**Exhibit10.45**

**ISONICS CORPORATION**

**Amended and Restated**

**2005 STOCK OPTION PLAN**

A.            1.             Purposes of and Benefits Under the Plan.  This2005 Stock Option Plan (the “Plan”) is intended to encourage stock ownership byemployees, officers, consultants and advisors of Isonics Corporation and itscontrolled, affiliated and subsidiary entities (collectively, the “Corporation”),so that they may acquire or increase their proprietary interest in theCorporation. The Plan is intended to facilitate the Corporation’s effortsto:  (i) induce qualified persons tobecome employees, officers, consultants and advisors of the Corporation; (ii)compensate employees, officers, consultants and advisors for services to theCorporation; and (iii) encourage such persons to remain in the employ of orassociated with the Corporation and to put forth maximum efforts for thesuccess of the Corporation.  Optionsgranted by the Committee pursuant to Section 6 of this Plan are “incentivestock options” (“Incentive Stock Options”) within the meaning of Section 422 ofthe Internal Revenue Code, and options granted by the Committee pursuant toSection 7 of this Plan are “non-qualified stock options” (“Non-qualified StockOptions”).

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

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

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

(c)           “Committee” shall mean any Committeeappointed 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’sno par value common stock.

(e)           “Disability” shall mean a Recipient’sinability to engage in any substantial gainful activity by reason of anymedically determinable physical or mental impairment that can be expected toresult in death or that has lasted or can be expected to last for a continuousperiod of not less than 12 months.  Ifthe Recipient has a disability insurance policy, the term “Disability” shall beas defined therein.

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

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

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

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

3.             Administration.

(a)           The Plan shall be administered by theCommittee.  The Committee shall have theauthority in its discretion, subject to and not inconsistent with the expressprovisions of the Plan, to administer the Plan and to exercise all the powersand authorities either specifically conferred under the Plan or necessary oradvisable in the administration of the Plan, including the authority:  to grant Options and Bonuses; to determinethe vesting schedule and other restrictions, if any, relating to Options andBonuses; to determine the purchase price of the shares of Common Stock coveredby each Option (the “Option Price”); to determine the persons to whom, and thetime or times at which, Options and Bonuses shall be granted; to determine thenumber of shares to be covered by each Option or Bonus; to determine FairMarket Value per share; to interpret the Plan; to prescribe, amend and rescindrules and regulations relating to the Plan; to determine the terms andprovisions of the Option agreements (which need not be identical) entered intoin connection with Options granted under the Plan; and to make all otherdeterminations deemed necessary or advisable for the administration of thePlan.  The Committee may delegate to oneor more of its members or to one or more agents such administrative duties asit may deem advisable, and the Committee or any person to whom it has delegatedduties as aforesaid may employ one or more persons to render advice with respectto any responsibility the Committee or such person may have under the Plan.

(b)           Options and Bonuses granted under the Planshall be evidenced by duly adopted resolutions of the Committee included in theminutes of the meeting at which they are adopted or in a unanimous writtenconsent.

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

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

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4.             Eligibility.

(a)           Subject to certain limitations hereinafterset 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 grantedand the number of shares to be covered by each Option or Bonus, the Committeeshall take into account the duties of the respective persons, their present andpotential contributions to the success of the Corporation, and such otherfactors as the Committee shall deem relevant to accomplish the purposes of thePlan.

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

5.             Stock Reserved.

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

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

6.             Incentive Stock Options.

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

(b)           The aggregate Fair Market Value (determinedas of the date the Incentive Stock Option is granted) of the shares of CommonStock with respect to which Incentive Stock Options granted under this and anyother plan of the Corporation are exercisable for the first time by a Recipientduring 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 thisPlan are intended to satisfy all requirements for incentive stock options underSection 422 of the Internal Revenue Code and the Treasury Regulationspromulgated thereunder and, notwithstanding any other provision of this Plan,the Plan and all Incentive Stock Options granted under it shall be soconstrued, and all 

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contraryprovisions shall be so limited in scope and effect and, to the extent theycannot be so limited, they shall be void.

