Document:

Exhibit
10.2

AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

This Amended and Restated Employment  Agreement,
dated as of October 27, 2006 (this “Agreement”), is by and between SenseIt Corp., a Delaware corporation (the “Company”), and Christopher Toffales, an individual residing at 21 Motts
Hollow Road, Port Jefferson, New York 
11777 (“Executive”).

W I T N E S S E T H:

WHEREAS, the Company and
Executive are parties to an Employment Agreement, dated as of May 9, 2006 (the “Prior
Agreement”), which was to become effective upon the occurrence of certain
specified events; and

WHEREAS, the parties desire to
amend and restate the Prior Agreement to reflect an employment arrangement
pursuant to which the Company shall employ Executive as the Company’s president
and chief executive officer and to set forth the terms and conditions of such
employment as now contemplated by this Agreement; and

WHEREAS, simultaneous with the
execution of this Agreement, the Company has entered into a Class A Common
Stock Purchase Agreement (the “Isonics Purchase Agreement”) with Isonics
Corporation, a California corporation (“Isonics”), pursuant to which Isonics
shall purchase specified shares of the capital stock of the Corporation in
exchange for cash and/or other consideration, including, but not limited to, an
assignment of all of Isonics rights, title and interest in that certain
Development and Licensing Agreement, dated as of September 28, 2005, as amended
(the “Lucent Agreement”), between Isonics and Lucent Technologies Inc. (“Lucent”).

NOW,
THEREFORE, in consideration of the foregoing and of the
mutual premises, covenants, representations and warranties herein contained,
and for other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:

1.             Termination of
Prior Agreement.  This Agreement
supersedes all prior employment agreements and arrangements between the
parties, including the Prior Agreement, in all respects and each of such prior
employment agreements and arrangements, including the Prior Agreement, are
terminated in their entirety and hereby made null and void with no party to
such prior employment agreements and arrangements, including the Prior
Agreement, having any rights, obligations or liabilities under such prior
employment agreements and arrangements, including, but not limited to, the
Prior Agreement.

2.             Retention of
Services; Term.  Effective as of the
date (the “Effective Date”) on which there shall occur the Initial Closing
under the Isonics Purchase Agreement, the Company retains the services of
Executive, and Executive agrees to furnish such services, upon the terms and
conditions set forth in this Agreement. 
Subject to earlier termination on the terms and conditions provided in
section 8 of this Agreement, and subject to certain provisions of this
Agreement which shall survive any termination of the employment of Executive,
the initial term 

 

 

(the
“Initial Term”) of  the employment of
Executive under this Agreement is two years. 
The term of the employment of Executive under this Agreement shall
automatically be extended for an unlimited number of additional two-year terms
(each, a “Renewal Term”); provided, however, that either the
Board of Directors or Executive may elect not to extend the term of the
employment of Executive by the Company under this Agreement for any future
Renewal Term by giving notice to the other party at least three months prior to
the commencement of such Renewal Term. 
(For the purposes of this Agreement, the Initial Term and all effective
Renewal Terms are referred to in this Agreement collectively as the “Employment
Period.”)

3.             Duties and
Extent of Services During Employment Period.

(a)           During the Employment Period,
Executive shall (i) serve as the president and chief executive officer of the
Company on the terms and conditions set forth in this Agreement, (ii) report
directly to the board of directors of the Company (the “Board of Directors”)
and (iii) exercise such authority, perform such executive duties and functions
and discharge such executive responsibilities as are reasonably associated with
the Executive’s positions, consistent with the responsibilities of the
president and/or chief executive officer of companies comparable to the
Company, commensurate with the authority vested in the Executive pursuant to
this Agreement and consistent with the Bylaws of the Company, including, but
not limited to, supervising the day-to-day business operations and activities
of the Company.

(b)           Notwithstanding anything to the contrary
contained in this Agreement, in his capacity as the president and chief
executive officer of the Company, Executive may act on behalf of the Company to
the fullest extent permissible for a person acting in such capacities under
applicable law and without approval of the Board of Directors or the consent of
the holders of any class of securities of the Company, except with respect to
the following items, which shall require:

(i)            the majority vote of the Board of
Directors in order to:

(A)          enter into a transaction with an
affiliate of Executive, the Company or any affiliate of Executive or the
Company;

(B)           on behalf of the Company, borrow
funds over $250,000 on a secured or unsecured basis in one or more
transactions, from banks or any other person or entity;

(C)           invest or reinvest funds of the
Company in an amount greater than $250,000 in any securities, whether equity or
debt, public or private, or any similar investments, or in any other
investment;

(D)          accept any capital investment in, or
issue any additional securities of, the Company in a transaction with any
person or entity;

(E)           on behalf of the Company, (1) make a
general assignment for the benefit of creditors, (2) consent to the appointment
of a receiver, liquidator, custodian, or similar official of all or
substantially all of its properties, (3) commence any action or proceeding or
take advantage of or file under any federal or state insolvency statute,
including, without limitation, the United States Bankruptcy Code or any
political subdivision thereof, seeking to have an order for relief entered with
respect to the Company or seeking adjudication as a bankrupt or insolvent, or
(4) seek reorganization, arrangement, adjustment, liquidation, dissolution,
administration, a voluntary arrangement, or other relief with respect to the
Company or its debts;

(F)           declare or pay a dividend on any
class of securities of the Company; and

 2
 

 

 

(G)           Fail to terminate the Lucent
Agreements for convenience under Section 4.02(a) of the Lucent Agreement at a
time when the Company does not have sufficient funds readily available to meet
the Company’s obligations to Lucent under the Lucent Agreement, other than such
time when the Company does not have such funds readily available due to a
failure by Isonics to timely purchase securities of the Company in accordance
with the Isonics Purchase Agreement; and

(ii)           the majority vote of the Board of
Directors and, until the termination of the Stockholders’ Agreement, dated of
even date as this Agreement (the “Stockholders’ Agreement”), among the Company,
Executive (in his individual capacity and not in his capacity as an officer,
director and/or employee of the Company), Isonics and others, an affirmative
vote of the holders of a majority of the outstanding shares of each class of
securities of the Company, including, but not limited to, the Class A Common
Stock and Class B Common Stock of the Company, in order to:

(A)          merge, consolidate or dissolve the
Company or sell all or substantially all of its assets as part of a single transaction,
series of related transactions or plan;

(B)           mortgage, pledge, or grant a security
interest in any property of the Company not in the ordinary course of business;
and

(C)           on behalf of the Company, lend money
to or guaranty or become surety for the obligations of any person or entity.

(c)           Executive shall be required to devote
five business days per calendar month to the Company’s affairs, which time
shall be documented in reasonable detail and provided to the Board of Directors
upon written request by the Board of Directors. 
Executive shall use his discretion in determining whether it is
necessary to devote any additional time to the Company’s affairs beyond the
required five business days per calendar month; provided, however,
that Executive provision to the Company of additional business days in excess
of two additional business days in any calendar month shall require the
pre-approval of the Board of Directors.

(d)           Notwithstanding anything to the
contrary contained in this Agreement, during the Employment Period, Executive
may (i) engage, directly or indirectly, in any other businesses and ventures,
including providing services and otherwise being affiliated with (A) Irvine
Sensors Corporation and (B) and other persons or entities (and their respective
affiliates) with whom Executive or CTC Aero, LLC, a New York limited liability
company in which Executive (in his individual capacity and not in his capacity
as an officer, director and/or employee of the Company) is the sole member (“CTC
Aero”), has any equity interest or any other business or financial relationship
or arrangement as of the date of the commencement of the Employment Period,
(ii) become an employee, officer or director of, or provide consulting or other
services for, any other person or entity that is not directly competitive with
the Company and (iii) devote time, attention and energies to reasonable
community activities and public affairs, provided such community activities and
public affairs efforts shall not in any way conflict with the amount of time
required to be devoted to the Company under this Agreement.  Neither the Company nor any of the Company’s
officers, directors, employees and stockholders shall have any right, title or
interest, by virtue of this Agreement or otherwise, to share in any of the
businesses, ventures, equity interests, business or financial relationships or
arrangements, investments or activities to which Executive may engage or
participate in pursuant to the preceding sentence or in any 

 3
 

 

 

income or revenues
derived from any of such businesses, ventures, equity interests, business or
financial relationships or arrangements, investments or activities.

(e)           From and after the later of the
Effective Date or the date of the occurrence of a Threshold Event (as such term
is defined in the Company’s Certificate of Incorporation, as amended through
the Effective Date) and, thereafter, through the earlier of the (i) third
anniversary of the termination of the Employment Period and (ii) the date on
which Executive no longer owns any equity securities of the Company, in any and
all elections of directors of the Company (whether at a meeting or by written
consent in lieu of a meeting), the Company shall take all steps reasonably
necessary (including, but not limited to, solicitation of proxies or written
consents) to cause Executive to be elected as a director of the Company.

4.             Remuneration.

(a)            During the Employment Period, the
Company shall pay to Executive as compensation for his services performed under
this Agreement an amount equal to $21,000.00 per calendar month (the “Base
Salary”), which amount shall be paid in a manner consistent with the Company’s
payroll practices for executive officers. 
In the event that Executive shall devote more than five business days in
any calendar month to the Company’s affairs under this Agreement, the Company
shall pay to Executive an amount equal to $4,000 per business day (such amount
to be pro-rated accordingly for any partial days of additional services
rendered, based on an eight-hour business day). 
To the extent that the first and/or last months of the Employment Period
consist of less than a full calendar month, the compensation and required
number of days devoted to the Company’s affairs shall be pro-rated accordingly
for such first and last months.

