Document:

EMPLOYMENT
      AGREEMENT

    

    THIS
      EMPLOYMENT AGREEMENT
      (this
“Agreement”) is entered into as of December 19, 2007 by and between Richard
      Papalian (the “Executive”) 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.”

    

    WHEREAS,
      the
      Corporation believes that the Executive’s service, experience, contacts and
      knowledge are valuable to the Corporation in connection with its business;
      and

    

    WHEREAS,
      the
      Corporation desires to employ the Executive, and the Executive desires to be
      employed by the Corporation, as the Chief Executive Officer of the
      Corporation.

    

    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. Employment.
      The
      Corporation hereby agrees to employ the Executive and the Executive hereby
      accepts such employment upon the terms and subject to the conditions hereinafter
      set forth. The Executive agrees to devote at least two (2) business days per
      week to the performance of his duties and responsibilities hereunder. The
      Executive shall not be prohibited from engaging in any other business or
      endeavor so long as such other business or endeavor is not competitive with
      the
      Corporation’s actual or prospective business and, subject to the foregoing,
      nothing herein shall prohibit Executive from engaging in any other business
      or
      activity, including, without limitation, as an officer, director, manager,
      member, partner or stockholder of any other entities. 

    

    2. Term
      of Employment.
      Subject
      to Section 7, the term of the Executive’s employment pursuant to this Agreement
      shall commence on and as of the date hereof (the “Effective Date”), and shall
      terminate on December 19, 2008 (the “Initial Term”). This Agreement shall
      automatically renew for an additional one (1) year period (the “Successive
      Term”), unless either Party shall notify the other in writing of its intent not
      to renew at least sixty (60) days prior to the expiration of the Initial Term.
      In
      this
      Agreement the word “Term” shall refer to the Initial Term and the Successive
      Term, if any.

    

    3. Authority;
      Extent of Service.
      During
      the Term, the Executive shall serve as Chief Executive Officer of the
      Corporation. The Executive shall report directly to the board of directors
      of
      the Corporation (the “Board”), and shall have powers and duties consistent with
      the position of Chief Executive Officer, including, but not limited to: (a)
      hiring personnel, subject to Board approval (except with respect to hiring
      administrative support staff, which shall not require Board approval); (b)
      terminating personnel, upon Board approval; (c) establishing and executing
      a
      strategic plan for the Corporation, which plan shall be approved by the Board;
      (d) overseeing of all of the Corporation’s day-to-day operations; (e)
      recommending to the Board auditing, financial and legal advisors for engagement
      by the Corporation; (f) negotiating and managing strategic transactions for
      the
      Corporation, including, without limitation, corporate financing, sale and
      acquisition transactions; and (g) such other duties as are reasonably and
      lawfully delegated to him from time to time by the Board.

     

    4. Appointment
      to Board.
      On the
      Effective Date, the Board shall appoint the Executive to serve as a member
      of
      the Board. Thereafter, the Executive shall be a director of the Corporation
      and
      shall hold such office so long as Employee continues to serve as the Chief
      Executive Officer of the Corporation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    5. Location.
      During
      the Term, the Executive may perform his duties from his home office or at the
      Corporation's offices in Irvine, California, at the discretion of the Executive.
      

     

    6. Remuneration;
      Benefits.
      In
      consideration of the services to be rendered hereunder, the Executive shall
      be
      entitled to the following remuneration:

    

    (a) Equity
      Compensation.
      Upon
      the Effective Date, the Executive shall be granted a non-qualified stock option
      (the “Option”) to purchase up to an aggregate of 5% of the Corporation’s
      outstanding common stock, par value $0.001 per share (the “Common Stock”), on a
      fully diluted basis calculated as of the Effective Date (the “Option Shares”),
      and exercisable for a period of 5 years at an exercise price of $0.25 per share
      (the “Exercise Price”), which Option Shares shall be subject to vesting and
      certain adjustments as provided in the Notice of Grant of Stock Option
      substantially in the form attached hereto as Exhibit
      A
      (the
“Grant Notice”) and the form of Option Agreement attached thereto as Exhibit A
      (the “Option Agreement”). The Corporation agrees to register the Option Shares
      with the Securities and Exchange Commission on Form S-8 within 30 days of the
      Effective Date. In addition, in the event the Corporation’s Market
      Capitalization (as defined in the Grant Notice) is $175 million or more for
      15
      consecutive trading days, no later than the first year anniversary of the
      expiration of the Term, then the Corporation will issue to the Executive upon
      the conclusion of such 15 trading day period a five-year option to purchase
      an
      additional 1.5% of the Corporation’s outstanding Common Stock on a fully diluted
      basis calculated as of the date of this Agreement, at an exercise price equal
      to
      the closing price on the 15th
      day of
      such 15 trading day period.

