Document:

<Page>

                               SENSAR CORPORATION
                            2001 STOCK INCENTIVE PLAN
                             (AMENDED AND RESTATED)

         1.       PURPOSE. The purpose of this 2001 Incentive Stock Plan
(Amended and Restated) (the "PLAN") is to enable Sensar Corporation (the
"COMPANY") to attract and retain the services of (i) selected employees,
officers and directors of the Company or any parent or subsidiary of the Company
and (ii) selected nonemployee agents, consultants, advisers and independent
contractors of the Company or any parent or subsidiary of the Company. For
purposes of this Plan, a person is considered to be employed by or in the
service of the Company if the person is employed by or in the service of any
entity (an "EMPLOYER") that is the Company or any parent or subsidiary of the
Company.

         2.       SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided
below and in Section 10, the shares to be offered under the Plan shall consist
of Common Stock of the Company, and the total number of shares of Common Stock
that may be issued under the Plan shall be 8,000,000 shares; provided, however,
the total number of securities issuable upon exercise of all outstanding awards
and the total number of shares subject to any other bonus or similar plan or
agreement of the Company shall not exceed a number of securities which is equal
to 30 percent of the then outstanding securities of the Company, with
convertible preferred or convertible senior common shares of stock counted on an
as if converted basis, unless a percentage higher than 30 percent is approved by
at least two-thirds of the outstanding securities entitled to vote. If an option
or Performance-based Award (as defined below) granted under the Plan expires,
terminates or is canceled, the unissued shares subject to that option or
Performance-based Award shall again be available under the Plan. If shares
awarded as a bonus pursuant to Section 7 or sold pursuant to Section 8 under the
Plan are forfeited to or repurchased by the Company, the number of shares
forfeited or repurchased shall again be available under the Plan.

         3.       EFFECTIVE DATE AND DURATION OF PLAN.

                  3.1      EFFECTIVE DATE. The initial 2001 Stock Incentive
Plan became effective as of January 28, 2002 (the "INITIAL EFFECTIVE DATE").
The 2001 Stock Incentive Plan (Amended and Restated) shall become effective
on March 15, 2002 (the "AMENDED EFFECTIVE DATE"). Any awards may be granted
and shares may issued with respect to such awards at any time after the
Initial Effective Date and before termination of the Plan. Notwithstanding
the foregoing, (a) no payments shall be made under a Performance-based Award
unless and until the Plan is approved by the shareholders of the Company, (b)
any option that is designated an Incentive Stock Option (as defined in
Section 5 below) granted under the Plan shall be deemed to be a Non-Statutory
Stock Option if it is exercised prior to the approval of the Plan by the
shareholders of the Company or if shareholder approval is not obtained before
March 15, 2003, and (c) unless a waiver of California Code of Regulations
Rule 260.140.41(i) is obtained from the Securities Regulation Division of the
State of California, all options granted under the Plan after the Amended
Effective Date and prior to the approval of the Plan by the

                                       2

<Page>

shareholders of the Company shall automatically terminate if the Plan is not
approved by the shareholders of the Company on or before January 28, 2003
and, if any such options are exercised prior to January 28, 2003, the
exercise shall be subject to an obligation on the part of the option holder
to rescind the exercise if the Plan is not approved by the shareholders of
the Company on or before January 28, 2003. All agreements reflecting the
grant of Performance-based Awards or options shall contain provisions
reflecting the limitations set forth in this paragraph to the extent
applicable.

                  3.2      DURATION. The Plan shall continue in effect until the
earliest to occur of (a) January 28, 2012, (b) the date all shares available for
issuance under the Plan have been issued and all restrictions on the shares have
lapsed, and (c) the date set by the Board of Directors. The Board of Directors
may suspend or terminate the Plan at any time except with respect to options,
Performance-based Awards and shares subject to restrictions then outstanding
under the Plan. Termination shall not affect any outstanding options,
Performance-based Awards, any right of the Company to repurchase shares or the
forfeitability of shares issued under the Plan.

         4.       ADMINISTRATION.

                  4.1      BOARD OF DIRECTORS. The Plan shall be administered by
the Board of Directors of the Company, which shall determine and designate the
individuals to whom awards shall be made, the amount of the awards and the other
terms and conditions of the awards. Subject to the provisions of the Plan, the
Board of Directors may adopt and amend rules and regulations relating to
administration of the Plan, advance the lapse of any waiting period, accelerate
any exercise date, waive or modify any restriction applicable to shares (except
those restrictions imposed by law) and make all other determinations in the
judgment of the Board of Directors necessary or desirable for the administration
of the Plan. The interpretation and construction of the provisions of the Plan
and related agreements by the Board of Directors shall be final and conclusive.
The Board of Directors may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any related agreement in the
manner and to the extent it deems expedient to carry the Plan into effect, and
the Board of Directors shall be the sole and final judge of such expediency.

                  4.2      COMMITTEE. The Board of Directors may delegate to any
committee of the Board of Directors (the "COMMITTEE") any or all authority for
administration of the Plan. If authority is delegated to the Committee, all
references to the Board of Directors in the Plan shall mean and relate to the
Committee, except (i) as otherwise provided by the Board of Directors and (ii)
only the Board of Directors may amend or terminate the Plan as provided in
Sections 3, 10 and 11.

         5.       TYPES OF AWARDS; ELIGIBILITY; LIMITATIONS. The Board of
Directors may, from time to time, take the following actions, separately or in
combination, under the Plan: (i) grant options that are Incentive Stock Options
as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"CODE") ("INCENTIVE STOCK OPTIONS"); (ii) grant options that are

                                       2

<Page>

not Incentive Stock Options ("NON-STATUTORY STOCK OPTIONS"); (iii) award
stock bonuses as provided in Section 7; (iv) issue shares subject to
restrictions as provided in Section 8; and (v) award Performance-based Awards
as provided in Section 9. Awards may be made to employees, including
employees who are officers or directors, and to other individuals described
in Section 1 selected by the Board of Directors; provided, however, only
employees of the Company or any parent or subsidiary of the Company (as
defined in Sections 424(e) and 424(f) of the Code) are eligible to receive
Incentive Stock Options under the Plan. The Board of Directors shall select
the individuals to whom awards shall be made and shall specify the action
taken with respect to each individual to whom an award is made. At the
discretion of the Board of Directors, an individual may be given an election
to surrender an award in exchange for the grant of a new award.

         6.       OPTION GRANTS.

                  6.1      GENERAL RULES RELATING TO OPTIONS.

                           6.1-1    TERMS OF GRANT. The Board of Directors may
grant options under the Plan. Subject to the provisions of subsections (a), (b)
and (c) of this Section 6.1-1, from which the Board of Directors is not
authorized to deviate with respect to options granted after the Amended
Effective Date, with respect to each option grant, the Board of Directors shall
determine the number of shares subject to the option, the exercise price, the
period of the option, the time or times at which the option may be exercised and
whether the option is an Incentive Stock Option or a Non-Statutory Stock Option.
At the time of the grant of an option or at any time thereafter, the Board of
Directors may provide that an optionee who exercised an option with Common Stock
of the Company shall automatically receive a new option to purchase additional
shares equal to the number of shares surrendered and may specify the terms and
conditions of such new options.

