidential and not disclose to any
other parties or use for any other purposes, except as expressly permitted by this Agreement, any confidential information, especially
business and trade secrets, including the terms of this Agreement, financial circumstances, technical information and information
regarding products and price (herein after referred to as "Confidential Information"). The Parties acknowledge, confirm
and agree that any right, title and interest in and to such Confidential Information shall be and remain the sole property of
the owning Party. The Parties shall take any and all necessary precautions to prevent any disclosure of Confidential Information
owned by any Party, by any and all of its employees, officers, directors, representatives or agents.

 

	B.	Notice

 

All
notices, requests or other communications required or permitted under this Agreement shall be in writing and shall be deemed given
when mailed by registered mail with return receipt or sent by courier or sent by fax to the following address:

 

	Licensor:	 	 	Licensee:
	 	 	 	 
	Sionix
    Corporation	 	Sionix
    Oilfield Solutions, LLC 
	ATTN:	Henry
    W. Sullivan	 	ATTN:
    Rex E. Crick
	 	2010
    North Loop Freeway	 	2049
    US Hwy 2
	 	Suite
    110	 	Culbertson,
    MT 59218
	 	Houston,
    TX 77018	 	 
	 	Fax
    No: 713-682-6505	 	 

 

    	 	5	 

     

    

 

	C.	waiver

 

No
forbearance, indulgence or relaxation by any Party at any time to require performance of any provisions of this agreement shall
in any way effect, diminish or prejudice the right of such Party to require performance of that provision and any waiver by any
Party of any breach of any provisions of this Agreement shall not be construed as a waiver of any continuing or succeeding breach
of such provisions, a waiver or an amendment or the provision itself, or a waiver of any right under or arising out of this Agreement.

 

	D.	Force Majeure

 

None
of the Parties hereto shall be responsible for any delay or non-performance of this Agreement if such delay or non-perfournance
shall be due to any cause of force majeure such as, without limitation, earthquakes, typhoon, floods, strikes, riots, civil commotion,
wars or warlike condition, restriction, guidance or instruction of the Government, not issuing any license or permit, change of
laws and regulations and all or any other causes whatsoever beyond the reasonable control of such Party.

 

The
Parties, which claim force majeure, shall, as soon as possible, notify in writing the other Parties of the occurrence of
such force majeure and all the Parties hereto shall discuss how to deal with the force majeure.

 

	E.	Entire Agreement

 

		(1)	This
                                         Agreement and the attachment set forth the entire agreement and understanding between
                                         the Parties with respect to the subject matter hereof and merges all discussions and
                                         negotiations between them and neither of the Parties shall be bound by any conditions,
                                         warranties, understanding or representatives with respect to such subject matter other
                                         than as expressly provided herein or duly set forth on or subsequent to the date hereof
                                         in writing and signed by a proper and duly authorized officer of the Party to be bound
                                         thereby.

 

		(2)	There
                                         are no agreements, understandings, restrictions, promises, warranties, covenants or undertakings
                                         express or implied, relating to the subject matter of this agreement other than those
                                         expressly set forth herein.

 

		(3)	This
                                         Agreement may be executed simultaneously in two or more counterparts, each of which shall
                                         be deemed to be an original but all of which together shall constitute one instrument.

 

		(4)	The
                                         invalidity of any portion of this agreement shall not affect the remaining portions of
                                         this agreement or any part thereof and this agreement shall be construed as if such invalid
                                         portion or portions had not been inserted herein.

 

		(5)	In
                                         the event of litigation concerning the terms and conditions of this Agreement, the prevailing
                                         party, after all lawful appeals have been completed, shall be entitled to receive from
                                         the prevailing party its attorney fees incurred in such litigation.

 

	F.	Governing Law

 

This
Agreement shall be governed by, construed and enforced according to the Laws of Texas.

 

    	 	6	 

     

    

 

	G.	Jurisdiction and Venue

 

The
Parties consent and agree that jurisdiction and venue of any dispute or law suit arising out of or related to this Agreement or
the production or sale of any good or service hereunder, shall be bought exclusively in any court of competent jurisdiction sitting
in Houston, Texas.

 

	H.	Term

 

This
Agreement shall begin as of the Effective Date. Upon completion of all the itemized compensation payments itemized in this Agreement
the terms of this Agreement shall continue in effect as part of a permanent, paid up License and Royalty.

