STOCK
      OPTION AGREEMENT

    


    THIS
      STOCK OPTION AGREEMENT
      (this
“Agreement”) is entered into as of November 11, 2008 by and between RICHARD H.
      PAPALIAN (the “Optionee”) and Sionix Corporation, a Nevada corporation (the
“Corporation”). The foregoing parties are sometimes referred to hereinafter
      individually as a “Party” or collectively as the “Parties.” All capitalized
      terms not otherwise defined herein shall have the definitions ascribed to them
      in the Grant Notice.

    


    WHEREAS,
      in
      connection with the Termination, Separation and Release Agreement between the
      Corporation and the Optionee, dated the date hereof, the Corporation has agreed
      to issue to the Optionee a new option to purchase shares of its common stock
      pursuant to the Notice of Grant of Stock Option dated the date hereof (the
      “Option”).

     

    WHEREAS,
      the
      Optionee and the Corporation wish to memorialize in writing the terms and
      conditions applicable to the Option, as provided herein and in the Grant
      Notice.

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and agreements hereinafter set forth,
      and
      for other good and valuable consideration, the receipt and sufficiency of which
      are hereby acknowledged, the Parties do hereby covenant and agree as
      follows:

    


    1.    Grant
      of Option.
      The
      Corporation hereby grants to the Optionee, as of the Grant Date, an Option
      to
      purchase up to the aggregate number of Option Shares specified in the Grant
      Notice. The Option Shares shall be purchasable from time to time during the
      Option term specified in Paragraph 2 below at the Exercise Price. 

    


    2.    Option
      Term.
      The
      Option shall have a term of five (5) years measured from the Grant Date and
      shall accordingly expire at the close of business on the Expiration Date, unless
      sooner terminated pursuant to Paragraph 4 or 7 of this Agreement. 

    


    3.    Limited
      Transferability.
      

     

    (a) During
      the Optionee’s lifetime, the Option shall be exercisable only by the Optionee
      and shall not be assignable or transferable other than by will or by the laws
      of
      descent and distribution following the Optionee’s death. However, Optionee may
      designate one or more persons as the beneficiary or beneficiaries of this
      Option, so that, if Optionee is holding this Option at the time of his or her
      death, this Option shall, in accordance with such designation, automatically
      be
      transferred to such beneficiary or beneficiaries upon Optionee’s death. Such
      beneficiary or beneficiaries shall take the transferred Option subject to all
      the terms and conditions of this Agreement, including (without limitation)
      the
      limited time period during which this option may, pursuant to Paragraph 6(c),
      be
      exercised following Optionee’s death.

     

    (b) If
      this
      option is designated a Non-Statutory Option in the Grant Notice, then this
      Option may be assigned in whole or in part during Optionee’s lifetime to one or
      more members of Optionee’s family (as defined in Rule 701 promulgated by the
      Securities and Exchange Commission) or to a trust established for the benefit
      of
      one or more such family members or to Optionee’s former spouse, to the extent
      such assignment is in connection with Optionee’s estate plan or pursuant to a
      domestic relations order. The assigned portion shall be exercisable only by
      the
      person or persons who acquire a proprietary interest in the Option pursuant
      to
      such assignment. The terms applicable to the assigned portion shall be the
      same
      as those in effect for this Option immediately prior to such assignment.


     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c) Anything
      herein to the contrary notwithstanding, in no event shall the Optionee sell
      prior to January 1, 2009 (the “Lock-Up Period”) any shares of Common Stock
      acquired upon exercise of the Option. The Optionee consents to the placement
      of
      a legend to that effect on any Common Stock certificates issued to the Optionee
      during the Lock-Up Period upon exercise of the Option.

    


    4.    Vesting
      Schedule.
      The
      Option shall vest according to the vesting schedule provided in the Grant
      Notice. 