    

    (b) Annual
      Salary.
      The
      Executive shall not be entitled to receive an annual salary during the Initial
      Term.

    

    (c) Benefits.
      The
      Executive shall not be entitled to receive any paid vacation or other benefits
      during the Initial Term, including, without limitation, medical, pension,
      dental, life insurance, disability income, retirement or other employment
      benefits as may be in effect from time to time for other executive officers
      of
      the Corporation generally.

    

    (d) Expenses.
      The
      Corporation shall reimburse the Executive for all reasonable business expenses
      incurred during Executive’s employment hereunder (the “Expenses”), with any
      individual Expenses in excess of two thousand five hundred dollars ($2,500)
      or
      aggregate Expenses in excess of five thousand dollars ($5,000) in any 30-day
      period commencing as of the Effective Date to be submitted to the Board for
      pre-approval by the Board.

    

    (e) Directors’
      and Officers’ Liability Insurance.
      The
      Corporation shall maintain directors’ and officers’ liability insurance in an
      amount of not less than $5,000,000 million in coverage and with a carrier as
      determined in the Board’s discretion and consented to by the
      Executive.

    

    (f) Additional
      Remuneration.
      During
      the Successive Term, if any, the Executive shall be entitled to only such
      remuneration and benefits as may be negotiated and mutually agreed upon in
      writing by the Parties. The parties agree that prior to the end of the Initial
      Term they shall use good faith efforts to negotiate renumeration for the
      Successive Term; provided that nothing herein shall require either party to
      renew the term of this Agreement for the Successive Term. 

    

    7. Termination
      and Termination Benefits.
      Notwithstanding the provisions of Section 2, the Executive’s employment under
      this Agreement shall terminate under the following circumstances:

     

    
      
        
        

      

      
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    (a) Termination
      for Cause.
      Subject
      to Section 7(d), the Corporation may terminate Executive's employment under
      this
      Agreement for Cause at any time prior to expiration of the Term. As used herein,
      "Cause" shall mean only:

     

    (i)if
      Executive is convicted of (or pleads nolo contendere to) any felony;

     

    (ii)acts
      of
      fraud, misappropriation or embezzlement committed by Executive at the expense
      of
      the Corporation; 

     

    (iii)
      a
      determination by the Corporation that Executive has engaged in willful
      misconduct, gross negligence or gross or habitual neglect in the performance
      of
      his duties under this Agreement; or 

    

    (iv) a
      material breach by the Executive of any of the covenants, terms or provisions
      of
      this Agreement that remains uncured for a period of 30 days after written notice
      by the Corporation to the Executive.

    

    Executive
      shall not be deemed to have been terminated for Cause unless and until there
      shall have been delivered to him a copy of a resolution duly adopted by the
      affirmative vote of a majority of the Board (not counting Executive) at a
      meeting of the Board (after reasonable notice to Executive and opportunity
      for
      Executive, together with his counsel, to be heard before the Board and to cure
      such conduct within thirty (30) days thereof to the extent curable), finding
      that in the good faith opinion of the Board, Executive engaged in the conduct
      described herein, and specifying the particulars thereof. 