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

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

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

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

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

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

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

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

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

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

(2)           The exercise period of any Option shall notexceed ten years from the date of grant of the Option.

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

(4)           The Committee shall have the authority toaccelerate or extend the exercisability of any outstanding Option at such timeand under such circumstances as it, in its sole discretion, deemsappropriate.  In any event, no exerciseperiod may be so extended to increase the term of the Option beyond ten yearsfrom the date of the grant.

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

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

(1)           An Option may be exercised as to any or allwhole 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 suchnumber of shares as to which the Option is then exercisable if such number ofshares 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 theSecretary of the Corporation designating the number of shares as to which theOption is being exercised, and shall be accompanied by payment in full of theOption Price for the number of shares so designated, together with any writtenstatements required by, or deemed by the Corporation’s counsel to be advisablepursuant to, any applicable securities laws.

(3)           The Option Price shall be paid in cash, or inshares 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 toapproval of the Committee, may be effected in whole or in part with fundsreceived from the Corporation at the time of exercise as a compensatory cashpayment.

(4)           The Committee shall have the sole andabsolute discretion to determine whether or not property other than cash orCommon 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 thewithholding of taxes as required by Section 10 hereof.

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(f)            Termination of Relationship With Corporation.

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

(2)           Nothing in the Plan or in any Option or Bonusgranted hereunder shall confer upon an individual any right to continue in theemploy of or continue any other relationship with the Corporation or interferein any way with the right of the Corporation to terminate such employment orother relationship between the individual and the Corporation.

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

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

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

then all Options theretofore granted to such Recipient (whether or nototherwise exercisable) unless earlier terminated in accordance with theirterms, 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’sestate or by a person who acquired the right to exercise such Options bybequest or inheritance; *provided, however,*that in the case of Incentive Stock Options such one-year period shall belimited to three months in the case of retirement.

(h)           Transferability Restriction.

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

(2)           Any attempted sale, pledge, assignment,hypothecation or other transfer of an Option contrary to the provisions hereofand/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 atermination of the Option.

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(3)           (A)  Asa condition to the transfer of any shares of Common Stock issued upon exerciseof an Option granted under this Plan, the Corporation may require an opinion ofcounsel, satisfactory to the Corporation, to the effect that such transfer willnot be in violation of the U.S. Securities Act of 1933, as amended (the “1933Act”) or any other applicable securities laws or that such transfer has beenregistered under federal and all applicable state securities laws.  (B) The Corporation shall be authorized to refrainfrom delivering or transferring shares of Common Stock issued under this Planuntil the Committee determines that such delivery or transfer will not violateapplicable securities laws and the Recipient has tendered to the Corporationany federal, state or local tax owed by the Recipient as a result of exercisingthe Option or disposing of any Common Stock when the Corporation has a legalliability to satisfy such tax.  (C)  The Corporation shall not be liable fordamages due to delay in the delivery or issuance of any stock certificate forany reason whatsoever, including, but not limited to, a delay caused by listingrequirements of any securities exchange or any registration requirements underthe 1933 Act, the 1934 Act, or under any other state, federal or provinciallaw, rule or regulation.  (D)  The Corporation is under no obligation totake any action or incur any expense in order to register or qualify thedelivery or transfer of shares of Common Stock under applicable securities lawsor to perfect any exemption from such registration or qualification.  (E) The Corporation will not be liable to anyRecipient for failure to deliver or transfer shares of Common Stock if suchfailure is based upon the provisions of this paragraph.

(i)            Effect of Certain Changes.

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

(2)           In the event of the proposed dissolution orliquidation of the Corporation, or any corporate separation or division,including, but not limited to, split-up, split-off or spin-off, or a merger orconsolidation of the Corporation with another corporation, the Committee mayprovide that the holder of each Option then exercisable shall have the right toexercise such Option (at its then current Option Price) solely for the kind andamount of shares of stock and other securities, property, cash or anycombination thereof receivable upon such dissolution, liquidation, corporateseparation or division, or merger or consolidation by a holder of the number ofshares of Common Stock for which such Option might have been exercisedimmediately prior to such dissolution, liquidation, corporate separation ordivision, or merger or consolidation; or, in the alternative the Committee mayprovide that each Option granted under the Plan shall terminate as of a datefixed by the Committee; provided, however, that not less than 30 days’ writtennotice of the date so fixed shall be given to each Recipient, who shall havethe right, during the period of 30 days preceding such termination, to exercisethe 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.