    


    5.    Representations
      of the Optionee.
      The
      Optionee hereby represents as follows:

     

    (a)
      The
      Optionee either has a preexisting personal or business relationship with the
      Corporation or any of its officers, directors or controlling persons, or by
      reason of his business or financial experience or the business or financial
      experience of his professional advisors who are unaffiliated with and who are
      not compensated by the Corporation or any affiliate or selling agent of the
      Corporation, directly or indirectly, could be reasonably assumed to have the
      capacity to protect his own interests in connection with the transaction.


     

    (b)
      The
      Optionee is acquiring the Option and, upon exercise, the Option Shares, for
      his
      own account and not with a view to or for sale in connection with any
      distribution thereof. 

     

    (c)
      The
      Optionee did not learn of the offer and sale of the Option through the
      publication of any advertisement. 

     

    6.    [Intentionally
      Omitted]

    


    7.    Corporate
      Transactions.

    


    (a) In
      the
      event of  (i)
      a
      dissolution or liquidation of the Corporation, (ii) a merger or consolidation
      in
      which the Corporation is not the surviving corporation (other than a merger
      or
      consolidation with a wholly-owned subsidiary, a reincorporation of the
      Corporation in a different jurisdiction, or other transaction in which there
      is
      no substantial change in the stockholders of the Corporation or their relative
      stock holdings), (iii) a merger in which the Corporation is the surviving
      corporation but after which the stockholders of the Corporation immediately
      prior to such merger (other than any stockholder that merges, or which owns
      or
      controls another corporation that merges, with the Corporation in such merger)
      cease to own their shares or other equity interest in the Corporation, (iv)
      the
      sale of substantially all of the assets of the Corporation, or (v) the
      acquisition, sale, or transfer of more than 50% of the outstanding shares or
      the
      Corporation by tender offer or similar transaction (each, a “Corporate
      Transaction”), the Corporation shall provide written notice to the Optionee of
      such Corporate Transaction no less than 15 business days prior to the
      consummation thereof.

    


    (b) Immediately
      following the consummation of the Corporate Transaction, the Option shall
      terminate and cease to be outstanding.

    


    (c) This
      Agreement shall not in any way affect the right of the Corporation to adjust,
      reclassify, reorganize or otherwise change its capital or business structure
      or
      to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
      of its business or assets.

     

    8.    Adjustment
      in Option Shares.
      Should
      any change be made to the Common Stock by reason of any stock split, stock
      dividend, recapitalization, combination of shares, exchange of shares or other
      change affecting the outstanding Common Stock as a class without the
      Corporation’s receipt of consideration, appropriate adjustments shall be made to
      (a) the total number and/or class of securities subject to this option and
      (b)
      the Exercise Price in order to reflect such change and thereby preclude a
      dilution or enlargement of benefits hereunder.

     

    
      
         

      

      
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    9.    Shareholder
      Rights.
      The
      Optionee shall not have any shareholder rights with respect to the Option Shares
      until the Optionee shall have exercised the Option in accordance with this
      Agreement and become a holder of record of the purchased shares.

    


    10.    Manner
      of Exercising Option.

    


    (a) In
      order
      to exercise the Option with respect to all or any part of the Option Shares,
      the
      Optionee (or any other person or persons exercising the option) must take the
      following actions:

    


    (i) Execute
      and deliver to the Corporation a written notice setting forth the number of
      Option Shares for which the Option is exercised.

    


    (ii) Pay
      the
      aggregate Exercise Price for the purchased shares in cash or in one or more
      of
      the following forms:

    


    (A) by
      cancellation of indebtedness of the Corporation to the Optionee;

    


    (B) by
      surrender of shares of Common Stock that either: (1) have been owned by the
      Optionee for more than six (6) months and have been paid for within the meaning
      of Rule 144 promulgated under the Securities Act of 1933, as amended (and,
      if
      such shares were purchased from the Corporation by use of a promissory note,
      such note has been fully paid with respect to such shares); or (2) were obtained
      by the Optionee in the public market;

    


    (C) with
      respect only to purchases upon exercise of an Option, and provided that a public
      market for the Corporation’s stock exists:

    


