AND

EXHIBIT 10.32

XXXXXXXXX-XXXXXX (15 USC 3710)
COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT
MASTER TERMS AND CONDITIONS
(hereinafter "CRADA Terms") NO. BG9938900

BETWEEN Xxxxxx Xxxxxxx Xxxxxxxx Berkeley National Laboratory
(hereinafter "Laboratory")

AND

Isonics Corporation
United States Industry Coalition Member Company(s)
(hereinafter "Participant")

both being hereinafter jointly referred to as the "Parties."

The U.S. Department of Energy (DOE) is the agency responsible for the
federally-owned facility known as Laboratory managed and operated under a prime
contract with DOE, designated Xxxxxxxx Xx. XX-XX00-00XX00000. This instrument
constitutes the Master Terms and Conditions for use in a series of Cooperative
Research and Development Agreements (CRADA) initiated by individual Project
Letter Agreements (PLA) under the Initiatives for Proliferation Prevention (IPP)
Program of the DOE, the United States Industry Coalition, Inc. (USIC), and
cooperating New Independent States (NIS) of the Former Soviet Union (FSU). When
these "CRADA Terms" are combined with an approved PLA, the instrument
constitutes a CRADA under the authority of the Xxxxxxxxx-Xxxxxx Technology
Innovation Act of 1980, as amended (15 U.S.C. 3710 et seq).

ARTICLE I. DEFINITIONS

A. "Government" means the United States of America and agencies thereof.

B. "DOE" means the Department of Energy, an agency of the Government.

C. "Contracting Officer" means the DOE employee administering the Laboratory's
DOE Contract.

D. "Generated Information" means information produced in the performance of
this CRADA.

E. "Proprietary Information" means information which is developed at private
expense outside of this CRADA, is marked as Proprietary Information, and
embodies (I) trade secrets or (ii) commercial or financial information which is
privileged or confidential under the Freedom of Information Act (5 USC 552
(b)(4)).

F. "Protected CRADA Information" means Generated Information which is marked
as being Protected CRADA Information by a Party to this CRADA and which would
have been Proprietary Information had it been obtained from a non-federal
entity.

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G. "Subject Invention" means any invention of the Laboratory or Participant
conceived or first actually reduced to practice in the performance of work under
this CRADA.

H. "Intellectual Property" means patents, Trademarks, copyrights, Mask Works,
and other forms of comparable property rights protected by Federal law and other
foreign counterparts.

I. "Trademark" means a distinctive xxxx, symbol, or emblem used in commerce by
a producer or manufacturer to identify and distinguish their goods or services
from those of others.

J. "Mask Work" means a series of related images, however fixed or encoded,
having or representing the predetermined, three-dimensional pattern of metallic,
insulating, or semiconductor material present or removed from the layers of a
semiconductor chip product; and in which series the relation of the images to
one another is that each image has the pattern of the surface of one form of the
semiconductor chip product. (17 USC 901(a)(2))

K. "Participating NIS Institute" means the scientific institute of the New
Independent State of the Former Soviet Union that is performing work in support
of this CRADA under subcontract with the Laboratory.

L. "Participating NIS Institute Invention" means any invention of the
Participating NIS Institute conceived or first actually reduced to practice in
the performance of work under its subcontract with the Laboratory in support of
this CRADA.

ARTICLE II. STATEMENT OF WORK

Appendix A, Statement of Work, is hereby incorporated into this CRADA by
reference.

ARTICLE III. TERM, FUNDING AND COSTS

A. The effective date of this CRADA shall be the latter date of (1) the date
on which the Project Letter Agreement (PLA) incorporating the Terms and
Conditions of this instrument is signed by the last of the Parties hereto or (2)
the date on which it is approved by DOE. The work to be performed under this
CRADA shall be completed within the time specified in the PLA Statement of Work
(SOW).

B. The cost contribution of the Participant unless otherwise approved by the
DOE will be at least fifty percent (50%) of the total cost of the project.

The estimated contribution by the Participant and the Government for each
cooperative research project shall be as set forth in the specific PLA entered
into under this CRADA, subject to available funding.

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C. Neither Party shall have an obligation to continue or complete performance
of its work at a cost in excess of its estimated cost as contained in paragraph
B of this Article, including any subsequent amendment.

D. Each Party agrees to provide at least thirty (30) days notice to the other
Party if the actual cost to complete performance will exceed the estimated cost.

ARTICLE III.1 SPECIAL PAYMENT TERMS AND CONDITIONS

An advance payment is required on the funds-in contribution made by the
Participant under any PLA entered into hereunder. The terms and conditions of
the advance payment will be set forth in the PLA.

ARTICLE IV. PERSONAL PROPERTY

All tangible personal property produced or acquired under this CRADA shall
become the property of the Participant or the Government depending upon whose
funds were used to obtain it. Such property will be identified in the Statement
of Work, attached to the individual PLA. Personal property shall be disposed of
as directed by the owner at the owner's expense. All jointly funded property
shall be owned by the Government.

ARTICLE V. DISCLAIMER

THE GOVERNMENT, THE PARTICIPANT, THE PARTICIPATING NIS INSTITUTE, AND THE
LABORATORY MAKE NO EXPRESS OR IMPLIED WARRANTY AS TO THE CONDITIONS OF THE
RESEARCH OR ANY INTELLECTUAL PROPERTY, GENERATED INFORMATION, OR PRODUCT MADE OR
DEVELOPED UNDER THIS CRADA, OR THE OWNERSHIP, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OF THE RESEARCH OR RESULTING PRODUCT. NEITHER THE GOVERNMENT,
THE PARTICIPANT, THE PARTICIPATING NIS INSTITUTE, NOR THE LABORATORY SHALL BE
LIABLE FOR SPECIAL, CONSEQUENTIAL, OR INCIDENTAL DAMAGES ATTRIBUTED TO SUCH
RESEARCH OR RESULTING PRODUCT, INTELLECTUAL PROPERTY, GENERATED INFORMATION, OR
PRODUCT MADE OR DEVELOPED UNDER THIS CRADA.