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(3)           Paragraph 2 of this Section 8 (i) shall notapply to a merger or consolidation in which the Corporation is the survivingcorporation and shares of Common Stock are not converted into or exchanged forstock, securities of any other corporation, cash or any other thing of value.  Notwithstanding the preceding sentence, incase of any consolidation or merger of another corporation into the Corporationin which the Corporation is the surviving corporation and in which there is areclassification or change (including a change to the right to receive cash orother 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 subdivisionor combination, but including any change in such shares into two or more classesor series of shares), the Committee may provide that the holder of each Optionthen exercisable shall have the right to exercise such Option solely for thekind and amount of shares of stock and other securities (including those of anynew direct or indirect parent of the Corporation), property, cash or anycombination thereof receivable upon such reclassification, change,consolidation or merger by the holder of the number of shares of Common Stockfor which such Option might have been exercised.

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

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

(6)           Except as expressly provided in this Section8(i), the Recipient shall have no rights by reason of any subdivision orconsolidation of shares of stock of any class, or the payment of any stockdividend or any other increase or decrease in the number of shares of stock ofany class, or by reason of any dissolution, liquidation, merger, orconsolidation or spin-off of assets or stock of another corporation; and anyissue by the Corporation of shares of stock of any class, or securitiesconvertible into shares of stock of any class, shall not affect, and noadjustment by reason thereof shall be made with respect to, the number or priceof shares of Common Stock subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any waythe right or power of the Corporation to make adjustments, reclassifications,reorganizations or changes of its capital or business structures, or to mergeor consolidate, or to dissolve, liquidate, or sell or transfer all or any partof its business or assets.

(j)            No Rights as Shareholder - Non-DistributiveIntent.

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

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respectto, any shares subject to such Option until after the Option is exercised andthe shares are issued.

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

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

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

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

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

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

(b)           The grant of a Bonus and the issuance anddelivery of shares of Common Stock pursuant thereto shall be subject toapproval by the Corporation’s counsel of all legal matters in connectiontherewith, including compliance with the requirements of the 1933 Act, the 1934Act, other applicable securities laws, rules and regulations, and therequirements of any stock exchanges upon which the Common Stock then may belisted.  Any certificates prepared toevidence Common Stock issued pursuant to a Bonus grant shall bear legends asthe 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 

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statementrelating thereto is not effective under the 1933 Act shall execute aSubscription Agreement substantially in the form of Exhibit B.

10.           Agreement by Recipient Regarding WithholdingTaxes.  Each Recipient agrees that the Corporation,to the extent permitted or required by law, shall deduct a sufficient number ofshares due to the Recipient upon exercise of the Option or the grant of a Bonusto allow the Corporation to pay federal, provincial, state and local taxes ofany kind required by law to be withheld upon the exercise of such Option orpayment of such Bonus from any payment of any kind otherwise due to theRecipient.  The Corporation shall not beobligated to advise any Recipient of the existence of any tax or the amountwhich the Corporation will be so required to withhold.

11.           Term of Plan. Options and Bonuses may be granted under this Plan from time to timewithin 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 (includingany exchange with which the shares of the Corporation are listed for trading),the Board of Directors may at any time, without further action by theshareholders, amend the Plan or any Option granted hereunder in such respectsas it may consider advisable and, without limiting the generality of theforegoing, it may do so to ensure that Options granted hereunder will complywith any provisions respecting stock options in the income tax and other lawsin force in any country or jurisdiction of which any Option holders may fromtime to time be a resident or citizen, or it may at any time without action byshareholders terminate the Plan.

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

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

(b)           Except as provided in Section 8 hereof, nosuspension, termination, modification or amendment of the Plan may adverselyaffect any Option previously granted, unless the written consent of theRecipient is obtained.

