Document:

Exhibit 10.3

 

ISONICS CORPORATION

Amended and Restated

EXECUTIVE EMPLOYMENT
AGREEMENT

 

                                THIS
AGREEMENT (the “Agreement”) amends and restates that certain EXECUTIVE
EMPLOYMENT AGREEMENT (“Original Agreement”), that was originally effective February 6,
2008 (“Original Effective Date”), is made between Isonics Corporation, a
California corporation (“Employer”), and Christopher Toffales (“Executive”)
effective as of October 16, 2008. 
Collectively Employer and Executive are referred to as the “parties.”

 

RECITALS

 

                                WHEREAS,
the financial situation of the Employer has deteriorated since the Original
Effective Date.

 

                                WHEREAS,
the Employer and the Executive desire to amend the terms of the Original
Agreement to provide for the continued employment of Executive.  Executive is willing to commit himself to
continue to serve Employer, on the terms and conditions herein provided,
although this Agreement may be amended at any time by written agreement among
the parties; and

 

                                WHEREAS,
the Executive understands that the Employer’s financial condition is such that
it has only limited working capital available and, as a result, Employer may
not be able to perform all of its obligations hereunder timely or completely;
and

 

                                WHEREAS,
in order to effect the foregoing, Employer and the Executive wish to enter into
this Agreement on the terms and conditions set forth below.

 

AGREEMENT

 

                                NOW,
THEREFORE, in
consideration of the mutual covenants herein contained, and other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties agree to amend the Original Agreement as follows:

 

                                1.             Employment.

 

                                (a)           Employer hereby employs Executive,
and Executive agrees to continue to be employed as President, Chief Executive
Officer and Chairman of the Board.  
Executive will report to the Board of Directors.  Executive will devote substantially full time
and attention to achieving the purposes and discharging the responsibilities of
his positions.

 

                                (b)           Executive will comply with all rules,
policies and procedures of Employer as modified from time to time, including
without limitation, rules and procedures set forth in the Employer’s
employee manuals and handbooks, supervisor’s manuals and operating
manuals.  Executive will perform all of Executive’s responsibilities in
compliance with all applicable laws 

 

 

and will ensure that the operations that Executive manages are in
compliance with all applicable laws.

 

                                (c)           Notwithstanding anything to the
contrary contained in this Agreement, during the Term of employment, Executive
may: (i) engage, directly or indirectly, in other businesses and ventures,
including providing services and otherwise being affiliated with (A) SenseIt
Corp., a Delaware corporation in which Employer is a stockholder (“SenseIt”),  (B) 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 Employer) is the sole
member (“CTC Aero”), and (C) other persons or entities (and their
respective affiliates) with whom Executive or 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 a director of,
or provide consulting or other services for, any other person or entity that is
not directly competitive with Employer so long as such activities do not
interfere with Executive’s duties and responsibilities under this Agreement;
and (iii) devote time, attention and energies to reasonable community
activities and public affairs, provided such community activities and public
affairs efforts shall not conflict with the amount of time required to be
devoted to Employer under this Agreement (the foregoing activities are
collectively referred to as “Outside Activities”).  Neither Employer nor any of Employer’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 Outside Activities or in any income or revenues
derived from any of such businesses, ventures, equity interests, business or
financial relationships or arrangements, investments or activities relating to
Outside Activities.

 

                                2.             Prior Agreements.  The Executive and Employer
agree that all prior employment agreements and understandings between the Executive
and Employer related to Executive’s employment be and hereby are cancelled and
are of no further force or effect. 
Without limitation of the foregoing, subject to Section 4.4 below,
that certain employment
agreements dated February 6, 2008 and the February 16, 2007, and any
and all other understandings between the Executive and Employer
related to Executive’s employment be and hereby are cancelled and are of no
further force or effect.

 

                                3.             Term of Employment.  The term of employment (“Term”) shall be for
6 months or, if earlier, the sale by the Employer directly or indirectly
(through a sale or a transfer in lieu of foreclosure or other business
combination) of assets (individually or as a group, at one time or over a
period of time) for a total resulting in Cash Proceeds of more than $5,000,000
at which point the term of employment will automatically revert to month to
month.  As used throughout this
Agreement, “Cash Proceeds” shall include the forgiveness of indebtedness and be
calculated before the deduction of any brokerage or other selling costs.

