Exhibit
10.45


ISONICS CORPORATION


Amended and Restated


2005 STOCK OPTION PLAN


A.            1.             Purposes of and Benefits Under the Plan.  This
2005 Stock Option Plan (the “Plan”) is intended to encourage stock ownership by
employees, officers, consultants and advisors of Isonics Corporation and its
controlled, affiliated and subsidiary entities (collectively, the “Corporation”),
so that they may acquire or increase their proprietary interest in the
Corporation. The Plan is intended to facilitate the Corporation’s efforts
to:  (i) induce qualified persons to
become employees, officers, consultants and advisors of the Corporation; (ii)
compensate employees, officers, consultants and advisors for services to the
Corporation; and (iii) encourage such persons to remain in the employ of or
associated with the Corporation and to put forth maximum efforts for the
success of the Corporation.  Options
granted by the Committee pursuant to Section 6 of this Plan are “incentive
stock options” (“Incentive Stock Options”) within the meaning of Section 422 of
the Internal Revenue Code, and options granted by the Committee pursuant to
Section 7 of this Plan are “non-qualified stock options” (“Non-qualified Stock
Options”).


2.             Definitions.  As used in this Plan, the
following words and phrases shall have the meanings indicated:


(a)           “Board” shall mean the Board of Directors of
the Corporation.


(b)           “Bonus” shall mean the grant of shares of
Common Stock.


(c)           “Committee” shall mean any Committee
appointed by the Board to administer this Plan, if one has been appointed.  If no Committee has been appointed, the term “Committee”
shall mean the Board.


(d)           “Common Stock” shall mean the Corporation’s
no par value common stock.


(e)           “Disability” shall mean a Recipient’s
inability to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or that has lasted or can be expected to last for a continuous
period of not less than 12 months.  If
the Recipient has a disability insurance policy, the term “Disability” shall be
as defined therein.


(f)            “Fair Market Value” per share as of a
particular date shall mean the last sale price of the Corporation’s Common
Stock as reported on a national securities exchange or by NASDAQ, or if the
quotation for the last sale reported is not available for the Corporation’s
Common Stock, the average of the closing bid and asked prices of the
Corporation’s Common Stock as so reported or, if such quotations are
unavailable, the value determined by the Committee in accordance with its
discretion in making a bona fide, good faith determination of fair market
value.  Fair Market Value shall be
determined without regard to any restriction other than a restriction which, by
its terms, never will lapse.



 1
 








(g)           “Options” shall mean either Incentive Stock
Options or Non-qualified Stock Options.


(h)           “Recipient” means any person granted an
Option or awarded a Bonus hereunder.


(i)            “Internal Revenue Code” shall mean the United
States Internal Revenue Code of 1986, as amended from time to time.


3.             Administration.


(a)           The Plan shall be administered by the
Committee.  The Committee shall have the
authority in its discretion, subject to and not inconsistent with the express
provisions of the Plan, to administer the Plan and to exercise all the powers
and authorities either specifically conferred under the Plan or necessary or
advisable in the administration of the Plan, including the authority:  to grant Options and Bonuses; to determine
the vesting schedule and other restrictions, if any, relating to Options and
Bonuses; to determine the purchase price of the shares of Common Stock covered
by each Option (the “Option Price”); to determine the persons to whom, and the
time or times at which, Options and Bonuses shall be granted; to determine the
number of shares to be covered by each Option or Bonus; to determine Fair
Market Value per share; to interpret the Plan; to prescribe, amend and rescind
rules and regulations relating to the Plan; to determine the terms and
provisions of the Option agreements (which need not be identical) entered into
in connection with Options granted under the Plan; and to make all other
determinations deemed necessary or advisable for the administration of the
Plan.  The Committee may delegate to one
or more of its members or to one or more agents such administrative duties as
it may deem advisable, and the Committee or any person to whom it has delegated
duties as aforesaid may employ one or more persons to render advice with respect
to any responsibility the Committee or such person may have under the Plan.


(b)           Options and Bonuses granted under the Plan
shall be evidenced by duly adopted resolutions of the Committee included in the
minutes of the meeting at which they are adopted or in a unanimous written
consent.


(c)           The Committee shall endeavor to administer
the Plan and grant Options and Bonuses hereunder in a manner that is compatible
with the obligations of persons subject to Section 16 of the U.S. Securities
Exchange Act of 1934 (the “1934 Act”), although compliance with Section 16 is
the obligation of the Recipient, not the Corporation.  Neither the Committee, the Board nor the
Corporation can assume any legal responsibility for a Recipient’s compliance
with his obligations under Section 16 of the 1934 Act.