ARTICLE VI. PRODUCT LIABILITY

Except for any liability resulting from any negligent acts or omissions of the
Participating NIS Institute, Participant agrees to indemnify the Government, The
Regents, and the Participating NIS Institute for all damages, cost and expenses,
including attorney's fees, arising from the commercialization and utilization of
technologies, including, but not limited to, the making, using, selling or
exporting of a product, process or service by or on behalf of the Participant,
its

Page 3 of 14

assignees or licensees, which were derived from the work performed under this
CRADA. In respect to this Article, neither the Government nor The Regents shall
be considered assignees or licensees of the Participant as a result of reserved
Regents and/or Government rights. The indemnity set forth in this paragraph
shall apply only if the Participant shall have been informed as soon and as
completely as practical by The Regents and/or the Government of the action
alleging such claim and shall have been given an opportunity, to the maximum
extent afforded by applicable laws, rules, or regulations, to participate in and
control its defense, and The Regents and/or Government shall have provided all
reasonably available information and reasonable assistance requested by the
Participant. No settlement of an action against The Regents and/or the
Government for which the Participant would be responsible hereunder shall be
made without the Participant's consent unless required by final decree of a
court of competent jurisdiction.

ARTICLE VII. OBLIGATIONS AS TO PROPRIETARY INFORMATION

A. If Proprietary Information is orally disclosed to a Party, it shall be
identified as such, orally, at the time of disclosure and confirmed in a written
summary thereof, appropriately marked by the disclosing party, within ten (10)
days as being Proprietary Information.

B. Each Party agrees to not disclose Proprietary Information provided by a
Participating NIS Institute or another Party to anyone other than the CRADA
Participant, the Participating NIS Institute, and the Laboratory without written
approval of the providing Party, except to Government employees who are subject
to the statutory provisions against disclosure of confidential information set
forth in the Trade Secrets Act (18 USC 1905).

C. All Proprietary Information shall be returned to the provider thereof at
the conclusion of this CRADA at the provider's expense.

D. All Proprietary Information shall be protected, unless and until such
Proprietary Information shall become publicly known without the fault of the
recipient, shall come into recipient's possession without breach of any of the
obligations set forth herein by the recipient, or shall be independently
developed by recipient's employees who did not have access to such Proprietary
Information.

ARTICLE VIII. OBLIGATIONS AS TO PROTECTED CRADA INFORMATION

A. Each Party may designate as Protected CRADA Information, as defined in
Article I, any Generated Information produced by its employees, and with the
agreement of the other Party, designate any Generated Information produced by
the other Party's employees. All such designated Protected CRADA Information
shall be appropriately marked.

B. For a period of five (5) years from the date Protected CRADA Information is
produced, the Parties agree not to further disclose such information except:

(1) as necessary to perform this CRADA, including disclosure to the
Participating NIS Institute;

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(2) as provided in Article XI;

(3) as requested by the DOE Contracting Officer to be provided to other
DOE facilities for use only at those DOE facilities with the same
protection in place;

(4) as requested by Participant for disclosure to other USIC members with
the same protection in place;

(5) to existing or potential licensees, affiliates, customers or suppliers
of the Parties in support of commercialization of the technology with
the same protection in place. Disclosure of Participant's Protected
CRADA Information under this subparagraph shall only be done with
Participant's consent; or

(6) as mutually agreed by the Parties in advance.

C. The obligations of paragraph B of this Article shall end sooner for any
Protected CRADA Information which shall become publicly known without fault of
either Party, shall come into a Party's possession without breach by that Party
of the obligations of paragraph B of this Article, or shall be independently
developed by a Party's employees who did not have access to the Protected CRADA
Information.

ARTICLE IX. RIGHTS IN GENERATED INFORMATION

The Government shall have unlimited rights in all Generated Information produced
or provided by the Parties under this CRADA, except for information which is
disclosed in a Subject Invention disclosure being considered for patent
protection, protected as a Mask Work right, or marked as being copyrighted,
Protected CRADA Information, or Proprietary Information.

ARTICLE X. EXPORT CONTROL

THE PARTIES UNDERSTAND THAT MATERIALS AND INFORMATION RESULTING FROM THE
PERFORMANCE OF THIS CRADA MAY BE SUBJECT TO EXPORT CONTROL LAWS AND THAT EACH
PARTY IS RESPONSIBLE FOR ITS OWN COMPLIANCE WITH SUCH LAWS.

ARTICLE XI. REPORTS AND ABSTRACTS

A. The Parties agree to produce the following deliverables:

(1) an initial abstract suitable for public release at the time the CRADA
is approved by DOE;

Page 5 of 14

(2) other abstracts (final when work is complete, and others as
substantial changes in scope and funding occur);

(3) a final report, upon completion or termination of this CRADA, to
include a list of Subject Inventions;

(4) a semi-annual, signed financial report of the Participant's in-kind
contributions to the project;

(5) other topical/periodic reports where the nature of research and
magnitude of funding justify; and

(6) computer software in source and executable object code format as
defined within the Statement of Work or elsewhere within the CRADA
documentation.

B. It is understood that the Laboratory has the responsibility to provide the
above information at the time of its completion to the DOE Office of Scientific
and Technical Information.

C. Participant agrees to provide the above information to the Laboratory to
enable full compliance with paragraph B of this Article.