(b)           Notwithstanding the provisions of the
first sentence of paragraph 4(a), for each Renewal Term, the Base Salary shall
be increased for such Renewal Term, effective as of the first day of the
Renewal Term, to an amount equal to the product resulting from multiplying (i)
the Base Salary in effect immediately prior to such increase in the Base Salary
by (ii) a fraction, (A) the numerator of which shall be the Consumer Price
Index for the New York/New Jersey Metropolitan Area (All Employees), as
published by the U.S. Bureau of Labor Statistics (the “CPI”) for the most
recent published period prior to the effective date of any such increase, and
(B) the denominator of which shall be the CPI for the most recent published
period prior to the date of this Agreement (with respect to the first Renewal
Period) or prior to commencement of the immediately preceding Renewal Term
(with respect to all other Renewal Terms).

5.             Employee Benefits; Expenses.

(a)           During the term of this Agreement, the Company shall
provide to Executive the right to participate in the Company’s then existing
medical and dental insurance, any retirement plan, profit-sharing plan,
savings plan, stock option plan and
other employee benefit plans and policies on the same terms as are then
generally available to the Company’s executive officers.

(b)           The Company shall reimburse Executive for all reasonable
and necessary expenses, and other disbursements incurred by Executive for or on
behalf of the Company in the performance 

 4
 

 

 

of Executive’s duties under
this Agreement, upon submission of appropriate documentation therefor,
consistent with the Company’s expense reimbursement policies.

(c)           During the term of this Agreement,
the Company shall have in effect at all times, at its expense and no cost to
Executive, one or more directors and officers liability indemnification
insurance policies (the “D&O Policies”) covering liabilities which may have
accrued or that will be incurred by the performance of Executive’s services on
behalf of the Company in the minimum benefit amount of $5,000,000; provided,
however, that, in the event that the Company shall obtain D&O
Policies for any director or officer of the Company with a benefit amount
greater than $5,000,000, the minimum benefit amount under this paragraph 5(c)
shall be increased to the benefit amount provided to such other director and
officer.

(d)           Subject to the provisions of
paragraph 5(e), during the term of this Agreement, the Company shall maintain,
at its expense and at no cost to Executive but subject to Executive being
insurable, a (i) life insurance policy (the “Life Insurance Policy”) on the
life of Executive providing for a minimum death benefit of $5,000,000 (“Life
Insurance Policy”) for which Executive shall have the right to designate the
beneficiary of the Life Insurance Policy and (ii) long-term disability
insurance policy (the “Disability Insurance Policy”) for the benefit of
Executive and providing for a minimum net benefit of $10,000 per month after
taxes.

(e)           The Company’s obligation under
paragraph 5(d) to maintain the Life Insurance Policy and Disability Insurance
Policy shall be limited to an aggregate annual premium amount of $15,000.  Should the aggregate annual premium amount for
the Life Insurance Policy and Disability Insurance Policy exceed $15,000,
Executive shall have the option to either (i) consent to a reduction in the
benefit amount(s) of the Life Insurance Policy and/or Disability Insurance
Policy so as to cause the aggregate annual premium amount for such policies to
be no greater than $15,000 or (ii) tender to the Company (no later than five
days prior to the applicable premium payment date(s) and, to the extent that
premiums are payable in installments, proportionally among the various
installment payment dates) an amount equal to the excess by which the actual
aggregate annual premium amount exceeds $15,000.

(f)            (i)            In
addition to receiving the Base Salary provided for in Section 4, upon the
Company receiving an aggregate of at least $5,000,000 in gross proceeds from
equity investments in the Company (excluding equity investments pursuant to
that certain Class A Common Stock Purchase Agreement, of even date herewith
(the “Isonics Agreement”), between the Company and Isonics (the “Car Allowance
and Rental Office Threshold”) and thereafter through our Employment Period,
Executive shall be entitled to receive a car allowance (the “Car Allowance”) of
$1,200 per month (plus any reasonable premiums for automotive insurance),
payable in advance, commencing as of the first day of the first calendar month
following the attainment of the Car Allowance and Rental Office Threshold.  It is agreed by the parties hereto that the
payment of the Car Allowance is in lieu of any right of Executive to
reimbursement of costs related the use by Executive of Executive’s personal
motor vehicle, including, but not limited to, insurance, repair, maintenance,
mileage charges and fuel costs, but does not include parking and toll charges
(the “Other Car Expenses”) reasonably incurred on the Company’s behalf, such
Other Car Expenses to be reimbursed by the Company upon submission of
appropriate documentation of such Other Car Expenses by Executive to the
Company.  

 5
 

 

 

Notwithstanding the
provisions of the first sentence of this subparagraph 5(f)(i), for each Renewal
Term, the Car Allowance shall be increased for such Renewal Term, effective as
of the first day of the Renewal Term, to an amount equal to the product
resulting from multiplying (i) the Car Allowance in effect immediately prior to
such increase in the Base Salary by (ii) a fraction, (A) the numerator of which
shall be the CPI for the most recent published period prior to the effective
date of any such increase, and (B) the denominator of which shall be the CPI
for the most recent published period prior to the date of this Agreement (with
respect to the first Renewal Period) or prior to commencement of the
immediately preceding Renewal Term (with respect to all other Renewal Terms).

(ii)           Prior to becoming entitled to receive
the Car Allowance, the Company shall reimburse Executive for all costs relating
to the use by Executive of Executive’s personal motor vehicle in connection
with executive’s performance of services under this Agreement, including, but
not limited to mileage charges, fuel costs and Other Car Expenses.

(g)           No amounts paid to or on behalf of
Executive under any plan or arrangement in accordance with paragraphs 5(a),
(b), (c), (d) and (f) shall be deemed to be paid in lieu of other compensation
to which Executive is entitled to receive or benefit from under this Agreement.

(h)           Upon the Company attaining the Car
Allowance and Rental Office Threshold, Executive shall have the right to lease
reasonable office facilities, lease or purchase general office equipment and supplies
and retain staff, all in the name and on behalf of the Company, at such costs
as Executive determines, in his sole discretion, are in the best interest of
the Company.

6.             Confidential
Information; Proprietary Rights.

(a)           In the course of Executive’s
employment by the Company, Executive will have access to and possession of
valuable and important confidential or proprietary data or information of the
Company and/or its affiliates and their operations.  Executive will not, during Executive’s
employment by the Company or at any time thereafter, divulge or communicate to
any person, nor shall Executive direct any employee, representative or agent of
the Company or any of its affiliates to divulge or communicate to any person or
entity (other than to a person or entity bound by confidentiality obligations
similar to those contained in this section 6 and other than as necessary in
performing Executive’s duties under this Agreement) or use, to the detriment of
the Company, or any of the Company’s affiliates or for the benefit of any other
person or entity, including, but not limited to, any competitor, supplier,
licensor, licensee or customer of the Company, any of such confidential or
proprietary data or information or make or remove any copies thereof, whether
or not marked or otherwise identified as “confidential” or “secret.”  Executive shall take all reasonable
precautions in handling the confidential or proprietary data or information
within the Company to a strict need-to-know basis and shall comply with any and
all security systems and measures adopted from time to time by the Company to
protect the confidentiality of confidential or proprietary data or information.

(b)           The term “confidential or proprietary data or information”
as used in this Agreement shall mean information not generally available to the
public, including, but not limited to, all information derived from or relating
to the Lucent Agreement, customer information, database 

 6
 

 

 

information, personnel
information, financial information, account lists or other account information,
names, telephone numbers or addresses, supplier or vendor lists, trade secrets,
patented or other proprietary information, forms, information regarding
operations, systems, methods, processes, financing, services, know how,
computer and any other processed or collated data, computer programs, pricing,
marketing and advertising data; provided, however, confidential
or proprietary information shall not include information that is (i) generally
available to the public or becomes publicly known through no wrongful act of
Executive, (ii) independently developed by a third party and disclosed to
Executive through no wrongful act of Executive or the other party or (iii) is
required to be disclosed by law. 
Notwithstanding anything to the contrary in the immediately preceding
sentence, Executive will not knowingly propagate the spread of information
which is proprietary to either the Company, Isonics, Lucent or any other
stockholder of the Company.

(c)           Executive will, at all times,
promptly disclose to the Company in such form and manner as the Company may
reasonably require, any inventions, improvements or procedural or
methodological innovations, including, but not limited to, those relating to
programs, methods, forms, systems, services, designs, marketing ideas, products
or processes (whether or not capable of being trademarked, copyrighted or
patented) conceived or developed or created by Executive solely in connection
with Executive’s employment under this Agreement and which solely relate to the
business of the Company (the “Work Product”). 
Executive agrees that all Work Product shall be the sole property of the
Company.  Executive hereby assigns all of
his right, title and interest to the Work Product to the Company.  Executive further agrees that Executive,
without charge, will execute such instruments and perform such acts as may
reasonably be requested by the Company to transfer to and perfect in the
Company all legally protectable rights in the Work Product.  To the extent any moral rights or other Work
Product rights are not legally transferable to the Company, Executive hereby
waives and agrees to never assert any such rights against the Company or any of
its affiliates, even after termination of employment.

(d)           All written materials, books, records and documents made
by Executive or coming into Executive’s possession during Executive’s
employment by the Company concerning any products, processes or systems used,
developed, investigated, purchased, sold or considered by the Company or any of
its affiliates or otherwise concerning the business or affairs of the Company
or any of its affiliates, including, but not limited to, any files, customer
records such as names, telephone numbers and addresses, lists, firm records,
brochures and literature, shall be the sole property of the Company and, upon
termination of Executive’s employment by the Company or upon request of the
Company during Executive’s employment by the Company, Executive shall promptly
deliver the same to the Company.  In
addition, upon termination of Executive’s employment by the Company, Executive
will deliver to the Company all other Company property in Executive’s
possession or under Executive’s control, including, but not limited to,
financial statements, marketing and sales data, customer and supplier lists and
information, account lists and other account information, database information,
plans, designs and other documents.