Notwithstanding the foregoing, the following limitations shall apply to all
options granted after the Amended Effective Date:

                                    6.1-1(a) LIMITATIONS ON GRANTS TO 10 PERCENT
SHAREHOLDERS. An option may be granted to a person possessing more than 10
percent of the total combined voting power of all classes of stock of the
Company or any parent or subsidiary (as defined in subsections 424(e) and 424(f)
of the Code) only if the exercise price is at least 110 percent of the fair
market value of the Common Stock subject to the option on the date it is granted
and the option by its terms is not exercisable after the expiration of five
years from the date it is granted. Unless otherwise specified, for purposes of
any award granted under the Plan, the fair market value of the Common Stock
shall be the closing price of the Common Stock last reported before the time the
award is granted (or the time as of which the determination must be made), if
the stock is publicly traded, or another value of the Common Stock as specified
by the Board of Directors.

                                    6.1-1(b) DURATION OF OPTIONS. Subject to
Sections 6.1-2, 6.1-4 and 6.1-1(a), options shall continue in effect for the
period fixed by the Board of

                                       3

<Page>

Directors, which period shall be no more than 10 years from the date the
option is granted.

                                    6.1-1(c) EXERCISE PRICE. The exercise price
of an option shall not be less than 85% of the fair market value of the Common
Stock covered by the option at the date the option is granted.

                                    6.1-1(d) NONTRANSFERABILITY. Each option
granted after the Amended Effective Date by its terms (i) shall be nonassignable
and nontransferable by the optionee, either voluntarily or by operation of law,
except by will, by the laws of descent and distribution of the state or country
of the optionee's domicile at the time of death, by instrument to an intervivos
or testamentary trust in which the options are to be passed to beneficiaries
upon the death of the trustor (settlor) or by gift to "immediate family" as that
term is defined in 17 CFR 240.16a-1(e).

                           6.1-2    EXERCISE OF OPTIONS. Except as provided in
Section 6.1-4 or as determined by the Board of Directors, no option granted
under the Plan may be exercised unless at the time of exercise the optionee is
employed by or in the service of an Employer and shall have been so employed or
provided such service continuously since the date the option was granted. Except
as provided in Sections 6.1-4 and 10 and in this paragraph, options granted
under the Plan may be exercised from time to time over the period stated in each
option in amounts and at times prescribed by the Board of Directors; provided,
however the vesting schedule for any options granted to a person who is not an
officer, director or consultant of the Company, its parent or one of its
subsidiaries shall provide that no fewer than 20% of the options subject to such
option become exercisable each year following the grant (so that the option
vests in full no later than 5 years after the grant date). Options may not be
exercised for fractional shares. Unless otherwise determined by the Board of
Directors, if an optionee does not exercise an option in any one year for the
full number of shares to which the optionee is entitled in that year, the
optionee's rights shall be cumulative and the optionee may purchase those shares
in any subsequent year during the term of the option.

                           6.1-3    [intentionally left blank]

                           6.1-4    TERMINATION OF EMPLOYMENT OR SERVICE.

                                    6.1-4(a) GENERAL RULE. Unless the Board of
Directors determines to extend the period of exercise for an option (either at
or following the grant date), if an optionee's employment or service with the
Employer terminates for any reason other than because of total disability or
death as provided in Sections 6.1-4(b) and (c), his or her option may be
exercised at any time before the expiration date of the option or the expiration
of 30 days after the date of termination, whichever is the shorter period, but
only if and to the extent the optionee was entitled to exercise the option at
the date of termination.

                                    6.1-4(b) TERMINATION BECAUSE OF TOTAL
DISABILITY. Unless the Board of Directors determines to extend the period of
exercise for an option (either at or following the grant date) if an optionee's
employment or service with the Employer terminates

                                       4

<Page>

because of total disability, his or her option may be exercised at any time
before the expiration date of the option or before the date 12 months after
the date of termination, whichever is the shorter period, but only if and to
the extent the optionee was entitled to exercise the option at the date of
termination. The term "total disability" means a medically determinable
mental or physical impairment that is expected to result in death or has
lasted or is expected to last for a continuous period of 12 months or more
and that, in the opinion of the Company and two independent physicians,
causes the optionee to be unable to perform his or her duties as an employee,
director, officer or consultant of the Employer and unable to be engaged in
any substantial gainful activity. Total disability shall be deemed to have
occurred on the first day after the two independent physicians have furnished
their written opinion of total disability to the Company and the Company has
reached an opinion of total disability.

                                    6.1-4(c) TERMINATION BECAUSE OF DEATH.
Unless the Board of Directors determines to extend the period of exercise for an
option, (either at or following the grant date), if an optionee dies while
employed by or providing service to an Employer, his or her option may be
exercised at any time before the expiration date of the option or before the
date 12 months after the date of death, whichever is the shorter period, but
only if and to the extent the optionee was entitled to exercise the option at
the date of death and only by the person or persons to whom the optionee's
rights under the option shall pass by the optionee's will or by the laws of
descent and distribution of the state or country of domicile at the time of
death.

                                    6.1-4(d) AMENDMENT OF EXERCISE PERIOD
APPLICABLE TO TERMINATION. The Board of Directors may at any time extend the
30-day and 12-month exercise periods any length of time not longer than the
original expiration date of the option. The Board of Directors may at any time
increase the portion of an option that is exercisable, subject to terms and
conditions determined by the Board of Directors.

                                    6.1-4(e) FAILURE TO EXERCISE OPTION. To the
extent that the option of any deceased optionee or any optionee whose employment
or service terminates is not exercised within the applicable period, all further
rights to purchase shares pursuant to the option shall cease and terminate.

                                    6.1-4(f) LEAVE OF ABSENCE. Absence on leave
approved by the Employer or on account of illness or disability shall not be
deemed a termination or interruption of employment or service. Unless otherwise
determined by the Board of Directors, vesting of options shall continue during a
medical, family or military leave of absence, whether paid or unpaid, and
vesting of options shall be suspended during any other unpaid leave of absence.

                           6.1-5    PURCHASE OF SHARES.

                                    6.1-5(a) NOTICE OF EXERCISE. Unless the
Board of Directors determines otherwise, shares may be acquired pursuant to an
option granted under the Plan only upon the Company's receipt of written notice
from the optionee of the optionee's binding

                                       5

<Page>

commitment to purchase shares, specifying the number of shares the optionee
desires to purchase under the option and the date on which the optionee
agrees to complete the transaction, and, if required to comply with the
Securities Act of 1933 and/or governing state securities laws, containing a
representation that it is the optionee's intention to acquire the shares for
investment and not with a view to distribution.

                                    6.1-5(b) PAYMENT. Unless the Board of
Directors determines otherwise (either at or following the grant date), on or
before the date specified for completion of the purchase of shares pursuant to
an option exercise, the optionee must pay the Company the full purchase price of
those shares in cash or by check or, with the consent of the Board of Directors,
in whole or in part, in Common Stock of the Company valued at fair market value,
restricted stock or other contingent awards denominated in either stock or cash,
promissory notes and other forms of consideration. Unless otherwise determined
by the Board of Directors (either at or following the grant date), any Common
Stock provided in payment of the purchase price must have been previously
acquired and held by the optionee for at least six months. The fair market value
of Common Stock provided in payment of the purchase price shall be the closing
price of the Common Stock last reported before the time payment in Common Stock
is made or, if earlier, committed to be made, if the Common Stock is publicly
traded, or another value of the Common Stock as specified by the Board of
Directors. No shares shall be issued until full payment for the shares has been
made, including all amounts owed for tax withholding. With the consent of the
Board of Directors, an optionee may request the Company to apply automatically
the shares to be received upon the exercise of a portion of a stock option (even
though stock certificates have not yet been issued) to satisfy the purchase
price for additional portions of the option.