(d)           No member of the Committee or the Board shall
be liable for any action taken or determination made in good faith with respect
to the Plan or any Option or Bonus granted hereunder.



 2
 








4.             Eligibility.


(a)           Subject to certain limitations hereinafter
set forth, Options and Bonuses may be granted to employees, officers,
consultants and advisors of the Corporation. 
In determining the persons to whom Options or Bonuses shall be granted
and the number of shares to be covered by each Option or Bonus, the Committee
shall take into account the duties of the respective persons, their present and
potential contributions to the success of the Corporation, and such other
factors as the Committee shall deem relevant to accomplish the purposes of the
Plan.


(b)           A Recipient shall be eligible to receive more
than one grant of an Option or Bonus during the term of the Plan, on the terms
and subject to the restrictions herein set forth.


5.             Stock Reserved.


(a)           The stock subject to Options or Bonuses hereunder
shall be shares of Common Stock.  Such
shares, in whole or in part, may be authorized but unissued shares or shares
that shall have been or that may be reacquired by the Corporation.  The aggregate number of shares of Common
Stock as to which Options and Bonuses may be granted from time to time under
the Plan shall not exceed 2,875,000 (following the reverse stock split
accomplished in February 2007) and subject to further adjustment as provided in
Section 8(i) hereof.


(b)           If any Option outstanding under the Plan for
any reason expires or is terminated without having been exercised in full, or
if any Bonus granted is forfeited because of vesting or other restrictions
imposed at the time of grant, the shares of Common Stock allocable to the
unexercised portion of such Option or the forfeited portion of the Bonus shall
become available for subsequent grants of Options and Bonuses under the Plan.


6.             Incentive Stock Options.


(a)           Options granted pursuant to this Section 6
are intended to constitute Incentive Stock Options and shall be subject to the
following special terms and conditions, in addition to the general terms and
conditions specified in Section 8 hereof. 
Only employees of the Corporation shall be entitled to receive Incentive
Stock Options.


(b)           The aggregate Fair Market Value (determined
as of the date the Incentive Stock Option is granted) of the shares of Common
Stock with respect to which Incentive Stock Options granted under this and any
other plan of the Corporation are exercisable for the first time by a Recipient
during any calendar year may not exceed the amount set forth in Section 422(d)
of the Internal Revenue Code.


(c)           Incentive Stock Options granted under this
Plan are intended to satisfy all requirements for incentive stock options under
Section 422 of the Internal Revenue Code and the Treasury Regulations
promulgated thereunder and, notwithstanding any other provision of this Plan,
the Plan and all Incentive Stock Options granted under it shall be so
construed, and all 



 3
 








contrary
provisions shall be so limited in scope and effect and, to the extent they
cannot be so limited, they shall be void.


7.             Non-qualified Stock Options. 
Options granted pursuant to this Section 7 are intended to constitute
Non-qualified Stock Options and shall be subject only to the general terms and
conditions specified in Section 8 hereof.


8.             Terms and Conditions of Options.  Each
Option granted pursuant to the Plan shall be evidenced by a written Option
Agreement between the Corporation and the Recipient, which agreement shall be
substantially in the form of Exhibit A hereto as modified from time to
time by the Committee in its discretion, and which shall comply with and be
subject to the following terms and conditions:


(a)           Number of Shares.  Each
Option agreement shall state the number of shares of Common Stock covered by
the Option.


(b)           Type of Option.  Each
Option Agreement shall specifically identify the portion, if any, of the Option
which constitutes an Incentive Stock Option and the portion, if any, which
constitutes a Non-qualified Stock Option.


(c)           Option Price. 
Subject to adjustment as provided in Section 8 (i) hereof, each Option
Agreement shall state the Option Price, which shall be determined by the
Committee subject only to the following restrictions:


(1)           Each Option Agreement shall state the Option
Price, which shall be not less than 100% of the Fair Market Value per share on
the date of grant of the Option.


(2)           Any Incentive Stock Option granted under the
Plan to a person owning more than ten percent of the total combined voting
power of the Common Stock shall be at a price of no less than 110% of the Fair
Market Value per share on the date of grant of the Incentive Stock Option.


(3)           The date on which the Committee adopts a
resolution expressly granting an Option shall be considered the day on which
such option is granted, unless a future date is specified in the resolution.


(d)           Term of Option.  Each
Option Agreement shall state the period during and times at which the Option
shall be exercis­able, in accordance with the following limitations:


(1)           The date on which the Committee adopts a
resolution expressly granting an Option shall be considered the day on which
such Option is granted, unless a future date is specified in the resolution,
although any such grant shall not be effective until the Recipient has executed
an Option Agreement with respect to such Option.