 

                                4.             Compensation. 
For the duration of Executive’s employment hereunder, the Executive will
be entitled to compensation that will be computed and paid pursuant to the
following subsections.

 

 

                                4.1          Base Salary. 
Employer will pay to Executive a base salary (“Base Salary”) at an
annual rate of Two Hundred Fifty Thousand Dollars ($250,000), subject to
withholdings, ratably in accordance with Employer’s policies, so long as
Executive remains employed.  Executive’s
Base Salary will be reviewed annually during the term of Executive’s employment
by the Compensation Committee or the Board of Directors of Employer and may be
increased based on such review. 
Effective October 16, 2008, the Executive will defer 25% of the
salary payment otherwise due ($5,208.33 per month) (the “Deferred
Compensation”) until the Employer directly or indirectly (through a sale or
a transfer in lieu of foreclosure or other business combination) of assets
(individually or as a group, at one time or over a period of time) for a total
resulting in Cash Proceeds of more than $3,000,000, at which time the Employer
will pay the entire amount of the Deferred Compensation and the deferral will
cease.  The deferral will also cease if
the Employer appoints a third director to its Board.

 

                                4.2          Bonus. 
It is
unlikely that the Employer will pay the Executive any bonus.

 

                                4.3          Equity-based Compensation.  The Executive shall be
entitled to participate in all equity-based compensation plans offered by Employer
to its employees and as determined by the Employer’s board of directors.  There is no commitment by the Employer to
provide the Executive with any equity-based compensation beyond that
compensation that the Executive possesses at the current time.

 

                                4.4          Previously-Accrued
Paid Time Off (“PTO”).  Through
October 15, 2008, the Executive has accrued unused PTO pursuant to his
earlier employment relationships, totaling in value $19,230.40.  The Employer will pay the Executive the
amount of this PTO and all other accrued PTO on the earlier of the sale,
directly or indirectly, by the Employer of assets (through a sale or a transfer
in lieu of foreclosure or other business combination) (individually or
as a group, at one time or over a period of time) for Cash Proceeds of more than $3,000,000 or the termination by the
Employer or the Executive of this Agreement (whether or not such termination is
as a result of the Employer making the Severance Payment contemplated by Section 5.4
hereof).

 

                                5.             Other Benefits.

 

                                5.1          Certain
Benefits.  The Executive will
be eligible to participate in all employee benefit programs established by
Employer that are applicable to management personnel on a basis commensurate
with Executive’s position and in accordance with Employer’s policies from time
to time, including, but not limited to, life insurance, disability insurance,
retirement plans, profit-sharing plans, savings plans, stock option plans and
other employee benefit plans and policies, but nothing herein shall require the
adoption or maintenance of any such plan. 
Notwithstanding the foregoing, Employer shall provide full medical and
dental insurance coverage for the Executive as currently provided by
Administaff (or its successor) on the same terms as are then generally available
to the Company’s senior executive officers, at no cost to the Executive.

 

 

                                5.2          Paid Time Off and Expenses. 
For the duration of Executive’s employment hereunder, Executive will be
provided such PTO (which includes vacations and sick leave) as Employer makes
available to its management level employees generally as described in, and
subject to the provisions of, Employer’s employee manual. Employer will
reimburse Executive in accordance with company policies and procedures for
reasonable expenses necessarily incurred in the performance of duties hereunder
against appropriate receipts and vouchers indicating the specific business
purpose for each such expenditure.

 

                                5.3          Directors and
Officers Insurance.  During
the term of this Agreement and for a three year period thereafter, and subject
to the availability of adequate financing, Employer shall use its best efforts
to 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 Employer in the minimum
benefit amount to be determined in good faith by the Board of Directors, and
provided that all officers and directors are treated alike.

 

                                5.4          Severance Pay.  Upon the sale by the Employer directly or
indirectly (through a sale or a transfer in lieu of foreclosure or other
business combination) of assets (individually or as a group, at one time or
over a period of time), the Executive will have earned severance pay (the “Severance
Payment”) to be paid to the Executive (directly from closing and not through
the Employer, if practicable) as follows:

 

                (a)           If such assets are sold during the
term of this Agreement for a total resulting in Cash Proceeds of less than
$5,000,000, the Executive will be entitled to no Severance Payment.

