THORIUM POWER, LTD.

SECOND AMENDED AND RESTATED 2006 STOCK PLAN

NOTICE OF GRANT

Capitalized but otherwise undefined terms in this Notice of Grant and the
attached Stock Option Agreement shall have the same defined meanings as in the
Second Amended and Restated 2006 Stock Plan (the “Plan”).

Name: 
James Guerra
 
Address:
423 Cumnor Road
       
Kenilworth, IL 60043

You have been granted an option (the “Option”) to purchase Common Stock of the
Corporation, subject to the terms and conditions of the Plan and the attached
Stock Option Agreement, as follows:

Date of Grant:
July 14, 2009
   
Vesting Commencement Date:
July 14, 2009
   
Option Price per Share:
$0.17
   
Total Number of Shares Granted:
988,235
   
Total Option Price:
$167,999.95
   
Type of Option:
_______
Incentive Stock Option
 
      X       
Nonqualified Stock Option
     
Term/Expiration Date:
Ten (10) years after Date of Grant

 
Vesting Schedule:

The Option shall vest, in whole or in part, in accordance with the following
schedule:

The Option shall vest with respect to 1/3 of the Total Number of Shares Granted
(as specified above) on the first anniversary of the Vesting Commencement Date
and shall thereafter vest 1/3 on each of the second and third anniversaries of
the Vesting Commencement Date.
 

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THORIUM POWER, LTD.

SECOND AMENDED AND RESTATED 2006 STOCK PLAN

STOCK OPTION AGREEMENT
 
This STOCK OPTION AGREEMENT (“Agreement”), dated as of the 14th day of July,
2009 is made by and between THORIUM POWER, LTD., a Nevada corporation (the
“Corporation”), and JAMES GUERRA (the “Optionee,” which term as used herein
shall be deemed to include any successor to the Optionee by will or by the laws
of descent and distribution, unless the context shall otherwise require).
 
BACKGROUND
 
Pursuant to the Corporation’s Second Amended and Restated 2006 Stock Plan (the
“Plan”), the Corporation, acting through the Committee of the Board of Directors
(if a committee has been formed to administer the Plan) or its entire Board of
Directors (if no such committee has been formed) responsible for administering
the Plan (in either case, referred to herein as the “Committee”), approved the
issuance to the Optionee, effective as of the date set forth above, of a stock
option to purchase shares of Common Stock of the Corporation at the price (the
“Option Price”) set forth in the attached Notice of Grant (which is expressly
incorporated herein and made a part hereof, the “Notice of Grant”), upon the
terms and conditions hereinafter set forth.
 
NOW, THEREFORE, in consideration of the mutual premises and undertakings
hereinafter set forth, the parties hereto agree as follows:
 
1.           Option; Option Price.  On behalf of the Corporation, the Committee
hereby grants to the Optionee the option (the “Option”) to purchase, subject to
the terms and conditions of this Agreement and the Plan (which is incorporated
by reference herein and which in all cases shall control in the event of any
conflict with the terms, definitions and provisions of this Agreement), that
number of shares of Common Stock of the Corporation set forth in the Notice of
Grant, at an exercise price per share equal to the Option Price as is set forth
in the Notice of Grant (the “Optioned Shares”).  If designated in the Notice of
Grant as an “incentive stock option,” the Option is intended to qualify for
Federal income tax purposes as an “incentive stock option” within the meaning of
Section 422 of the Code.  A copy of the Plan as in effect on the date hereof has
been supplied to the Optionee, and the Optionee hereby acknowledges receipt
thereof.
 
2.           Term.  The term (the “Option Term”) of the Option shall commence on
the date of this Agreement and shall expire on the Expiration Date set forth in
the Notice of Grant unless such Option shall theretofore have been terminated in
accordance with the terms of the Notice of Grant, this Agreement or of the Plan.
 
3.           Time of Exercise.
 
(a)           Unless accelerated in the discretion of the Committee or as
otherwise provided herein, the Option shall become exercisable during its term
in accordance with the Vesting Schedule set out in the Notice of Grant.  Subject
to the provisions of Sections 5 and 8 hereof, shares as to which the Option
becomes exercisable pursuant to the foregoing provisions may be purchased at any
time thereafter prior to the expiration or termination of the Option.
 

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(b)           Anything contained in this Agreement to the contrary
notwithstanding, to the extent the Option is intended to be an Incentive Stock
Option, the Option shall not be exercisable as an Incentive Stock Option, and
shall be treated as a Non-Statutory Option, to the extent that the aggregate
Fair Market Value on the date hereof of all stock with respect to which
Incentive Stock Options are exercisable for the first time by the Optionee
during any calendar year (under the Plan and all other plans of the Corporation,
its parent and its subsidiaries, if any) exceeds $100,000.
 