 

 7

 

 

7.             Remedies.

(a)           Executive
acknowledges that the covenants contained in section 6 are fair and reasonable
in order to protect the Company’s business and were a material and necessary
inducement for the Company to agree to the terms of this Agreement.  Executive further acknowledges that any
remedy at law for any breach or threatened or attempted breach of the covenants
contained in section 6 may be inadequate and that the violation of any of the
covenants contained in section 6 will cause irreparable and continuing damage
to the Company.  Accordingly, the Company
shall be entitled to specific performance or any other mode of injunctive
and/or other equitable relief to enforce its rights under section 6, including,
but not limited to, an order restraining any further violation of such
covenants, or any other relief a court might award, without the necessity of
the posting of any bond or furnishing of other security, and that such
injunctive relief shall be cumulative and in addition to any other rights or remedies
to which the Company may be entitled. 
The covenants in sections 6 shall run in favor of the Company and its
successors and assigns.  The provisions
of section 6 and this section 7 shall survive the termination of the Employment
Period.

(b)           It is the desire and intent of the
parties hereto that the provisions of this Agreement shall be enforced to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. 
Accordingly, to the extent that a restriction contained in this
Agreement is more restrictive than permitted by the laws of any jurisdiction
where this Agreement may be subject to review and interpretation, the terms of
such restriction, for the purpose only of the operation of such restriction in
such jurisdiction, shall be the maximum restriction allowed by the laws of such
jurisdiction and such restriction shall be deemed to have been revised
accordingly herein.

8.             Termination.

(a)           The Board of Directors may terminate Executive’s employment
by the Company “for cause” by delivering to Executive, not less than ten days
prior to the date on which the termination is to be effective, a written notice
of termination for cause specifying the act, acts or failure to act that
constitute the cause.  For the purposes
of this agreement, the term “for cause” shall mean:

(i)            any act of fraud or embezzlement
materially adversely affecting the financial, market, reputation or other
interests of the Company;

(ii)           in the event of a conviction of Executive
of, or a plea of nolo contendere
to, (A) any violent felony or misdemeanor resulting in a jail sentence, (B) any
felony involving moral turpitude or (C) a criminal violation of federal or
state securities laws;

(iii)          any material failure to perform Executive’s
duties as set forth in this Agreement which results in material harm to the
Company, after reasonable notice and the opportunity to cure; or

(iv)          the death of Executive.

(b)           Executive shall not be entitled to
receive any further compensation (other than his compensation through the
effective date of such termination for cause) under this Agreement in 

 8
 

 

 

his capacity
as an employee of the Company, in the event that the Company terminates
Executive’s employment by the Company for cause.

(c)           If, after the earlier of (x) the
first commercial sale of Licensed Product (as such term is defined in the
Lucent Agreement), (y) the Company’s acquisition of one or more entities with
aggregate annual revenues of or exceeding $10,000,000, or (z) entities acquired
by the Company having annual revenues aggregating to or exceeding $10,000,000
in any one year, and thereafter at any time during the Employment Period, the
Company terminates the employment of Executive with the Company other than for
cause, then:

(i)            the Company shall pay Executive,
within three months of the date of such termination, amount equal to the
product resulting from multiplying (A) the annualized average of the total
compensation paid to Executive for the five calendar years immediately preceding
Executive’s termination by (B) two;

(ii)           within 30 days following the date of
termination, the Company shall pay Executive the total compensation earned
through the date of termination to the extent not yet paid;

(iii)           all then outstanding unexercised stock
options granted to Executive, if any, under any stock incentive plan of the
Company shall become fully vested and exercisable as of the date of termination
and shall continue to be exercisable for the life of such option.

9.             Indemnification.

(a)           The Company agrees to indemnify
Executive and hold Executive harmless against any and all losses, claims,
damages, liabilities and costs (and all actions in respect thereof and any
legal or other expenses in giving testimony or furnishing documents in response
to a subpoena or otherwise), including, without limitation, the costs of
investigating, preparing or defending any such action or claim, whether or not
in connection with litigation in which Executive is a party, as and when
incurred, directly or indirectly caused by, relating to, based upon or arising
out of any work performed by Executive in connection with this Agreement to the
full extent permitted by the Delaware General Corporation Law and by the
Certificate of Incorporation and Bylaws of the Company, as may be amended from
time to time.

(b)           The indemnification provision of this
section 9 shall be in addition to any liability which the Company may otherwise
have to Executive.

(c)           If any action, proceeding or
investigation is commenced as to which Executive proposes to demand such
indemnification, Executive shall notify the Company with reasonable
promptness.  Executive shall have the
right to retain counsel of Executive’s own choice to represent Executive and
the Company shall pay all reasonable fees and expenses of such counsel; and
such counsel shall, to the fullest extent consistent with such counsel’s
professional responsibilities, cooperate with the Company and any counsel
designated by the Company.  The Company
shall be liable for any settlement of any claim against Executive made with the
Company’s written consent, which consent shall not be unreasonably withheld or
delayed, to the fullest extent permitted by the Delaware General Corporation
Law and the Certificate of Incorporation and Bylaws of the Corporation, as may
be amended from time to time.

 9
 

 

 

10.           Notices.  All notices and other communications required
or permitted hereunder shall be in writing. 
Notices shall be delivered personally, against written receipt therefor,
via a recognized overnight courier (such as Federal Express, DHL, Airborne
Express or U.S.P.S. Express Mail) or via certified or registered mail.  Notices may be delivered via facsimile or
e-mail, provided that by no later than two days thereafter such notice is
confirmed in writing and sent via one of the methods described in the previous
sentence.  Notices shall be addressed as
follows:

	
  

  	
  If to Executive, to:

  	
  Christopher Toffales

  
	
   

  	
   

  	
  21 Motts Hollow
  Road

  
	
   

  	
   

  	
  Port Jefferson,
  New York 11777

  
	
   

  	
   

  	
  Facsimile: (631)
  331-3371

  
	
   

  	
   

  	
  E-Mail:
  Toffales21@aol.com

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  If to the
  Company, to:

  	
  Board of Directors

  
	
   

  	
   

  	
  SenseIt Corp.

  
	
   

  	
   

  	
  21 Motts Hollow
  Road

  
	
   

  	
   

  	
  Port Jefferson,
  New York 11777

  
	
   

  	
   

  	
  Facsimile: (631)
  331-3371

  
	
   

  	
   

  	
  E-Mail:
  Toffales21@aol.com

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  Neil M. Kaufman, Esq.

  
	
   

  	
   

  	
  Davidoff Malito
  & Hutcher LLP

  
	
   

  	
   

  	
  200 Garden City
  Plaza, Suite 315

  
	
   

  	
   

  	
  Garden City, New
  York 11530

  
	
   

  	
   

  	
  Facsimile: (516)
  248-6422

  
	
   

  	
   

  	
  E-Mail:
  nmk@dmlegal.com

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and, if (x)
  Isonics and/or Isonics Homeland Security and Defense Corporation (“IHSDC”)
  owns of record at least 25% of the then outstanding shares of Class A Common
  Stock or (y) following the occurrence of a Threshold Event (as such term is
  defined in the Amended Certificate of Incorporation), Isonics and/or IHSDC
  owns of record at least 25% of the then outstanding shares of Common Stock,
  to Isonics in the manner as set forth in this Section 10.

  

 

or, in the case of any of
the parties hereto, at such other address as such party shall have furnished to
each of the other parties hereto in accordance with this section 10.  Each such notice, demand, request or other
communication shall be deemed given (i) on the date of such 

 10
 

 

 

delivery by hand, (ii) on
the first business day following the date of such delivery to the overnight
delivery service or facsimile transmission, or (iii) three business days
following such mailing.

11.           Successors and Assigns; Third
Party Beneficiaries. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company, and unless clearly
inapplicable, all references herein to the Company shall be deemed to include
any such successor. In addition, this Agreement shall be binding upon and inure
to the benefit of Executive and his heirs, executors, legal representatives and
assigns; provided, however, that the obligations of Executive
under this Agreement may not be delegated without the prior written approval of
the Board of Directors.  In the event of
any consolidation or merger of the Company into or with any other corporation,
or the sale of all or substantially all of the assets of the Company to another
corporation, person or entity during the Employment Period, such successor
corporation shall assume this Agreement and become obligated to perform all of
the terms and provisions hereof applicable to the Company, and Executive’s
obligations hereunder shall continue in favor of such successor corporation.

12.           Acknowledgment. Executive
acknowledges that he has carefully read this Agreement, has had an opportunity
to consult counsel regarding this Agreement and hereby represents and warrants
to the Company that Executive’s entering into this Agreement, and the
obligations and duties undertaken by Executive under this Agreement, will not
conflict with, constitute a breach of or otherwise violate the terms of any
other agreement to which Executive is a party and that Executive is not
required to obtain the consent of any person, firm, corporation or other entity
in order to enter into and perform his obligations under this Agreement.

13.           Arbitration.

(a)           Any dispute arising between the
parties to this Agreement, including, but not limited to, those pertaining to
the formation, validity, interpretation, effect or alleged breach of this
Agreement (“Arbitrable Dispute”) will be submitted to arbitration in Nassau or
Suffolk Counties of the State of New York, before an experienced employment
arbitrator and selected in accordance with the rules of the American
Arbitration Association labor tribunal. 
Each party shall pay the fees of their respective attorneys, the
expenses of their witnesses and any other expenses connected with presenting
their claim.  Other costs of the
arbitration, including the fees of the arbitrator, cost of any record or
transcript of the arbitration, administrative fees, and other fees and costs
shall be borne equally by the parties hereto.