 

                (b)           If such assets are sold for a total
resulting in Cash Proceeds of at least $5,000,000 in the aggregate but less
than $6,000,000 (i) during the term of this Agreement or (ii) if the
Employer terminates this Agreement (other than a termination for Cause), within
six months of the date hereof, the Executive will be entitled to a Severance
Payment of six months’ salary ($125,000) upon termination of this Agreement.

 

                (b)           If such assets are sold for a total
resulting in Cash Proceeds at least $6,000,000 in the aggregate but less than
$7,500,000 (i) during the term of this Agreement or (ii) if the
Employer terminates this Agreement (other than a termination for Cause), within
six months of the date hereof, the Executive will be entitled to a Severance
Payment of nine months’ salary ($192,500) upon termination of this Agreement.

 

                (c)           If such assets are sold for a total
resulting in Cash Proceeds that exceed $7,500,000 (i) during the term of
this Agreement or (ii) if the Employer terminates this Agreement (other
than a termination for Cause), within six months of the date hereof, the
Executive will be entitled to nine months’ salary ($192,500) plus an additional
one months’ salary ($22,500) for each $400,000 of Cash Proceeds received in
excess of $7,500,000.  No amount will be
earned for amounts less than full multiples of $400,000 and in no event will
the amount of the Severance Payment exceed $400,000.

 

 

                                6.             Termination Or Discharge.

 

                                6.1          For Cause.  Employer will have the right to immediately terminate
Executive’s services and this Agreement for “Cause.”  For the purposes of this Agreement, the term “for
cause” shall mean:

 

                                (a)           any act of fraud or embezzlement
materially adversely affecting the financial, market, reputation or other
interests of Employer,

 

                                (b)           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,

 

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

 

                                (d)           gross negligence, incompetence or willful misconduct in the
performance by the Executive of his duties,

 

                                (e)           refusal by the Executive, without
proper reason, to perform his duties,

 

                                (f)            the Executive willfully engaging in
conduct that is materially injurious to Employer or its subsidiaries
(monetarily or otherwise),

 

                                (g)           unauthorized disclosure by the
Executive of Confidential Information, as such term is defined in Section 10
of this Agreement, or the unauthorized disclosure of proprietary material
information of Employer or an affiliate), or

 

                                (h)           Employer’s reasonable belief supported by a legal
opinion that Executive has engaged in a violation of any statute, rule or
regulation, any of which in the judgment of Employer is harmful to Employer’s
business or to Employer’s reputation.

 

                                Upon
termination of Executive’s employment hereunder for Cause, Executive will have
no rights to any unvested benefits or any other compensation or payments
(including without limitation the Severance Payment) after the termination
date.  Upon a termination of this
Agreement pursuant to this Section 6.1, the Employer shall pay to the
Executive compensation and benefits through the Date of Termination.

 

                                6.2          Termination Other
Than For Cause.  The Employer
or the Executive may terminate the Executive’s employment hereunder without any
breach of this Agreement upon not less than two weeks’ notice given to the
other party in writing.  Upon a
termination of this Agreement by the Employer pursuant to this Section 6.2
the Employer shall pay to the Executive all accrued PTO in one lump sum payment
upon such termination.  Severance
Payments, if any, will be paid in accordance with Section 5.4 hereof.  If the Executive terminates this Agreement
for any reason other than a breach of this Agreement by the Employer, he waives

 

 

all rights to any severance payment
(including the Severance Payment) that would otherwise be due to the
Executive.  If the Executive terminates
this Agreement for any reason other than a breach of this Agreement by the
Employer, Employer will pay PTO as contemplated in Section 4.4, above.

 

                                6.3          Notice of Termination. 
Any termination of the Executive’s employment by the Employer or by the
Executive (other than termination pursuant to Section 6.2(b) above)
shall be communicated by written Notice of Termination to the other party.

 

                                7.             No Termination by Executive due to
Change of Control.  The Executive
shall have no further right (beyond that provided in Section 6.2, above)
to terminate this Agreement upon the occurrence of any change of control.