13.           Approval of Shareholders.  ThePlan shall take effect upon its adoption by the Board but shall be subject toapproval at a duly called and held meeting of stockholders in conformance withthe vote required by the Corporation’s governing documents, resolution of theBoard, any other applicable law and the rules and regulations thereunder, orthe rules and 

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regulationsof any national securities exchange upon which the Corporation’s Common Stockis 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 byor on behalf of the Corporation, or by any shareholder of the Corporationagainst any past, present or future member of the Board, or against anyemployee, or by an employee (past, present or future) against the Corporationwill, irrespective of the place where an action may be brought and irrespectiveof the place of residence of any such shareholder, director or employee, ceaseand be barred by the expiration of three years from the date of the act oromission in respect of which such right of action is alleged to have risen.

15.           Tax Litigation.  TheCorporation shall have the right, but not the obligation, to contest, at itsexpense, any tax ruling or decision, administrative or judicial, on any issuewhich is related to the Plan and which the Board believes to be important toholders of Options issued under the Plan and to conduct any such contest or anylitigation arising therefrom to a final decision.

16.           Adoption.   This Plan was approved byresolution of the Board of Directors of the Corporation on                 ,2005, with the adoption of the Plan contingent on obtaining shareholderapproval of the Plan at the next meeting of shareholders.

[End of Plan]

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Exhibit A

FORM OF STOCK OPTIONAGREEMENT

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

Inaccordance with the Corporation’s 2005 Stock Option Plan (the “Plan”), theprovisions of which are incorporated herein by reference, the Corporationdesires, in connection with the services of the Recipient, to provide theRecipient with an opportunity to acquire shares of the Corporation’s no parvalue common stock (“Common Stock”) on favorable terms and thereby increase theRecipient’s proprietary interest in the Corporation and incentive to put forthmaximum efforts for the success of the business of the Corporation.  Capitalized terms used but not defined hereinare used as defined in the Plan.

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

1.             Confirmation of Grant of Option.  Pursuant to a determination of the Committeeor, in the absence of a Committee, by the Board of Directors of the Corporationmade on                        ,                (the “Date of Grant”), the Corporation, subject to the terms of the Plan and ofthis Agreement, confirms that the Recipient has been irrevocably granted on theDate of Grant, as a matter of separate inducement and agreement, and in additionto 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 toadjustment 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 8hereof.

3.             Vesting and Exercise of Option.  (a)  Exceptas otherwise provided herein or in Section 8 of the Plan, the Option [shallvest and become exercisable as follows: (insert vesting schedule), provided, however, that no option shall vestor become exercisable unless the Recipient is an employee of the Corporation onsuch vesting date/or may be exercised in whole or in part at any time duringthe term of the Option.]  (b)  The Option may not be exercised at any onetime as to fewer than 100 shares (or such number of shares as to which theOption 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 theCorporation accompanied by payment in full of the Option Price as provided inSection 8 of the Plan.

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4.             Term of Option.  The term of the Option will be through                ,            ,subject to earlier termination or cancellation as provided in thisAgreement.  The holder of the Option willnot have any rights to dividends or any other rights of a shareholder with respectto any shares of Common Stock subject to the Option until such shares shallhave been issued (as evidenced by the appropriate transfer agent of theCorporation) upon purchase of such shares through exercise of the Option.

5.             Transferability Restriction.  The Option may not be assigned, transferredor otherwise disposed of, or pledged or hypothecated in any way (whether byoperation of law or otherwise) except in strict compliance with Section 8 ofthe Plan.  Any assignment, transfer,pledge, hypothecation or other disposition of the Option or any attempt to makeany levy of execution, attachment or other process will cause the Option toterminate immediately upon the happening of any such event; provided, however,that any such termination of the Option under the provisions of this Paragraph5 will not prejudice any rights or remedies which the Corporation may haveunder this Agreement or otherwise.

6.             Exercise Upon Termination.  The Recipient’s rights to exercise thisOption 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 Retirementof Recipient.  The exercisability ofthis Option upon the death, Disability or retirement of the Recipient shall beas set forth in Section 8(g) of the Plan.