(b)           Should any party to this Agreement
hereafter institute any legal action or administrative proceedings against
another party with respect to any claim waived by this Agreement or pursue any
other Arbitrable Dispute by any method other than said arbitration, the
responding party shall be entitled to recover from the initiating party all
damages, costs, expenses and attorney’s fees incurred as a result of such
action.

14.           Reimbursement of Legal Expenses.  Upon the Company receiving the Aggregate
Final Installment Shares Purchase Price of $500,000 pursuant to (and as such
term is defined in) the Isonics Agreement, Executive shall be reimbursed for
all Executive’s expenses (including, 

 11
 

 

 

but not limited to, legal
fees and expenses) incurred in connection with the formation of the Company,
the Prior Agreement, Isonics Agreement, the Amended Certificate of
Incorporation referred to (and as such term is defined in) the Isonics
Agreement and related transactions, as well as other expenses incurred for the
benefit of the Company and not previously reimbursed pursuant to paragraph
5(b).

15.           Miscellaneous.

(a)           The construction, validity and
interpretation of this Agreement will be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law.

(b)           This Agreement supersedes all prior
agreements and constitutes the entire Agreement and understanding between parties.  This Agreement may not be amended, modified
in any manner or terminated orally; and no amendment, modification, termination
or attempted waiver of any of the provisions hereof shall be binding unless in
writing and signed by the parties against whom the same is sought to be
enforced; provided, however, that Executive’s compensation may be increased at
any time by the Corporation without in any way affecting any of the other terms
and conditions of this Agreement which in all other respects shall remain in
full force and effect.

(c)           No delay or omission to exercise any
right, power or remedy accruing to any party under this Agreement, upon any
breach or default of any other party under this Agreement, shall impair any
such right, power or remedy of such nonbreaching or nondefaulting party nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring.

(d)           Whenever possible, each provision of
this Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or any other jurisdiction, but this Agreement
will be reformed, construed and enforced in such jurisdiction to the greatest
extent possible to carry out the intentions of the parties hereto.

(e)           This Agreement may be executed in
separate counterparts each of which will be an original and all of which taken
together will constitute one and the same agreement.

(f)            Any signature page delivered by a
fax machine shall be binding to the same extent as an original signature page,
with regard to any agreement subject to the terms hereof or any amendment thereto.

(g)           The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

 12
 

 

 

(h)           The language of all parts of this
Agreement shall in all cases be construed as a whole according to its fair
meaning, and not strictly for or against any of the parties.

(i)            As used in this Agreement, the term “or”
shall be deemed to include the term “and/or” and the singular or plural number
shall be deemed to include the other whenever the context so indicates or
requires.

 13
 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day of and year first above written.

	
  

  	
  SenseIt Corp.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  [Name], [Title]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Christopher Toffales

  

 

 14Exhibit 10.3

SENSEIT CORP.

STOCKHOLDERS’ AGREEMENT

This Stockholders’
Agreement (this “Agreement”), dated as of October 27, 2006, is by
and among (a) SenseIt Corp., a
Delaware corporation (the “Company”), (b) Christopher
Toffales, an individual residing at 21 Motts Hollow Road, Port
Jefferson, New York 11777 (“Toffales”), (c) Isonics
Corporation, a California corporation having its principal place of
business at 5906 McIntyre Street, Golden, Colorado 80403 (“Isonics”), and (d)
each other holder of equity securities of the Company who becomes a party to
this Agreement, subject to the conditions set forth herein, by executing an
Instrument of Accession (“Instrument of Accession”) in the form attached as
Schedule I to this Agreement (each, an “Investor Stockholder”).

WHEREAS, pursuant to a Stock Exchange Agreement, of
even date herewith (as same may be amended or supplemented, the “Toffales
Exchange Agreement”), between Toffales and the Company, Toffales shall,
simultaneously with the execution of this Agreement by the Company, Toffales
and Isonics, exchange all 100 shares (the “Original Toffales Shares”) of the
common stock, par value $0.001 per share (the “Original Common Stock”), of the
Company (which Original Toffales Shares constitute all of the issued and outstanding
shares of Original Common Stock) for 100 shares of Class B Common Stock, par
value $0.001 per share (the “Class B Common Stock”);

WHEREAS, pursuant to a Stock Purchase Agreement, of
even date herewith (as the same may be amended or supplemented, the “Isonics
Purchase Agreement”), between the Company and Isonics, (a) Isonics shall
purchase from the Company (i) simultaneously with the consummation of the
exchange transaction contemplated by the Toffales Exchange Agreement, an
aggregate of 425,000 shares of Class A Common Stock, par value $0.001 per share
(the “Class A Common Stock”), of the Company by, among other transactions, (A)
assigning to the Company all of Isonics rights, title and interest in that
certain Development and Licensing Agreement, dated as of September 28, 2005, as
amended effective as of July 31, September 1, September 29, and October 16,
2006 (collectively, as so amended, the “Lucent Agreement”), between Lucent
Technologies Inc. (“Lucent”) and Isonics, as more fully described in the Lucent
Agreement, and (B) tendering to the Company a cash payment of $250,000, (ii) an
aggregate 25,000 shares of Class A Common Stock upon tendering to the Company a
cash payment of $250,000 within three business days of the date on which
Isonics shall receive financing from Cornell Capital Partners, L.P. (“Cornell”)
pursuant to the Securities Purchase Agreement, dated as of May 30, 2006 between
Isonics and Cornell, but in no event later than December 31, 2006, (iii) an
aggregate 100,000 shares of Class A Common Stock on or prior to January 11,
2007 in consideration of a cash payment of $1,000,000, and (iv) 50,000 shares
of Class A Common Stock upon tendering to the Company a cash payment of
$500,000 on or before February 14, 2007 (or such lesser number of shares and
payment amount to reflect 

 1
 

 

 

any issuance of Credit
Shares based upon a credit issued by Lucent resulting in the creation of a
Credit Amount (as such terms are defined in the Isonics Purchase Agreement))
and (b) the Company may be required to issue Credit Shares in the event that
Lucent issues a credit against amounts due under the Lucent Agreement resulting
in the creation of a Credit Amount; and

WHEREAS, Toffales, Isonics and the Company desire to
promote their mutual interests by imposing certain restrictions and obligations
on the Company and each party to this Agreement (each, a “Stockholder”).

NOW, THEREFORE, the parties to this Agreement hereby agree
as follows:

ARTICLE I

DEFINITIONS

Section 1.1            Certain
Capitalized Terms Defined.  For all purposes of this
Agreement, including the preamble, terms defined elsewhere in this Agreement
shall have their assigned meanings and each of the following terms shall have
the following meanings (such definitions to be applicable to both the plural and
singular of the terms defined):

“Board of Directors” shall
mean the board of directors of the Company.

“Business Day” shall mean any day other than (a) a
Saturday, (b) a Sunday, (c) a public holiday under the laws of the State of New
York or (d) any other day on which banking institutions are authorized to close
in the State of New York.

“Certificate of Incorporation” shall mean the
Certificate of Incorporation of the Company, as amended from time to time.

“Class A Director” shall have the meaning ascribed
to such term in paragraph 3.1(b).

“Class B Director” shall have the meaning ascribed
to such term in paragraph 3.1(b).

“Common Stock” shall mean the common stock, par
value $0.001 per share (the “Common Stock”), of the Company.

“Employment Agreement” shall mean that certain
Employment Agreement, dated as of even date herewith, between the Company and
Toffales, and each and every amendment and supplement to such agreement or any
succeeding employment agreement entered into by the Company and Toffales during
the term of this Agreement.

“Exchange Act” shall mean the Securities Exchange
Act of 1934, as amended.

 2
 

 

 

“Offered Securities” shall mean the Securities that
are the subject of a proposed Transfer.

“Person” shall mean an individual, partnership,
corporation, limited liability company, association, trust, joint venture,
unincorporated organization, or any government, governmental department or
agency or political subdivision thereof.

“Public Offering” shall mean a public offering
pursuant to an effective registration statement under the Securities Act
covering the offer and sale of shares of Common Stock.

“Public Sale” shall mean any sale of Common Stock to
the public pursuant to a Public Offering or to the public through a broker or
market-maker pursuant to the provisions of Rule 144 (or any successor rule)
adopted under the Securities Act.

“Securities” shall mean each share Class A Common
Stock, Class B Common Stock and Common Stock and all securities issued by the
Company that are convertible into, exercisable or exchangeable for shares of
Class A Common Stock, Class B Common Stock and/or Common Stock.

“Securities Act” shall mean
the Securities Act of 1933, as amended.

“Stockholder” shall mean each party to this
Agreement other than the Company.

“Transfer” or “Transferred” shall mean and include
any sale, assignment, encumbrance, hypothecation, pledge, conveyance in trust,
gift, transfer by request, devise or descent, or other transfer or disposition
of any kind, including, but not limited to, transfers to receivers, levying
creditors, trustees or receivers in bankruptcy proceedings or general assignees
for the benefit of creditors, whether voluntary or by operation of law,
directly or indirectly, of any of the Securities.

ARTICLE II

TRANSFERS OF SECURITIES

Section 2.1.                                General.

(a)                                  No Transfer of any Securities made in
violation of this Agreement shall be effective, and no such Transfer shall be
recorded on the stock record books of the Company.  The Company shall not recognize any
transferee receiving any Securities in violation of the terms of this Agreement
as a stockholder of the Company, nor shall any such transferee have any rights
as a stockholder of the Company or under this Agreement.

(b)                                 Any Transfer by a Stockholder of Securities
to a Person who is not a party to this Agreement shall be made only pursuant to
the terms of this Agreement and on the 

 3
 

 

 

condition
that such Person shall become a party to this Agreement, agreeing in writing to
be bound by all of its terms, by executing and delivering to the Company a duly
completed, dated and executed Instrument and Accession.