    

    (b) Termination
      for Good Reason.
      Subject
      to Section 7(d), the Executive’s employment under this Agreement may be
      terminated by the Executive for Good Reason by written notice to the Board.
      The
      occurrence of one or more of the following events shall constitute “Good
      Reason”:

     

    (i) the
      Corporation’s material breach of any of the provisions of this Agreement, which
      breach is not cured by the Corporation within fifteen (15) days following
      written notice thereof from Executive; provided, that the Corporation can only
      cure such breach on two (2) occasions;

     

    (ii) any
      adverse alteration in Executive's titles, positions, status, duties or authority
      with the Corporation;

     

    (iii) the
      Executive's ceasing to be a member of the Board for any reason other than
      Executive's death, Disability, termination for Cause hereunder, resignation
      or
      refusal to stand for re-election to the Board;

     

    (iv) any
      reduction in Executive's compensation;

     

    (v) any
      relocation of the Corporation's principal executive offices outside of the
      Orange County or Los Angeles metropolitan areas;

    

    (vi) the
      Board
      requests the Executive to engage in any unlawful activity; or 

     

    
      
        
        

      

      
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    (vii) a
      Change
      in Control shall occur.

     

    A
      "Change
      in Control" shall be deemed to have occurred if the conditions set forth in
      any
      one of the following paragraphs shall have been satisfied:

     

    (i) any
      "person," as such term is used in Sections 13(d) and 14(d) of the Securities
      Exchange Act of 1934, as amended (the "Exchange Act") (other than the
      Corporation or any Affiliate thereof, is or becomes after the Effective Date
      the
      "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
      directly or indirectly, of securities of the Corporation (not including in
      the
      securities beneficially owned by such person any securities acquired directly
      from the Corporation or Executive) representing fifty percent (50%) or more
      of
      the combined voting power of the Corporation's then outstanding securities;
      or

     

    (ii) in
      the
      event that the individuals who at the beginning of the Initial Term constitute
      the Board, and any new director whose election by the Board or nomination for
      election by the Corporation's shareholders was approved by a vote of at least
      a
      majority of the Board then still in office who either were members of the Board
      at the beginning of the Initial Term or whose election or nomination for
      election was previously so approved, cease for any reason to constitute at
      least
      a majority thereof during the Initial Term; or

     

    (iii) the
      shareholders of the Corporation approve a merger or consolidation of the
      Corporation with or the sale of the Corporation to any other entity and, in
      connection with such merger, consolidation or sale, individuals who constitute
      the Board immediately prior to the time any agreement to effect such merger
      or
      consolidation is entered into fail for any reason to constitute at least a
      majority of the Board of the surviving corporation following the consummation
      of
      such merger or consolidation; or 

     

    (iv) the
      shareholders of the Corporation approve a plan of
      complete liquidation of the Corporation or an agreement for the sale or
      disposition by the Corporation of all or substantially all of the Corporation's
      assets to an entity not controlled by the Corporation.

     

    (c) Termination
      Without Cause or Good Reason.
      Subject
      to Section 7(d), the Executive’s employment under this Agreement may be
      terminated by the Corporation without Cause, or by the Executive without Good
      Reason, immediately upon written notice to the other Party.

    

    (d) Effects
      of Termination.
      If
      during the Term (i) the Executive’s employment is terminated by the Corporation
      for Cause, or by the Executive without Good Reason, then any as yet unvested
      Option Shares shall be immediately forfeited upon the date of such termination
      (the “Termination Date”), as provided in the Option Agreement; or (ii) the
      Executive’s employment is terminated by the Corporation without Cause, or by the
      Executive for Good Reason, then any as yet unvested Option Shares shall
      immediately vest and become exercisable upon the Termination Date, for the
      entire life of the Option, as provided in the Option Agreement. Notwithstanding
      anything herein to the contrary, the Executive’s obligations under Sections 8 of
      this Agreement and the Corporation’s obligations under Section 9 of this
      Agreement shall survive any termination of the Executive’s employment with the
      Corporation at any time and for any reason.

     

    
      
        
        

      

      
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    (e) Death;
      Disability.
      Upon
      the death or Disability of the Executive, all obligations of the Corporation
      under this Agreement shall immediately terminate other than with respect to
      vested but unexercised Option Shares to the extent accrued or vested through
      the
      Termination Date, as provided in the Option Agreement. As used in this Section
      7, the term “Disability” means the good faith determination of the Board that
      the Executive has become so physically or mentally incapacitated or disabled
      as
      to be unable to satisfactorily perform his duties hereunder for a period of
      one
      hundred twenty (120) consecutive calendar days or for one-hundred eighty (180)
      days in any three-hundred sixty (360) day period, such determination based
      upon
      a certificate as to such physical or mental disability issued by a licensed
      physician and/or psychiatrist (as the case may be) mutually agreed upon by
      Executive and the Corporation.