8.             Adjustments.  The Option shall be subject to adjustmentupon 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 isnot registered under the 1933 Act and, unless by separate written agreement,the Corporation has no obligation to so register the Option or any of theshares 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 sharesissuable upon exercise of Options granted pursuant to the Plan.  The Recipient represents that the Option isbeing acquired for the Recipient’s own account and that unless registered bythe Corporation, the shares of Common Stock issued on exercise of the Optionwill 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 uponexemptions from the 1933 Act, and acknowledges and agrees that all certificatesfor the shares issued upon exercise of the Option may bear the following legendunless such shares are registered under the 1933 Act prior to their issuance:

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

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

TheRecipient further understands and agrees that the Option may be exercised onlyif at the time of such exercise the underlying shares are registered and/or theRecipient and the Corporation are able to establish the existence of anexemption from registra­tion under the 1933 Act and applicable state or otherlaws.

10.           Notices.  Each notice relating to this Agreement willbe in writing and delivered in person or by certified mail to the properaddress.  Notices to the Corporationshall be addressed to the Corporation, attention:  President, 5906 McIntyre Street, Golden,Colorado  80403, or at such other addressas 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., 6400S. Fiddlers Green Circle, Suite 1030, Englewood, CO 80111.  Notices to the Recipient or other person orpersons then entitled to exercise the Option shall be addressed to theRecipient or such other person or persons at the Recipient’s address belowspecified.  Anyone to whom a notice maybe given under this Agreement may designate a new address by notice to thateffect given pursuant to this Paragraph 10.

11.           Approval of Counsel.  The exercise of the Option and the issuanceand delivery of shares of Common Stock pursuant thereto shall be subject toapproval by the Corporation’s counsel of all legal matters in connectiontherewith, including compliance with the requirements of the 1933 Act, theSecurities Exchange Act of 1934, as amended, applicable state and othersecurities laws, the rules and regulations thereunder, and the requirements ofany national securities exchange(s) upon which the Common Stock then may belisted.

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

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

14.           Plan Governs.  In the event that any provision in thisAgreement conflicts with a provision in the Plan, the provision of the Planshall govern.

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Executed in the name and onbehalf of the Corporation by one of its duly authorized officers and by theRecipient all as of the date first above written.
|                                                                                                                                                                                                                                                                                                                                       |   | ISONICS CORPORATION |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|
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| Date                                    ,                    |   | By:                 |   |
|                                                                                                                                                                                                                                                                                                                                  |   |                |   | President |

 

Theundersigned Recipient has read and understands the terms of this OptionAgreement and the attached Plan and hereby agrees to comply therewith.
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|                                                                                                                                                                                                                                                                                                                                  | Signature of  Recipient                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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Exhibit B

SUBSCRIPTIONAGREEMENT

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

ThisSubscription Agreement is entered for the purpose of the undersigned acquiring                    shares of the no par value common stock (the “Securities”) of IsonicsCorporation, a California corporation (the “Corporation”) from the Corporationas a Bonus or pursuant to exercise of an Option granted pursuant to theCorporation’s 2005 Stock Option Plan (the “Plan”). All capitalized terms nototherwise defined herein shall be as defined in the Plan.

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

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

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

2.             The Corporation has given theundersigned the opportunity to ask questions of and to receive answers frompersons acting on the Corporation’s behalf concerning the terms and conditionsof this transaction and the opportunity to obtain any additional informationregarding the Corporation, its business and financial condition or to verifythe accuracy of the Available Information which the Corporation possesses orcan acquire without unreasonable effort or expense.

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

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

5.             By the undersigned’s executionbelow, it is acknowledged and understood that the Corporation is relying uponthe accuracy and completeness hereof in complying with certain obligationsunder applicable securities laws.

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

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

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

9.             The Plan is incorporated herein byreference.  In the event that anyprovision in this Agreement conflicts with ANY provision in the Plan, theprovisions of the Plan shall govern.
| Date:                             ,                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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|                                                                                                                                                                                                                                                                                  | Signature of  Recipient                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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