                                   6.1-5(c) TAX WITHHOLDING. Each optionee who
has exercised an option shall, immediately upon notification of the amount due,
if any, pay to the Company in cash or by check amounts necessary to satisfy any
applicable federal, state and local tax withholding requirements. If additional
withholding is or becomes required (as a result of exercise of an option or as a
result of disposition of shares acquired pursuant to exercise of an option)
beyond any amount deposited before delivery of the certificates, the optionee
shall pay such amount, in cash or by check, to the Company on demand. If the
optionee fails to pay the amount demanded, the Company or the Employer may
withhold that amount from other amounts payable to the optionee, including
salary, subject to applicable law. With the consent of the Board of Directors,
an optionee may satisfy this obligation, in whole or in part, by instructing the
Company to withhold from the shares to be issued upon exercise or by delivering
to the Company other shares of Common Stock; provided, however, that the number
of shares so withheld or delivered shall not exceed the minimum amount necessary
to satisfy the required withholding obligation.

                                   6.1-5(d) REDUCTION OF RESERVED SHARES. Upon
the exercise of an option, the number of shares reserved for issuance under the
Plan shall be reduced by the number of shares issued upon exercise of the option
(less the number of any shares surrendered in payment for the exercise price or
withheld to satisfy withholding

                                       6

<Page>

requirements).

                           6.1-6    LIMITATIONS ON GRANTS TO NON-EXEMPT
EMPLOYEES. Unless otherwise determined by the Board of Directors (either at or
following the grant date), if an employee of the Company or any parent or
subsidiary of the Company is a non-exempt employee subject to the overtime
compensation provisions of Section 7 of the Fair Labor Standards Act (the
"FLSA"), any option granted to that employee shall be subject to the following
restrictions: (i) the exercise price shall be at least 85 percent of the fair
market value of the Common Stock subject to the option on the date it is
granted; and (ii) the option shall not be exercisable until at least six months
after the date it is granted; provided, however, that this six-month restriction
on exercisability will cease to apply if the employee dies, becomes disabled or
retires, there is a change in ownership of the Company, or in other
circumstances permitted by regulation, all as prescribed in Section 7(e)(8)(B)
of the FLSA.

                  6.2      INCENTIVE STOCK OPTIONS. Incentive Stock Options
shall be subject to the following additional terms and conditions:

                           6.2-1    LIMITATION ON AMOUNT OF GRANTS. If the
aggregate fair market value of stock (determined as of the date the option is
granted) for which Incentive Stock Options granted under this Plan (and any
other stock incentive plan of the Company or its parent or subsidiary
corporations, as defined in subsections 424(e) and 424(f) of the Code) are
exercisable for the first time by an employee during any calendar year exceeds
$100,000, the portion of the option or options not exceeding $100,000, to the
extent of whole shares, will be treated as an Incentive Stock Option and the
remaining portion of the option or options will be treated as a Non-Statutory
Stock Option. The preceding sentence will be applied by taking options into
account in the order in which they were granted. If, under the $100,000
limitation, a portion of an option is treated as an Incentive Stock Option and
the remaining portion of the option is treated as a Non-Statutory Stock Option,
unless the optionee designates otherwise at the time of exercise, the optionee's
exercise of all or a portion of the option will be treated as the exercise of
the Incentive Stock Option portion of the option to the full extent permitted
under the $100,000 limitation. If an optionee exercises an option that is
treated as in part an Incentive Stock Option and in part a Non-Statutory Stock
Option, the Company will designate the portion of the stock acquired pursuant to
the exercise of the Incentive Stock Option portion as Incentive Stock Option
stock by issuing a separate certificate for that portion of the stock and
identifying the certificate as Incentive Stock Option stock in its stock
records.

                           6.2-2    EXERCISE PRICE. The exercise price shall not
be less than 100 percent of the fair market value of the Common Stock covered by
the Incentive Stock Option at the date the option is granted.

                           6.2-3    EARLY DISPOSITIONS. If within two years
after an Incentive Stock Option is granted or within 12 months after an
Incentive Stock Option is exercised, the optionee sells or otherwise disposes of
Common Stock acquired on exercise of the Option, the optionee shall within 30
days of the sale or disposition notify the Company in writing of (i) the

                                       7

<Page>

date of the sale or disposition, (ii) the amount realized on the sale or
disposition and (iii) the nature of the disposition (e.g., sale, gift, etc.).

                           6.2-4.   NONTRANSFERABILITY. Each Incentive Stock
Option shall be nonassignable and nontransferable by the optionee, either
voluntarily or by operation of law, except by will or by the laws of descent and
distribution of the state or country of the optionee's domicile at the time of
death, and during the optionee's lifetime, shall be exercisable only by the
optionee.

         7.       STOCK BONUSES. Subject to any restrictions imposed by
applicable law, the Board of Directors may award shares under the Plan as stock
bonuses. Shares awarded as a bonus shall be subject to the terms, conditions and
restrictions determined by the Board of Directors. The restrictions may, subject
to any limitations imposed by applicable law (including California Code of
Regulations Rule 260.140.41) include restrictions concerning transferability and
forfeiture of the shares awarded, together with any other restrictions
determined by the Board of Directors. The Board of Directors may require the
recipient to sign an agreement as a condition of the award, but may not require
the recipient to pay any monetary consideration other than amounts necessary to
satisfy tax withholding requirements. The agreement may contain any terms,
conditions, restrictions, representations and warranties required by the Board
of Directors. The certificates representing the shares awarded shall bear any
legends required by the Board of Directors. The Company may require any
recipient of a stock bonus to pay to the Company in cash or by check upon demand
amounts necessary to satisfy any applicable federal, state or local tax
withholding requirements. If the recipient fails to pay the amount demanded, the
Company or the Employer may withhold that amount from other amounts payable to
the recipient, including salary, subject to applicable law. With the consent of
the Board of Directors, a recipient may satisfy this obligation, in whole or in
part, by instructing the Company to withhold from any shares to be issued or by
delivering to the Company other shares of Common Stock; provided, however, that
the number of shares so withheld or delivered shall not exceed the minimum
amount necessary to satisfy the required withholding obligation. Upon the
issuance of a stock bonus, the number of shares reserved for issuance under the
Plan shall be reduced by the number of shares issued, less the number of shares
withheld or delivered to satisfy withholding obligations.

         8.       RESTRICTED STOCK.

                  8.1      GENERAL RULES. Subject to any restrictions imposed by
applicable law and the Plan, the Board of Directors may issue shares under the
Plan for any consideration (including promissory notes and services) determined
by the Board of Directors. Shares issued under the Plan shall be subject to the
terms, conditions and restrictions of the Plan and any other terms, conditions
and restrictions determined by the Board of Directors. The restrictions may
include, subject to any limitations imposed by applicable law (including
California Code of Regulations Rule 260.140.41), without limitation,
restrictions concerning transferability, repurchase by the Company and
forfeiture of the shares issued.

                                       8

<Page>

                  8.2      PRICING LIMITATIONS. The purchase price for any
shares issued under this Section 8 shall be at least 85% of the fair market
value of the Common Stock on the date the purchase agreement is signed. The
purchase price for any shares issued under this Section 8 to any person
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or any parent or subsidiary shall be at least
100% of the fair market value of the Common Stock on the date the purchase
agreement is signed.