 

	I.	Authority to Sign
    the Agreement

 

Licensor
and Licensee each hereby warrants that it has the complete power and authority to execute and deliver this Agreement and to consummate
the transaction contemplated by this Agreement. Each signatory to this Agreement represents and warrants that he is duly authorized
by the Party for and on whose behalf he is signing this Agreement to execute the same in a manner binding upon said Party and
that all corporate approvals and procedures necessary for vesting such authority in him have been duly obtained and complied with.

 

	Signed
    for and on behalf of Licensor	 	Signed
    for and on behalf of Licensee
	 	 	 
	Henry
    W. Sullivan	 	Henry
    W. Sullivan
	CEO	 	MEMBER
	 	 	 
	Date: 7/16/15                                     	 	Date:
    7/16/15                                       

 

    	 	7	 

     

    

 

ATTACHMENT
A

 

LICENSOR'S
TECHNOLOGY AND INTELLECTUAL PROPERTY

 

PATENTS

 

Sionix
holds, held or applied for patents covering various elements of Dissolved Air Flotation (DAF) including mechanical design, self-contained
unit configuration, white water injection system and bubble separation system:

 

	 	Patents
    and Applications
	 	●	6,921,478
	 	●	7,033,495
	 	●	7,767,080
	 	●	7,981,287
	 	●	8,343,355
	 	●	US
    2012/0251 98
	 	●	US
    2012/0251 93
	 	●	US
    2013/0297 83
	 	●	US
    2014/0159 18

 

TRADEMARK

 

SIONIX
REGISTERED 3719207

ELIXER
REGISTERED 3701985

 

KNOW-HOW

 

Our
chemical/pH adjustment protocols are proprietary and provide a competitive cost advantage. We believe that attempts to patent
specific chemical parameters would require disclosure that would be very difficult to protect. We therefore are maintaining that
portion of our technology as "knowhow/trade secrets/proprietary information".

 

We
are reviewing the option to extend our DAF technology combined with chemical and process configuration knowhow into a process
patent that would be enforceable.

 

SITE
SPECIFIC

 

All
information about Culbertson site, equipment drawings, procedures, data documentation, personnel and governmental and industry
contact is part of the Licensor's Technology and intellectual property.

 

Attachment
B

 

    	 	8	 

     

    

 

ATTACHMENT
B

 

SIONIX
- SOS LETTER OF INTENT WHEN SIGNED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	9	 

     

    

 

DRAFT

 

LETTER
OF INTENT BETWEEN SIONIX OILFIELD SOLUTIONS, LLC (“SOS”) AND 

STEELWORKS INVESTMENTS LTD AND ITS SUBSIDIARIES AND AFFILIATES (“SWI”)

5/06/15

 

The
Parties, SOS and SWI agree to work together to acquire the Property (as defined in Exhibit A) in Culbertson, Montana and establish
the operation of an SOS water treating facility on the Property.

 

WHEREAS,
SWI desires to acquire the Property for the purpose of improving the Property and leasing a portion of the Property to SOS; and

 

WHEREAS,
SOS has technology, experience in oil and gas water treating and has done extensive due diligence on the Culbertson site, has
designed the process to be implemented on the site and has established credible relationships with the market, local government,
the property owner and the mortgage holder, regional water and tax authorities and potential employees as well as an industry
presence through participation in Industry Trade presentations and symposia; and

 

WHEREAS,
SOS desires to occupy a portion of the Property (Exhibit B) and enter a lease agreement with SWI;

 

The
Parties agree to the following:

 

SWI
will:

 

		1.	Assume
                                         the mortgage obligations of Great Plains Oil & Exploration, LLC (“GPOE”)
                                         and acquire the Property by making mortgage payments of $20,000 per month to the mortgage
                                         holder as follows:

 

$240,000
on day 1, no later than May 11, 2015

$240,000
on day 366

$240,000
on day 731

Remainder
of $1.1 million plus 10% accrued on unpaid balance on day 1096

 

It
is the intention of SWI to pay off the mortgage obligation more quickly than the base schedule. An early pay-off schedule would
be:

 

	 	Year 1.	$1.1
    million minus $240,000 equals $860,000.
	 	 	 
	 	Year
    2.	$1.1
    million minus $240,000 first payment minus $240,000 second payment plus $86,000 (10% of Year 1 unpaid balance) equals $706,000.
	 	 	 