(2)           The exercise period of any Option shall not
exceed ten years from the date of grant of the Option.



 4
 








(3)           Incentive Stock Options granted to a person
owning more than ten percent of the total combined voting power of the Common
Stock of the Corporation shall be for no more than five years.


(4)           The Committee shall have the authority to
accelerate or extend the exercisability of any outstanding Option at such time
and under such circumstances as it, in its sole discretion, deems
appropriate.  In any event, no exercise
period may be so extended to increase the term of the Option beyond ten years
from the date of the grant.


(5)           The exercise period shall be subject to
earlier termination as provided in Sections 8(f) and 8(g) hereof, and,
furthermore, shall be terminated upon surrender of the Option by the holder
thereof if such surrender has been authorized in advance by the Committee.


(e)           Method of Exercise and Medium and Time of
Payment.


(1)           An Option may be exercised as to any or all
whole shares of Common Stock as to which it then is exercisable, provided,
however, that no Option may be exercised as to less than 100 shares (or such
number of shares as to which the Option is then exercisable if such number of
shares is less than 100).


(2)           Each exercise of an Option granted hereunder,
whether in whole or in part, shall be effected by written notice to the
Secretary of the Corporation designating the number of shares as to which the
Option is being exercised, and shall be accompanied by payment in full of the
Option Price for the number of shares so designated, together with any written
statements required by, or deemed by the Corporation’s counsel to be advisable
pursuant to, any applicable securities laws.


(3)           The Option Price shall be paid in cash, or in
shares of Common Stock having a Fair Market Value equal to such Option Price,
or in property or in a combination of cash, shares and property and, subject to
approval of the Committee, may be effected in whole or in part with funds
received from the Corporation at the time of exercise as a compensatory cash
payment.


(4)           The Committee shall have the sole and
absolute discretion to determine whether or not property other than cash or
Common Stock may be used to purchase the shares of Common Stock hereunder and,
if so, to determine the value of the property received.


(5)           The Recipient shall make provision for the
withholding of taxes as required by Section 10 hereof.



 5
 








(f)            Termination of Relationship With Corporation.


(1)           Unless otherwise provided in the Option
Agreement by and between the Corporation and the Recipient, if the Recipient
ceases to be an employee, officer, director or consultant of the Corporation
(other than by reason of death, Disability or retirement), all Options
theretofore granted to such Recipient but not theretofore exercised shall
terminate three months following the date the Recipient ceased to be an
employee, officer, director or consultant of the Corporation; provided, however, that notwithstanding any other provision
in this paragraph (8)(f)(1), if the Recipient’s relationship with the
Corporation is terminated for cause, then the Recipient’s Options shall
terminate upon the date of termination of employment or termination of the
Recipient’s other relationship with the Corporation.


(2)           Nothing in the Plan or in any Option or Bonus
granted hereunder shall confer upon an individual any right to continue in the
employ of or continue any other relationship with the Corporation or interfere
in any way with the right of the Corporation to terminate such employment or
other relationship between the individual and the Corporation.


(g)           Death, Disability or Retirement of Recipient.  Unless
otherwise provided in the Option Agreement by and between the Corporation and
the Recipient:


(1)
if a Recipient shall die: (A) while an employee, officer, director or
consultant of the Corporation; or (B) within ninety days after the termination
of such Recipient as an employee, officer, director or consultant, other than
termination for cause; or


(2)
if the Recipient’s relationship with the Corporation shall terminate by reason
of Disability or retirement;


then all Options theretofore granted to such Recipient (whether or not
otherwise exercisable) unless earlier terminated in accordance with their
terms, may be exercised at any time within one year after the date of death,
Disability or retirement of the Recipient by the Recipient or by the Recipient’s
estate or by a person who acquired the right to exercise such Options by
bequest or inheritance; provided, however,
that in the case of Incentive Stock Options such one-year period shall be
limited to three months in the case of retirement.


(h)           Transferability Restriction.


(1)           Options granted under the Plan shall not be
transferable other than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Internal
Revenue Code or Title I of the Employee Retirement Income Security Act of 1974,
or the rules thereunder.  Options may be
exercised during the lifetime of the Recipient only by the Recipient and
thereafter only by his legal representative.


(2)           Any attempted sale, pledge, assignment,
hypothecation or other transfer of an Option contrary to the provisions hereof
and/or the levy of any execution, attachment or similar process upon an Option,
shall be null and void and without force or effect and shall result in a
termination of the Option.