(c)                                  All such Transfers shall be conducted in
accordance with all applicable federal and state securities laws.

(d)                                 Notwithstanding anything to the contrary
contained in this Agreement, Isonics may, upon not less than ten business days’
prior notice to the Corporation (which notice shall be accompanied by a duly
completed, dated and executed Instrument of Accession), Transfer all (but not
less than all) of the Securities then owned by Isonics to Isonics Homeland
Security and Defense Corporation, a Delaware corporation (“IHSDC”), provided
that, at the effective time of such Transfer, IHSDC is a wholly-owned
subsidiary of Isonics.  Nothing in this
paragraph 2.1(d) shall affect in any manner, Isonics’ obligations, agreements
and covenants contained in the Isonics Purchase Agreement.

Section 2.2.           Restrictions
on Transfer.  Each Stockholder agrees that such Stockholder
shall not Transfer any Securities owned by such Stockholder other than in full
compliance with the terms and provisions of this Agreement.  Notwithstanding anything contained in this
Agreement (and except as provided in paragraph 2.1(d)), no Transfer of any
Securities shall be permitted prior to the first anniversary of the date of
this Agreement.

Section 2.3.           Right
of First Refusal.

(a)                                  Effective as of the first anniversary of the
date of the Agreement and thereafter through the remainder of the term of this
Agreement, each Stockholder (the “Transferring Stockholder”) desiring to Transfer
any of the Securities owned by the Transferring Stockholder shall give the
Company and each other Stockholder (each, an “Other Stockholder”) notice of the
terms of any proposed bona fide sale of Offered Securities, including (i) the
number and type of Securities that are proposed to be Transferred, (ii) the
anticipated date of the proposed Transfer, (iii) the name and address of each
Person to whom the Transfer is proposed to be made and (iv) the material terms
of the proposed Transfer, including the cash and/or other consideration to be
received with respect to such Transfer, at least 30 days prior to the
consummation of such proposed Transfer (a “Transfer Notice”); provided, however,
that in connection with a Transfer pursuant to a Public Sale, the Transferring
Stockholder shall deliver the Transfer Notice to the Company and each Other
Stockholder at least ten business
days, or any other time period as may be mutually agreed upon by the parties to
this Agreement, prior to the consummation of such proposed Transfer pursuant to
a Public Sale.  Any such Transfer Notice
shall be deemed an irrevocable bona fide offer to sell such shares to the
Company, initially, and, thereafter, the Other Stockholders, on such terms as
set forth in such Transfer Notice and shall be deemed a representation by the
Transferring Stockholder that the proposed Transfer is a bone fide transaction.

 4
 

 

 

(b)                                 The Company shall have a period of (i) five
business days, in connection with a Transfer pursuant to a Public Sale, or (ii)
fifteen business days, in connection with any other Transfer, from the giving
of the Transfer Notice with respect to such Transfer within which to elect to
purchase all or any portion of the Offered Securities at the same price and
subject to the same material terms and conditions as described in the Transfer
Notice.  The Company may exercise such
purchase option, and thereby purchase all or any portion of the Offered
Securities, by notifying the Transferring Stockholder in writing, before the
expiration of such five or fifteen business day period, as the case may be, as
to the number and kind of such Securities that the Company wishes to
purchase.  If the Company gives the
Transferring Stockholder notice that the Company desires to purchase all or a
portion of the Offered Securities, then payment for the Offered Securities
shall be in cash, by check or wire transfer or in such other consideration as
set forth in the Transfer Notice, against delivery of the Offered Securities to
be purchased at a place, at a time and on a date agreed upon by the
Transferring Stockholder and the Company, or, if the parties are unable to
agree on the place, time and date of such purchase and sale, at 10:00 am (local
time) on the 25th business day after the expiration of such five or fifteen
business day period at the principal offices of the Company.  Neither the Transferring Stockholder nor any
member of the Board of Directors elected by holders of a class of securities of
the Company in which the Transferring Stockholder owns of record or
beneficially a majority of the outstanding shares of such class of securities
may participate in the determination by the Company whether of not to purchase
the Offered Securities pursuant to this paragraph 2(b).

(c)                                  If the Company shall have failed to elect to
purchase all of the Offered Securities by giving the Transferring Stockholder
the notice contemplated by paragraph 2.3(b), the Other Stockholders shall have
a period of (i) ten business days, in connection with a Transfer pursuant to a
Public Sale, and (ii) 25 business days, in connection with any other Transfer,
from the giving of the Transfer Notice with respect to such Transfer within
which to elect to purchase their respective pro rata shares of the Offered
Securities not being purchased by the Company, at the same price and subject to
the same material terms and conditions as described in the Transfer
Notice.  Each Other Stockholder may
exercise such purchase option, and thereby purchase all or any portion of its
pro rata share of the Offered Securities not being purchased by the Company, by
notifying the Transferring Stockholder in writing, before the expiration of
such ten or 25 business day period, as the case may be, as to the number of
such shares that the Other Stockholder desires to purchase.  For the purpose of the preceding sentence,
each Other Stockholder’s pro rata share shall be a fraction of the Offered
Securities not being purchased by the Company, the numerator of which shall be
the number of shares of Common Stock issuable upon conversion of Class A Common
Stock and Class B Common Stock upon the occurrence of a Threshold Event (as
such term is defined in the Certificate of Incorporation of the Company) and
the number of shares of Common Stock owned by such Other Stockholder on the
date of the Transfer 

 5
 

 

 

Notice
and the denominator of which shall be the total number of shares of Common
Stock then outstanding plus the number of shares of Common Stock
issuable upon conversion of Class A Common Stock and Class B Common Stock upon
the occurrence of a Threshold Event then owned by all Other Stockholders, each
as of the date of the Transfer Notice. 
Each participating Other Stockholder shall have a right of reallotment
such that, if any Other Stockholder fails to exercise the right to purchase
such other Stockholder’s full pro rata share of the Offered Securities, each
participating Other Stockholders may exercise an additional right to purchase,
on a pro rata basis, the Offered Securities not previously purchased.  If a participating Other Stockholder gives
the Transferring Stockholder notice that the participating Other Stockholder
desires to purchase its pro rata share of the Offered Securities and, as the
case may be, its reallotment, then payment for the Offered Securities shall be
in cash, by check or wire transfer or in such other consideration as set forth
in the Transfer Notice, against delivery of the Offered Securities to be
purchased at a place, at a time and on a date agreed upon by the Transferring
Stockholder and the Company, or, if the parties are unable to agree on the
place, time and date of such purchase and sale, at 10:00 am (local time) on the
fifth business day after the expiration of such ten or 25 business day period
at the principal offices of the Company.

(d)                                 If all the Offered Securities are not so
purchased by the Company and Other Stockholders, the Transferring Stockholder
shall be free for a period of 90 days after expiration of the time periods
referred to in this Section 2.3 to consummate the proposed transaction upon
terms not more favorable to the Transferring Stockholder than those set forth
in the Transfer Notice with respect to any Offered Securities not sold to the
Company and the Other Stockholders pursuant to this Section 2.3.  Promptly upon the consummation of any such
transaction, the Transferring Stockholder shall confirm in writing to the
Company and Other Stockholders the terms of the transaction as so consummated,
including the number and kind of Securities involved, the consideration
received, and the name of the party to whom the Transfer was made. After the
expiration of said 90 day sale period, subject to the time period set forth in
paragraph 2.3(a), if such Transferring Stockholder again wishes to Transfer any
Securities, such Transferring Stockholder shall again offer the Securities in
accordance with the provisions of this Section 2.3.

(e)                                  Should the purchase price specified in the
Transfer Notice be payable in property other than cash or evidences of
indebtedness, the Company and Other Stockholders shall have the right to pay
the purchase price in the form of cash equal in amount to the value of such
property.  If the Transferring
Stockholder and the Company and such Other Stockholders cannot agree on such
cash value within fifteen business days after the receipt of the Transfer
Notice, the valuation shall be made by an appraiser of recognized standing
selected by the Company.  The cost of
such appraisal shall be shared equally by the Company, such Other Stockholders
and the Transferring Stockholder.

 6
 

 

 

Section 2.4.           Drag
Along Rights.

(a)                                  Effective as of the first anniversary of the
date of this Agreement and thereafter through the remainder of the term of this
Agreement, in the event the holders of a majority of the then outstanding
shares of Class A Common Stock or Class B Common Stock (and, following the
occurrence of a Threshold Event, the Common Stock) (in either case, the “Control
Group”) elect to transfer all of the Securities owned by the members of the
Control Group to an unaffiliated third party (a “Third Party”) (including any
transfer of shares that is being effected by a merger or consolidation of the
Company with another person), the Control Group shall have the right (the “Drag-Along
Right”) to cause each of the other Stockholders as a group to transfer all of
their Securities to the Third Party (or to exchange such Securities pursuant to
the terms of such merger or consolidation) at the same price and on the same
terms and conditions as the Control Group Transfer their Securities to the
Third Party; provided, however, that, in connection with the
exercise of a Drag-Along Right prior to the occurrence of a Threshold Event,
the holders of Class B Common Stock shall be entitled to receive, in aggregate,
no less than 10% of the total consideration being tendered by the Third Party
in connection with such transaction.

(b)                                 The Control Group may elect to exercise the
Drag-Along Right by delivering written notice to all of the other Stockholders
and the Company 30 days prior to the consummation of the Transfer described in
paragraph 2.4(a), such notice to be accompanied by a copy of the definitive
documentation pursuant to which the Securities will be transferred to the Third
Party by the Control Group and will state (i) the bona fide intention of the
Control Group to effect the Transfer described in paragraph 2.4(a), (ii) the
name and address of the Third Party and (iii) the expected closing date of such
Transfer.  The notice delivered pursuant
to this paragraph 2.4(b) shall also be deemed a Transfer Notice under paragraph
2.3(a) and the Company and all other Stockholders shall have all of the rights
granted under Section 2.3 with respect to the Securities owned by the Control
Group.