 

                                8.             Covenant Not To
Compete.

 

(a)           Except as otherwise provided for in this Agreement, during
the Term of this Agreement and, if this Agreement is terminated for any reason
during the Term, for one year following such date of termination (the “Termination
Period”), the Executive shall not, directly or indirectly, compete with respect
to any Semiconductor or Guarded Security services or products of Employer which
are either offered or are being developed by Employer as of the date of
termination; or, without limiting the generality of the foregoing, be or
become, or agree to be or become, interested in or associated with, in any capacity
(whether as a partner, shareholder, owner, officer, director, executive,
principal, agent, creditor, trustee, consultant, co-venturer or otherwise), any
individual, corporation, firm, association, partnership, joint venture or other
business entity, which competes with respect to any services or products of
Employer which are either offered or are being developed by Employer as of the
date of termination; provided, however, that the Executive may own, solely as
an investment, not more than 9.99% of any class of securities of any
corporation in competition with Isonics whose securities are traded on any
national securities exchange in the United States of America.

 

                                (b)           Employer and Executive agree to the
following: this provision does not impose an undue hardship on Executive and is
not injurious to the public; this provision is necessary to protect the
business of Employer and its affiliates; the nature of Executive’s
responsibilities with Employer under this Agreement require Executive to have
access to Confidential Information, as such term is defined in Section 10
of this Agreement, which is valuable and confidential to all of the business;
the scope of this Section 8 is reasonable in terms of length of time and
geographic scope; and adequate consideration supports this Section 8,
including consideration herein.

 

                                (c)           In the event that any of the
covenants in this Section 8 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of extending for too great a period
of time or by reason of being too extensive in any other respect, it shall be
interpreted to extend over the maximum period of time for which it may be
enforceable and to the maximum extent in all other respects as to which it may
be enforceable, and enforced as so interpreted, all as determined by such court
in such action.  Executive acknowledges
the uncertainty of the law 

 

 

in
this respect and expressly stipulates that this Agreement is to be given the
construction that renders its provisions valid and enforceable to the maximum
extent (not exceeding its express terms) possible under applicable law.

 

                                9.             Non-solicitation.  During the term of this
Agreement and for a period of one year thereafter, the Executive shall not,
directly or indirectly, (i) induce or attempt to influence any employee of
Isonics to leave its employ, (ii) aid or agree to aid any competitor,
customer or supplier of Isonics in any attempt to hire any person who is an
employee of Isonics, or (iii) induce or attempt to influence any person or
business entity who was a customer or supplier of Isonics during any portion of
said period to transact business with a competitor of any aspect of Isonics’
business.

 

                                10.          Confidentiality.

 

                                (a)           Executive acknowledges that, during
the course of Executive’s employment with Employer, Executive may have
developed Confidential Information (as defined below) for Employer, and
Executive may have learned of Confidential Information developed or owned by
Employer or its affiliates or entrusted to Employer or its affiliates by
others.  Executive agrees that Executive
will not, directly or indirectly, use any Confidential Information or disclose
it to any other person or entity, except as otherwise required by law.

 

                                (b)           “Confidential Information” means any
and all information relating to Employer that is not generally known by the
public or others with whom Employer does (or plans to) compete or do business,
as well as comparable information relating to any of Employer’s
affiliates.  Confidential Information includes,
but is not limited to, information relating to the terms of this Agreement, as
well as Employer’s business, technology, practices, products, marketing, sales,
services, finances, strategic opportunities, internal strategies, legal affairs
(including pending litigation), the terms of business relationships not yet
publicly known, intellectual property and the filing or pendency of patent
applications.  Confidential Information
also includes, but is not limited to, comparable information that Employer may
receive or has received belonging to customers, suppliers, consultants and
others who do business with Employer, or any of Employer’s affiliates.

 

                                (c)           “Confidential Information” does not
include any information that is: (i) shown to have been developed
independently by Executive prior to Executive’s employment with Employer; or (ii) required
by a judicial tribunal or similar governmental body to be disclosed under law
(provided that Executive have first promptly notified Employer of such
disclosure requirement and have cooperated fully with Employer (at Employer’s
expense) in exhausting all appeals

 

                                11.          Property of Employer.  Upon any termination from Employer, Executive agrees
to return to Employer any and all records, files, notes, memoranda, reports,
work product and similar items, and any manuals, drawings, sketches, plans,
tape recordings, computer programs, disks, cassettes and other physical
representations of any information, relating to Employer, or any of its
affiliates, whether or not constituting confidential information; and 

 

 

Executive agrees to return to Employer any other property, including
but not limited to a laptop computer, belonging to Employer, no later than the
date of Executive’s termination from employment for any reason, and Executive
further agrees not to retain copies of any Confidential Information.  Upon termination of this Agreement or
employment hereunder, Executive who has been using a computer owned by the
Employer may purchase said computer from the Employer for fair market value
provided the information in the computer is backed up in the Employer’s data
files and all Confidential Information has been deleted from the computer in a
manner reasonably satisfactory to the remaining senior officers of the
Employer.  The Executive will pay the
Employer the fair market value of such computer as may be reasonably determined
by the Employer.