                  8.2      PURCHASE AGREEMENT AND LEGENDS. All Common Stock
issued pursuant to this Section 8 shall be subject to a purchase agreement,
which shall be executed by the Company and the prospective purchaser of the
shares before the delivery of certificates representing the shares to the
purchaser. The purchase agreement may contain any terms, conditions,
restrictions, representations and warranties required by the Board of Directors.
The certificates representing the shares shall bear any legends required by the
Board of Directors.

                  8.3      TRANSFERABILITY. The rights of any purchaser of
shares under this Section 8 shall be nonassignable and nontransferable, either
voluntarily or by operation of law, except by will, by the laws of descent and
distribution of the state or country of such person's at the time of death.

                  8.4      TAX WITHHOLDING. The Company may require any
purchaser of restricted stock to pay to the Company in cash or by check upon
demand amounts necessary to satisfy any applicable federal, state or local tax
withholding requirements. If the purchaser fails to pay the amount demanded, the
Company or the Employer may withhold that amount from other amounts payable to
the purchaser, including salary, subject to applicable law. With the consent of
the Board of Directors, a purchaser may satisfy this obligation, in whole or in
part, by instructing the Company to withhold from any shares to be issued or by
delivering to the Company other shares of Common Stock; provided, however, that
the number of shares so withheld or delivered shall not exceed the minimum
amount necessary to satisfy the required withholding obligation. Upon the
issuance of restricted stock, the number of shares reserved for issuance under
the Plan shall be reduced by the number of shares issued, less the number of
shares withheld or delivered to satisfy withholding obligations.

         9.       PERFORMANCE-BASED AWARDS. To the extent counsel for the
Company determines that the applicable grants qualify, the Board of Directors
may grant awards intended to qualify as qualified performance-based compensation
under Section 162(m) of the Code and the regulations thereunder
("PERFORMANCE-BASED AWARDS"). Performance-based Awards shall be denominated at
the time of grant either in Common Stock ("STOCK PERFORMANCE AWARDS") or in
dollar amounts ("DOLLAR PERFORMANCE AWARDS"). Payment under a Stock Performance
Award or a Dollar Performance Award shall be made, at the discretion of the
Board of Directors, in Common Stock ("PERFORMANCE SHARES"), or in cash or in any
combination thereof. Performance-based Awards shall be subject to the following
terms and conditions:

                                       9

<Page>

                  9.1      AWARD PERIOD. The Board of Directors shall determine
the period of time for which a Performance-based Award is made (the "AWARD
PERIOD").

                  9.2      PERFORMANCE GOALS AND PAYMENT. The Board of Directors
shall establish in writing objectives ("PERFORMANCE GOALS") that must be met by
the Company or any subsidiary, division or other unit of the Company ("BUSINESS
UNIT") during the Award Period as a condition to payment being made under the
Performance-based Award. The Performance Goals for each award shall be one or
more targeted levels of performance with respect to one or more of the following
objective measures with respect to the Company or any Business Unit: earnings,
earnings per share, stock price increase, total shareholder return (stock price
increase plus dividends), return on equity, return on assets, return on capital,
economic value added, revenues, operating income, inventories, inventory turns,
cash flows or any of the foregoing before the effect of acquisitions,
divestitures, accounting changes, and restructuring and special charges
(determined according to criteria established by the Board of Directors). The
Board of Directors shall also establish the number of Performance Shares or the
amount of cash payment to be made under a Performance-based Award if the
Performance Goals are met or exceeded, including the fixing of a maximum payment
(subject to Section 9.4). The Board of Directors may establish other
restrictions to payment under a Performance-based Award, such as a continued
employment requirement, in addition to satisfaction of the Performance Goals.
Some or all of the Performance Shares may be issued at the time of the award as
restricted shares subject to forfeiture in whole or in part if Performance Goals
or, if applicable, other restrictions are not satisfied.

                  9.3      COMPUTATION OF PAYMENT. During or after an Award
Period, the performance of the Company or Business Unit, as applicable, during
the period shall be measured against the Performance Goals. If the Performance
Goals are not met, no payment shall be made under a Performance-based Award. If
the Performance Goals are met or exceeded, the Board of Directors shall certify
that fact in writing and certify the number of Performance Shares earned or the
amount of cash payment to be made under the terms of the Performance-based
Award.

                  9.4      MAXIMUM AWARDS. No participant may receive in any
fiscal year Stock Performance Awards under which the aggregate amount payable
under the awards exceeds the equivalent of 500,000 shares of Common Stock or
Dollar Performance awards under which the aggregate amount payable under the
awards exceeds $500,000.

                  9.5      TAX WITHHOLDING. With respect to Dollar Performance
Awards, the Company or the Employer may withhold any amounts necessary to
satisfy any applicable federal, state or local tax withholding requirements from
the Dollar Performance Award. Each participant who has received Performance
Shares shall, upon notification of the amount due, pay to the Company in cash or
by check amounts necessary to satisfy any applicable federal, state and local
tax withholding requirements. If the participant fails to pay the amount
demanded, the Company or the Employer may withhold that amount from other
amounts payable to the participant, including salary, subject to applicable law.
With the consent of the

                                       10

<Page>

Board of Directors, a participant may satisfy this obligation with respect to
Performance Shares, in whole or in part, by instructing the Company to
withhold from any shares to be issued or by delivering to the Company other
shares of Common Stock; provided, however, that the number of shares so
delivered or withheld shall not exceed the minimum amount necessary to
satisfy the required withholding obligation.

                  9.6      EFFECT ON SHARES AVAILABLE. The payment of a
         Performance-based Award in cash shall not reduce the number of shares
         of Common Stock reserved for issuance under the Plan. The number of
         shares of Common Stock reserved for issuance under the Plan shall be
         reduced by the number of shares issued upon payment of an award, less
         the number of shares delivered or withheld to satisfy withholding
         obligations.

         10.      CHANGES IN CAPITAL STRUCTURE.

                  10.1     STOCK SPLITS, STOCK DIVIDENDS. If the outstanding
Common Stock of the Company is hereafter increased or decreased or changed into
or exchanged for a different number or kind of shares or other securities of the
Company by reason of any stock split, combination of shares, dividend payable in
shares, distribution, reverse stock split, recapitalization or reclassification,
appropriate adjustment shall be made by the Board of Directors in the number and
kind of shares available for grants under the Plan and in all other share
amounts set forth in the Plan. In addition, the Board of Directors shall make
appropriate adjustment in the number and kind of shares as to which outstanding
options or other awards, or portions thereof then unexercised, shall relate, so
that the holder's proportionate interest before and after the occurrence of the
event is maintained. Notwithstanding the foregoing, the Board of Directors shall
have no obligation to effect any adjustment that would or might result in the
issuance of fractional shares, and any fractional shares resulting from any
adjustment may be disregarded or provided for in any manner determined by the
Board of Directors. Any such adjustments made by the Board of Directors shall be
conclusive.

                  10.2     MERGERS, REORGANIZATIONS, ETC. For purposes of this
Section, a "Transaction" shall mean (a) a transaction (or a related series of
transactions not in the ordinary course of business) in which a majority of the
assets or business of the Company is transferred, by merger, lease, sale,
consolidation, plan of exchange, split-up, split-off, spin-off, reorganization,
liquidation or other transfer, to a person or entity that is not a parent of the
Company, a wholly-owned subsidiary of the Company or an other entity in which
the shareholders of the Company immediately prior to such transaction (or the
first of a series of related transaction) receive in the transaction on a pro
rata basis and own immediately after the transaction (or the last of a series of
related transactions) a majority of the issued and outstanding shares of capital
stock, or (b) a transfer by one or more shareholders, in one transfer or several
related transfers (such as in response to a tender offer or in a collectively
negotiated sale), of 50% or more of the Common Stock outstanding on the date of
such transfer (or the first of such related transfers) to persons, other than
wholly-owned subsidiaries or family trusts, who were not shareholders of the
Company prior to the first such transfer.