	 	Year
    3.	$706,000
    + $70,600 (10% of year 2 unpaid balance) minus $240,000 third payment equals $536,600.

 

Total
payment for early pay off to Mortgage Holder:

 

	 	Year
    1 Pay Off	 	Year
    2 Pay Off	 	Year
    3 Pay Off
	 		 		 	                 
     
	 	$1.186 Million	 	$1.2566 Million	 	$1.1 Million

 

    	 	10	 

     

    

 

		2.	Pay
                                         all delinquent taxes on Property such that Roosevelt County agrees in writing that on
                                         receipt of specified funds (estimated to be approximately $500,000), there will be no
                                         claim or lien on the Property. Payment of all such delinquent taxes shall be made no
                                         later than closing.

 

SOS
will:

 

		1.	Secure
                                         written agreement with GPOE that they will step aside, turn the deed over to SWI and
                                         relinquish any rights of redemption in case the mortgage holder proceeds with a foreclosure
                                         procedure at any time.

 

		2.	Secure
                                         written agreement with the mortgage holder that he will abide by the terms described
                                         above, including the terms and conditions under which SWI and SOS can operate on and
                                         modify the Property prior to completing the acquisition of the Property. This may require
                                         a formal Forbearance Agreement to clearly define the above.

 

		3.	Secure
                                         written agreement with the applicable taxing authority to formally document Item 2. above
                                         under “SWI will”.

 

		4.	Make
                                         lease payment to SWI of $25,000 per month commencing in Month 13; $35,000 per month commencing
                                         in Month 25 and thereafter.

 

		5.	Consult
                                         with and assist SWI in evaluating development and potential commercial applications of
                                         the total Property.

 

		NOTE:	Detailed
                                         project description and plot maps will be an attachment to the final agreement.

 

The
Parties anticipate completing the transactions contemplated by this Letter of Intent by executing formal conveyance documents
between the mortgage holder, the land owner and SWI.

 

The
Parties concur that the terms of this Letter of Intent express only the current intentions of the parties, do not create any legally
binding relationship between the parties, and do not impose any legal obligations on the parties. No such legal obligations or
relationships shall arise unless and until definitive documents are executed by the Parties. This LOI will be superseded by signed
formal agreements.

 

	 	For SOS:	 
	 	 	 
	 	/s/
Henry W. Sullivan	 
	 	Henry W. Sullivan	 
	 	 	 
	 	For SWI:	 
	 	 	 
	 	/s/ Jeffrey
    C. Leo	 
	 	Name: Jeffrey C. Leo	 

 

 

 

11Exhibit
10.2

 

Lease

 

This
Lease (the "Lease") is entered into between Steelworks Montana, LLC, a Delaware Limited Liability Company ("Landlord"),
and Sionix Oilfield Solutions, LLC, a Texas limited Liability Company ("Tenant") effective as of July 13, 2015
(the "Effective Date").

 

	1.	Premises

 

A.          Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord the real property, improvements and fixtures located at 2049 Highway
2, Culbertson, Montana 59218, being more particularly described as approximately 49.31 acres, more or less, in S28, T28N, R56E,
and comprised of a 16.90 acre tract in the NESW, plus a 27.53 acre tract in the W2SW4, plus a 4.88 acre tract in the N2SW. The
land as more particularly described on Exhibit "A" attached hereto ("Land"), all buildings located on the
Land (individually, a "Building" and collectively, the "Buildings"), all fixtures installed in or attached
to the Buildings (collectively, the "Fixtures"), and all equipment, systems, controls and machinery located in the Buildings
or on the Land (collectively, the "Equipment"). The Land, the Buildings, the Fixtures and the Equipment are collectively
the "Leased Premises".

 

	2.	Term

 

The term
of this Lease ("Term") shall commence on July 13, 2015 ("Commencement Date"), and shall expire July 13, 2021
("Expiration Date"). The Lease can be extended under the same terms by the mutual agreement of the Landlord and Tenant,
such agreement to be concluded 90 days prior to the expiration date.