D. It is understood that the Laboratory and DOE have a need to document the
long-term economic benefit of the cooperative research being done under this
CRADA. Therefore, the Participant acknowledges a responsibility to respond to
reasonable requests, during the term of this CRADA and for two years thereafter,
from the Laboratory for pertinent information.

ARTICLE XII. PRE-PUBLICATION REVIEW

A. The Parties agree to secure pre-publication approval from each other which
shall not be unreasonably withheld or denied beyond thirty (30) days.

B. The Parties agree that neither will use the name of the other Party or its
employees in any promotional activity, such as advertisements, with reference to
any product or service resulting from this CRADA, without prior written approval
of the other Party.

ARTICLE XIII. COPYRIGHTS

A. The Parties may assert copyright in any of their Generated Information.
Assertion of copyright generally means to enforce the copyright or give any
indication of an intent or right to enforce, such as by marking or securing
Federal registration.

B. Each Party may retain ownership of copyrights in works created by its
employees or contractors. Copyrights in jointly developed works shall be jointly
owned.

Page 6 of 14

C. For Generated Information, the Parties acknowledge that the Government has
for itself and others acting on its behalf, a royalty-free, non-transferable,
nonexclusive, irrevocable worldwide copyright license to reproduce, prepare
derivative works, distribute copies to the public, and perform publicly and
display publicly, by or on behalf of the Government, all copyrightable works
produced in the performance of this CRADA, subject to the restrictions this
CRADA places on publication of Proprietary Information and Protected CRADA
Information.

D. For all copyrighted computer software produced in the performance of this
CRADA, the Party owning the copyright will provide the source code, an expanded
abstract as described in Appendix B (Abstract Format Description), the
executable object code and the minimum support documentation needed by a
competent user to understand and use the software to DOE's Energy Science and
Technology Software Center, X.X. Xxx 0000, Xxx Xxxxx, XX 00000. The expanded
abstract will be treated in the same manner as Generated Information in
paragraph C of this Article.

E. The Laboratory and the Participant agree that, with respect to any
copyrighted computer software produced in the performance of this CRADA, DOE has
the right, at the end of the period set forth in paragraph B of Article VIII
hereof and at the end of each two-year interval thereafter, to request the
Laboratory and the Participant and any assignee or exclusive licensee of the
copyrighted software to grant a nonexclusive, partially exclusive, or exclusive
license to a responsible applicant upon terms that are reasonable under the
circumstances, provided such grant does not cause a termination of any
licensee's right to use the copyrighted computer software. If the Laboratory or
the Participant or any assignee or exclusive licensee refuses such request, the
Laboratory and the Participant agree that DOE has the right to grant the license
if DOE determines that the Laboratory, the Participant, assignee, or licensee
has not made a satisfactory demonstration that it is actively pursuing
commercialization of the copyrighted computer software.

Before requiring licensing under this paragraph E, DOE shall furnish the
Laboratory/Participant written notice of its intentions to require the
Laboratory/Participant to grant the stated license, and the
Laboratory/Participant shall be allowed thirty (30) days (or such longer period
as may be authorized by the cognizant DOE Contracting Officer for good cause
shown in writing by the Laboratory/Participant) after such notice to show cause
why the license should not be required to be granted.

The Laboratory/Participant shall have the right to appeal the decision by DOE to
the grant of the stated license to the Invention Licensing Appeal Board as set
forth in paragraphs (b)-(g) of 10 CFR 781.65, "Appeals."

F. The Parties agree to place copyright and other notices, as appropriate for
the protection of copyright, in human readable form onto all physical media, and
in digitally encoded form in the header of machine readable information recorded
on such media such that the notice will appear in human readable form when the
digital data are off-loaded or the data are accessed for display or printout.

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ARTICLE XIV. REPORTING SUBJECT INVENTIONS

A. The Parties agree to promptly disclose to each other every Subject
Invention which may be patentable or otherwise protectable under the Patent Act.
The Laboratory agrees to promptly disclose to Participant every Participating
NIS Institute Invention which is reported to the Laboratory. The Parties
acknowledge that the Laboratory and Participant will disclose their respective
Subject Inventions to DOE within two (2) months after the inventor first
discloses the Subject Invention in writing to the person(s) responsible for
patent matters of the disclosing Party.

B. These disclosures should be in sufficiently complete technical detail to
convey a clear understanding, to the extent known at the time of the disclosure,
of the nature, purpose and operation of the Subject Invention. The disclosure
shall also identify any known actual or potential statutory bars, i.e., printed
publications describing the Subject Invention or the public use or on sale of
the Subject Invention in this country. The Parties further agree to disclose to
each other any subsequent statutory bar that occurs for a Subject Invention
disclosed but for which a patent application has not been filed. All Subject
Invention disclosures shall be marked as confidential under 35 USC 205.

ARTICLE XV. TITLE TO INVENTIONS

Whereas the Participant and Laboratory have been granted the right to elect to
retain title to Subject Inventions,

A. Each Party shall have the first option to elect to retain title to any
Subject Invention made by its employees, and such election shall be made: (1)
for the Participant within 12 months of disclosure of the Subject Invention to
DOE or (2) for the Contractor within the time period specified in its prime
contract for electing to retain title to Subject Inventions. If a Party elects
not to retain title to any Subject Invention of its employees, then the other
Party shall have the second option to elect to retain title to the Subject
Invention.

B. For Subject Inventions made by the Laboratory and Participating NIS
Institute Inventions, the Laboratory will provide Participant with a
non-exclusive, non-transferable, royalty-free, field of use license required by
the Participant for its own use. Participant has a first option to negotiate for
greater rights, such as exclusive, transferable, domestic and foreign rights. If
Participant obtains the right to sublicense, the sublicenses must be
royalty-bearing, and the Participant will pay a reasonable royalty to the
Laboratory. The Laboratory will share equitably all net royalties received for
Subject Inventions and Participating NIS Institute Inventions with the
Participating NIS Institute.