                                       11

<Page>

In the event of a Transaction, the Board of Directors shall, in its sole
discretion and to the extent possible under the structure of the Transaction,
select one of the following alternatives for treating outstanding options and
other awards under the Plan prior to the consummation of the Transaction:

                           10.2-1   Outstanding options and other awards shall
         remain in effect in accordance with their terms.

                           10.2-2   Outstanding options and other awards shall
         be converted into options to purchase stock or awards with respect to
         stock in one or more of the corporations, including the Company, that
         are the surviving or acquiring corporations in the Transaction. The
         amount, type of securities subject thereto and exercise price of the
         converted options or other awards shall be determined by the Board of
         Directors of the Company, taking into account the relative values of
         the companies involved in the Transaction and the exchange rate, if
         any, used in determining shares of the surviving corporation(s) to be
         held by holders of shares of the Company following the Transaction.
         Unless otherwise determined by the Board of Directors, the converted
         options or other awards shall be vested only to the extent that the
         vesting requirements relating to options or other awards granted
         hereunder have been satisfied.

                           10.2-3   With respect to options, the Board of
         Directors shall provide a period of at least 10 days before the
         completion of the Transaction during which outstanding options may be
         exercised, to the extent then exercisable, and upon the expiration of
         that period, all unexercised options shall immediately terminate. The
         Board of Directors may, in its sole discretion, accelerate the
         exercisability of options so that they are exercisable in full during
         that period.

                           10.2-4   With respect to awards other than options,
         the Board of Directors may, in its sole discretion and subject to
         applicable law, terminate or waive the application of all forfeiture
         provisions, performance thresholds and similar restrictions at any time
         prior to the consummation of the Transaction.

                  10.3     DISSOLUTION OF THE COMPANY. In the event of the
dissolution of the Company, options and other awards shall be treated in
accordance with Section 10.2-3.

                  10.4     RIGHTS ISSUED BY ANOTHER CORPORATION. The Board of
Directors may also grant options and stock bonuses and Performance-based Awards
and issue restricted stock under the Plan with terms, conditions and provisions
that vary from those specified in the Plan, provided that any such awards are
granted in substitution for, or in connection with the assumption of, existing
options, stock bonuses, Performance-based Awards and restricted stock granted,
awarded or issued by another corporation and assumed or otherwise agreed to be
provided for by the Company pursuant to or by reason of a Transaction.

         11.      AMENDMENT OF THE PLAN. The Board of Directors may at any time
modify or

                                       12

<Page>

amend the Plan in any respect (except that the Board of Directors may not
make any amendment that would cause the Plan to cease to comply with
governing law). Except as provided in Section 10, however, no change in an
award already granted shall be made without the written consent of the holder
of the award if the change would adversely affect the holder.

         12.      APPROVALS. The Company's obligations under the Plan are
subject to the approval of state and federal authorities or agencies with
jurisdiction in the matter. The Company will use its best efforts to take steps
required by state or federal law or applicable regulations, including rules and
regulations of the Securities and Exchange Commission and any stock exchange on
which the Company's shares may then be listed, in connection with the grants
under the Plan. The foregoing notwithstanding, the Company shall not be
obligated to issue or deliver Common Stock under the Plan if such issuance or
delivery would violate state or federal securities laws. Unless the Company
determines, with advice of counsel that such legend is not necessary,
certificates representing all shares of Common Stock issued in connection with
the Plan will contain a legend indicating that such shares of Common Stock are
"restricted securities," as defined under Rule 144 promulgated under the
Securities Act of 1933, as amended, and that such shares may not be transferred
unless such transfer is registered under the Securities Act and governing state
securities laws or exempt from the registration requirements of the same.

         13.      EMPLOYMENT AND SERVICE RIGHTS. Nothing in the Plan or any
award pursuant to the Plan shall (i) confer upon any employee any right to be
continued in the employment of an Employer or interfere in any way with the
Employer's right to terminate the employee's employment at will at any time, for
any reason, with or without cause, or to decrease the employee's compensation or
benefits, or (ii) confer upon any person engaged by an Employer any right to be
retained or employed by the Employer or to the continuation, extension, renewal
or modification of any compensation, contract or arrangement with or by the
Employer.

         14.      RIGHTS AS A SHAREHOLDER. The recipient of any award under the
Plan shall have no rights as a shareholder with respect to any shares of Common
Stock until the date the recipient becomes the holder of record of those shares.
Except as otherwise expressly provided in the Plan, no adjustment shall be made
for dividends or other rights for which the record date occurs before the date
the recipient becomes the holder of record.

         15.      RIGHT TO RECEIVE FINANCIAL STATEMENTS. A holder of any award
granted under the Plan shall be entitled to receive financial statements of the
Company at least annually until the expiration or full exercise of such award.

                                       13

<Page>

         The undersigned, who is the duly elected Chief Operating Officer of the
Company, hereby certifies that, this Company's 2001 Stock Incentive Plan was
approved by the Board of Directors of the Company and became effective on the
Initial Effective Date, and the Company's 2001 Stock Incentive Plan (Amended and
Restated) was approved by the Board of Directors of the Company on the Amended
Effective Date. The Board of Directors has directed the Company to submit this
Plan to the shareholders for approval on or before January 28, 2003.

                                              SENSAR CORPORATION

                                              By: /s/ Andrew Bebbington
                                                  ------------------------------
                                                  Andrew Bebbington
                                                  Chief Operating Officer

                                       14<Page>

                          REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT, dated as of March 20, 2002 (this
"Agreement"), is made by and between ISONICS CORPORATION, a California
corporation, with headquarters located at 5906 McIntyre Street, Golden, Colorado
80403 (the "Company"), and each entity named on a signature page hereto (each,
an "Initial Lender" and collectively the "Initial Lenders") (each agreement with
an Initial Lender being deemed a separate and independent agreement between the
Company and such Initial Lender, except that each Initial Lender acknowledges
and consents to the rights granted to each other Initial Lender under such
agreement).

                              W I T N E S S E T H:

     WHEREAS, upon the terms and subject to the conditions of the Financing
Agreement, dated as of March 20, 2002, between the Initial Lenders and the
Company (the "Financing Agreement;" capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Financing Agreement), the
Company has agreed to issue and sell to the Initial Lenders the Notes; and

     WHEREAS, the Notes are convertible into shares of Common Stock (the
"Conversion Shares" upon the terms and subject to the conditions contained in
the Notes; and

     WHEREAS, the Company has agreed to issue the Warrants to the Initial
Lenders in connection with the issuance of the Notes and upon prepayment of the
Notes in cash, and the Warrants may be exercised for the purchase of shares of
Common Stock (the "Warrant Shares") upon the terms and conditions of the
Warrants; and

     WHEREAS, to induce the Initial Lenders to execute and deliver the Financing
Agreement and to perform their obligations as contemplated in the Financing
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "Securities
Act"), with respect to the Registrable Securities;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Initial
Lenders hereby agree as follows:

     1.   DEFINITIONS. As used in this Agreement, the following terms shall have
the following meanings:

     (a)  "Closing Date" means the date hereof.
<Page>

     (b)  "Effective Date" means the date the SEC declares a Registration
Statement covering Registrable Securities and otherwise meeting the conditions
contemplated hereby to be effective.

