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 corporati