    (1) through
      a
“same day sale” commitment from the Optionee and a broker-dealer that is a
      member of the Financial Industry Regulatory Authority (an “FINRA Dealer”)
      whereby the Optionee irrevocably elects to exercise the Option and to sell
      a
      portion of the shares so purchased to pay for the Exercise Price, and whereby
      the FINRA Dealer irrevocably commits upon receipt of such shares to forward
      the
      Exercise Price directly to the Corporation; or

    


    (2) through
      a
“margin” commitment from the Optionee and a FINRA Dealer whereby the Optionee
      irrevocably elects to exercise the Option and to pledge the shares so purchased
      to the FINRA Dealer in a margin account as security for a loan from the FINRA
      Dealer in the amount of the Exercise Price, and whereby the FINRA Dealer
      irrevocably commits upon receipt of such shares to forward the Exercise Price
      directly to the Corporation; or

    


    (D) by
      any
      combination of the foregoing. 

    


    Except
      to
      the extent the sale and remittance procedure is utilized in connection with
      the
      Option exercise, payment of the Exercise Price in one of the forms provided
      above must accompany the written notice delivered to the Corporation in
      connection with the Option exercise.

     

    
      
         

      

      
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    (iii) Furnish
      to the Corporation appropriate documentation that the person or persons
      exercising the Option (if other than Optionee) have the right to exercise the
      Option.

    


    (iv) Execute
      and deliver to the Corporation such written representations as may be requested
      by the Corporation in order for it to comply with the applicable requirements
      of
      federal and state securities laws.

    


    (v) Make
      appropriate arrangements with the Corporation for the satisfaction of all
      federal, state and local income and employment tax withholding requirements
      applicable to the Option exercise.

    


    (b) As
      soon
      as practical after the exercise date, the Corporation shall issue to or on
      behalf of the Optionee (or any other person or persons exercising the Option)
      a
      certificate for the purchased Option Shares, with the appropriate legends
      affixed thereto.

    


    (c) Fractions
      of Option Shares will not be issued but will either be replaced by a cash
      payment equal to the fair market value of such fraction of an Option Share
      (based on the closing price of the Common Stock reported by Bloomberg LP on
      the
      replacement date) or will be rounded up to the nearest whole share of Common
      Stock, as determined by the Corporation.

    


    11.    Compliance
      with Laws and Regulations.
      The
      exercise of the Option and the issuance of the Option Shares upon such exercise
      shall be subject to compliance by the Corporation and the Optionee with all
      applicable requirements of law relating thereto and with all applicable
      regulations of any national securities exchange or interdealer quotation system
      on which the Corporation’s Common Stock may be listed or quoted at the time of
      such exercise and issuance.

    


    12.    Successors
      and Assigns.
      Except
      to the extent otherwise provided in Paragraph 3, the provisions of this
      Agreement shall inure to the benefit of, and be binding upon, the Corporation
      and its successors and assigns and the Optionee, the Optionee’s assigns and the
      legal representatives, heirs and legatees of the Optionee’s estate.

    


    13.    Notices.
      Any
      notice required to be given or delivered to the Corporation under the terms
      of
      this Agreement shall be in writing and addressed to the Corporation at its
      principal executive offices. Any notice required to be given or delivered to
      the
      Optionee shall be in writing and addressed to the Optionee at the last address
      the Optionee filed in writing with the Corporation. All notices shall be deemed
      effective upon personal delivery or upon deposit in the U.S. mail, postage
      prepaid and properly addressed to the Party to be notified.

    


    14.    Governing
      Law.
      The
      interpretation, performance and enforcement of this Agreement shall be governed
      by the laws of the State of California without resort to that State’s
      conflict-of-laws rules.

    


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    IN
      WITNESS WHEREOF,
      the
      Parties hereto have executed this Stock Option Agreement as of the date first
      set forth above.

     

    
      	 	
              CORPORATION:

              


              SIONIX
                CORPORATION

              


              


              By:
                /s/
                James Houtz

              Name:
                James Houtz

              Title:
                Chief Executive Officer

              


              


              OPTIONEE:     

              


              


              /S/
                RICHARD H. PAPALIAN

              RICHARD
                H. PAPALIAN

            


    

     

    
      
         

      

      
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