 6
 








(3)           (A)  As
a condition to the transfer of any shares of Common Stock issued upon exercise
of an Option granted under this Plan, the Corporation may require an opinion of
counsel, satisfactory to the Corporation, to the effect that such transfer will
not be in violation of the U.S. Securities Act of 1933, as amended (the “1933
Act”) or any other applicable securities laws or that such transfer has been
registered under federal and all applicable state securities laws.  (B) The Corporation shall be authorized to refrain
from delivering or transferring shares of Common Stock issued under this Plan
until the Committee determines that such delivery or transfer will not violate
applicable securities laws and the Recipient has tendered to the Corporation
any federal, state or local tax owed by the Recipient as a result of exercising
the Option or disposing of any Common Stock when the Corporation has a legal
liability to satisfy such tax.  (C)  The Corporation shall not be liable for
damages due to delay in the delivery or issuance of any stock certificate for
any reason whatsoever, including, but not limited to, a delay caused by listing
requirements of any securities exchange or any registration requirements under
the 1933 Act, the 1934 Act, or under any other state, federal or provincial
law, rule or regulation.  (D)  The Corporation is under no obligation to
take any action or incur any expense in order to register or qualify the
delivery or transfer of shares of Common Stock under applicable securities laws
or to perfect any exemption from such registration or qualification.  (E) The Corporation will not be liable to any
Recipient for failure to deliver or transfer shares of Common Stock if such
failure is based upon the provisions of this paragraph.


(i)            Effect of Certain Changes.


(1)           If there is any change in the number of
shares of outstanding Common Stock through the declaration of stock dividends,
or through a recapitalization resulting in stock splits or combinations or
exchanges of such shares, the number of shares of Common Stock available for
Options and the number of such shares covered by outstanding Options, and the
exercise price per share of the outstanding Options, shall be proportionately
adjusted by the Committee to reflect any increase or decrease in the number of
issued shares of Common Stock; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated.


(2)           In the event of the proposed dissolution or
liquidation of the Corporation, or any corporate separation or division,
including, but not limited to, split-up, split-off or spin-off, or a merger or
consolidation of the Corporation with another corporation, the Committee may
provide that the holder of each Option then exercisable shall have the right to
exercise such Option (at its then current Option Price) solely for the kind and
amount of shares of stock and other securities, property, cash or any
combination thereof receivable upon such dissolution, liquidation, corporate
separation or division, or merger or consolidation by a holder of the number of
shares of Common Stock for which such Option might have been exercised
immediately prior to such dissolution, liquidation, corporate separation or
division, or merger or consolidation; or, in the alternative the Committee may
provide that each Option granted under the Plan shall terminate as of a date
fixed by the Committee; provided, however, that not less than 30 days’ written
notice of the date so fixed shall be given to each Recipient, who shall have
the right, during the period of 30 days preceding such termination, to exercise
the Option as to all or any part of the shares of Common Stock covered thereby,
including shares as to which such Option would not otherwise be exercisable.



 7
 








(3)           Paragraph 2 of this Section 8 (i) shall not
apply to a merger or consolidation in which the Corporation is the surviving
corporation and shares of Common Stock are not converted into or exchanged for
stock, securities of any other corporation, cash or any other thing of value.  Notwithstanding the preceding sentence, in
case of any consolidation or merger of another corporation into the Corporation
in which the Corporation is the surviving corporation and in which there is a
reclassification or change (including a change to the right to receive cash or
other property) of the shares of Common Stock (excluding a change in par value,
or from no par value to par value, or any change as a result of a subdivision
or combination, but including any change in such shares into two or more classes
or series of shares), the Committee may provide that the holder of each Option
then exercisable shall have the right to exercise such Option solely for the
kind and amount of shares of stock and other securities (including those of any
new direct or indirect parent of the Corporation), property, cash or any
combination thereof receivable upon such reclassification, change,
consolidation or merger by the holder of the number of shares of Common Stock
for which such Option might have been exercised.


(4)           In the event of a change in the Common Stock
of the Corporation as presently constituted into the same number of shares with
a different par value, the shares resulting from any such change shall be
deemed to be the Common Stock of the Corporation within the meaning of the
Plan.


(5)           To the extent that the foregoing adjustments
relate to stock or securities of the Corporation, such adjustments shall be
made by the Committee, whose determination in that respect shall be final,
binding and conclusive, provided that each Incentive Stock Option granted
pursuant to this Plan shall not be adjusted in a manner that causes such option
to fail to continue to qualify as an Incentive Stock Option within the meaning
of Section 422 of the Internal Revenue Code.