4.           Termination of Option.
 
(a)            The Optionee may exercise the Option (but only to the extent the
Option was exercisable at the time of termination of the Optionee’s consulting
agreement with the Corporation, its parent or any of its subsidiaries) at any
time within three (3) months following the termination of the Optionee’s
business relationship with the Corporation, its parent or any of its
subsidiaries, but not later than the scheduled expiration date.  If the
termination of the Optionee’s employment is for cause or is otherwise
attributable to a breach by the Optionee of an employment, non-competition,
non-disclosure or other material agreement, the Option shall expire immediately
upon such termination.  If the Optionee is a natural person who dies while in a
business relationship with the Corporation, its parent or any of its
subsidiaries, this option may be exercised, to the extent of the number of
shares with respect to which the Optionee could have exercised it on the date of
his death, by his estate, personal representative or beneficiary to whom this
option has been assigned pursuant to Section 9 of the Plan, at any time within
the twelve (12) month period following the date of death.  If the Optionee is a
natural person whose business relationship with the Corporation, its parent or
any of its subsidiaries is terminated by reason of his disability, this Option
may be exercised, to the extent of the number of shares with respect to which
the Optionee could have exercised it on the date the business relationship was
terminated, at any time within the twelve (12) month period following the date
of such termination, but not later than the scheduled expiration date.  At the
expiration of such three (3) or twelve (12) month period or the scheduled
expiration date, whichever is the earlier, this Option shall terminate and the
only rights hereunder shall be those as to which the Option was properly
exercised before such termination.
 
(b)           Anything contained herein to the contrary notwithstanding, the
Option shall not be affected by any change of duties or position of the Optionee
(including a transfer to or from the Corporation, its parent or any of its
subsidiaries) so long as the Optionee continues in a business relationship with
the Corporation, its parent or any of its subsidiaries.
 
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5.           Procedure for Exercise.
 
(a)           The Option may be exercised, from time to time, in whole or in
part (but for the purchase of whole shares only), by delivery of a written
notice in the form attached as Exhibit A hereto (the “Notice”) from the Optionee
to the Secretary of the Corporation, which Notice shall:
 
(i)           state that the Optionee elects to exercise the Option;
 
(ii)          state the number of shares with respect to which the Option is
being exercised (the “Optioned Shares”);
 
(iii)         state the method of payment for the Optioned Shares pursuant to
Section 5(b);
 
(iv)         state the date upon which the Optionee desires to consummate the
purchase of the Optioned Shares (which date must be prior to the termination of
such Option and no later than 30 days from the delivery of such Notice);
 
(v)          include any representations of the Optionee required under Section
8(b);
 
(vi)         if the Option shall be exercised in accordance with Section 9 of
the Plan by any person other than the Optionee, include evidence to the
satisfaction of the Committee of the right of such person to exercise the
Option; and
 
(b)           Payment of the Option Price for the Optioned Shares shall be made
either (i) by delivery of cash or a check to the order of the Corporation in an
amount equal to the Option Price, (ii) if approved by the Committee, by delivery
to the Corporation of shares of Common Stock of the Corporation having a Fair
Market Value on the date of exercise equal in amount to the Option Price of the
options being exercised, (iii) by any other means which the Board of Directors
determines are consistent with the purpose of the Plan and with applicable laws
and regulations (including, without limitation, the provisions of Rule 16b-3 and
Regulation T promulgated by the Federal Reserve Board), or (iv) by any
combination of such methods of payment.  Notwithstanding any provisions herein
to the contrary, if the Fair Market Value of one share of Common Stock of the
Corporation is greater than the Option Price (at the date of calculation as set
forth below), in lieu of paying the Option Price in cash, the Optionee may elect
to receive shares equal to the value (as determined below) of the Optioned
Shares by delivering notice of such election to the Corporation in which event
the Corporation shall issue to the Optionee a number of shares of Common Stock
computed using the following formula:
 
X = Y(A-B)
 
A
 
                Where
X 
= the number of shares of Common Stock to be issued to the Optionee

 
Y 
= the number of Optioned Shares

 
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A 
= the Fair Market Value of one share of Common Stock (at the date of such
calculation)

 
B 
= Option Price (as adjusted to the date of such calculation)

 
(c)           The Corporation shall issue a stock certificate in the name of the
Optionee (or such other person exercising the Option in accordance with the
provisions of Section 9 of the Plan) for the Optioned Shares as soon as
practicable after receipt of the Notice and payment of the aggregate Option
Price for such shares.
 