 

	3.	Rent

 

A.          As "Base Rental" for the
lease and use of the Leased Premises, Tenant will pay Landlord or Landlord's
assigns, at the address of Landlord herein specified or such other address as Landlord may hereafter specify in writing the
following sums:

 

	Year 1	 	             0
	Year 2	 	$300,000.00
	Year 3	 	$420,000.00
	Year 4	 	$420,000.00
	Year 5	 	$420,000.00
	Year 6	 	$420,000.00

 

The Base Rental shall be payable on the first day
of each month, commencing on August 1, 2016. The monthly rental shall be $25,000 per month for 12 months and then shall be $35,000
per month for the remainder of the Lease Term.

 

B.          Tenant
shall pay to Landlord the Base Rental. Landlord shall not be required to make any payment of any kind whatsoever or be under any
other obligation or liability hereunder except as herein otherwise expressly set forth. All other amounts due to Landlord from
Tenant shall be Additional Rent.

 

C.          Any
bills, charges and other unpaid items in existence at the Effective Date related to the purchase 1 and closing of the Leased Premises by the Landlord
shall be paid by Landlord.

 

    1

     

    

 

D.          Landlord will be responsible for no expenses or
investments involved in the Culbertson Plant or any business activities operated on or from the Leased Premises during the
term of this Lease.

 

	4.	Title and
                                         Use

 

A.          Tenant
will use the Leased Premises for the operation of a water treating facility and related activities such as water storage, truck
cleaning and services and for no other purposes without the written consent of the Landlord.

 

B.          Landlord
warrants that it has good and indefeasible title to the Leased Premises.

 

C.          Tenant
shall be responsible for any site maintenance or environmental issues after the Effective Date. Tenant has inspected the Leased
Premises and agrees to take the Leased Premises in its "AS IS, WHERE IS, WITH ALL FAULTS" condition.

 

D.          Tenant
agrees not to use the Leased Premises for the purpose of generating, manufacturing, producing, refining, transporting, treating,
processing or handling "hazardous substances" or "hazardous waste" as such terms are defined in any federal,
state or local law or regulation applicable to Tenant, the Leased Premises or Tenant's use or occupancy of the Leased Premises,
and not to release, spill, leak, pump, emit, pour, empty or dump any such "hazardous substances" or "hazardous waste"
onto the Leased Premises, or any adjacent property, or into the sewer, drainage system or other waste disposal system serving the
Leased Premises, or any water course on or near the Leased Premises.

 

	5.          	Fire or
                                         Other Casualty

 

If any portion
of the Buildings are damaged or destroyed by fire or other casualty, all insurance proceeds shall be made available to Tenant for
rebuilding and the Lease shall continue in full force and effect. Tenant will be responsible for repairing or rebuilding the Leased
Premises with no expenses from Landlord, if any portion of the Building is damaged or destroyed by fire or other casualty for whatever
the reason during the term.

 

	6.          	Compliance
                                         with Laws and Usage

 

Tenant,
at its own expense, will comply with all federal, state, municipal and other laws, ordinances, rules and regulations applicable
to the Leased Premises and the business conducted therein by Tenant. Tenant will not commit any act which is a nuisance; will not
engage in any activity except as expressly permitted herein which would cause Landlord's insurance to be canceled or the rate therefor
to be increased (or, at Landlord's option, will pay any such increase).

 

	7.	Additions
                                         and Fixtures

  

Construction on the Leased Premises
shall be performed in a good and workmanlike manner
at Tenant's expense. If any mechanic's or shall be placed on the Leased Premises during the Term caused by or resulting from any
work performed, materials furnished or obligation incurred by or at the request of Tenant, Tenant shall cause the same to be discharged
of record within thirty (30) days of such filing.

 

    	 	2	 

     

    

 

	8.	Assignment
                                         and subletting

 

A.          Neither
Tenant nor Tenant's legal representatives or successors in interest by operation of law or otherwise shall assign this Lease
or sublease the Leased Premises or any part thereof, or mortgage, pledge or hypothecate its leasehold interest or grant any
concession or license within the Leased Premises without the prior written permission of Landlord, which consent shall not be
unreasonably withheld Any attempt to do any of the foregoing without the prior written permission of Landlord shall be void.
In the event Landlord's permission is requested for an assignment, sublease or other transaction, signed copies of all
instruments relative thereto (executed by all parties except Landlord) shall be submitted to Landlord prior to or
contemporaneously with the request for Landlord's written permission (it being understood that no such instrument shall be
effective without the written permission of Landlord).