(6)           Except as expressly provided in this Section
8(i), the Recipient shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class, or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class, or by reason of any dissolution, liquidation, merger, or
consolidation or spin-off of assets or stock of another corporation; and any
issue by the Corporation of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option. 
The grant of an Option pursuant to the Plan shall not affect in any way
the right or power of the Corporation to make adjustments, reclassifications,
reorganizations or changes of its capital or business structures, or to merge
or consolidate, or to dissolve, liquidate, or sell or transfer all or any part
of its business or assets.


(j)            No Rights as Shareholder - Non-Distributive
Intent.


(1)           Neither a Recipient of an Option nor such
Recipient’s legal representative or heir shall be deemed to be the holder of,
or to have any rights of a holder with 



 8
 








respect
to, any shares subject to such Option until after the Option is exercised and
the shares are issued.


(2)           No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 8(i) hereof.


(3)           Upon exercise of an Option at a time when
there is no registration statement in effect under the 1933 Act relating to the
shares issuable upon exercise, shares may be issued to the Recipient only if
the Recipient represents and warrants in writing to the Corporation that the
shares purchased are being acquired for investment and not with a view to the
distribution thereof and provides the Corporation with sufficient information
to establish an exemption from the registration requirements of the 1933
Act.  A form of subscription agreement
containing representations and warranties deemed sufficient as of the date of
adoption of this Plan is attached hereto as Exhibit B.


(4)           No shares shall be issued upon the exercise
of an Option unless and until there shall have been compliance with any then
applicable requirements of the U.S. Securities and Exchange Commission or any
other regulatory agencies having jurisdiction over the Corporation.


(k)           Other Provisions. 
Option Agreements authorized under the Plan may contain such other
provisions, including, without limitation, (i) the imposition of restrictions
upon the exercise, and (ii) in the case of an Incentive Stock Option, the inclusion
of any condition not inconsistent with such Option qualifying as an Incentive
Stock Option, as the Committee shall deem advisable.


9.             Grant of Stock Bonuses.  In
addition to, or in lieu of, the grant of an Option, the Committee may grant
Bonuses.


(a)           At the time of grant of a Bonus, the
Committee may impose a vesting period of up to ten years, and such other
restrictions which it deems appropriate. 
Unless otherwise directed by the Committee at the time of grant of a
Bonus, the Recipient shall be considered a shareholder of the Corporation as to
the Bonus shares which have vested in the grantee at any time regardless of any
forfeiture provisions which have not yet arisen.


(b)           The grant of a Bonus and the issuance and
delivery of shares of Common Stock pursuant thereto shall be subject to
approval by the Corporation’s counsel of all legal matters in connection
therewith, including compliance with the requirements of the 1933 Act, the 1934
Act, other applicable securities laws, rules and regulations, and the
requirements of any stock exchanges upon which the Common Stock then may be
listed.  Any certificates prepared to
evidence Common Stock issued pursuant to a Bonus grant shall bear legends as
the Corporation’s counsel may seem necessary or advisable.  Included among the foregoing requirements,
but without limitation, any Recipient of a Bonus at a time when a registration 



 9
 








statement
relating thereto is not effective under the 1933 Act shall execute a
Subscription Agreement substantially in the form of Exhibit B.


10.           Agreement by Recipient Regarding Withholding
Taxes.  Each Recipient agrees that the Corporation,
to the extent permitted or required by law, shall deduct a sufficient number of
shares due to the Recipient upon exercise of the Option or the grant of a Bonus
to allow the Corporation to pay federal, provincial, state and local taxes of
any kind required by law to be withheld upon the exercise of such Option or
payment of such Bonus from any payment of any kind otherwise due to the
Recipient.  The Corporation shall not be
obligated to advise any Recipient of the existence of any tax or the amount
which the Corporation will be so required to withhold.


11.           Term of Plan. 
Options and Bonuses may be granted under this Plan from time to time
within a period of ten years from the date the Plan is adopted by the Board.


12.           Amendment and Termination of the Plan.


(a)           (1)           Subject to the policies,
rules and regulations of any lawful authority having jurisdiction (including
any exchange with which the shares of the Corporation are listed for trading),
the Board of Directors may at any time, without further action by the
shareholders, amend the Plan or any Option granted hereunder in such respects
as it may consider advisable and, without limiting the generality of the
foregoing, it may do so to ensure that Options granted hereunder will comply
with any provisions respecting stock options in the income tax and other laws
in force in any country or jurisdiction of which any Option holders may from
time to time be a resident or citizen, or it may at any time without action by
shareholders terminate the Plan.


(2)           provided, however, that any amendment that
would require shareholder approval under applicable state law, the rules and
regulations of any national securities exchange on which the Corporation’s
securities then may be listed, the Internal Revenue Code or any other
applicable law, shall be subject to the approval of the shareholders of the
Corporation as provided in Section 13 hereof.