6.           No Rights as a Stockholder.  The Optionee shall not have any
privileges of a stockholder of the Corporation with respect to any Optioned
Shares until the date of issuance of a stock certificate pursuant to Section
5(c).
 
7.            Adjustments. The Plan contains provisions covering the treatment
of options in a number of contingencies such as stock splits and
mergers.  Provisions in the Plan for adjustment with respect to stock subject to
options and the related provisions with respect to successors to the business of
the Corporation are hereby made applicable hereunder and are incorporated herein
by reference.  In general, the Optionee should not assume that options would
survive the acquisition of the Corporation.
 
8.           Additional Provisions Related to Exercise.
 
(a)           The Option shall be exercisable only on such date or dates and
during such period and for such number of shares of Common Stock as are set
forth in this Agreement.
 
(b)           To exercise the Option, the Optionee shall follow the procedures
set forth in Section 5 hereof.  Upon the exercise of the Option at a time when
there is not in effect a registration statement under the Securities Act of
1933, as amended (the “Securities Act”), relating to the shares of Common Stock
issuable upon exercise of the Option, the Committee in its discretion may, as a
condition to the exercise of the Option, require the Optionee (i) to execute an
Investment Representation Statement substantially in the form set forth in
Exhibit B hereto and (ii) to make such other representations and warranties as
are deemed appropriate by counsel to the Corporation.
 
(c)           Stock certificates representing shares of Common Stock acquired
upon the exercise of Options that have not been registered under the Securities
Act shall, if required by the Committee, bear an appropriate restrictive legend
referring to the Securities Act.  No shares of Common Stock shall be issued and
delivered upon the exercise of the Option unless and until the Corporation
and/or the Optionee shall have complied with all applicable Federal or state
registration, listing and/or qualification requirements and all other
requirements of law or of any regulatory agencies having jurisdiction.
 
9.            No Evidence of Employment or Service.  Nothing contained in the
Plan or this Agreement shall confer upon the Optionee any right to continue in a
business relationship with the Corporation, its parent or any of its
subsidiaries or interfere in any way with the right of the Corporation, its
parent or its subsidiaries (subject to the terms of any separate agreement to
the contrary) to terminate the Optionee’s business relationship or to increase
or decrease the Optionee’s compensation at any time.
 
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10.          Restriction on Transfer.  The Option may not be transferred,
pledged, assigned, hypothecated or otherwise disposed of in any way by the
Optionee, except by will or by the laws of descent and distribution, and may be
exercised during the lifetime of the Optionee only by the Optionee.  If the
Optionee dies, the Option shall thereafter be exercisable, during the period
specified in Section 4, by his executors or administrators to the full extent to
which the Option was exercisable by the Optionee at the time of his death.  The
Option shall not be subject to execution, attachment or similar process.  Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
the Option contrary to the provisions hereof, and the levy of any execution,
attachment or similar process upon the Option, shall be null and void and
without effect.  The words “transfer” and “dispose” include without limitation
the making of any sale, exchange, assignment, gift, security interest, pledge or
other encumbrance, or any contract therefor, any voting trust or other agreement
or arrangement with respect to the transfer of any interest, beneficial or
otherwise, in the Option, the creation of any other claim thereto or any other
transfer or disposition whatsoever, whether voluntary or involuntary, affecting
the right, title, interest or possession with respect to the Option.
 
11.          Specific Performance.  Optionee expressly agrees that the
Corporation will be irreparably damaged if the provisions of this Agreement and
the Plan are not specifically enforced.  Upon a breach or threatened breach of
the terms, covenants and/or conditions of this Agreement or the Plan by the
Optionee, the Corporation shall, in addition to all other remedies, be entitled
to a temporary or permanent injunction, without showing any actual damage,
and/or decree for specific performance, in accordance with the provisions hereof
and thereof.  The Board of Directors shall have the power to determine what
constitutes a breach or threatened breach of this Agreement or the Plan.  Any
such determinations shall be final and conclusive and binding upon the Optionee.
 
12.          Disqualifying Dispositions.  To the extent the Option is intended
to be an Incentive Stock Option, and if the Optioned Shares are disposed of
within two years following the date of this Agreement or one year following the
issuance thereof to the Optionee (a “Disqualifying Disposition”), the Optionee
shall, immediately prior to such Disqualifying Disposition, notify the
Corporation in writing of the date and terms of such Disqualifying Disposition
and provide such other information regarding the Disqualifying Disposition as
the Corporation may reasonably require.
 