     (c)  "Lender" means the Initial Lender and any permitted transferee or
assignee who agrees in writing to become bound by the provisions of this
Agreement in accordance with Section 9 hereof and who holds Notes, Warrants or
Registrable Securities.

     (d)  "Potential Material Event" means any of the following: (i) the
possession by the Company of material information not ripe for disclosure in a
registration statement, which shall be evidenced by a determination in good
faith by the Board of Directors of the Company that disclosure of such
information in the registration statement would be detrimental to the business
and affairs of the Company or (ii) any material engagement or activity by the
Company which would, in the good faith determination of the Board of Directors
of the Company, be adversely affected by disclosure in a registration statement
at such time; in each case where such determination shall be accompanied by a
good faith determination by the Board of Directors of the Company that the
registration statement would be materially misleading absent the inclusion of
such information.

     (e)  "Principal Trading Market" means NASDAQ or the Over-the-Counter
Bulletin Board Market.

     (f)  "Register," "Registered," and "Registration" refer to a registration
effected by preparing and filing a Registration Statement or Statements in
compliance with the Securities Act and pursuant to Rule 415 under the Securities
Act or any successor rule providing for offering securities on a continuous
basis ("Rule 415"), and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange Commission
(the "SEC").

     (g)  "Registrable Securities" means the Conversion Shares and the Warrant
Shares.

     (h)  "Registration Statement" means a registration statement of the Company
under the Securities Act covering Registrable Securities on Form S-3 if the
Company is then eligible to file using such form, and if not eligible, on Form
S-1, SB-2, or other appropriate form.

                                       2
<Page>

     2.   REGISTRATION.

     (a)  MANDATORY REGISTRATION.

     (i)  The Company shall prepare and file with the SEC, on or prior to June
14, 2002 (the "Required Filing Date") either a Registration Statement or an
amendment to an existing Registration Statement, in either event registering for
resale by the Lenders a sufficient number of shares of Common Stock for the
Initial Lenders to sell the Registrable Securities, but in no event less than
the number of shares equal to the aggregate of (x) one hundred ten percent
(110%) of the number of shares into which the Notes would be convertible at the
time of filing of such Registration Statement (assuming for such purposes that
all Notes had been issued, had been eligible to be converted, and had been
converted, into Conversion Shares in accordance with their terms, whether or not
such issuance, eligibility, accrual of interest or conversion had in fact
occurred as of such date) and (y) 1,350,000 Warrant Shares. The Registration
Statement shall also state that, in accordance with Rule 416 and 457 under the
Securities Act, it also covers such indeterminate number of additional shares of
Common Stock as may become issuable upon conversion of the Notes or exercise of
the Warrants to prevent dilution resulting from stock splits, or stock
dividends. The Company will use its reasonable best efforts to cause such
Registration Statement to be declared effective on a date which is no later than
the earlier of (Y) five (5) business days after oral or written notice by the
SEC that it may be declared effective or (Z) ninety (90) days after the Closing
Date.

     (ii) The aggregate number of shares registered for the Lenders in each
Registration Statement or amendment thereto shall be allocated among the Lenders
on a pro rata basis among them according to their relative Registrable Shares
included in such Registration Statement.

     (b)  PAYMENTS BY THE COMPANY.

     (i)  If the Registration Statement covering the Registrable Securities is
not filed by the SEC by the Required Filing Date, then it shall be considered to
be an event of default under the Notes and the Initial Lenders may exercise
their rights under the Notes, the Financing Agreement and the Related Documents
(as that term is defined in the Financing Agreement).

     (ii) Notwithstanding the foregoing, no event of default shall be deemed to
exist to the extent any delay in the effectiveness of the Registration Statement
occurs because of an act of, or a failure to act or to act timely by the Initial
Lender or its counsel.

     3.   OBLIGATIONS OF THE COMPANY. In connection with the registration of the
Registrable Securities, the Company shall do each of the following:

     (a)  Prepare promptly, and file with the SEC a Registration Statement with
respect to not less than the number of Registrable Securities provided in
Section 2(a) above, and thereafter use its reasonable best efforts to cause such
Registration Statement relating to Registrable Securities to promptly become
effective and keep the Registration Statement effective at all times during the
period (the "Registration Period") continuing until the earlier of

                                       3
<Page>

(i) the date when the Lenders may sell all Registrable Securities under Rule 144
without volume or other restrictions or limits or (ii) the date the Lenders no
longer own any of the Registrable Securities, which Registration Statement
(including any amendments or supplements thereto and Prospectuses, as defined
below, contained therein) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances in which they were
made, not misleading;

     (b)  Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
Prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;

     (c)  Permit a single firm of counsel designated by the Initial Lenders
(which, until further notice, shall be deemed to be Krieger & Prager LLP, Attn:
Samuel Krieger, Esq., which firm has requested to receive such notification;
each, an "Lender's Counsel") to review the Registration Statement and all
amendments and supplements thereto a reasonable period of time (but not less
than three (3) business days) prior to their filing with the SEC, and not file
any document in a form to which such counsel reasonably objects;

     (d)  Notify each Lender and the Lender's Counsel and any managing
underwriters immediately (and, in the case of (i)(A) below, not less than three
(3) business days prior to such filing) and (if requested by any such person)
confirm such notice in writing no later than one (1) business day following the
day

     (i)(A) when a Prospectus or any Prospectus supplement or post-effective
     amendment to the Registration Statement is proposed to be filed; (B)
     whenever the SEC notifies the Company whether there will be a "review" of
     such Registration Statement; (C) whenever the Company receives (or a
     representative of the Company receives on its behalf) any oral or written
     comments from the SEC in respect of a Registration Statement (copies or, in
     the case of oral comments, summaries of such comments shall be promptly
     furnished by the Company to the Lenders); and (D) with respect to the
     Registration Statement or any post-effective amendment, when the same has
     become effective;

     (ii) of any request by the SEC or any other Federal or state governmental
     authority for amendments or supplements to the Registration Statement or
     Prospectus or for additional information;

     (iii) of the issuance by the SEC of any stop order suspending the
     effectiveness of the Registration Statement covering any or all of the
     Registrable Securities or the initiation of any proceedings for that
     purpose;

                                       4
<Page>

     (iv) if at any time any of the representations or warranties of the Company
     contained in any agreement (including any underwriting agreement)
     contemplated hereby ceases to be true and correct in all material respects;

     (v) of the receipt by the Company of any notification with respect to the
     suspension of the qualification or exemption from qualification of any of
     the Registrable Securities for sale in any jurisdiction, or the initiation
     or threatening of any proceeding for such purpose; and

     (vi) of the occurrence of any event that to the best knowledge of the
     Company makes any statement made in the Registration Statement or
     Prospectus or any document incorporated or deemed to be incorporated
     therein by reference untrue in any material respect or that requires any
     revisions to the Registration Statement, Prospectus or other documents so
     that, in the case of the Registration Statement or the Prospectus, as the
     case may be, it will not contain any untrue statement of a material fact or
     omit to state any material fact required to be stated therein or necessary
     to make the statements therein, in light of the circumstances under which
     they were made, not misleading.