C. The Participant acknowledges that The Regents has offered to the
Participant the option to an exclusive license, for reasonable compensation and
subject to reasonable terms, in a pre-

Page 8 of 14

negotiated field of use related to this CRADA for any Subject Invention made in
whole or in part by The Regents' employee.

D. The Parties acknowledge that DOE may obtain title to each Subject Invention
reported under Article XIV for which a patent application or applications are
not filed pursuant to Article XVI and for which any issued patents are not
maintained by any Party to this CRADA.

E. The Parties acknowledge that the Government retains a nonexclusive,
nontransferable, irrevocable, paid-up license to practice or to have practiced
for or on behalf of the United States every Subject Invention under this CRADA
throughout the world.

ARTICLE XVI. FILING PATENT APPLICATIONS

A. The Parties agree that the Party initially indicated as having an ownership
interest in any Subject Inventions shall have the first opportunity to file U.S.
and foreign patent applications; but if such Party does not file such
applications within one year after election, then the other Party to this CRADA
may file patent applications on such inventions and the Party initially having
ownership shall fully cooperate in this effort. The Parties will agree as to who
will file patent applications on any joint Subject Inventions.

B. The Parties agree that DOE has the right to file patent applications in any
country in which neither Party desires to file a patent application for any
Subject Invention. Notification of such negative intent shall be made in writing
to the DOE Contracting Officer within three (3) months of the decision of the
non-inventing Party not to file a patent application for the Subject Invention
pursuant to Article XV, or not later than sixty (60) days prior to the time when
any statutory bar might foreclose filing of a U.S. patent application.

ARTICLE XVII. TRADEMARKS

The Parties may seek to obtain Trademark/Service Xxxx protection on products or
services generated under this agreement or any resulting PLA, in the United
States or foreign countries. The ownership and other rights relating to this
Trademark shall be as mutually agreed to in writing by the Parties. The Parties
hereby acknowledge that the Government shall have the right to indicate on any
similar goods or services it produces, that such goods or services were derived
from and are a DOE version of the goods or services protected by such
Trademark/Service Xxxx with the Trademark of the owner thereof being
specifically identified. In addition, the Government shall have the right to use
such Trademark/Service Xxxx in print or communication media.

ARTICLE XVIII. MASK WORKS

The Parties may seek to obtain legal protection for Mask Works fixed in
semiconductor products generated under this agreement as provided by Chapter 9
of Title 17 of the United States Code.

Page 9 of 14

The rights to any Mask Work covered by this provision shall be as mutually
agreed to in writing by the Parties. The Parties acknowledge that the Government
or others acting on its behalf shall retain a nonexclusive, paid-up, worldwide,
irrevocable, nontransferable license to reproduce, import, or distribute the
covered semiconductor product by or on behalf of the Government, and to
reproduce and use the Mask Work by or on behalf of the Government.

ARTICLE XIX. COST OF INTELLECTUAL PROPERTY PROTECTION

Each Party shall be responsible for payment of all costs relating to copyright,
Trademark, and Mask Work filing, U.S. and foreign patent application filing and
prosecution, and all costs relating to maintenance fees for U.S. and foreign
patents hereunder which are owned by the Party.

ARTICLE XX. REPORTS OF INTELLECTUAL PROPERTY USE

The Parties agree to submit, upon request of DOE, a non-proprietary report no
more frequently than annually on efforts to utilize any Intellectual Property
arising under this CRADA.

ARTICLE XXI. DOE MARCH-IN RIGHTS

For Subject Inventions made solely by the Participant and for assignments and
exclusive licenses by the Laboratory to the Participant in Subject Inventions
made in whole or in part by the Laboratory, DOE has march-in rights in
accordance with 15 USC 3710a(b)(1)(B) and (C).

For all other rights retained or transferred by the Laboratory in Subject
Inventions of the Laboratory, DOE has march-in rights in accordance with 48 CFR
27.304-1(g).

ARTICLE XXII. U.S. COMPETITIVENESS

The Parties agree that a purpose of this program is to provide substantial
benefit to the United States economy and the economy of the participating NIS.

A. In exchange for the benefits received under this CRADA, the Participant
therefore agrees to the following:

Products, processes, services, and improvements which are covered by
Intellectual Property developed under this CRADA shall be incorporated into the
Participant's manufacturing facilities in the United States either prior to or
simultaneously with implementation outside the United States. In any case, such
implementation outside the United States shall not result in reduction of
manufacture or use of the same products, processes, services, or improvements in
the United States.

Page 10 of 14

B. The Laboratory agrees to a U.S. Industrial Competitiveness clause in
accordance with its prime contract with respect to any licensing and assignments
of its Intellectual Property arising from this CRADA, except that any licensing
or assignment of its Intellectual Property rights to the Participant shall be in
accordance with Paragraph A of this Article.

In the event it is not feasible to meet the requirements of this Article, a plan
for providing net benefit to the United States economy is attached hereto as an
integral part of the PLA.

ARTICLE XXIII. ASSIGNMENT OF PERSONNEL

A. It is contemplated that each Party may assign personnel to the other
Party's facility as part of this CRADA. Such personnel assigned by the assigning
Party to participate in or observe the research to be performed under this CRADA
shall not, during the period of such assignments, be considered employees of the
receiving Party for any purposes.

B. The receiving Party shall have the right to exercise routine administrative
and technical supervisory control of the occupational activities of such
personnel during the assignment period and shall have the right to approve the
assignment of such personnel and/or to later request their removal by the
assigning Party.