(3)           provided further that any such modification
that may result from adjustments authorized by Section 8(i) hereof or which are
required for compliance with the 1934 Act, the Internal Revenue Code, their
rules or other laws or judicial order, shall not require such approval of the
shareholders.


(b)           Except as provided in Section 8 hereof, no
suspension, termination, modification or amendment of the Plan may adversely
affect any Option previously granted, unless the written consent of the
Recipient is obtained.


13.           Approval of Shareholders.  The
Plan shall take effect upon its adoption by the Board but shall be subject to
approval at a duly called and held meeting of stockholders in conformance with
the vote required by the Corporation’s governing documents, resolution of the
Board, any other applicable law and the rules and regulations thereunder, or
the rules and 



 10
 








regulations
of any national securities exchange upon which the Corporation’s Common Stock
is listed and traded, each to the extent applicable.


14.           Termination of Right of Action. 
Every right of action arising out of or in connection with the Plan by
or on behalf of the Corporation, or by any shareholder of the Corporation
against any past, present or future member of the Board, or against any
employee, or by an employee (past, present or future) against the Corporation
will, irrespective of the place where an action may be brought and irrespective
of the place of residence of any such shareholder, director or employee, cease
and be barred by the expiration of three years from the date of the act or
omission in respect of which such right of action is alleged to have risen.


15.           Tax Litigation.  The
Corporation shall have the right, but not the obligation, to contest, at its
expense, any tax ruling or decision, administrative or judicial, on any issue
which is related to the Plan and which the Board believes to be important to
holders of Options issued under the Plan and to conduct any such contest or any
litigation arising therefrom to a final decision.


16.           Adoption.   This Plan was approved by
resolution of the Board of Directors of the Corporation on                 ,
2005, with the adoption of the Plan contingent on obtaining shareholder
approval of the Plan at the next meeting of shareholders.


[End of Plan]



 11















Exhibit A


FORM OF STOCK OPTION
AGREEMENT


STOCK
OPTION AGREEMENT made as of this           
day of                     ,
               ,
by and between Isonics Corporation, a California corporation (the “Corporation”),
and                     
                              
(the “Recipient”).


In
accordance with the Corporation’s 2005 Stock Option Plan (the “Plan”), the
provisions of which are incorporated herein by reference, the Corporation
desires, in connection with the services of the Recipient, to provide the
Recipient with an opportunity to acquire shares of the Corporation’s no par
value common stock (“Common Stock”) on favorable terms and thereby increase the
Recipient’s proprietary interest in the Corporation and incentive to put forth
maximum efforts for the success of the business of the Corporation.  Capitalized terms used but not defined herein
are used as defined in the Plan.


NOW,
THEREFORE, in consideration of the premises and mutual covenants herein set
forth and other good and valuable consideration, the Corporation and the
Recipient agree as follows:


1.             Confirmation of Grant of Option.  Pursuant to a determination of the Committee
or, in the absence of a Committee, by the Board of Directors of the Corporation
made on                        ,
                
(the “Date of Grant”), the Corporation, subject to the terms of the Plan and of
this Agreement, confirms that the Recipient has been irrevocably granted on the
Date of Grant, as a matter of separate inducement and agreement, and in addition
to and not in lieu of salary or other compensation for services, a Stock Option
(the “Option”) exercisable to purchase an aggregate of                
shares of Common Stock on the terms and conditions herein set forth, subject to
adjustment as provided in Paragraph 8 hereof.


2.             Option Price.  The Option Price of shares of Common  Stock covered by the Option will be $         
per share (the “Option Price”) subject to adjustment as provided in Paragraph 8
hereof.


3.             Vesting and Exercise of Option.  (a)  Except
as otherwise provided herein or in Section 8 of the Plan, the Option [shall
vest and become exercisable as follows: 
(insert vesting schedule), provided, however, that no option shall vest
or become exercisable unless the Recipient is an employee of the Corporation on
such vesting date/or may be exercised in whole or in part at any time during
the term of the Option.]  (b)  The Option may not be exercised at any one
time as to fewer than 100 shares (or such number of shares as to which the
Option is then exercisable if such number of shares is less than 100).  (c) 
The Option may be exercised by written notice to the Secretary of the
Corporation accompanied by payment in full of the Option Price as provided in
Section 8 of the Plan.













4.             Term of Option.  The term of the Option will be through                ,
            ,
subject to earlier termination or cancellation as provided in this
Agreement.  The holder of the Option will
not have any rights to dividends or any other rights of a shareholder with respect
to any shares of Common Stock subject to the Option until such shares shall
have been issued (as evidenced by the appropriate transfer agent of the
Corporation) upon purchase of such shares through exercise of the Option.