In addition, the Company shall furnish the Lender's Counsel with copies of all
intended written responses to the comments contemplated in clause (C) of this
Section 3(d) not later than one (1) business day in advance of the filing of
such responses with the SEC so that the Lenders shall have the opportunity to
comment thereon;

     (e)  Furnish to each Lender and to Lender's Counsel

     (i) promptly after the same is prepared and publicly distributed, filed
     with the SEC, or received by the Company, one (1) copy of the Registration
     Statement, each preliminary Prospectus and Prospectus, and each amendment
     or supplement thereto, and

     (ii) such number of copies of a Prospectus, and all amendments and
     supplements thereto and such other documents, as such Lender may reasonably
     request in order to facilitate the disposition of the Registrable
     Securities owned by such Lender;

     (f)  As promptly as practicable after becoming aware thereof, notify each
Lender of the happening of any event of which the Company has knowledge, as a
result of which the Prospectus included in the Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and use its best efforts promptly to prepare a supplement or
amendment to the Registration Statement or other appropriate filing with the SEC
to correct such untrue statement or omission, and deliver a number of copies of
such supplement or amendment to each Lender as such Lender may reasonably
request;

     (g)  As promptly as practicable after becoming aware thereof, notify each
Lender who holds Registrable Securities being sold (or, in the event of an
underwritten offering, the managing underwriters) of the issuance by the SEC of
a notice of effectiveness or any stop

                                       5
<Page>

order or other suspension of the effectiveness of the Registration Statement at
the earliest possible time;

     (h)  Notwithstanding the foregoing, if at any time or from time to time
after the date of effectiveness of the Registration Statement, the Company
notifies the Lenders in writing of the existence of a Potential Material Event,
the Lenders shall not offer or sell any Registrable Securities, or engage in any
other transaction involving or relating to the Registrable Securities, from the
time of the giving of notice with respect to a Potential Material Event until
such Lender receives written notice from the Company that such Potential
Material Event either has been disclosed to the public or no longer constitutes
a Potential Material Event; PROVIDED, HOWEVER, that the Company shall, if lawful
to do so, provide the Lender with at least two (2) business days' notice of the
existence (but not the substance of) a Potential Material Event;

     (i)  Use its reasonable efforts to secure and maintain the designation of
all the Registrable Securities covered by the Registration Statement on the
Principal Trading Market and the quotation of the Registrable Securities on the
Principal Trading Market.

     (j)  Provide a transfer agent ("Transfer Agent") and registrar, which may
be a single entity, for the Registrable Securities not later than the initial
Effective Date.

     (k)  Cooperate with the Lenders who hold Registrable Securities being
offered to facilitate the timely preparation and delivery of certificates for
the Registrable Securities to be offered pursuant to the Registration Statement
and enable such certificates for the Registrable Securities to be in such
denominations or amounts as the case may be, as the Lenders may reasonably
request, and, within five (5) business days after a Registration Statement which
includes Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel selected by the Company to deliver,
to the Transfer Agent for the Registrable Securities (with copies to the Lenders
whose Registrable Securities are included in such Registration Statement) an
appropriate instruction and opinion of such counsel, which shall include,
without limitation, directions to the Transfer Agent to issue certificates of
Registrable Securities(including certificates for Registrable Securities to be
issued after the Effective Date and replacement certificates for Registrable
Securities previously issued) without legends or other restrictions; and

     (l)  Take all other reasonable actions necessary to expedite and facilitate
disposition by the Lender of the Registrable Securities pursuant to the
Registration Statement.

     4.   OBLIGATIONS OF THE LENDERS. In connection with the registration of the
Registrable Securities, the Lenders shall have the following obligations:

     (a)  Each Lender, by such Lender's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless such Lender has notified the Company in writing of
such Lender's election to exclude all of such Lender's Registrable Securities
from the Registration Statement; and

                                       6
<Page>

     (b)  Each Lender agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3(f) or 3(g),
above, such Lender will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Lender's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 3(f) or 3(g) and, if so directed by
the Company, such Lender shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Lender's possession, of the Prospectus covering such
Registrable Securities current at the time of receipt of such notice.

     5.   EXPENSES OF REGISTRATION. All reasonable expenses (other than
underwriting discounts and commissions of the Lender) incurred in connection
with registrations, filings or qualifications pursuant to Section 3, but
including, without limitation, all registration, listing, and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company shall be borne by the Company. In addition, a fee for a single
counsel for the Lenders (as a group and not individually) equal to $2,500 for
the review of each Registration Statement and $1,500 for each post-effective
amendment to a Registration Statement, shall be borne by the Company. The
Lenders will bear all of their other expenses incurred in connection with any
Registration Statement or amendment individually.

     6.   INDEMNIFICATION. After Registrable Securities are included in a
Registration Statement under this Agreement:

     (a)  To the extent permitted by law, the Company will indemnify and hold
harmless, the Lender, the directors, if any, of such Lender, the officers, if
any, of such Lender, and each Person (each, an "Indemnified Party"), against any
losses, claims, damages, liabilities or expenses (joint or several) incurred
(collectively, "Claims") to which any of them may become subject under the
Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or otherwise, insofar as such Claims (or actions or proceedings, whether
commenced in respect thereof) arise out of or are based upon:

     (i) any untrue statement or alleged untrue statement of a material fact
     contained in the Registration Statement or any post-effective amendment
     thereof or the omission or alleged omission to state therein a material
     fact required to be stated therein or necessary to make the statements
     therein not misleading,

     (ii) any untrue statement or alleged untrue statement of a material fact
     contained in the final Prospectus (as amended or supplemented, if the
     Company files any amendment thereof or supplement thereto with the SEC) or
     the omission or alleged omission to state therein any material fact
     necessary to make the statements made therein, in the light of the
     circumstances under which the statements therein were made, not misleading
     or

     (iii) any violation or alleged violation by the Company of the Securities
     Act, the Exchange Act, any state securities law or any rule or regulation
     under the Securities Act, the Exchange Act or any state securities law

                                       7
<Page>

(the matters in the foregoing clauses (i) through (iii) being collectively
referred to as "Violations"). The Company shall reimburse the Lender, promptly
as such expenses are incurred and are due and payable, for any reasonable legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim.

     Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a) shall not

     (I) apply to any Claims arising out of or based upon a Violation which
     occurs in reliance upon and in conformity with information furnished in
     writing to the Company by or on behalf of any Indemnified Party expressly
     for use in connection with the preparation of the Registration Statement or
     any such amendment thereof or supplement thereto, if such Prospectus was
     timely made available by the Company pursuant to Section 3(c) hereof;

     (II) be available to the extent such Claim is based on a failure of the
     Lender to deliver or cause to be delivered the Prospectus made available by
     the Company; or

     (III) apply to amounts paid in settlement of any Claim if such settlement
     is effected without the prior written consent of the Company, which consent
     shall not be unreasonably withheld.

The Lender will indemnify the Company, its officers, directors and agents
(including legal counsel) (each an "Indemnified Party") against any claims
arising out of or based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company, by or on behalf
of such Lender, expressly for use in connection with the preparation of the
Registration Statement, subject to such limitations and conditions set forth in
this Section 6. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of the Indemnified Party, and shall
survive the offering and transfer of the Registrable Securities by the Lender.