 

                                12.          Section 280G
Safe Harbor Cap.  In the event it shall be determined that
any payment or distribution or any part thereof of any type to or for the
benefit of Executive whether pursuant to the Agreement or any other agreement
between Executive and the Employer, or any person or entity that acquires
ownership or effective control the Employer or ownership of a substantial
portion of the Employer’s assets (within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended, and the regulations thereunder
(the “Code”)) whether paid or payable or distributed or distributable pursuant
to the terms of the Agreement or any other agreement, (the “Total Payments”),
is or will be subject to the excise tax imposed by Section 4999 of the
Code (the “Excise Tax”), then the Total Payments shall be reduced to the
maximum amount that could be paid to Executive without giving rise to the Excise
Tax (the “Safe Harbor Cap”), if the net after-tax payment to Executive after
reducing Executive’s Total Payments to the Safe Harbor Cap is greater than the
net after-tax (including the Excise Tax) payment to Executive without such
reduction.  The reduction of the amounts payable hereunder, if applicable,
shall be made by reducing first the payment made pursuant to the Agreement and
then to any other agreement that triggers such Excise Tax, unless an
alternative method of reduction is elected by Executive.  All mathematical
determinations, and all determinations as to whether any of the Total Payments
are “parachute payments” (within the meaning of Section 280G of the Code),
that are required to be made under this Section 12, including
determinations as to whether the Total Payments to Executive shall be reduced
to the Safe Harbor Cap and the assumptions to be utilized in arriving at such
determinations, shall be made by a nationally recognized accounting firm
selected by the Employer (the “Accounting Firm”).  If the Accountant
determines that the Total Payments to Executive shall be reduced to the Safe
Harbor Cap (the “Cutback Payment”) and it is established pursuant to a final
determination of a court or an Internal Revenue Service (the “IRS”) proceeding
which has been finally and conclusively resolved, that the Cutback Payment is
in excess of the limitations provided in Section 6(e) (hereinafter
referred to as an “Excess Payment”), such Excess Payment shall be deemed for
all purposes to be an overpayment to Executive made on the date such Executive
received the Excess Payment and Executive shall repay the Excess Payment to the
Employer on demand; provided, however, if Executive shall be required to pay an
Excise Tax by reason of receiving such Excess Payment (regardless of the
obligation to repay the Employer), Executive shall not be required to repay the
Excess Payment (if Executive has already repaid such amount, the Employer shall
refund the amount to the Executive), and the Employer shall pay Executive an
amount equal to the difference between the Total Payments and the Shortfall
Cap.

 

 

                                13.          Remedies.  Notwithstanding other provisions
of this Agreement regarding dispute resolution, Executive agrees that Executive’s
violation of any of Sections 8, 9, 10 or 11 of this Agreement would cause
Employer irreparable harm that would not be adequately compensated by monetary
damages and that an injunction may be granted by any court or courts having
jurisdiction, restraining Executive from violation of the terms of this
Agreement, upon any breach or threatened breach of Executive of the obligations
set forth in any of the Sections 8, 9, 10 or 11.  The preceding sentence shall not be construed
to limit Employer from any other relief or damages to which it may be entitled
as a result of Executive’s breach of any provision of this Agreement, including
Sections 8, 9, 10 or 11.  Executive also
agrees that a violation of any of Sections 8, 9, 10 or 11 would entitle
Employer, in addition to all other remedies available at law or equity, to
recover from Executive any and all funds, including, without limitation, wages,
salary and profits, which will be held by Executive in constructive trust for
Employer, received by Executive in connection with such violation.

 

                                14.          Indemnification.

 

                                (a)           Employer agrees
to indemnify Executive and hold Executive harmless from and 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 California Corporation Code,
and by the Articles of Incorporation and Bylaws of Employer, as may be amended from time to time, and
pursuant to any indemnification agreement between Executive and Employer.