(c)                                  Each Stockholder as part of its participation
in the Transfer pursuant to a duly exercised Drag-Along Right shall deliver to
the Third Party at a closing to be held at the offices of the Company (or such
other place as the parties agree), one or more certificates, properly endorsed
for transfer, which represent all of the Securities owned by such Stockholder
and each Stockholder shall make such representations and warranties, and shall
enter into such agreements, as are customary and reasonable in the context of
the proposed sale, including, without limitation, representations and
warranties (and indemnities with respect thereto) that the transferee of the
Securities (or interests therein) is receiving good and marketable title to
such Securities (or interests therein), free and clear of all pledges, security
interests, or other liens; provided, however, that with respect
to any matter as to which a Stockholder shall agree to provide indemnification
(other

 

 7

 

 

than
its own title to such Securities), such Stockholder shall in no event be
required to provide indemnification in an amount that would exceed its pro rata
portion of the total liability for which such indemnification is sought, which
pro rata portion shall be determined on the basis of the percentage of the
total Securities involved in such transfer that are represented by the
Securities owned by such Stockholder.  In
addition, each Stockholder and the Control Group shall reasonably cooperate and
consult with each other in order to effect the Transfer described in this
Section 2.4, and each Stockholder shall provide reasonable assistance to the
Control Group in connection with the preparation of disclosure schedules
relating to representations and warranties to be made to the Third Party in
connection with such Transfer and in the determination of the appropriate scope
of, or limitations or exceptions to, such representations and warranties.

(d)                                 If the transaction which is the subject of
the Drag Along Right is structured as an acquisition, merger or consolidation
of the Company, each Stockholder shall waive any dissenters’ rights, appraisal
rights or similar rights in connection with such Transfer.

(e)                                  In the event that the Control Group consists
of holders of a majority of the then outstanding shares of Class A Common Stock
and such Control Group desires to Transfer less than all of the shares of Class
A Common Stock owned by the members of such Control Group, all of the
provisions of this Section 2.4 shall remain applicable proportionately (as the
number of shares of Class A Common Stock owned by the Control Group subject to
the partial exercise of the Drag-Along Right bears to the total number of
shares of Class A Common Stock owned by the Control Group), but only with
respect to Class A Common Stock and shall only be effective if the Third Party
becomes a party to this Agreement as an Investor Stockholder by executing and
delivering to the Company a duly completed, dated and executed Instrument of
Accession.

Section 2.5.           Tag-Along
Rights.  Each Stockholder agrees that:

(a)                                  In the event that any Stockholder (the “Purchase
Offer Stockholder Recipient”) shall receive a bona fide offer from a third
party not a party to this Agreement to purchase (the “Purchase Offer”) any of
the Securities owned by such Purchase Offer Stockholder Recipient, and the
Purchase Offer Stockholder Recipient determines to accept such Purchase Offer,
then, prior to accepting such Purchase Offer, the Purchase Offer Stockholder
Recipient shall arrange for the proposed purchaser to make, in lieu of the
Purchase Offer, a substitute bona fide offer to purchase the same number and
kind of Securities that were the subject of the Purchase Offer, and upon the
same terms and conditions as the Purchase Offer (appropriately adjusted for any
conversion rights or common stock equivalency calculations), from the
Stockholders owning Securities in the relative proportions and otherwise as
described in paragraph 2.5(b) (the “Substitute Purchase Offer”).

 8
 

 

 

(b)                                 In the event a Substitute Purchase Offer is
made, the Purchase Offer Stockholder Recipient shall give each of the other
Stockholders written notice of the making of the Substitute Purchase Offer (the
“Substitute Purchase Offer Notice”) specifying (i) the number and kind of
Securities that is the subject of such Substitute Purchase Offer, (ii) the
terms (including the proposed date of consummation of the Substitute Purchase
Offer, which shall be not less than 30 business days following the date of the giving
of the Substitute Purchase Offer Notice) of such Substitute Purchase Offer, and
(iii) the identity of the proposed purchaser. 
Upon receipt of the Substitute Purchase Offer Notice, each Stockholder
shall have the right (the “Tag-Along Rights”) to participate in the Substitute
Purchase Offer, pro rata, with the Purchase Offer Stockholder Recipient.

(c)                                  The Tag-Along Right may be exercised by a
Stockholder by delivery, not later than fifteen days after receipt of the
Substitute Purchase Offer Notice, of a written notice (the “Tag-Along Notice”)
to the Purchase Offer Stockholder Recipient.

Section 2.6.           Right
to Sell in the Event of a Dispute.  Notwithstanding anything to the
contrary contained in this Article II, in the event that (a) either the Class A
Common Stock Director or Class B Common Stock Director affirmatively votes
against a proposal before the Board of Directors to (i) accept an investment
offer made by any Person other than a Stockholder (an “Investment Issue”) or
(ii) approve and adopt an exit strategy involving a spin-off, merger,
consolidation or dissolution of the Company or the sale of all or substantially
all of the Company’s assets in a single transaction, series of related
transactions or plan (an “Exit Strategy Issue”), (b) the Corporation is, at
such time, insolvent or is anticipated, based on the then current trend of the
Company’s financial position, to be insolvent within 90 days thereafter, (c)
the Investment Issue or Exit Strategy Proposal has been approved (and, if
applicable, adopted) by a majority vote of the Board of Directors and (d) the
holders of a majority of the outstanding Class A Common Stock, if the Class A
Common Stock Director has affirmatively voted against such proposal, or the
holders of a majority the outstanding Class B Common Stock, if the Class B
Common Stock Director has affirmatively voted against such proposal, do not
consent to such majority vote of the Board of Directors, then such holders (the
“Disapproving Stockholders”) of the majority of the outstanding Class A Common
Stock or Class B Common Stock, as the case may be, shall have the right to
offer and sell all of the Disapproving Stockholders’ shares of Class A Common
Stock or Class B Common Stock, as the case may be, to the holders of Class B
Common Stock, if it is Class A Common Stock to be sold, or the holders of Class
A Common Stock, if it is Class B Common Stock to be sold, or designees of such
holders, at a price equal to the fair market value of the shares to be sold
(such fair market value to be determined, as of the date of the Board of
Directors vote on the subject proposal and without giving effect to any
subsequent financing or other activities of the Company, by an unaffiliated
third party designated by the director (the “Other Director”) of the Company
who is not the Class A Common Stock Director or Class B Common Stock
Director).  Exercise of such right to
offer and sell the Disapproving Stockholders’ shares of Class A Common Stock or
Class B Common Stock, as the case may be, shall be made by written notice to
the holders of 

 9
 

 

 

Class A Common Stock, if it is Class B Common Stock to be sold, or to
the holders of Class B Common Stock, if it is Class A Common Stock, and the
Board of Directors.  The Other Director
shall have ten business days from the giving of such notice upon which to
designate the unaffiliated third party to determine the fair market value of
the Disapproving Stockholders’ shares to be sold.  The sale of the Disapproving Stockholders’
shares shall be consummated no later than ten business days following the
determination of the fair market value of the Disapproving Stockholders’ shares
by the unaffiliated third party.

Section 2.7.           No
Waiver of a Stockholder’s Rights.  Any election by any Stockholder
not to invest additional funds in the Company in any particular instance in
which such Stockholder has the option, but not the obligation, to invest in the
Company pursuant to this Article II, shall not affect the ability of the
Stockholder to provide additional funding in any other instance in which the
Stockholder has the option, but not the obligation, to invest in the Company
pursuant to this Article II.

Section 2.8.           Legend
on Share Certificates; Stock Transfer Orders.

(a)                                  The Company shall endorse legends in the
following form, together with any other legends the Company may reasonably
require, on the face or reverse side of the certificates evidencing all
Securities owned by each Stockholder:

“The securities represented by this certificate are subject to the
terms and conditions of a Stockholders’ Agreement, dated as of             ,
2006, among the Company, Christopher Toffales, Isonics Corporation and others,
a copy of which is on file with the Company, and such securities may not be
Transferred (as such term is defined in such Stockholders’ Agreement), except
in accordance with the terms and conditions of such Stockholders’ Agreement.”

“The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or the securities laws
of any state and may be offered and sold only if so registered or if an
exemption from such registration is available and the Company has received an
opinion of counsel satisfactory to the Company that such exemption is
available.”

(b)                                 The Company shall make a notation in the
appropriate books and records of the Company prohibiting the Transfer of the
Securities heretofore and hereafter issued to the Stockholders, or to any other
person acquiring Securities pursuant to this Agreement, in the absence of compliance
with all of the terms and conditions of this Agreement.

 10
 

 

 

ARTICLE III

BOARD OF DIRECTORS AND VOTING AGREEMENTS

Section 3.1.           Board
of Directors; Voting Agreements.

(a)                                  Until the occurrence of a Threshold Event,
the number of members of the Board of Directors shall be fixed at three.

(b)                                 In accordance with the Certificate of
Incorporation of the Company, (i) the holders of Class A Common Stock shall be
entitled at each meeting of the stockholders of the Corporation at which the
Board of Directors are to be elected to elect one member (the “Class A Common
Stock Director”) of the Board of Directors (and to fill any vacancy created by
the resignation, death or removal of the Class A Common Stock Director) and
(ii) the holders of Class B Common Stock shall be entitled at each meeting of
the stockholders of the Corporation at which the Board of Directors are to be
elected to elect one member (the “Class B Common Stock Director”) of the Board
of Directors (and to fill any vacancy created by the resignation, death or
removal of the Class B Common Stock Director). 
The holders of Class A Common Stock also shall have the power to remove
any Class A Common Stock Director, whether or not for cause, upon the
affirmative vote of holders of a majority of the then outstanding shares of
Class A Common Stock and the holders of Class B Common Stock also shall have
the power to remove any Class B Common Stock Director, whether or not for
cause, upon the affirmative vote of holders of a majority of the then
outstanding shares of Class B Common Stock.