C. The assigning Party shall bear any and all costs and expenses with regard
to its personnel assigned to the receiving Party's facilities under this CRADA.
The receiving Party shall bear facility costs of such assignments.

ARTICLE XXIV. FORCE MAJEURE

No failure or omission by the Laboratory or Participant in the performance of
any obligation under this CRADA shall be deemed a breach of this CRADA or create
any liability if the same shall arise from any cause or causes beyond the
control of the Laboratory or Participant, including but not limited to the
following, which, for the purpose of the CRADA, shall be regarded as beyond the
control of the Party in question: acts of God, acts or omissions of any
government or agency thereof, compliance with requirements, rules, regulations,
or orders of any governmental authority or any office, department, agency, or
instrumentality thereof, fire, storm, flood, earthquake, accident, acts of the
public enemy, war, rebellion, insurrection, riot, sabotage, invasion,
quarantine, restriction, transportation embargoes, or failures or delays in
transportation.

ARTICLE XXV. ADMINISTRATION OF THE CRADA

It is understood and agreed that this CRADA is entered into by the Laboratory
under the authority of its prime contract with DOE. The Laboratory is authorized
to and will administer this CRADA in all respects unless otherwise specifically
provided for herein. Administration of

Page 11 of 14

this CRADA may be transferred from the Laboratory to DOE or its designee with
notice of such transfer to the Participant, and the Laboratory shall have no
further responsibilities except for the confidentiality, use, and/or
nondisclosure obligations of this CRADA.

ARTICLE XXVI. RECORDS AND ACCOUNTING SYSTEM

The Participant shall maintain records of receipts, expenditures, and the
disposition of all Government property in its custody related to the CRADA.

ARTICLE XXVII. NOTICES

A. Any communications required by this CRADA, if given by postage prepaid
first class U.S. Mail addressed to the Party to receive the communication, shall
be deemed made as of the day of receipt of such communication by the addressee,
or on the date given if by verified facsimile. Address changes shall be given in
accordance with this Article and shall be effective thereafter. All such
communications, to be considered effective, shall include the number of this
CRADA.

B. The address, telephone numbers, and facsimile numbers for the Parties are
as follows:

(1) For the Laboratory:

U.S. Mail Only: Fed. Ex., UPS, Freight:

The Regents of the University of California
Xxxxxx Xxxxxxx Xxxxxxxx Berkeley National Laboratory
1 Cyclotron Road, Mail Stop 937-400

Xxxxxxxx, XX 00000
Sponsored Projects Office Contact:
Xxxxxx Xxxx
E-mail: XXXxxx@xxx.xxx
Phone: (000) 000-0000
Fax: (000) 000-0000

(a) FORMAL NOTICES AND COMMUNICATIONS, COPIES OF REPORTS

Attn: Xx. Xxxxxx Xxxx
Tel: 000-000-0000
Facsimile: 000-000-0000

(b) TECHNICAL CONTACT, REPORTS, COPIES OF FORMAL NOTICES AND
COMMUNICATIONS

Technical Contacts:

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Xxxxxx Xxxxxx, Mailstop 2-200 Xxxx Xxxx, Mailstop 62-203
Email: XXXxxxxx@xxx.xxx Email: XXXxxx@xxx.xxx
Phone: (000) 000 0000 Phone: (000) 000 0000
FAX: (000) 000 0000 FAX: (000) 000 0000

(2) For Participant:

U.S. Mail Only: Fed. Ex., UPS, Freight:

Isonics Corporation
0000 XxXxxxxx Xxxxxx
Xxxxxx, XX 00000

(a) FORMAL NOTICES AND COMMUNICATIONS, COPIES OF REPORTS

Attn: Xx. Xxxxxxx Xxxxxx, Vice President, Electronic Materials
Tel: 000-000-0000
Facsimile: 303-279-7300

(b) TECHNICAL CONTACT, REPORTS, COPIES OF FORMAL NOTICES AND
COMMUNICATIONS

Attn: Xx. Xxxxxxx Xxxxxx, Vice President, Electronic Materials
Tel: 000-000-0000
Facsimile: 303-279-7300

ARTICLE XXVIII. DISPUTES

The parties shall attempt to jointly resolve all disputes arising from this
CRADA. If the Parties are unable to jointly resolve a dispute within a
reasonable period of time after submission of the dispute for resolution, said
dispute shall be adjudicated in a court of competent jurisdiction in the State
of CALIFORNIA. To the extent that there is no applicable U.S. Federal law, this
CRADA and performance thereunder shall be governed by the law of the State of
California.

ARTICLE XXIX. ENTIRE CRADA AND MODIFICATIONS

A. It is expressly understood and agreed that this CRADA with its Appendices,
Statement of Work, and related Project Letter Agreements contains the entire
agreement between the Parties with respect to the subject matter hereof and that
all prior representations or agreements relating hereto have been merged into
this document and are thus superseded in totality by this CRADA. This CRADA
shall not be effective until approved by DOE.

Page 13 of 14

B. Any agreement to change any terms or conditions of this CRADA or the
Appendices shall be valid only if the change is made in writing, executed by the
Parties hereto, and approved by DOE.

C. The Participant certifies that it has not and will not enter into an
agreement with the Participating NIS Institute that conflicts with the terms of
this CRADA. To the extent that any subsequent agreement between the Participant
and the Participating NIS Institute conflicts with the allocation of rights in
Participating NIS Institute Inventions under this CRADA, the Participant agrees
that the terms of this CRADA will supersede the terms of such agreement.

ARTICLE XXX. TERMINATION

This CRADA may be terminated by either Party upon thirty (30) days written
notice to the other Party. This CRADA may also be terminated by the Laboratory
in the event of failure by the Participant to provide the necessary advance
funding, as agreed in Article III.1.