 

                                (b)           The indemnification provision of this
Section 14 shall be in addition to any liability which Employer 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 Employer with
reasonable promptness.  Executive shall
have the right to retain counsel of Executive’s own choice to represent
Executive and Employer 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 Employer and any counsel designated by Employer.  Employer shall be liable for any settlement of any
claim against Executive made with Employer’s written consent, which consent shall not be unreasonably withheld or
delayed, to the fullest extent permitted by the California General Corporation
Law and the Certificate of Incorporation and Bylaws of Employer, as may be amended from time to time.

 

                                15.          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 the 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.

 

                                16.          Fees. 
Unless otherwise agreed, the prevailing party will be entitled to its
costs and attorneys’ fees incurred in any litigation or dispute relating to the
interpretation or enforcement of this Agreement.

 

                                17.          Professional Fees and
Costs.  Each of the Parties
shall be responsible to pay his or its respective attorneys’ and other
professional fees and costs incurred in connection with the negotiation and
drafting of this Agreement.

 

                                18.          Disclosure.  Executive agrees fully and completely to
reveal the terms of this Agreement to any future employer or potential employer
of Executive and authorizes Employer, at its election, to make such disclosure.

 

                                19.          Representation of
Executive.  Executive
represents and warrants to Employer that Executive is free to enter into this
Agreement and has no contract, commitment, arrangement or understanding to or
with any party that restrains or is in conflict with Executive’s performance of
the covenants, services and duties provided for in this Agreement.  Executive agrees to indemnify Employer and to
hold it harmless against any and all liabilities or claims arising out of any
unauthorized act or acts by Executive that, the foregoing representation and
warranty to the contrary notwithstanding, are in violation, or constitute a
breach, of any such contract, commitment, arrangement or understanding.  Executive further represents and warrants to Employer
that Executive has consulted with his legal, tax, accounting, and investment
advisors with respect to the advisability of entering into this Agreement to
the extent that the Executive has determined such consultation to be necessary
or appropriate.

 

                                20.          Assignability.  During
Executive’s employment, this Agreement may not be assigned by either party
without the written consent of the other; provided, however, that Employer may
assign its rights and obligations under this Agreement without Executive’s
consent to a successor by sale, merger or liquidation, if such successor
carries on the Employer’s business substantially in the form in which it is
being conducted at the time of the sale, merger or liquidation.  This Agreement is binding upon Executive,
Executive’s heirs, personal representatives and permitted assigns and on
Employer, its successors and assigns.

 

 

                                21.          Notices.  For purposes of this Agreement, notices and
all other communications provided for herein shall be in writing and shall be deemed
to have been duly given when personally delivered or when mailed by United
States registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

 

	
  IF TO EMPLOYER TO:

  	
   

  	
  Isonics Corporation 

  535 8th Avenue, 3rd Floor  

  New York, NY 10018-2491

  
	
   

  	
   

  	
   

  
	
  IF TO EXECUTIVE TO:

  	
   

  	
  Christopher Toffales 

  21 Motts Hollow Road 

  Port Jefferson, New York 11777

  

 

                                22.          Severability.  If any
provision of this Agreement or compliance by any of the parties with any
provision of this Agreement constitutes a violation of any law, or is or
becomes unenforceable or void, then such provision, to the extent only that it
is in violation of law, unenforceable or void, shall be deemed modified to the
extent necessary so that it is no longer in violation of law, unenforceable or
void, and such provision will be enforced to the fullest extent permitted by
law.  If such modification is not
possible, said provision, to the extent that it is in violation of law,
unenforceable or void, shall be deemed severable from the remaining provisions
of this Agreement, which provisions will remain binding on the parties.

 

                                23.          Waivers. 
No failure on the part of either party to exercise, and no delay in
exercising, any right or remedy hereunder will operate as a waiver thereof; nor
will any single or partial waiver of a breach of any provision of this
Agreement operate or be construed as a waiver of any subsequent breach; nor
will any single or partial exercise of any right or remedy hereunder preclude
any other or further exercise thereof or the exercise of any other right or
remedy granted hereby or by law.

 

                                24.          Governing Law.  The validity, construction and
performance of this Agreement shall be governed by the laws of the State of New
York without regard to the conflicts of law provisions of such laws.