     

    (f) No
      Mitigation; No Offset.
      The
      Parties hereto agree that Executive shall not be required to mitigate damages
      in
      respect of any termination benefit or payment due under this Agreement or in
      respect of any damage award as a result of the Corporation's breach of this
      Agreement, nor shall any such benefit or award be offset by any future
      compensation or income received by Executive from any other source. The
      Corporation shall not have the right to offset against its obligations hereunder
      or against any such damage award any amounts payable by Executive to Corporation
      for any reason.

     

    8. Non-Competition;
      Non-Solicitation; Confidentiality; Proprietary Rights.

     

    (a) Non-Competition.
      The
      Executive agrees that he shall not during the Term:

    

    (i) directly
      or indirectly own, engage in, manage, operate, join, control, or participate
      in
      the ownership, management, operation, or control of, or be connected as a
      stockholder, partner, member, joint venturer, director, officer, employee,
      consultant or agent with, any corporation, limited liability company,
      partnership, sole proprietorship, association, business, trust, or other
      organization, entity or individual which develops, manufactures or markets
      products or performs services which are competitive with products or services
      of
      the Corporation or its subsidiaries; provided,
      however,
      that
      the Executive may own, directly or indirectly, securities of any entity traded
      on a national securities exchange or listed or quoted on an interdealer
      quotation system; and provided,
      further,
      that
      the Executive does not, directly or indirectly, own more than 5% of any class
      of
      equity securities, or securities convertible into or exercisable or exchangeable
      for more than 5% of any class of equity securities, of such entity;

    

    (ii) call
      upon, solicit, direct, take away, provide products or services to, or accept
      any
      orders of business from, any customers or clients of the Corporation for
      products or services which are competitive with the products or services of
      the
      Corporation or its subsidiaries; or

    

    (iii) solicit
      any employee of the Corporation to terminate such employee’s employment with the
      Corporation.

     

    
      
        
        

      

      
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    (b) Confidential
      Information.
      As used
      in this Agreement, the term “Confidential Information” shall mean proprietary
      and non-public information that is not disclosed by the Corporation in its
      public filings. Confidential Information includes information, whether or not
      patentable or copyrightable, in written, verbal, electronic or other tangible
      or
      intangible forms, stored in any medium, including, by way of example and without
      limitation, trade secrets, ideas, concepts, designs, configurations,
      specifications, drawings, blueprints, diagrams, models, prototypes, samples,
      flow charts processes, techniques, formulas, software, improvements, inventions,
      domain names, data, know-how, discoveries, copyrightable materials, marketing
      plans and strategies, sales and financial reports and forecasts, customer lists,
      studies, reports, records, books, contracts, instruments, surveys, computer
      disks, diskettes, tapes, computer programs and business plans, prospects and
      opportunities (such as possible acquisitions or dispositions of businesses
      or
      facilities). Confidential Information may include information developed by
      the
      Executive in the course of the Executive’s employment by the Corporation, as
      well as other information to which the Executive may have access, in connection
      with the Executive’s employment. Notwithstanding the foregoing, Confidential
      Information does not include information (i) that is or becomes generally
      available in the public domain through no fault of the Executive, (ii) was
      known
      by the Executive prior to his employment by the Corporation, (iii) is disclosed
      pursuant to the lawful requirement or request of a governmental agency or
      disclosure is permitted or required by operation of law, court order, civil
      process or stock exchange.