In the event of termination by either Party, each Party shall be responsible for
its share of the costs incurred through the effective date of termination, as
well as its share of the costs incurred after the effective date of termination
and which are related to the termination. The confidentiality, use, and/or
nondisclosure obligations of this CRADA shall survive any termination of this
CRADA.

For the Laboratory For Participant

BY /s/ Xxxxxxx X. Xxxxx BY /s/ X. X. Xxxxxx

TITLE: Xxxxxxx X. Xxxxx, Director TITLE: VP Semiconductor Materials

DATE: November 9, 1999 DATE: October 26, 1999

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PROJECT LETTER AGREEMENT
TO
MASTER CRADA BG99-389(00)
WITH
ISONICS CORPORATION
FOR
ISOTOPICALLY PURE SILICON FOR IMPROVED MICROELECTRONICS

A. SCOPE OF WORK:

ELECTRONICS MATERIALS PROGRAM, LBNL

This program (Xxxxxx Xxxxxx, program head) has been a research leader in
exploiting scientifically and technically the properties of isotopically pure
Group IV and III-V semiconductors. The program has studied phonon properties,
solid state diffusion, local vibrational mode spectroscopy, and metal-insulator
transitions in isotopically controlled materials and structures in collaboration
with many research groups worldwide.

ISONICS CORPORATION

Isonics is an advanced materials and technology company founded in 1992
which develops and commercializes products based on enriched stable isotopes and
high purity materials. Isonics is a publicly held company with annual sales of
$6.78 million for the fiscal year ended April 30, 1998 (49% increase from
previous fiscal year). Recent acquisitions have expanded the scope of the
company's products and based on historical performance, FY 1999 sales of $16
million are expected. Isonics is the major supplier of Depleted Zinc (DZ), used
in different forms to mitigate corrosion and cracking in nuclear power plants.
Isonics is the third largest supplier of carbon-13 for medical applications and
is further developing its supply position. The company also offers metal
isotopes used in nuclear medicine for therapy and imaging. Isonics has begun a
major R&D effect to develop isotopically enriched Si for semiconductor
applications; this CRADA is part of that effort.

KRASNOYARSK-45

B. REASONS FOR COOPERATION

The project involves Isonics, which is a leading supplier of isotopes to
technological markets, Berkeley Lab's Electronic Materials Program, which has
been a research leader in exploiting scientifically and technically the
properties of isotopically pure Group IV and III-V semiconductors, and
Krasnoyarsk-45, which has a unique high-volume manufacturing capacity for
silicon isotopes. These parties have a mutual interest in the project as
detailed below.

NONPROLIFERATION IMPACT AND BENEFIT TO NIS

The NIS institute in this project is Krasnoyarsk-45, a former Closed
Nuclear City of the USSR which was involved in nuclear weapons design, assembly,
and plutonium storage. The isotope manufacturing technology that will be
utilized in this project to make isotopically pure Si was used, and could still
be used, to make isotopes used in nuclear weapons. By adapting the centrifuge
facilities at Krasnoyarsk-45 for the production of silicon isotopes, this
project will develop a market for its unique isotope manufacturing technologies
that does not involve weapons of mass destruction. The potential market for
products based on isotopically pure Si is large, and Krasnoyarsk-45 has some
unique manufacturing capabilities to provide large quantities of raw materials
for this market. The highly skilled scientists and engineers would be employed
in developing a product, which, if successful, would allow

them to be a producer of silicon isotopes for the electronics industry. If
cost-effective production methods are achieved, it is possible that the NIS
could establish itself as the leading supplier of isotopically pure silicon for
semiconductor applications. This would give the NIS a role in the lucrative $6
billion international silicon manufacturing industry that it has not had to
date.

BENEFITS TO LBNL AND DOE

This project gives the LBNL scientists access to large quantities of highly
enriched Si isotopes, which still are prohibitively expensive to buy from
non-NIS vendors. There are a number of unique and fundamental scientific
experiments that can be performed with this material, as described below. There
are direct benefits to DOE from this project related to the missions of both the
Basic Energy Sciences Office and the DOE Technology Offices. Silicon is the
major semiconductor material and devices of this material are becoming
increasingly important in the generation, distribution, and consumption of
electrical energy. The US electric power grid can be used today to a much higher
capacity than a few years ago because loop currents and subharmonic oscillations
on the power grid can now be suppressed with active silicon controlled capacitor
charge storage and phase shifters. Isotopically controlled silicon has great
promise in allowing such silicon devices to handle larger power loads.
Furthermore, the Department of Energy and other Government Departments, would
have access to isotopically purified silicon which would benefit a wide range of
fundamental and applied electronic materials and device studies.

BENEFITS TO INDUSTRIAL PARTNER (ISONICS CORP.)

A goal of this project is the establishment of a manufacturing capability
for isotopically pure silicon. The application of isotopically pure silicon
would impact the entire semiconductor industry and allow Xxxxx'x Law to remain
valid for years to come. The potential benefits of isotopically pure silicon
will be of interest to electronic device manufacturers for the following
reasons.

o Improved device performance and higher speed switching due to lower
temperatures at active junctions

o Higher reliability devices due to fewer hot spots and a lower overall
operating temperatures

o Lower costs due to lowered cooling requirements, allowing the use of
smaller, less expensive packaging

o Improved yields due to increased number of prime chips

o The possibility of being able skip/delay next generation of manufacturing
technology due to the performance improvements, which would vastly decrease
capital expenditures

These advantages are available without any changes in current equipment or
process technology. Even further improvements can be realized by optimizing
devices to take advantage of the higher thermal conductivity of isotopically
enriched - 28Si. It is expected that improvements would occur in both high-
density integrated circuits (e.g. microprocessors) and in high power devices
(e.g. power transistors). A market analysis done by Isonics shows that if a
commercial source of isotopically pure Si were available, it would be of
international interest to IC manufacturers who use $6 billion worth of silicon
per year. At present, early test wafers of 28Si are being evaluated at leading
research organizations including Stanford University, Yale University, UC
Berkeley, MIT, and Lucent Technologies (Xxxx Laboratories). A limited number of
epitaxial wafers made to custom specifications are currently available to
integrated circuit manufacturers. Isonics has received inquires concerning
isotopically pure, high thermal conductivity Si wafers from a number of
microprocessor manufacturers including AMD, IBM, Intel, Motorola, Digital
Equipment (Compaq), Sun Microsystems, and Silicon Graphics.