(c)                                  Prior to each annual meeting of the
stockholders of the Company, the Class A Common Stock Director and Class B
Common Stock Director then in office shall designate a third person who shall
qualify as an “independent director,” as such term is used in the applicable
regulations promulgated by the Nasdaq Stock Market, Inc. (or regulations
promulgated by any other national stock exchange on which any class of the
Company’s securities is, at the time of such designation, listed), and who
shall otherwise have no prior affiliation with either the Company or any holder
of Class A Common Stock or Class B Common Stock or any affiliates of such
holders (other than as an independent director of the Company), to be the Board
of Director’s nominee for election as the third member of the Board of
Directors at such annual meeting of stockholders.  Such nominee shall only be deemed elected as
a director of the Company if the nominee receives a majority of the votes cast
by each of the holders of Class A Common Stock and the holders of Class B
Common Stock.  If such nominee fails to
receive a majority of the votes cast by each of the holders of Class A Common
Stock and the holders of Class B Common Stock, then a new alternate nominee
shall be designated in accordance with the terms of this paragraph 3.1(c) and a
special meeting of the stockholders of the Company shall be called and held for
the purpose of acting on the election of such alternate nominee.  In the event that a vacancy shall occur in 

 11
 

 

 

the Board of Directors as a
result of the death, disability, resignation or any other termination of the
director elected pursuant to this paragraph 3.1(c), the replacement for such
vacating director shall be designated by the Class A Common Stock Director and
Class B Common Stock Director, acting unanimously, to serve until the next
annual meeting of the stockholders of the Company.

(d)                                 Toffales shall act as the Chief Executive
Officer and President of the Company and will manage the day-to-day affairs of the
Company.  In such capacity, Toffales may
act on behalf of the Company to the fullest extent permissible for a person
acting in such capacities under applicable law and without approval of the
Board of Directors or the consent of the holders of any class of securities of
the Company, except with respect to the following items, which shall
require:

(i)            the majority vote of the Board of Directors in order to:

(A)          enter into a
transaction with an affiliate of Toffales, the Company or any affiliate of
Toffales or the Company;

(B)           borrow funds over
$250,000 on a secured or unsecured basis in one or more transactions, from
banks or any other person or entity;

(C)           invest or reinvest
funds of the Company in an amount greater than $250,000 in any securities,
whether equity or debt, public or private, or any similar investments, or in
any other investment;

(D)          accept any capital
investment in, or issue any additional securities of, the Company to any person
or entity;

(E)           (1) make a general
assignment for the benefit of creditors, (2) consent to the appointment of a
receiver, liquidator, custodian, or similar official of all or substantially
all of its properties, (3) commence any action or proceeding or take advantage
of or file under any federal or state insolvency statute, including, without
limitation, the United States Bankruptcy Code or any political subdivision
thereof, seeking to have an order for relief entered with respect to the
Company or seeking adjudication as a bankrupt or insolvent, or (4) seek reorganization,
arrangement, adjustment, liquidation, dissolution, administration, a voluntary
arrangement, or other relief with respect to the Company or its debts;

(F)           declare or pay a dividend on any
class of securities of the Company; and

(G)           fail to terminate the Lucent
Agreement for convenience under Section 4.02(a) of the Lucent Agreement at a
time when the Company does not have sufficient funds readily available to meet
the Company’s obligations to Lucent under the Lucent Agreement, other than such
time when the Company does not have such funds readily available due to a
failure by Isonics to timely purchase securities of the Company in accordance
with the Isonics Purchase Agreement; and

 12
 

 

 

(ii)           the majority vote of the Board of
Directors and an affirmative vote of the holders of a majority of the
outstanding shares of each class of Securities of the Company in order to:

(A)          merge, consolidate or
dissolve the Company or sell all or substantially all of its assets as part of
a single transaction, series of related transactions or plan;

(B)           mortgage, pledge, or
grant a security interest in any property of the Company not in the ordinary
course of business; and

(C)           lend money to or
guaranty or become surety for the obligations of any person or entity.

(e)                                  Notwithstanding anything to the contrary
contained in clause (ii) of paragraph 3.1(d), all actions by the Board of
Directors, other than those specified in said clause, will require the majority
vote of the Board of Directors.

(f)                                                    (i)            Each Stockholder agrees to vote, or
cause to be voted, all Securities held by the Stockholder for approval and
adoption of an amendment (the “Common Stock Classification Amendment”) to the
Certificate of Incorporation to eliminate the authorization of Class A Common
Stock and Class B Common Stock upon the occurrence of a Threshold Event.  In addition, each Stockholder, if a holder of
Class A Common Stock, shall do all reasonable acts to cause the Class A Common
Stock Director to vote for approval and adoption of the Common Stock Classification
Amendment and, if a holder of Class B Common Stock, shall do all reasonable
acts to cause the Class B Common Stock Director to vote for approval and
adoption of the Common Stock Classification Amendment.

(ii)           EACH STOCKHOLDER HEREBY GRANTS TO THE BOARD OF
DIRECTORS, AND EACH MEMBER OF THE BOARD OF DIRECTORS,  AN IRREVOCABLE PROXY, COUPLED WITH AN
INTEREST, TO VOTE ALL OF THE VOTING SECURITIES OWNED BY SUCH STOCKHOLDER OR
OVER WHICH SUCH STOCKHOLDER HAS VOTING CONTROL TO THE EXTENT NECESSARY TO CARRY
OUT THE PROVISIONS OF SUBPARAGRAPH 3.1(f)(i), BUT ONLY IN THE EVENT OF AND TO
THE EXTENT NECESSARY TO REMEDY ANY BREACH BY SUCH STOCKHOLDER OF THE
STOCKHOLDER’S OBLIGATIONS UNDER THE VOTING AGREEMENT CONTAINED IN SUBPARAGRAPH
3.1(f)(i).

 13
 

 

 

ARTICLE IV

ADDITIONAL STOCKHOLDER AGREEMENTS, RIGHTS AND OBLIGATIONS

Section 4.1.           Class A Common Stock Right of First Refusal.  In
the event that the Board of Directors determines to seek additional capital
funding in order to continue the operations of the Company (it being
specifically excluded any Acquisition Financing, as such term is defined in the
Certificate of Incorporation), (a “Continuing Operations Funding”), each of the
holders of Class A Common Stock shall have the right, but not the obligation,
to purchase the securities to be sold in the Continuing Operations
Financing.  The Company shall give each
holder of then outstanding Class A Common Stock notice of the proposed
Continuing Operations Funding and offer to such holder the right, exercisable
for 30 days after the giving of such notice, to purchase the securities being
offered in the Continuing Operations Funding in such proportion equal to the
proportion of Class A Common Stock then outstanding owned of record by the
holder.  Such offer to the holders of
Class A Common Stock shall be on the same terms and conditions as the Company
intends to offer the securities subject to the Continuing Operations Funding to
third parties.  Any securities subject to
the Continuing Operations Funding not purchased by the holders of Class A
Common Stock during such 30-day period shall be offered to third parties but
only on the same terms and conditions as any of such securities are being sold
to the holders of Class A Common Stock upon exercise of the right granted by this
Section 4.1.

Section 4.2.           Commitments
of Isonics.

(a)                                  Following Isonics consummating all of the
securities’ purchases contemplated by the Isonics Purchase Agreement, Isonics
shall either (i) make such additional capital and/or debt investments in the
Company as the Board of Directors deems in the best interests of the Company or
(ii) use its best efforts to assist the Company in obtaining additional
financing.

(b)                                 Isonics shall keep the Company advised as to
Isonics’ financial condition and financing plans and, if Isonics determines
that Isonics is not able to consummate any of the securities’ purchases or
investments contemplated by the Isonics Purchase Agreement, Isonics shall give
the Company no less than 90 days’ advance notice of Isonics inability to consummate
such securities purchase or investments.

Section 4.3.           Commitments
of Toffales.

(a)                                  In his capacity as Chief Executive Officer
and President of the Corporation, but subject to all applicable laws relating
to the disclosure of confidential information, Toffales shall, as frequent as
reasonably necessary but without unreasonably interfering with Toffales’ other
duties and responsibilities and time restrictions under the Toffales Employment
Agreement, (i) inform all Stockholders, including Isonics, of (A) the progress
and business activities of the Company, and (B) the Company’s financial
condition, including the solvency of the Company or the Company approaching the
zone of insolvency and (ii) promptly reply to reasonable requests for
information made by any Stockholder and the directors of the Company relating
to the operations of the Company.

 

 14

 

 

(b)                                 Subject to Isonics providing the Company with
an agreement to keep confidential any the disclosure of confidential
information other than to utilize information provided by the Company in order
for Isonics to comply with Isonics’ reporting obligations under the Securities
Act and Exchange Act, Toffales shall cause the Company to deliver to Isonics
the financial information Isonics reasonably requires in order to prepare and
file all reports, registration statements and other documents that Isonics is required
to file or publicly make available under the Securities Act and Exchange Act,
within fifteen days following the end of each fiscal quarter of the Company and
30 days following the end of each fiscal year of the Company.

Section 4.4.           Commitments
of the Company.

(a)                                  The Company shall deliver to Isonics the
financial information Isonics reasonably requires in order to prepare and file
all reports, registration statements and other documents that Isonics is
required to file or publicly make available under the Securities Act and
Exchange Act, within fifteen days following the end of each fiscal quarter of
the Company and 30 days following the end of each fiscal year of the Company.