    

    (c) Confidentiality.
      In the
      course of performing services hereunder on behalf of the Corporation and its
      affiliates, the Executive has had, and from time to time will have, access
      to
      Confidential Information. The Executive agrees (i) to hold such Confidential
      Information in strict confidence, (ii) not to disclose the Confidential
      Information to any person (other than in the course of the regular business
      of
      the Corporation), and (iii) not to use, directly or indirectly, any of the
      Confidential Information for any purpose other than on behalf of the
      Corporation. All documents, records, data, apparatus, equipment and other
      physical property, whether or not pertaining to Confidential Information, that
      are furnished to the Executive by the Corporation or are produced by the
      Executive in connection with the Executive’s employment will be and remain the
      sole property of the Corporation. Upon the termination of the Executive’s
      employment with the Corporation at any time and for any reason, and as and
      when
      otherwise requested by the Corporation, all Confidential Information (including,
      without limitation, all data, memoranda, customer lists, notes, programs and
      other papers or items, and reproductions thereof relating to the foregoing
      matters) in the Executive’s possession or control, shall be immediately returned
      to the Corporation.

     

    (d) Third
      Party Agreements and Rights.
      The
      Executive represents to the Corporation that the Executive’s execution of this
      Agreement, the Executive’s employment with the Corporation and the performance
      of the Executive’s obligations under this Agreement does not violate any
      existing obligations the Executive has to any previous employer or other party.
      In the Executive’s work for the Corporation, the Executive will not disclose or
      make use of any information in violation of any agreements with or rights of
      any
      previous employer or other party, and the Executive will not bring to the
      premises of the Corporation any copies or other tangible embodiments of
      confidential information belonging to or obtained from any previous employment
      or other party.

     

    (e) Inventions.
      The
      Executive recognizes that the Corporation possesses a proprietary interest
      in
      all of the Confidential Information and has the exclusive right and privilege
      to
      use, protect by copyright, patent or trademark, or otherwise exploit the
      processes, ideas and concepts described therein to the exclusion of the
      Executive, except as otherwise agreed between the Corporation and the Executive
      in writing. The Executive expressly agrees that any products, inventions,
      discoveries or improvements made by the Executive in the course of the
      Executive’s employment, including any of the foregoing which is based on or
      arises out of the Confidential Information, shall be the property of and inure
      to the exclusive benefit of the Corporation. The Executive further agrees that
      any and all products, inventions, discoveries or improvements developed by
      the
      Executive (whether or not able to be protected by copyright, patent or
      trademark) during the Term, or involving the use of the time, materials or
      other
      resources of the Corporation, shall be promptly disclosed to the Corporation
      and
      shall become the exclusive property of the Corporation, and the Executive shall
      execute and deliver any and all documents necessary or appropriate to implement
      the foregoing.

     

    
      
        
        

      

      
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    (f) Certain
      Remedies.
      It is
      specifically understood and agreed that any breach of the provisions of this
      Section 8 of this Agreement by the Executive could result in irreparable injury
      to the Corporation and its subsidiaries and affiliates, and that the remedy
      at
      law alone may be an inadequate remedy for such breach. Accordingly, the
      Executive agrees that if the Executive breaches any portion of this Agreement,
      the Corporation or its subsidiaries and affiliates shall be entitled, in
      addition to any other remedy it may have, to seek to enforce the specific
      performance of this Agreement by the Executive through both temporary and
      permanent injunctive relief, it being understood that injunctive relief is
      in
      addition to, and not in lieu of, such other remedies.

     

    9. Indemnification.
      The
      Corporation shall indemnify the Executive as provided in an indemnification
      agreement in the form attached hereto as Exhibit
      B.

    

    10. Integration.
      This
      Agreement and the attachments hereto constitute the entire agreement between
      the
      Parties with respect to the subject matter hereof and supersede all prior
      agreements between the Parties, whether written or verbal, with respect to
      any
      related subject matter.

    

    11. Assignment;
      Successors and Assigns, etc.
      Neither
      the Corporation nor the Executive may make any assignment of this Agreement
      or
      any interest herein without the prior written consent of the other Party;
provided,
      however,
      in the
      event of a Change in Control, this Agreement shall be binding upon and inure
      to
      the benefit of such successor and such successor shall discharge and perform
      all
      the promises, covenants, duties, and obligations of the Corporation
      hereunder.