C. EXPECTED ACCOMPLISHMENTS AND GOALS

The project will use 25 kg of 99.9% enriched 28Si, 500 g of 90% enriched
29Si, and 500 g of 90% enriched 30Si to be provided by Krasnoyarsk-45 as their
commitment. (All weights refer to the amount of Si regardless of the chemical
form, i.e., silane, trichlorosilane, etc.) The project goals are the following:

o Manufacture 28Si epitaxial layers on natural Si wafer up to 8" (200 mm) in
size for fabrication of IC test circuits and for thermal conductivity
testing with the goal of establishing isotopically enriched Si as a viable
component of the semiconductor manufacturing process.

o Produce 0.25-1.0" diameter 28Si boules using poly-28Si as a starting
material.

o Generate high-quality P-doped (n-type) Si material via neutron
transmutation doping (NTD) of highly 30Si -enriched material.

o Perform fundamental scientific measurements on isotope enriched Si
including thermal conductivity measurements in 28Si bulk samples, self- and
dopant diffusion and electronic transport studies in isotope superlattice
structures, and magnetic resonance studies in 29Si -enriched material.

D. TECHNICAL OBJECTIVES

KRASNOYARSK-45

Krasnoyarsk-45 is expected to use its existing isotope separation
technology (centrifuge) to achieve pilot-plant-scale production of silicon
tetrafluoride (SiF4) with semiconductor grade chemical purity isotopically
enriched to greater than 99.9% 28Si and to a lesser percentage (90%) for 29Si
and 30Si. These materials would be suitable for the manufacturing of high
quality, isotopically pure single xxxxxxx xxxxxx and wafers for use in IC
manufacturing and scientific studies. The contract with Krasnoyarsk-45 will be
negotiated separately through the Civilian Development and Research Foundation
(CDRF).

ISONICS CORPORATION

Isonics Corporation is responsible for the commercial purification of the
silicon tetrafluoride to semiconductor industry standards and production of
purified silane and other silicon compounds required by this project. Isonics
has previously used Krasnoyarsk material to manufacture IC-grade 28Si epitaxial
layers on natural Si wafer substrates. One of Isonics' objectives is to
establish this technology as a solution to the heat management problem that will
occur in the next generation of microprocessor designs.

XXXXXXXX BERKELEY NATIONAL LABORATORY

Xxxxxxxx Berkeley National Laboratory will assist in the chemical analysis
of the raw materials, produce small diameter single crystals of isotopically
pure silicon, and measure the electronic and physical properties of the
isotopically enriched bulk and thin film silicon, such as lattice parameter,
thermal conductivity, optical transmittance, carrier mobilities and lifetimes,
and perform basic materials studies. Most of these will use already existing
capabilities available to the Electronic Materials Program. With technical
assistance from Isonics, LBNL will construct and operate a reactor for the
deposition of the poly-Si precursor required to make single crystals.

E. TASKS, RESPONSIBILITIES, AND SCHEDULE

ACTIVITIES AND DELIVERABLES RESPONSIBLE 1 2 3 4 5 6 7 8
PARTY
----------------------------------- ----------- ----- ----- ----- ----- ----- ----- ----- -----

PRODUCTION SCHEDULE FOR ENRICHED SI Units are quantities after project start

Operation of centrifuge for the KRAS-45
production of enriched Si isotopes

Delivery #1: 7kg 28Si, 100g 29Si, KRAS-45
100g 30Si (required to be 99.9%
SiF4). All deliveries made to
Isonics

Delivery #2: 8kg 28Si, 200g 29Si, KRAS-45
200g 30Si

Delivery #3: 10kg 28Si, 200g KRAS-45
29Si, 200g 30Si

CONVERSION OF SIF4 TO CVD PRECURSORS

Conversion of SiF4 to trichlorosilane Isonics
for production of isotopic epilayers
and isotope superlattices

Conversion of SiF4 to silane for Isonics
production of poly-Si and single
crystals

MATERIALS PRODUCTION SCHEDULE: ISONICS

Produce 28Si epilayers on natural
Si wafers

Production milestones (10, 25, Isonics
100, 150 coated, IC-ready wafers,
respectively)

MATERIALS PRODUCTION SCHEDULE: LBNL

Precursor delivery #1: 1kg 28Si, Isonics
100g 29Si, 100g 30Si in form of
silane (these deliveries are made
to LBNL)

Precursor delivery #2: 1kg 28Si,
200g 29Si, 100g 30Si in form of
silane

Precursor delivery #3: 1kg 28Si, Isonics
200g 29Si, 100g 30Si in form of
silane

Construction of poly-Si reactor LBNL
and tests with natural Si

Production of poly-28Si LBNL

Single crystal growth LBNL

Production of first 28Si bulk LBNL
sample

Production of superlattice and LBNL
epilayer samples for fundamental
studies

FUNDAMENTAL STUDIES

NTO studies using 00Xx XXXX

Magnetic resonance studies using XXXX
00Xx

Transport and diffusion studies LBNL
using isotope superlattices

Thermal conductivity measurements LBNL
on bulk 28-Si

REPORTS AND MEETING

Quarterly technical meeting LBNL
Isonics

Quarterly progress reports LBNL

End of DOE Fiscal Year technical LBNL
report

1 2 3 4 5 6 7 8

F. DELIVERABLES

Project deliverables and milestones are indicted by solid diamonds in the
project plan in section B.4. Additional notes are as follows.