 

                                25.          Entire Agreement. 
This instrument contains the entire agreement of the parties with
respect to the relationship between Executive and Employer and supersedes all
prior agreements and understandings, and there are no other representations or
agreements other than as stated in this Agreement related to the terms and
conditions of Executive’s employment. 
This Agreement may be changed only by an agreement in writing signed by
the party against whom enforcement of any waiver, change, modification,
extension or discharge is sought, and any such modification will be signed by
the Chief Executive Officer.

 

                                26.          Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

 

 

                                IN WITNESS WHEREOF, the parties have duly signed and
delivered this Agreement as of the day and year first above written.

 

 

 

	
  EMPLOYER:

  	
   

  	
  EXECUTIVE:

  	
   

  
	
  ISONICS CORPORATION

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
  /s/

  	
   

  
	
  George O’Leary,
  CFO

  	
   

  	
  Christopher ToffalesExhibit 4.4

 

Amendment and Waiver to
Registration Rights Agreement

 

This Amendment and Waiver to Registration Rights Agreement is entered
into as of November 3, 2008 (this “Amendment”), by and among World Heart
Corporation, a Canadian corporation (the “Company”), its wholly-owned
subsidiary World Heart Inc. (“WHI”), and the undersigned Investors.  Capitalized terms used herein and not
otherwise defined have the meanings given them in the Agreement (as defined
below).

 

WHEREAS, the Company and certain Investors entered into that certain
Registration Rights Agreement dated as of July 31, 2008 (the “Agreement”);

 

WHEREAS, Section 7(a) of the Agreement provides that the
Agreement may be amended, and the Company may omit to perform any act therein
required to be performed by it, upon with the written consent of the Company
and the Required Investors;

 

WHEREAS, Section 2(a)(i) of the Agreement provides that no
later than the earlier of (i) thirty (30) days after the Shareholders
Meeting and (ii) September 30, 2008 (the earlier of such dates, the “Filing
Deadline”) the Company shall prepare and file with the SEC one Registration
Statement covering the resale of the Registrable Securities;

 

WHEREAS, Section 2(a)(i) of the Agreement provides that if a
Registration Statement covering the Registrable Securities is not filed with
the SEC on or prior to the Filing Deadline, the Company will pay certain
penalties to each Investor; and

 

WHEREAS, the undersigned Investors comprising the Required Investors
desire to amend the Agreement to extend the Filing Deadline, to make certain
other amendments as provided herein, and to waive certain obligations of the
Company to pay damages to the Investors pursuant to Section 2(a)(i) of
the Registration Rights Agreement solely as provided herein.

 

NOW,
THEREFORE, for good and valuable
consideration mutually given, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.                                       The first sentence of Section 2(a)(i) of the Agreement is
hereby amended and restated in its entirety as follows:

 

“Promptly
following the closing of the purchase and sale of the securities contemplated
by the Recapitalization Agreement (the “Closing Date”) but no later than thirty
(30) days after the Shareholders Meeting (the “Filing Deadline”), the Company
shall prepare and file with the SEC one Registration Statement on Form S-3
(or, if the Company is not then eligible to use Form S-3 to register the
resale of the Registrable Securities, on such form of registration statement as
is then available to effect a registration for resale of the

 

 

Registrable
Securities), covering the resale of the Registrable Securities.”

 

2.                                       The third sentence of Section 2(c)(i) of the Agreement is
hereby amended and restated in its entirety as follows:

 

“If (A) a
Registration Statement covering the Registrable Securities is not declared
effective by the SEC prior to the earliest of (i) five (5) Business
Days after the SEC shall have informed the Company that no review of the
Registration Statement will be made or that the SEC has no further comments on
the Registration Statement or (ii) the 90th day after the
Filing Deadline, or (B) after a Registration Statement has been declared
effective by the SEC, sales cannot be made pursuant to such Registration
Statement for any reason (including without limitation by reason of a stop
order, or the Company’s failure to update the Registration Statement), but
excluding any Allowed Delay (as defined below) or the inability of any Investor
to sell the Registrable Securities covered thereby due to market conditions,
then the Company will make payments to each Investor, as liquidated damages and
not as a penalty, in an amount equal to such Investor’s Liquidated Damages
Amount for each 30- day period (or pro rata for any portion thereof) following
the date by which such Registration Statement should have been effective (the “Blackout
Period”).”