(b)                                 The Company shall provide reasonable
assistance to the independent registered public accounting firm retained by
Isonics, at Isonics’ sole cost and expense, to audit the books and records of
the Company and provide Isonics with audited annual financial statements of the
Company, when and as reasonably required by Isonics in order for Isonics to
comply with  Isonics’ reporting
obligations under the Securities Act and Exchange Act.

(c)                                  The Company will not authorize the issuance
of any Securities or accept the Transfer by any Stockholder of Securities of
the Company unless the person acquiring such Securities agrees to become a
party to this Agreement, appropriately modified, such agreement to be evidenced
by a duly completed, dated and executed Instrument of Accession.

ARTICLE V

MISCELLANEOUS

Section 5.1.           Severability. 
Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or any other jurisdiction, but this Agreement will be reformed, construed and
enforced in such jurisdiction to the greatest extent possible to carry out the
intentions of the parties hereto.

 15
 

 

 

Section 5.2.           Entire
Agreement; No Third Party Beneficiaries.  Each
party to this Agreement hereby acknowledges that no other party or any other
person or entity has made any promises, warranties, understandings or
representations whatsoever, express or implied, not contained in this Agreement
and acknowledges that it has not executed this Agreement in reliance upon any
such promises, representations, understandings or warranties not contained
herein and that this Agreement supersedes all prior agreements and
understandings between the parties with respect thereto.  There are no promises, covenants or
undertakings other than those expressly set forth or provided for in this
Agreement.  This Agreement is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.

Section 5.3.           Successors
and Assigns.  Except as otherwise
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties.  Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

Section 5.4.           Counterparts;
Facsimile Signatures.  This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together
will constitute one and the same agreement. 
Any signature page delivered by a fax machine shall be binding to the
same extent as an original signature page, with regard to any agreement subject
to the terms hereof or any amendment thereto.

Section 5.5.           Remedies.  The
Stockholders will be entitled to enforce their rights under this Agreement
specifically (without posting a bond or other security), to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in their favor. 
The parties hereto agree and acknowledge that money damages may not be
an adequate remedy for any breach of the provisions of this Agreement and that
any Stockholder may in its sole discretion apply to any court of law or equity
of competent jurisdiction for specific performance and/or injunctive relief in
order to enforce or prevent any violation of the provisions of this
Agreement.  In the event of any dispute
involving the terms of this Agreement, the prevailing party shall be entitled
to collect reasonable fees and expenses incurred by the prevailing party in
connection with such dispute from the other parties to such dispute.

Section 5.6.           Notices.  All
notices and other communications required or permitted hereunder shall be in
writing.  Notices shall be delivered
personally, against written receipt therefor, via a recognized overnight
courier (such as Federal Express, DHL, Airborne Express or U.S.P.S. Express
Mail) or via certified or registered mail. 
Notices may be delivered via facsimile or e-mail, provided that by no
later than two days thereafter such notice is confirmed in writing and sent via
one of the methods described in the previous sentence.  Notices shall be addressed as follows:

 16
 

 

 

	
  

  	
  If to Toffales, to:

  	
  Christopher Toffales

  
	
   

  	
   

  	
  21 Motts Hollow Road

  
	
   

  	
   

  	
  Port Jefferson, New York 11777

  
	
   

  	
   

  	
  Facsimile: (631) 331-3371

  
	
   

  	
   

  	
  E-Mail: Toffales21@aol.com

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  If to Isonics, to:

  	
  James E. Alexander, President

  
	
   

  	
   

  	
  Isonics Corporation

  
	
   

  	
   

  	
  5906 McIntyre Street

  
	
   

  	
   

  	
  Golden, Colorado 80403

  
	
   

  	
   

  	
  Facsimile: (303) 279-7300

  
	
   

  	
   

  	
  E-Mail: jealexander@isonics.com

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  Herrick K. Lidstone, Jr., Esq.

  
	
   

  	
   

  	
  Burns, Figa & Will, P.C.

  
	
   

  	
   

  	
  6400 South Fiddlers Green Circle

  
	
   

  	
   

  	
  Suite 1000

  
	
   

  	
   

  	
  Greenwood Village, Colorado 80111

  
	
   

  	
   

  	
  Facsimile: (303) 796-2626

  
	
   

  	
   

  	
  E-Mail: hklidstone@bfw-law.com

  
	
   

  	
   

  	
   

  
	
   

  	
  If to the Company, to:

  	
  Christopher Toffales, President

  
	
   

  	
   

  	
  SenseIt Corp.

  
	
   

  	
   

  	
  21 Motts Hollow Road

  
	
   

  	
   

  	
  Port Jefferson, New York 11777

  
	
   

  	
   

  	
  Facsimile: (631) 331-3371

  
	
   

  	
   

  	
  E-Mail: Toffales21@aol.com

  

 

 17
 

 

 

	
  

  	
  with a copy to:

  	
  Neil M. Kaufman, Esq.

  
	
   

  	
   

  	
  Davidoff Malito & Hutcher LLP

  
	
   

  	
   

  	
  200 Garden City Plaza, Suite 315

  
	
   

  	
   

  	
  Garden City, New York 11530

  
	
   

  	
   

  	
  Facsimile: (516) 248-6422

  
	
   

  	
   

  	
  E-Mail: nmk@dmlegal.com

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and, if (x) Isonics and/or IHSDC owns of record at
  least 25% of the then outstanding shares of Class A Common Stock or (y)
  following the occurrence of a Threshold Event (as such term is defined in the
  Amended Certificate of Incorporation), Isonics and/or IHSDC owns of record at
  least 25% of the then outstanding shares of Common Stock, to Isonics in the
  manner as set forth in this Section 5.6

  
	
   

  	
   

  	
   

  
	
   

  	
  If to any other Stockholder, to: 

  	
  The address of such Stockholder on the Instrument of
  Accession of such Stockholder 

  

 

or, in the case of any of the parties hereto, at such other address as
such party shall have furnished to each of the other parties hereto in
accordance with this Section 5.6.  Each
such notice, demand, request or other communication shall be deemed given (i)
on the date of such delivery by hand, (ii) on the first business day following
the date of such delivery to the overnight delivery service or facsimile
transmission, or (iii) three business days following such mailing.

Section 5.7.           Amendment
and Waiver.  No modification, amendment or waiver of any
provision of this Agreement will be effective against the Company or the
Stockholders unless such modification, amendment or waiver is approved in
writing by the Company, Toffales, Isonics and all other Stockholders.  No delay or omission to exercise any right,
power or remedy accruing to any party under this Agreement, upon any breach or
default of any other party under this Agreement, shall impair any such right,
power or remedy of such non-breaching or non-defaulting party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring.

Section 5.8.           Termination. 
Notwithstanding any other provision of this Agreement, this Agreement
may be terminated in a writing approved by the Company, Toffales and
Isonics.  This Agreement will terminate
automatically upon the earliest to occur of (a) the completion of any voluntary
or involuntary liquidation or dissolution of the Company, (b) the sale of all
or substantially all of the Company’s assets or of a majority of the
outstanding equity of the Company (determined on a fully diluted basis) to any
Person 

 18
 

 

 

that is not a party to this Agreement (whether pursuant to a merger,
consolidation or otherwise), or (c) on the date that the Company becomes subject
to the reporting requirements of Section 13 of the Exchange Act.

Section 5.9.           Governing
Law. The
construction, validity and interpretation of this Agreement will be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to principles of conflicts of law.

Section 5.10.        Term
of the Agreement.  Unless sooner terminated in accordance with
Section 5.8, this Agreement shall have a term of ten years commencing as of the
date of this Agreement; provided, however, the term of this
Agreement shall be automatically renewed for an unlimited number of one year
terms unless a party to this Agreement shall give written notice to all other
parties to this Agreement of its termination no less than 30 days prior to the
end of the original term or any renewal term, in which event this Agreement
shall terminate at the end of the original term or such renewal term, as the
case may be.

Section 5.11.        Titles and
Subtitles. The titles
and subtitles used in this Agreement are used for convenience only and are not
to be considered in construing or interpreting this Agreement.

Section
5.12.        Delays or Omissions.  No
delay or omission to exercise any right, power or remedy accruing to any party
under this Agreement, upon any breach or default of any other party under this
Agreement, shall impair any such right, power or remedy of such non-breaching
or non-defaulting party nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach
or default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring.

 19
 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Stockholders’ Agreement on the
day and year first above written.

	
  

  	
  SenseIt Corp.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Christopher
  Toffales, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Isonics Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  James E.
  Alexander, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Christopher
  Toffales

  

 

 20
 

 

 

Schedule I

Form of Instrument of Accession

Instrument of Accession

Reference is made to that certain Stockholders’ Agreement, dated as of             ,
2006, a copy of which is attached hereto (as amended and in effect from time to
time, the “Stockholders Agreement”), among SenseIt Corp. (the “Company”),
Isonics Corporation and Christopher Toffales, and the Investor Stockholders (as
defined in the Stockholders Agreement). 
The undersigned,                         ,
in order to become the owner or holder of [identify Securities being
Transferred] (the “Securities”) of the Company hereby agrees that, by the
undersigned’s execution of this Instrument of Accession, the undersigned is an
Investor Stockholder and party to the Stockholders Agreement, subject to all of
the restrictions and conditions applicable to Stockholders set forth in such
Stockholders’ Agreement, and all of the Securities are subject to all the
restrictions and conditions applicable to the Securities, as set forth in the
Stockholders Agreement.  This Instrument
of Accession shall take effect and shall become a part of the Stockholders
Agreement immediately upon acceptance by the Company.  Executed as of the date set forth below under
the laws of the State of Delaware.

	
  Signature:

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  
	
   

  	
   

  	
   

  
	
  E-Mail:

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted:

  	
  SenseIt Corp.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

 21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}]]