     (b)  Promptly after receipt by an Indemnified Party under this Section 6 of
notice of the commencement of any action (including any governmental action),
such Indemnified Party shall, if a Claim in respect thereof is to be made
against any indemnifying party under this Section 6, deliver to the indemnifying
party a written notice of the commencement thereof and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed,
to assume control of the defense thereof with counsel mutually satisfactory to
the indemnifying party and the Indemnified Party, as the case may be; PROVIDED,
HOWEVER, that an Indemnified Party shall have the right to retain its own
counsel with the reasonable fees and expenses to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Party and the
indemnifying party would be inappropriate due to actual or potential differing
interests between such Indemnified Party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Party under this Section 6, except to the extent that the
indemnifying party is

                                       8
<Page>

prejudiced in its ability to defend such action. The indemnification required by
this Section 6 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.

     7.   CONTRIBUTION. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; PROVIDED,
HOWEVER, that

     (a) no contribution shall be made under circumstances where the maker would
     not have been liable for indemnification under the fault standards set
     forth in Section 6;

     (b) no seller of Registrable Securities guilty of fraudulent
     misrepresentation (within the meaning of Section 11(f) of the Securities
     Act) shall be entitled to contribution from any seller of Registrable
     Securities who was not guilty of such fraudulent misrepresentation; and

     (c) except where the seller has committed fraud (other than a fraud by
     reason of the information included or omitted from the Registration
     Statement as to which the Company has not given notice as contemplated
     under Section 3 hereof) or intentional misconduct, contribution by any
     seller of Registrable Securities shall be limited in amount to the net
     amount of proceeds received by such seller from the sale of such
     Registrable Securities.

     8.   REPORTS UNDER SECURITIES ACT AND EXCHANGE ACT. With a view to making
available to Lender the benefits of Rule 144 promulgated under the Securities
Act or any other similar rule or regulation of the SEC that may at any time
permit Lender to sell securities of the Company to the public without
Registration ("Rule 144"), the Company agrees to:

     (a)  make and keep public information available, as those terms are
understood and defined in Rule 144;

     (b)  file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act;

     (c)  furnish to the Lender so long as the Lender owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) if not available on the SEC's EDGAR system, a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company and (iii) such other information as may be
reasonably requested to permit the Lender to sell such securities pursuant to
Rule 144 without Registration; and

     (d)  at the request of any Lender holding Registrable Securities (a
"Holder"), give its Transfer Agent irrevocable instructions (supported by an
opinion of Company counsel, if

                                       9
<Page>

required or requested by the Transfer Agent) to the effect that, upon the
Transfer Agent's receipt from such Holder of

     (i) a certificate (a "Rule 144 Certificate") certifying (A) that the
     Holder's holding period (as determined in accordance with the provisions of
     Rule 144) for the shares of Registrable Securities which the Holder
     proposes to sell (the "Securities Being Sold") is not less than (1) year
     and (B) as to such other matters as may be appropriate in accordance with
     Rule 144 under the Securities Act, and

     (ii) an opinion of counsel acceptable to the Company (for which purposes it
     is agreed that the initial Lender's Counsel shall be deemed acceptable)
     within three (3) business days after request by the Lender that, based on
     the Rule 144 Certificate, Securities Being Sold may be sold pursuant to the
     provisions of Rule 144, even in the absence of an effective Registration
     Statement,

the Transfer Agent is to effect the transfer of the Securities Being Sold and
issue to the buyer(s) or transferee(s) thereof one or more stock certificates
representing the transferred Securities Being Sold without any restrictive
legend and without recording any restrictions on the transferability of such
shares on the Transfer Agent's books and records (except to the extent any such
legend or restriction results from facts other than the identity of the Holder,
as the seller or transferor thereof, or the status, including any relevant
legends or restrictions, of the shares of the Securities Being Sold while held
by the Holder). If the Transfer Agent reasonably requires any additional
documentation at the time of the transfer, the Company shall deliver or cause to
be delivered all such reasonable additional documentation as may be necessary to
effectuate the issuance of an unlegended certificate.

     9.   ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have the Company
register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Lenders to any transferee of the Registrable
Securities (or all or any portion of any unconverted Notes) only if:

     (a)  The securities being assigned are "restricted" as that term is defined
in Rule 144 under the Securities Act of 1933, and

     (b)  the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name and address of such
transferee or assignee, (ii) the securities with respect to which such
registration rights are being transferred or assigned, and (iii) the assignee
delivers to the Company an investment letter in which (among other things
customarily found in investment letters) the assignee accepts the terms of this
Agreement.

     10.  AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and Lenders who hold a eighty (67%) percent
interest of the Registrable Securities (as calculated by the stated value of the
Notes) then outstanding. Any amendment or waiver effected in accordance with
this Section 10 shall be binding upon each Lender and the Company.

                                       10
<Page>

     11.  MISCELLANEOUS.

     (a)  A person or entity is deemed to be a holder of Registrable Securities
whenever such person or entity owns of record such Registrable Securities. If
the Company receives conflicting instructions, notices or elections from two or
more persons or entities with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.

     (b)  Notices required or permitted to be given hereunder shall be given in
the manner contemplated by the Financing Agreement, (i) if to the Company or to
the Initial Lender, to their respective address contemplated by the Financing
Agreement, and (ii) if to any other Lender, at such address as such Lender shall
have provided in writing to the Company, or at such other address as each such
party furnishes by notice given in accordance with this Section 11(b).

     (c)  Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

     (d)  This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York for contracts to be wholly performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws. Each of the parties consents to the jurisdiction of the federal courts
whose districts encompass any part of the City of New York or the state courts
of the State of New York sitting in the City of New York in connection with any
dispute arising under this Agreement and hereby waives, to the maximum extent
permitted by law, any objection, including any objection based on FORUM NON
COVENIENS, to the bringing of any such proceeding in such jurisdictions.

     (e)  The Company and the Lender hereby waive a trial by jury in any action,
proceeding or counterclaim brought by either of the parties hereto against the
other in respect of any matter arising out of or in connection with this
Agreement or any of the other Transaction Agreements.

     (f)  If any provision of this Agreement shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.

     (g)  Subject to the requirements of Section 9 hereof, this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto.

     (h)  All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

     (i)  The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning thereof.

                                       11
<Page>

     (j)  This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.

     (k)  Neither party shall be liable to the other party hereunder for any
indirect, special, incidental or consequential damages.

     (l)  This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof. This Agreement may
be amended only by an instrument in writing signed by the party to be charged
with enforcement thereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       12
<Page>

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.

                                        COMPANY:
                                        ISONICS CORPORATION

                                        By:
                                        JAMES E. ALEXANDER, PRESIDENT

                                INITIAL LENDERS:

<Table>
<Caption>
              Name                                  Address                     Signature
              ----                                  -------                     ---------
<S>                                         <C>                                 <C>
Leonard J. Sokolow                          2458 Provence Court
SSN # ###-##-####                           Weston, Florida  33327

Mark Siegel                                 3010 N. Military Trail
SSN # ###-##-####                           Suite 300
                                            Boca Raton, Florida 33431

Stone Street Limited Partnership            c/o Canaccord Capital
An Ontario Limited Partnership              320 Bay Street, Suite 1300
                                            Toronto, Ontario M5H 4A6

Boat Basin Investors LLC                    c/o Novak Burnbaum Crystal
A St. Kitts & Nevis Limited Liability       300 East 42nd Street
Company                                     New York, New York  10017

Alpha Capital A.G.                          Pradafant 7
A Lichtenstein Corporation                  9490 Furstentums
                                            Vaduz, Lichtenstein
</Table>

                                       13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00038-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00038-of-00352.parquet"}]]