 

3.                                       Pursuant to Section 7(a) of the Agreement, the undersigned
hereby (i) consents to the failure by the Company to prepare and file with
the SEC, not later than September 30, 2008, a Registration Statement
covering the resale of the Registrable Securities, and (ii) waives, on
behalf of itself and each other Investor, any damages to which it or any other
Investor might be entitled pursuant to Section 2(a)(i) of the
Agreement or otherwise with regard to such failure.  This consent shall be effective for the
purposes set forth herein and shall not be deemed to be a consent to any waiver
of any other term of the Agreement, or otherwise prejudice any right or remedy
which the Investors may now have or may have in the future under or in
connection with the Agreement.

 

4.                                       Except as otherwise amended by this Amendment, the Agreement shall
continue in full force and effect.

 

[Remainder of page intentionally
left blank.]

 

2

 

IN WITNESS WHEREOF, the parties have executed this Amendment and Waiver
or caused their duly authorized officers to execute this Amendment and Waiver
as of the date first written above.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
  WORLD HEART
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Jal S. Jassawalla

  
	
   

  	
  Name:
  Jal S. Jassawalla

  
	
   

  	
  Title:
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WORLD HEART
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
      /s/ Jal S. Jassawalla

  
	
   

  	
  Name:
  Jal S. Jassawalla

  
	
   

  	
  Title:
  President

  

 

 

[SIGNATURE PAGE TO AMENDMENT AND WAIVER]

 

 

	
   

  	
  INVESTORS:

  
	
   

  	
   

  
	
   

  	
  ABIOMED,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
      /s/ Michael R. Minogue

  
	
   

  	
  Name:
  Michael R. Minogue

  
	
   

  	
  Title: CEO,
  President and Chairman of the Board

  

 

 

[SIGNATURE PAGE TO AMENDMENT AND WAIVER]

 

 

	
   

  	
  INVESTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
  SPECIAL
  SITUATIONS FUND III QP, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Austin W. Marxe

  
	
   

  	
  Name:
  Austin W. Marxe

  
	
   

  	
  Title:
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  SPECIAL
  SITUATIONS CAYMAN FUND, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
      /s/ Austin W. Marxe

  
	
   

  	
  Name:
  Austin W. Marxe

  
	
   

  	
  Title:
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  SPECIAL
  SITUATIONS PRIVATE EQUITY

  FUND, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
      /s/ Austin W. Marxe

  
	
   

  	
  Name:
  Austin W. Marxe

  
	
   

  	
  Title:
  General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SPECIAL
  SITUATIONS LIFE SCIENCES FUND,

  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Austin W. Marxe

  
	
   

  	
  Name:
  Austin W. Marxe

  
	
   

  	
  Title:
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
          /s/ Austin W. Marxe

  
	
   

  	
   

  	
          Austin W. Marxe

  

 

 

[SIGNATURE PAGE TO AMENDMENT AND WAIVER]

 

 

	
   

  	
  INVESTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
  VENROCK
  PARTNERS V, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  by its
  General Partner,

  
	
   

  	
  Venrock
  Partners Management V, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anders Hove

  
	
   

  	
  Name:
  Anders Hove

  
	
   

  	
  Title:
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
  VENROCK
  ASSOCIATES V, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  by its
  General Partner,

  
	
   

  	
  Venrock
  Management V LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Anders Hove

  
	
   

  	
  Name:
  Anders Hove

  
	
   

  	
  Title:
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VENROCK ENTRPRENEURS FUND V, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  by its
  General Partner,

  
	
   

  	
  VEF
  Management V LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Anders Hove

  
	
   

  	
  Name:
  Anders Hove

  
	
   

  	
  Title:
  Member

  

 

 

[SIGNATURE PAGE TO AMENDMENT AND WAIVER]

 

 

	
   

  	
  INVESTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
  NEW
  LEAF VENTURES II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
      New Leaf Venture Associates II, L.P.

  
	
   

  	
   

  	
      Its:    General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
      New Leaf Venture Management II, L.L.C.

  
	
   

  	
   

  	
      Its:    General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Jeani Delgardelle

  
	
   

  	
  Name:
  Jeani Delagardelle

  
	
   

  	
  Title:
  Managing Director

  

 

 

[SIGNATURE PAGE TO
AMENDMENT AND WAIVER]

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