    

    12. Enforceability.
      If any
      portion or provision of this Agreement (including, without limitation, any
      portion or provision of any section of this Agreement) shall to any extent
      be
      declared illegal or unenforceable by a court of competent jurisdiction, then
      the
      remainder of this Agreement, or the application of such portion or provision
      in
      circumstances other than those as to which it is so declared illegal or
      unenforceable, shall not be affected thereby, and each portion and provision
      of
      this Agreement shall be valid and enforceable to the fullest extent permitted
      by
      law.

    

    13. Waiver.
      No
      waiver of any provision hereof shall be effective unless made in writing and
      signed by the waiving Party. The failure of any Party to require the performance
      of any term or obligation of this Agreement, or the waiver by any Party of
      any
      breach of this Agreement, shall not prevent any subsequent enforcement of such
      term or obligation or be deemed a waiver of any subsequent breach.

    

    14. Notices.
      Any
      notices, requests, demands and other communications provided for by this
      Agreement shall be sufficient if in writing and delivered in person or sent
      by a
      nationally recognized overnight courier service or by registered or certified
      mail, postage prepaid, return receipt requested to the Parties as
      follows:

    

    if
      to the
      Executive, at the last address the Executive has filed in writing with the
      Corporation, 

     

    
      
        
        

      

      
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    with
      a
      copy to: 

    

    Manatt,
      Phelps & Phillips, LLP

    11355
      W.
      Olympic Blvd. 

    Los
      Angeles, California 90064

    Attn:
      Mark J. Kelson, Esq. 

    

    if
      to the
      Corporation, as follows:

    

    Sionix
      Corporation

    2082
      Michelson Drive, Suite 306

    Irvine
      CA
      92612

    Attn.:
      Chairman of the Board of Directors

    

    with
      a
      copy to:

    

    Richardson
      & Patel LLP

    The
      Chrysler Building

    405
      Lexington Avenue, 26th Floor

    New
      York,
      New York 10174

    Attn.:
      Kevin Friedmann, Esq.

    

    15. Amendment.
      This
      Agreement may be amended or modified only by a written instrument signed by
      the
      Executive and by a duly authorized representative of the
      Corporation.

    

    16. Governing
      Law.
      This
      Agreement shall be construed under and be governed in all respects by the laws
      of the State of California, without giving effect to the conflict of laws
      principles thereof.

    

    17. Counterparts.
      This
      Agreement may be executed in two or more identical counterparts, all of which
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each Party and delivered to the other Party;
      provided that a facsimile signature or email delivery of a “.pdf” file
      containing such signature shall be considered due execution and shall be binding
      upon the signatory thereto with the same force and effect as if the signature
      were an original, not a facsimile signature.

    

    18. Attorneys’
      Fees and Costs.
      If any
      action at law or in equity is necessary to enforce or interpret any of the
      rights or obligations under this Agreement, the prevailing Party shall be
      entitled to reasonable attorneys’ fees, costs, and disbursements in addition to
      any other relief to which the prevailing Party may be entitled. In addition,
      the
      Corporation shall promptly reimburse the Executive upon presentation of billing
      statements for any and all legal fees and expenses incurred by him in the
      preparation and negotiation of this Agreement and the other agreements related
      hereto. 

     

    

    [SIGNATURE
      PAGE TO FOLLOW]

     

    
      
        
        

      

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

    

      
        	 	
                CORPORATION:

              
	 	 
	 	
                
                  SIONIX
                    CORPORATION

                

              
	 	 
	 	 
	 	
                By:

              	/s/
                John Foster 
	 	 	
                Name:
                  John Foster

              
	 	 	
                Title:
                  Chairman of the Board

              
	 	 
	 	 
	 	
                EXECUTIVE:

              
	 	 
	 	 
	 	/s/ Richard
                    Papalian	 
	 	
                
                  RICHARD
                    PAPALIAN

                

              

      

    

     

    
      
        
        

      

      
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    Exhibit
      A

    

    Form
      of Stock Option Agreement

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      B

    

    Form
      of Indemnification AgreementNOTICE
      OF GRANT OF STOCK OPTION

    

    Notice
      is
      hereby given of the following option grant (the “Option”) to purchase shares of
      the common stock, par value $0.001 per share (the “Common Stock”), of Sionix
      Corporation, a Nevada corporation (the “Corporation”):