13.          Notices.  All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if (i) personally
delivered or sent by telecopy, (ii) sent by nationally-recognized overnight
courier or (iii) sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
 
if to the Optionee, to the address (or telecopy number) set forth on the Notice
of Grant; and
 
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if to the Corporation, to its principal executive office as specified in any
report filed by the Corporation with the Securities and Exchange Commission or
to such address as the Corporation may have specified to the Optionee in
writing, Attention: Corporate Secretary.
 
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith.  Any such
communication shall be deemed to have been given (i) when delivered, if
personally delivered, or when telecopied, if telecopied, (ii) on the first
Business Day (as hereinafter defined) after dispatch, if sent by
nationally-recognized overnight courier and (iii) on the third Business Day
following the date on which the piece of mail containing such communication is
posted, if sent by mail.  As used herein, “Business Day” means a day that is not
a Saturday, Sunday or a day on which banking institutions in the city to which
the notice or communication is to be sent are not required to be open.
 
14.          No Waiver.  No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other or subsequent breach or condition,
whether of like or different nature.
 
15.          Optionee Undertaking.  The Optionee hereby agrees to take whatever
additional actions and execute whatever additional documents the Corporation may
in its reasonable judgment deem necessary or advisable in order to carry out or
effect one or more of the obligations or restrictions imposed on the Optionee
pursuant to the express provisions of this Agreement.
 
16.          Modification of Rights.  The rights of the Optionee are subject to
modification and termination in certain events as provided in this Agreement and
the Plan.
 
17.          Governing Law.  This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Nevada applicable to contracts made
and to be wholly performed therein, without giving effect to its conflicts of
laws principles.
 
18.          Counterparts; Facsimile Execution.  This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same
instrument.  Facsimile execution and delivery of this Agreement is legal, valid
and binding execution and delivery for all purposes.
 
19.          Entire Agreement.  This Agreement (including the Notice of Grant)
and the Plan, and, upon execution, the Notice and Investment Representation
Statement, constitute the entire agreement between the parties with respect to
the subject matter hereof, and supersede all previously written or oral
negotiations, commitments, representations and agreements with respect thereto.
 
20.          Severability.  In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
 
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21.          WAIVER OF JURY TRIAL.  THE OPTIONEE HEREBY EXPRESSLY, IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
 
22.          Section 409A Status.  This option is not intended to result in a
deferral of compensation within the meaning of Code section 409A, and shall be
interpreted in a manner consistent with avoiding the deferral of
compensation.  If any provision of this agreement would result in the deferral
of compensation within the meaning of section 409A, the parties agree to amend
that provision to avoid the application of section 409A.

[signature page follows]
 
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IN WITNESS WHEREOF, the parties hereto have executed this Option Agreement as of
the date first written above.

 
THORIUM POWER, LTD.
     
By: 
/s/ Seth Grae
 
Name: Seth Grae
 
Title: President and Chief Executive Officer
     
Optionee:
     
   /s/ James Guerra
 
Name:  James Guerra

 
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NOTE RE: EXHIBITS

EXHIBITS A AND B ARE TO BE SIGNED

WHEN OPTIONS ARE EXERCISED,

NOT WHEN OPTION AGREEMENT IS SIGNED.
 

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EXHIBIT A

THORIUM POWER, LTD.

SECOND AMENDED AND RESTATED 2006 STOCK PLAN

EXERCISE NOTICE

Thorium Power, Ltd.
Attention:  Chief Executive Officer

1.           Exercise of Option.  Effective as of today,
_______________________, 20__ , the undersigned (the “Optionee”) hereby elects
to exercise the Optionee’s option to purchase ________________  shares of the
Common Stock (the “Shares”) of Thorium Power, Ltd. (the “Corporation”) under and
pursuant to the Second Amended and Restated 2006 Stock Plan (the “Plan”) and the
Stock Option Agreement dated July 14, 2009 (the “Stock Option Agreement”), with
the purchase of the Shares to be consummated on ______________ ___, ____ (the
“Effective Date”), which date is prior to the termination of the Option and no
later than 30 days from the date of delivery of this Notice.

2.           Representations of the Optionee.  The Optionee acknowledges that
the Optionee has received, read and understood the Plan and the Stock Option
Agreement and agrees to abide by and be bound by their terms and conditions.