 

B.          If
Landlord gives written permission to a particular assignment,
sublease or other transaction, it shall not be deemed as permission to any other or subsequent transaction or a release of Tenant
from its covenants, duties and obligations under this Lease. If this Lease is assigned or if the Leased Premises are subleased
(whether in whole or in part) or in the event of the mortgage, pledge or hypothecation of the leasehold interest or grant of any
concession or license within the Leased Premises without the prior written permission of Landlord (to the extent required hereunder
for such action), or if the Leased Premises are occupied in whole or in part by anyone other than Tenant, Landlord may nevertheless
collect rent from the occupant and apply the net amount collected to the rent payable hereunder, but no collection of rent by
Landlord shall be deemed a waiver of these provisions or a release of Tenant from the further performance of its covenants, duties
and obligations hereunder.

 

	9.	Subordination

 

Tenant accepts
this Lease subject to all matters of record which affected the Leased Premises.

 

	10.          	Payment
                                         of Taxes

 

A.          Tenant
shall be responsible for timely payment of Taxes. Tenant will furnish Landlord with copies of evidence of payment and copies
of receipt from the taxing authority.

 

B.          Tenant
may, if it shall so desire, contest the validity or amount of any Taxes provided, however, nothing herein contained shall be
so construed, as to allow such items to remain unpaid for such length of time as shall in any way hamper Landlord's rights
hereunder or permit the Leased Premises, or any part thereof, to be sold by governmental, city or municipal authority for the
non-payment of the same.

 

C.          The
term "Taxes" shall mean and include all taxes, assessments and other governmental charges, general and special,
ordinary and extraordinary, of any kind and nature whatsoever, applicable to the Leased Premises during the Term of this
Lease from and after the Commencement Date, including, but not limited to assessments for public improvements or benefits
which shall, during the Term hereby demised, be laid, assessed, levied, imposed upon or become due and payable and a lien
upon the Leased Premises or any part thereof.

 

D.          It
is understood that the Premises will be annexed by the City of Culbertson. Any fees associated with an annexation will be
paid by Tenant.

 

    	 	3	 

     

    

 

	11.	Insurance

 

(a)          Tenant
shall provide and maintain (i) a comprehensive policy of general liability insurance with respect to the Leased Premises with
a limit of at least $2,000,000 combined single limit with respect to personal injury, death or property damage arising out of
any one occurrence, such minimum coverage to be increased from time to time as reasonably required by Landlord, (ii) insurance
in respect of and covering Tenant's own furniture, furnishings, equipment and other personal property, and all improvements made
by or on behalf of Tenant, all insured for the replacement cost thereof, against all risks and hazards, including but not limited
to sprinkler and leakage damage, and theft (collectively, "Personal Property Insurance"), and (iii) workers' compensation
insurance with respect to and covering all employees and agents of Tenant. The original insurance policy (or a certificate thereof
satisfactory to Landlord) shall be deposited with Landlord prior to the Effective Date. Renewals of such policy (or certificates)
shall be deposited with Landlord not less than thirty (30) days prior to the end of the term of such policy. Such insurance shall
not be subject to cancellation except after at least thirty (30) days prior written notice to Landlord.

 

(b)          With
respect to Tenant's commercial general liability insurance and Personal Property Insurance, (i) no insurance coverage shall
contain a deductible in excess of $50,000.00 and $5,000.00, respectively, without the prior written consent of Landlord, (ii)
all deductibles shall be paid by Tenant, assumed by Tenant, for the account of Tenant, and at Tenant's sole risk, (iii)
Tenant's insurer shall be licensed or authorized to do business in the State of New Jersey and shall have a policyholder
rating of at least A- and be assigned a financial size category of at least Class IX as rated in the most recent edition of "Best's
Key Rating Guide" for insurance companies or a rating of at least AAA as rated by Standard & Poor's, (iv) such
insurance coverage provided shall be endorsed to be primary to any and all insurance carried by Landlord, with Landlord's
insurance being excess, secondary and non-contributing, (v) Landlord, Landlord's manager of the Building and all holders of a
deed to secure debt or other such security instrument and the landlord under any underlying lease shall be an additional
insured on all such policies, and (vi) all policies of liability insurance specified in this Lease shall specifically insure
Tenant's contractual liability under this Lease. In each policy procured regarding the Premises or Property or any property
located thereon, the insurance company shall waive its subrogation rights against Landlord and Tenant. If such waiver of
subrogation shall not be obtainable except at additional charge, Tenant shall pay the insurer's additional charge
therefore.