    

    
      	
              Optionee:

            	 	
              Richard
                Papalian

            
	
              Grant
                Date:

            	 	
              December
                19, 2007

            
	
              Vesting
                Commencement Date:

            	 	
              December
                19, 2007

            
	
              Number
                of Option Shares:

            	 	
              8,539,312

            
	
              Expiration
                Date:

            	 	
              December
                19, 2012

            
	
              Type
                of Option:

            	 	
              Non-Qualified
                Stock Option

            
	
              Exercise
                Price Per Share:

            	 	
              $0.25
                

            
	
              Vesting
                Schedule:

            	 	
              Except
                as provided in the Stock Option Agreement, the number of vested Option
                Shares as of any date is determined by multiplying the Number of
                Option
                Shares by the “Vested Ratio” determined as of such date as
                follows:

            
	 	 	 	 	
              Vested
                Ratio

            
	 	 	
              Grant
                Date

            	 	
              30%

            
	 	 	
               

              Upon
                the Corporation’s Market Capitalization exceeding $50,000,000 for 15
                consecutive trading days, in no event later than the earlier of (i)
                the
                first anniversary of the end of the Term and (ii) the fifth anniversary
                of
                the Grant Date.

            	 	
              20%

            
	 	 	
               

              Upon
                the Corporation’s Market Capitalization exceeding $75,000,000 for 15
                consecutive trading days, in no event later than the earlier of (i)
                the
                first anniversary of the end of the Term and (ii) the fifth anniversary
                of
                the Grant Date.

            	 	
              30%
                

            
	 	 	
               

              Upon
                the Corporation’s total Market Capitalization exceeding $100,000,000 for
                15 consecutive trading days, in no event later than the earlier of
                (i) the
                first anniversary of the end of the Term and (ii) the fifth anniversary
                of
                the Grant Date.

            	 	
              20%
                

            
	 	 	 	 	 

    

    

    1. Terms.
      The
      Optionee agrees to be bound by the terms of the Option as set forth in the
      Stock
      Option Agreement attached hereto as Exhibit
      A.
      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    2. No
      Employment or Service Contract.
      Except
      as may otherwise be set forth in an a written agreement by and between the
      Optionee and the Corporation, if any, nothing in this Grant Notice or in the
      attached Stock Option Agreement shall confer upon the Optionee any right to
      continue in service in any capacity, including as an employee, for any period
      of
      specific duration or interfere with or otherwise restrict in any way the rights
      of the Corporation or of the Optionee, which rights are hereby expressly
      reserved by each, to terminate the Optionee’s service and/or employment at any
      time for any reason, with or without cause.

    

    3. Definitions.
      

    

    (a) “Market
      Capitalization” means, as of any particular trading date, the product of (a) the
      number of issued and outstanding shares of Common Stock of the Corporation
      on
      such date, multiplied by (b) the per share closing price of the Common Stock
      on
      its principal trading market in the United States on such date, as reported
      by
      Bloomberg LP. 

    

    (b) “Term”
      has the meaning set forth in the Employment Agreement between the Optionee
      and
      the Corporation dated on or about the Grant Date. 

    

    All
      capitalized terms used but not defined herein shall have the definition ascribed
      to them in the Stock Option Agreement.

    

    

    [SIGNATURE
      PAGE FOLLOWS]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      Corporation and the Optionee have duly executed this Notice of Grant as of
      the
      date set forth below.

    

    Dated:
      December 19, 2007

    

    
      	 	
              CORPORATION:

            
	 	 
	 	
              SIONIX
                CORPORATION

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Robert McCray

              

            
	 	
              Name:

            	
              Robert
                McCray

            
	 	
              Title:

            	
              Chief
                Financial Officer

            
	 	 
	 	 
	 	
              EXECUTIVE:

            
	 	 
	 	 
	 	
              /s/ Richard
                    Papalian              

                

            
	 	
              RICHARD
                PAPALIAN

            

    

    
 

    ATTACHMENTS

    

    Exhibit
      A – Stock Option Agreement

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

    

    STOCK
      OPTION AGREEMENT

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