3.           Rights as Shareholder; Shares Subject to Stockholders
Agreement.  Until the stock certificate evidencing such Shares is issued (as
evidenced by the appropriate entry on the books of the Corporation or of a duly
authorized transfer agent of the Corporation), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
Shares, notwithstanding the exercise of the Option.  The Corporation shall issue
(or cause to be issued) such stock certificate promptly after the Effective
Date, provided the applicable price has been paid and the required documents
have been received.  No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as otherwise provided in the Plan.  Unless waived by the Corporation in
writing, the Shares shall automatically become subject to the terms and
conditions of any stockholders agreement or similar agreement to which a
majority of the outstanding capital stock of the Corporation is subject at the
time of exercise and the Optionee shall sign as a condition to the issuance of
the Shares such joinder agreement, signature pages or other documents in order
to evidence the Optionee’s agreement to be so bound.

4.           Tax Consultation.  The Optionee understands that the Optionee may
suffer adverse tax consequences as a result of the Optionee’s purchase or
disposition of the Shares.  The Optionee represents that the Optionee has
consulted with any tax consultants the Optionee deems advisable in connection
with the purchase or disposition of the Shares and that the Optionee is not
relying on the Corporation for any tax advice.
 

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5.           Successors and Assigns.  The Corporation may assign any of its
rights under the Stock Option Agreement to single or multiple assignees (who may
be stockholders, officers, directors, employees or consultants of the
Corporation), and this Agreement shall inure to the benefit of the successors
and assigns of the Corporation.  Subject to the restrictions on transfer set
forth in the Stock Option Agreement, this Agreement shall be binding upon the
Optionee and his or her heirs, executors, administrators, successors and
assigns.

6.           Interpretation. Any dispute regarding the interpretations of this
Agreement shall be submitted by the Optionee or by the Corporation forthwith to
the Committee, which shall review such dispute at its next regular meeting.  The
resolution of such a dispute by the Committee shall be final and binding on the
Corporation and on the Optionee.

7.           Governing Laws: Severability.  This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York applicable
to contracts made and to be wholly performed therein, without giving effect to
its conflicts of laws principles.  Should any provision of this Agreement be
determined by a court of law to be illegal or unenforceable, the other
provisions shall nevertheless remain effective and shall remain enforceable.

8.           Notices.  Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given if given in the manner
specified in the Stock Option Agreement.

9.           Further Instruments.  The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.

10.         Delivery of Payment.  The Optionee herewith delivers to the
Corporation the full Option Price for the Shares.

11.         Entire Agreement.  The Plan, the Notice of Grant, and the Stock
Option Agreement are incorporated herein by reference.  This Agreement, the
Plan, the Notice of Grant, the Stock Option Agreement, and the Investment
Representation Statement constitute the entire agreement of the parties and
supersede in their entirety all prior undertakings and agreements of the
Corporation and the Optionee with respect to the subject matter hereof.

Submitted by:
 
Accepted by:
     
OPTIONEE:
 
THORIUM POWER, LTD.
         
By: 
           
Its:
 
Name:
   

 
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EXHIBIT B

SECOND AMENDED AND RESTATED 2006 STOCK PLAN

INVESTMENT REPRESENTATION STATEMENT
 
OPTIONEE
:
James Guerra
     
CORPORATION
:
THORIUM POWER, LTD.
     
SECURITY
:
Common Stock
     
AMOUNT
:
       
DATE
:
 

In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Corporation the following:

(a)           The Optionee is aware of the Corporation’s business affairs and
financial condition and has acquired sufficient information about the
Corporation to reach an informed and knowledgeable decision to acquire the
Securities.  The Optionee is acquiring these Securities for investment for the
Optionee’s own account only and not with a view to, or for resale in connection
with, a “distribution” thereof within the meaning of the Securities Act of 1933,
as amended (the “Securities Act”).

(b)           The Optionee acknowledges and understands that the Securities
constitute “restricted securities” under the Securities Act and have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of the Optionee’s investment intent as expressed herein.  In this
connection, the Optionee understands that, in the view of the Securities and
Exchange Commission, the statutory basis for such exemption may be unavailable
if the Optionee’s representation was predicated solely upon a present intention
to hold these Securities for the minimum capital gains period specified under
tax statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future.  The Optionee further understands that the Securities must
be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available.  The
Optionee further acknowledges and understands that the Corporation is under no
obligation to register the Securities.  The Optionee understands that the
certificate evidencing the Securities will be imprinted with a legend which
prohibits the transfer of the Securities unless they are registered or such
registration is not required in the opinion of counsel satisfactory to the
Corporation and other legends required under the applicable state or federal
securities laws.

Signature of Optionee: _____________________________

Date:__________________

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