 

	12.	Eminent
                                         Domain

 

A.          If a portion of the Leased Premises is taken by eminent domain, this Lease shall continue in full force and
effect provided that the Base Rental shall be adjusted proportionately based on the square footage of the Building taken, if any.
Tenant shall be entitled to terminate this Lease without any liability to either party only
if the entire Leased Premises is taken by eminent domain.

 

B.          All sums awarded
or agreed upon between Landlord and the condemning authority for the taking of the interest of Landlord, whether as damages or
as compensation, will be the property of Landlord. All sums awarded or agreed upon between Tenant and the condemning authority
for the taking of the interest Tenant whether as damages or as compensation, will be the property of Tenant.

 

	13.	Access
                                         by Landlord
                                         

 

Landlord
and its employees shall have access to and the right to enter upon the Leased Premises at any time during Tenant's regular business
hours and upon at least twenty-four (24) hours prior telephonic notice of such entry (except in the case of emergencies) to examine
its condition or, during the final year of the Term, or any renewal term to show the Leased Premises to prospective purchasers
or tenants.

 

	14.	Sale

 

Any sale of the
leased premises shall be subject to this Lease.

 

    	 	4	 

     

    

 

	15.	Events
    of Default

  

A.          Each
of the following acts or omissions of Tenant or occurrence shall constitute an "Event of Default":

 

(1)          Failure
or refusal by Tenant to timely pay rent, Taxes, or Insurance, and such failure or refusal continues for a period of ten (10) business
days; or

 

(2)          Failure
to perform or observe any other covenant or condition of this Lease within thirty (30) days following notice from Landlord of such
failure; or

 

(3)          Tenant makes an assignment
for the benefit of creditors, or a petition for adjudication of bankruptcy or for reorganization is filed by or against Tenant
and is not dismissed within thirty (30) days, or a receiver or trustee is appointed for a substantial part of Tenant's property
and such appointment is not vacated within thirty (30) days.

 

B.          Whenever
any Event of Default shall occur, Landlord may, at its option, in addition to all other rights and remedies given hereunder
or by law or equity, do any one or more of the following:

 

(1)          Terminate
this Lease, in which event Tenant shall immediately surrender possession of the Leased Premises to Landlord;

 

(2)          Enter
upon and take possession of the Leased Premises, terminating Tenant's right to possession of the Leased Premises, and expel or
remove Tenant and any other occupant therefrom, with or without having terminated the Lease;

 

(3)          Compel
Tenant to arrange payment within twenty (20) business days for all bills due;

 

(4)          Tenant
shall pay to Landlord (i) all Annual Rent and all Additional Rent payable under this Lease by Tenant to the date upon which this
Lease shall have expired or to the date of re-entry upon the Premises by Landlord, as the case may be, and (ii) all costs and expenses
incurred by Landlord in connection with the Event of Default, the reletting of the Premises and/or the termination of the Lease
(including, without limitation, all repossession costs, brokerage commissions, attorneys' fees and disbursements, alteration, repair
and renovation costs and other expenses of terminating the Lease and/or preparing the Premises for such reletting);

 

(5)          Tenant
also shall pay to Landlord any deficiency ("Deficiency") between the Annual Rent and Additional Rent for the period
which otherwise would have constituted the unexpired portion of the Term and the net amount, if any, of rents collected under
any reletting for any part of such period (after first deducting from the rents collected under any such reletting all of
Landlord's expenses, in connection with the termination of this Lease, Landlord's reentry upon the Premises and such
reletting). Landlord shall be entitled to recover from Tenant each monthly Deficiency as the same shall arise, and no suit to
collect the amount of the Deficiency for any month shall prejudice Landlord's right to collect the Deficiency for any
subsequent month by a similar proceeding. If the Premises, or any part thereof, shall be relet together with other space in
the Building, the rents collected or reserved under any such reletting and the expenses of any such reletting shall be
equitably. Tenant shall in no event be entitled to any rents collected or payable under any reletting, whether or not such
rents exceed the Annual Rent reserved in this Lease;

 

(6)          If
Landlord elects to terminate this Lease, Tenant shall pay to Landlord, on demand, in lieu of any further Deficiency as and for
liquidated damages, a sum equal to the amount by which the unpaid rent for the period which otherwise would have constituted the
unexpired portion of the Term exceeds the then fair and reasonable rental value of the Premises for the same period, both discounted
to present worth at three (3%) percent per annum;