5.             Transferability Restriction.  The Option may not be assigned, transferred
or otherwise disposed of, or pledged or hypothecated in any way (whether by
operation of law or otherwise) except in strict compliance with Section 8 of
the Plan.  Any assignment, transfer,
pledge, hypothecation or other disposition of the Option or any attempt to make
any levy of execution, attachment or other process will cause the Option to
terminate immediately upon the happening of any such event; provided, however,
that any such termination of the Option under the provisions of this Paragraph
5 will not prejudice any rights or remedies which the Corporation may have
under this Agreement or otherwise.


6.             Exercise Upon Termination.  The Recipient’s rights to exercise this
Option upon termination of employment or cessation of service as an officer,
director or consultant shall be as set forth in Section 8(f) of the Plan.


7.             Death, Disability or Retirement
of Recipient.  The exercisability of
this Option upon the death, Disability or retirement of the Recipient shall be
as set forth in Section 8(g) of the Plan.


8.             Adjustments.  The Option shall be subject to adjustment
upon the occurrence of certain events as set forth in Section 8(i) of the Plan.


9.             No Registration Obligation.  The Recipient understands that the Option is
not registered under the 1933 Act and, unless by separate written agreement,
the Corporation has no obligation to so register the Option or any of the
shares of Common Stock subject to and issuable upon the exercise of the Option,
although it may from time to time register under the 1933 Act the shares
issuable upon exercise of Options granted pursuant to the Plan.  The Recipient represents that the Option is
being acquired for the Recipient’s own account and that unless registered by
the Corporation, the shares of Common Stock issued on exercise of the Option
will be acquired by the Recipient for investment.  The Recipient understands that the Option is,
and the underlying securities may be, issued to the Recipient in reliance upon
exemptions from the 1933 Act, and acknowledges and agrees that all certificates
for the shares issued upon exercise of the Option may bear the following legend
unless such shares are registered under the 1933 Act prior to their issuance:


The shares represented by this Certificate have
not been registered under the Securities Act of 1933 (the “1933 Act”), and are “restricted
securities” as that term is defined in Rule 144 under the 1933 Act.  The shares may not be offered for sale, sold
or otherwise transferred except pursuant to an effective registration statement
under the 1933 Act or pursuant to an exemption from 



 2
 









registration under the 1933 Act, the
availability of which is to be established to the satisfaction of the Company.


The
Recipient further understands and agrees that the Option may be exercised only
if at the time of such exercise the underlying shares are registered and/or the
Recipient and the Corporation are able to establish the existence of an
exemption from registra­tion under the 1933 Act and applicable state or other
laws.


10.           Notices.  Each notice relating to this Agreement will
be in writing and delivered in person or by certified mail to the proper
address.  Notices to the Corporation
shall be addressed to the Corporation, attention:  President, 5906 McIntyre Street, Golden,
Colorado  80403, or at such other address
as may constitute the Corporation’s principal place of business at the time,
with a copy to: Herrick K. Lidstone, Esq., Burns, Figa & Will, P.C., 6400
S. Fiddlers Green Circle, Suite 1030, Englewood, CO 80111.  Notices to the Recipient or other person or
persons then entitled to exercise the Option shall be addressed to the
Recipient or such other person or persons at the Recipient’s address below
specified.  Anyone to whom a notice may
be given under this Agreement may designate a new address by notice to that
effect given pursuant to this Paragraph 10.


11.           Approval of Counsel.  The exercise of the Option and the issuance
and delivery of shares of Common Stock pursuant thereto shall be subject to
approval by the Corporation’s counsel of all legal matters in connection
therewith, including compliance with the requirements of the 1933 Act, the
Securities Exchange Act of 1934, as amended, applicable state and other
securities laws, the rules and regulations thereunder, and the requirements of
any national securities exchange(s) upon which the Common Stock then may be
listed.


12.           Benefits of Agreement.  This Agreement will inure to the benefit of
and be binding upon each successor and assignee of the Corporation.  All obligations imposed upon the Recipient
and all rights granted to the Corporation under this Agreement will be binding
upon the Recipient’s heirs, legal representatives and successors.


13.           Effect of Governmental and Other
Regulations.  The exercise of the
Option and the Corporation’s obligation to sell and deliver shares upon the
exercise of the Option are subject to all applicable federal and state laws,
rules and regulations, and to such approvals by any regulatory or governmental
agency which may, in the opinion of counsel for the Corporation, be required.


14.           Plan Governs.  In the event that any provision in this
Agreement conflicts with a provision in the Plan, the provision of the Plan
shall govern.