o Over the course of the project 25 kg equivalent of 28Si produced by
Krasnoyarsk-45 will be delivered in the form of SiF4 to Isonics. Isonics is
responsible for the costs of converting this to silane (SiH4). 3 kg.
equivalent of this silane xxxx be delivered to LBNL per the schedule in
Section E. The balance of the silane will belong to Isonics.

o The costs of converting the 500 g equivalents of 50% enriched 28Si and 30Si
into silane or other suitable growth precursors will be borne by LBNL.

o The wafers coated with thick epilayers of 28Si in the size range up to 200
mm that are manufactured by Isonics using the 28SiH4 in this project will
belong to Isonics and may be marketed and sold by them. The 28Si poly-Si,
28Si single crystals, and the epilayer structures made with all three Si
isotopes by LBNL in this project will belong to LBNL.

G. PERIOD OF PERFORMANCE

The project is expected to run two years from the date of the signing of the
CRADA and the subcontract agreement with Krasnoyarsk-45.

H. AUTHORIZED TRAVEL

Travel by LBNL personnel to be supported by the DOE funds in this project is
authorized as detailed below.

Travel to Scientific Conference Up to 1 trip/year
Travel to Technical Meetings associated with the Project Up to 3 trips/year
Travel to vendors, suppliers, and Process Providers
associated with the operation of the project Up to 3 trips/year
Travel to Krasnoyarsk-45 Up to 1 trip/year

1. TOTAL COST, INCLUDING LBNL, NIS SUBCONTRACT, AND PARTICIPANT IN-KIND:

1. LBNL Total Costs (Including NIS Subcontract) $1,009,487.00
NIS Subcontract Amount $607,800.00

2. Participant In-Kind Contribution $1,144,475.00

3. Total Costs $2,153,962.00

There are no funds-in contribution by Isonics. Inc. and no advance payments are
due.

J. BACKGROUND INTELLECTUAL PROPERTY

"Background Intellectual Property" means the Intellectual Property Rights in the
items identified by the Parties below, which were in existence prior to or are
first produced outside of this CRADA, and for such items, the inventions must
have been conceived outside of this CRADA and not first actually reduced to
practice under this CRADA to qualify as Background Intellectual Property.
Licensing of Background Intellectual Property, if agreed to by the Parties,
shall be the subject of separate licensing agreements between tire Parties.
Background Inventions are not subject inventions.

F. DELIVERABLES

Project deliverables and milestones are indicted by solid diamonds in the
project plan in section B.4. Additional notes are as follows.

o Over the course of the project 25 kg. equivalent of 28Si produced by
Krasnoyarsk-45 will be delivered in the form of SiF4 to Isonics. Isonics is
responsible for the costs of converting this to silane (SiH4). 3 kg
equivalent of this silane will be delivered to LBNL per the schedule in
Section E. The balance of the silane will belong to Isonics.

o The costs of converting the 500 g equivalents of 50% enriched 28Si and 30Si
into silane or other suitable growth precursors will be borne by LBNL.

G. PERIOD OF PERFORMANCE

The project is expected to run two years from the date of the signing of the
CRADA and the subcontract agreement with Krasnoyarsk-45.

H. AUTHORIZED TRAVEL

Travel by LBNL personnel to be supported by the DOE funds in this project is
authorized as detailed below.

Travel to Scientific Conference Up to 1 trip/year
Travel to Technical Meetings associated with the Project Up to 3 trips/year
Travel to vendors, suppliers, and process providers
associated with the operation of the project Up to 3 trips/year
Travel to Krasnoyarsk-45 Up to 1 trip/year

I. TOTAL COST, INCLUDING LBNL, NIS SUBCONTRACT, AND PARTICIPANT IN-KIND:

1. LBNL Total Costs (Including NIS Subcontract) $1,009,487.00
NIS Subcontract Amount $607,800.00

2. Participant In-Kind Contribution $1,144,475.00
-------------
3. TOTAL COSTS $2,153,962.00

There are no funds-in contribution by Isonics, Inc. and no advance payments are
due.

J. BACKGROUND INTELLECTUAL PROPERTY

"Background Intellectual Property" means the Intellectual Property Rights in the
items identified by the Parties below, which were in existence prior to or are
first produced outside of this CRADA, and for such items, the inventions must
have been conceived outside of this CRADA and not first actually reduced to
practice under this CRADA to qualify as Background Intellectual Property.
Licensing of Background Intellectual Property, if agreed to by the Parties,
shall be the subject of separate licensing agreements between the Parties.
Background Inventions are not subject inventions.

The Parties have identified the following items as Background Intellectual
Property:

PARTICIPANT IDENTIFIED ITEMS:

Isonics will be using the isotopically enriched semiconductor devices to
study the isotopically pure silicon for improved microelectronics. In
addition to process know-how, the intellectual property consists of U.S.
Patent 5,144,409 assigned to Yale University, for which Isonics has the
exclusive license.

THE REGENTS IDENTIFIED ITEMS: None

THE REGENTS OF THE FOR PARTICIPANT
UNIVERSITY OF CALIFORNIA,
XXXXXXXX BERKELEY LABORATORY

BY /s/ Xxxxxxx X. Xxxxx BY /s/ Xxxxxxx X. Xxxxxx

TITLE: Laboratory Director TITLE VP Semiconductor Materials

DATE November 9, 1999 DATE October 26, 1999

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