 

    	 	5	 

     

    

 

C.          Nothing
contained in this Section 15 shall be deemed to limit or preclude the recovery by Landlord from Tenant of the maximum amount
allowed to be obtained as damages by any statute or rule of law, or of any sums or damages to which Landlord may be entitled
in addition to the damages set forth in this Section 15. The remedies available to Landlord herein specified are not intended
to be exclusive or to prevent Landlord from exercising any other remedy or means of redress to which Landlord may be lawfully
entitled. Landlord may pursue any other remedy now or hereafter available under the laws of the jurisdiction in which the
Leased Premises are located concurrently or in such order as Landlord determines.

 

D.          Tenant
hereby waives the service of any notice of intention to re-enter or to institute legal proceedings. Tenant, on its own behalf
and on behalf of all persons claiming through or under Tenant, including all creditors, waives any and all rights under any
present or future law to redeem the Leased Premises, or to re-enter or repossess the Leased Premises, or to restore the
operation of this Lease. The words "re-entry", "re-enter" and "re-entered" as used in this
Lease shall not be deemed to be restricted to their technical legal meanings.

 

E.          In
connection with either party instituting action seeking judicial relief at law or in equity in connection with this Lease,
the prevailing party shall be entitled to reasonable attorney's fees and court costs.

 

	16.	Notice

     

Any
notice which may or shall be given under the terms of this Lease shall be in writing and shall be either delivered by hand or
sent by United States Certified Mail, postage prepaid, or by Fax if for Landlord, to Steelworks Montana, LLC, 2711 Centerville
Rd., Ste 400, Wilmington, DE 19808 with a copy of such notice to Landlord being given to Jeffrey Leo, jleo@brogancapital.com
or if for Tenant, to Sionix Oilfield Solutions, LLC, 2010 North Loop West, Suite 110, Houston, TX 77018 with a copy of such
notice to Tenant being given to Sionix Oilfield Solutions, LLC, 2049 US Highway 2, Culbertson, MT 59218. Such addresses may be
changed from time to time by either party by giving notice as provided above. Notice shall be deemed given when delivered (if
delivered by hand) or three (3) days after postmarked (if sent by mail). Despite the foregoing, notice given by hand will be effectively
given wherever the intended recipient is found and will be deemed received upon the date of actual receipt.

 

	17.          	Tenant
                                         Improvement Obligation

 

Tenant
will repair and maintain the Leased Premises in operating condition at Tenant's expense. If Tenant provides and installs equipment
or fixtures not presently part of the Leased Premises, Tenant shall be entitled to remove such equipment and fixtures upon termination
of this Lease. In addition, Tenant will not construct a new building or demolish an existing building and reconstruct it without
prior written permission of the Landlord, which Landlord may withhold in Landlord's sole discretion.

 

	18.          	Miscellaneous

   

A.          Provided
Tenant complies with its covenants, duties and obligations hereunder, Tenant shall quietly have, hold and enjoy the Leased
Premises subject to the terms and provisions of this Lease.

 

    	 	6	 

     

    

 

B.          If
any provision of this Lease shall ever be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision of the Lease, but such other provisions shall continue in full force and effect.

 

C.          Tenant
acknowledges that Landlord has not made any representation with respect to any matter or thing affecting or related to the Leased
Premises, other than expressly provided herein.

 

	19.          	Entire
                                         Agreement and Binding Effect

 

This Lease and any attached exhibits
signed or initialed by the parties constitute the entire agreement between Landlord and Tenant. No prior written or prior or contemporaneous
oral promises or representations shall be binding. This Lease shall not be amended, except by written instrument signed by Landlord
and Tenant; no agent or employee of Landlord or Tenant has authority to modify this Lease. Paragraph captions are for convenience
only, and neither limits nor amplifies the provisions of this Lease. The provisions of this Lease shall be binding upon and inure
to the benefit of the heirs, executors, administrators, successors and assigns of the parties, but this provision shall in no way
alter the restriction herein in connection with assignment and subletting by Tenant. The submission of this Lease by Landlord for
examination does not constitute a reservation of or option for the Leased Premises. This Lease shall become effective only upon
execution by all parties and delivery by Landlord to Tenant.