 3
 









Executed in the name and on
behalf of the Corporation by one of its duly authorized officers and by the
Recipient all as of the date first above written.


	
  

  	
   

  	
  ISONICS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date
                                    ,                   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  President

  



 


The
undersigned Recipient has read and understands the terms of this Option
Agreement and the attached Plan and hereby agrees to comply therewith.


	
  Date
                                    ,                   

  	
   

  
	
   

  	
  Signature of
  Recipient

  
	
   

  	
   

  
	
   

  	
  Tax ID
  Number:                                                                         

  
	
   

  	
   

  
	
   

  	
  Address:                                                                                     

  
	
   

  	
   

  
	
   

  	
                                                                                                     

  



 



 4














Exhibit B


SUBSCRIPTION
AGREEMENT


THE
SECURITIES BEING ACQUIRED BY THE UNDERSIGNED HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933 OR ANY OTHER LAWS AND ARE OFFERED UNDER EXEMPTIONS
FROM THE REGISTRATION PROVISIONS OF SUCH LAWS. 
THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE
DISPOSED OF EXCEPT IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER CONTAINED IN
THIS STOCK SUBSCRIPTION AGREEMENT AND APPLICABLE SECURITIES LAWS.


This
Subscription Agreement is entered for the purpose of the undersigned acquiring                    
shares of the no par value common stock (the “Securities”) of Isonics
Corporation, a California corporation (the “Corporation”) from the Corporation
as a Bonus or pursuant to exercise of an Option granted pursuant to the
Corporation’s 2005 Stock Option Plan (the “Plan”). All capitalized terms not
otherwise defined herein shall be as defined in the Plan.


It
is understood that no grant of any Bonus or exercise of any Option at a time
when no registration statement relating thereto is effective under the U.S.
Securities Act of 1933, as amended (the “1933 Act”) can be completed until the
undersigned executes this Subscription Agreement and delivers it to the
Corporation, and that such grant or exercise is effective only in accordance
with the terms of the Plan and this Subscription Agreement.


In
connection with the undersigned’s acquisition of the Securities, the
undersigned represents and warrants to the Corporation as follows:


1.             The undersigned has been provided
with, and has reviewed the Plan, and such other information as the undersigned
may have requested of the Corporation regarding its business, operations,
management, and financial condition (all of which is referred to herein as the “Available
Information”).


2.             The Corporation has given the
undersigned the opportunity to ask questions of and to receive answers from
persons acting on the Corporation’s behalf concerning the terms and conditions
of this transaction and the opportunity to obtain any additional information
regarding the Corporation, its business and financial condition or to verify
the accuracy of the Available Information which the Corporation possesses or
can acquire without unreasonable effort or expense.


3.             The Securities are being acquired by
the undersigned for the undersigned’s own account and not on behalf of any
other person or entity.












4.             The undersigned understands that
the Securities being acquired hereby have not been registered under the 1933
Act or any state or foreign securities laws, and are, and unless registered
will continue to be, restricted securities within the meaning of Rule 144 of
the General Rules and Regulations under the 1933 Act and other statutes, and
the undersigned consents to the placement of appropriate restrictive legends on
any certificates evidencing the Securities and any certificates issued in
replacement or exchange therefor and acknowledges that the Corporation will
cause its stock transfer records to note such restrictions.


5.             By the undersigned’s execution
below, it is acknowledged and understood that the Corporation is relying upon
the accuracy and completeness hereof in complying with certain obligations
under applicable securities laws.


6.             This Agreement binds and inures to
the benefit of the representatives, successors and permitted assigns of the
respective parties hereto.


7.             The undersigned acknowledges that
the grant of any Bonus or Option and the issuance and delivery of shares of
Common Stock pursuant thereto shall be subject to prior approval by the
Corporation’s counsel of all legal matters in connection therewith, including
compliance with the requirements of the 1933 Act and other applicable
securities laws, the rules and regulations thereunder, and the requirements of
any national securities exchange(s) upon which the Common Stock then may be
listed.


8.             The undersigned acknowledges and
agrees that the Corporation has withheld            
shares for the payment of taxes as a result of the grant of the Bonus or the
exercise of an Option.


9.             The Plan is incorporated herein by
reference.  In the event that any
provision in this Agreement conflicts with ANY provision in the Plan, the
provisions of the Plan shall govern.


	
  Date:                             ,                 

  	
   

  
	
   

  	
  Signature of
  Recipient

  
	
   

  	
   

  
	
   

  	
  Tax ID Number:                                                                        

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:                                                                                     

  
	
   

  	
   

  
	
   

  	
                                                                                                     

  
			



 



 2