 

	20.          	Notice
                                         to Purchase

 

Landlord shall notify Tenant of the
proposed terms of sale in the event Landlord intends to sell the Leased Premises. This notice shall not be construed as a
Right of First Office, or a Right of First Refusal. In the absence of such notice, Tenant shall have the opportunity
to purchase the Leased Premises at any time during the Lease Term, subject to terms to be mutually agreed upon between
Landlord and Tenant.

 

	21.	Indemnification.

 

Tenant shall indemnify, defend (with
counsel of Landlord's choice) and hold the Landlord and its members, partners, shareholders, directors, officers, employees and
agents harmless from and against any and all -claims, judgments, damages (including consequential damages), penalties, fines,
liabilities, losses, suits, administrative proceedings, costs and expense of any kind or nature, known or unknown, contingent
or otherwise, including reasonable legal fees and the cost of enforcing this indemnity, which arise from: (i) any accident, injury
or damage to any person (including Tenant's employees and agents) or property occurring in, on or about the Premises or any part
thereof; (ii) any breach of this Lease by Tenant, including without limitation a breach constituting an "Environmental Default"
(as defined herein); or (iii) any injury to person or damage to property resulting from any negligence or misconduct of Tenant
or any of its employees, agents, licensees, invitees, contractors or anyone else for whom Tenant is legally responsible.

 

	22.	Covenant Against Liens.

 

Tenant"shall
not have any right to subject Landlord's interest in the Leased Premises to any mechanic's lien or any other lien whatsoever.
If any mechanic's lien or other lien, charge or order for payment of money shall be filed as a result of the act or omission of
Tenant, Tenant shall cause such lien, charge or order to be discharged or appropriately bonded within ten (10) business days after
Tenant's receipt of written notice from Landlord thereof, and Tenant shall indemnify and save Landlord harmless from all liabilities
and costs resulting therefrom. If Tenant fails to discharge the lien, then, in addition to any other right or remedy of Landlord,
Landlord may bond or insure over the lien or otherwise discharge the lien. Tenant shall, within ten (10) days after receipt of
an invoice from Landlord, reimburse Landlord for any amount paid by Landlord, including reasonable attorneys' fees, to bond or
insure over the lien or discharge the lien.

 

    	 	7	 

     

    

 

	23.          	Limitation on liability of landlord.

 

Landlord shall
not be liable for any injury or damage to the person, business, equipment, merchandise or other property of Tenant resulting from
(i) fire, steam, electricity, water, gas or rain, (ii) leakage obstruction or other defects of pipes, sprinklers, wires, plumbing,
air conditioning, boilers or lighting fixtures; or (iii) any act or omission of Landlord, its agents or employees unless such injury
or damage is due solely to the gross negligence or willful misconduct of Landlord's, its agents or employees.

 

	24.          	Holdover.

 

Any holding
over by Tenant after the expiration of the Term shall be treated as a month-to month tenancy at the greater of (x) Two Hundred
Percent (200%) of the fair market value of the Leased Premises (as determined by Landlord) or (y) Two Hundred Percent (200%) of
the sum of (i) the Base Rental payable during the last month of the Term, plus (ii) all items of Additional Rent and other charges
with respect to the Leased Premises payable by Tenant during the last month of the Term, and shall otherwise be on the terms and
conditions set forth in this Lease, as far as applicable. Landlord waives no rights against Tenant by reason of accepting any
holding over by Tenant, including, without limitation, the right to terminate such month-to-month tenancy as provided by law at
any time after the expiration of the Term and any right to damages in the event that Tenant's holding over causes Landlord to
suffer any loss. Nothing herein contained shall be deemed to give Tenant any right to remain in possession of the Leased Premises
after the expiration of the Term of this Lease.

 

SIGNATURES FOLLOW ON
NEXT PAGE.

 

    	 	8	 

     

    

 

Executed
by the parties effective as of the date set forth above.

 

	Landlord:	 	Tenant:
	 	 	 	 	 
	Steel works montana, LLC	 	Sionix Oilfields Solutions, LLC
	 	 	 	 	 
	By:	/s/ Jeffrey Leo	 	By:	/s/ Henry W. Sullivan
	Name:	Jeffrey Leo	 	Name:	Henry W. Sullivan
	Title:	Director	 	Title:	Member

 

    	 	9	 

     

    

 

EXHIBIT
A – THE LAND

 

 

 

 

 

10

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