EXHIBIT 10.16
Contract 08843672/70034-02D
page 1 of 16
CONTRACT
REG. NO. 08843672 / 70034-02D
FOR THE SUPPLY OF SERVICES OF PROCESSING RAW
MATERIALS INTO PRODUCTS OF DEPLETED ZINC
BETWEEN:
AO "TECHSNABEXPORT"
(THE EXPORTER)
ELECTROCHEMICAL PLANT
(THE PRODUCER)
AND
ISONICS CORPORATION
(THE BUYER)
*Portions of this exhibit have Confidential Treatment Requested
Contract 08843672/70034-021D
page 2 of 16
1. PARTIES.
1.1. AO TECESNABEXPORT, a foreign trade joint stock company organized and
existing under the laws of the Russian Federation (hereinafter referred to
as "TSE").
1.2. ELECTROCHEMICAL PLANT, an enterprise organized and existing under the
laws of the Russian Federation (hereinafter referred to as "ECP").
1.3. TSE and ECP shall be jointly and severally referred to, for the text
convenience, as the "the Seller".
1.4. ISONICS CORPORATION, a corporation organized and existing under the laws
of the State of California, the United States of America (hereinafter
referred to as the Buyer).
1.5. The Buyer and the Seller shall be referred to as the "Party" and
collectively as the "Parties".
2. RECITALS
2.1. The Seller, among its other industrial activities, is in the business of
producing and selling depleted zinc in various chemical forms, such as
oxide or metal, either as powder or pellets by means of separation and
conversion of diethyl zinc gas into various zinc isotopes and depleted
zinc.
2.2. The Buyer and the Seller are the parties to a certain memorandum of August
1, 1996, pursuant to which the Seller grants the Buyer, among other rights
and obligations, full right and authority in accordance with the section 5
of the Contract to buy such depleted zinc, to acquire zinc depletion and
conversion services and a right to market, trade and resell such depleted
zinc for ultimate consumption by its customers.
2.3. Based on the above, the Seller wishes to provide to the Buyer and the
Buyer wishes to acquire from the Seller various depleted zinc products,
obtained from the raw material to be supplied by the Buyer to the Seller
as set forth in this Contract.
3. DEFINITIONS AND INTERPRETATIONS
3.1. In this Contract, unless inconsistent with the context, the following
expressions or terms shall have the meanings ascribed to them
respectively:
3.1.1. "THE BASIC PRODUCT" MEANS DZ OXIDE POWDER CONFORMING TO THE
SPECIFICATION IN EXISTENCE AND IN EFFECT AT THE TIME OF SIGNING OF THE
CONTRACT.
3.1.2. "CONTRACT" MEANS THE CONTRACT SET OUT IN THIS DOCUMENT AND ALL
ADDENDA, AMENDMENTS AND SPECIFICATIONS HERETO.
Contract 08843672/70034-02D
page 3 OF 16
3.1.3. "DEPLETED ZINC" ("DZ", "DZ PRODUCT") MEANS ZINC, DEPLETED TO NOT
MORE THAN ONE PERCENT (1.0%) IN ZINC-64, IN VARIOUS CHEMICAL FORMS AND
PROVIDED AS POWDER OR PELLETS (THE CHEMICAL COMPOSITIONS AND SHAPES
ARE TO BE DEFINED IN SPECIFICATIONS HERETO).
3.1.4. "DEPLETION AND CONVERSION SERVICES" MEANS THE SERVICES TO BE
PROVIDED BY THE SELLER IN CONVERTING RAW MATERIAL INTO DZ MEETING THE
SPECIFICATIONS.
3.1.5. "DZ BATCH" MEANS ONE OR MORE DZ LOTS WHICH ARE DELIVERED TOGETHER.
3.1.6. "DZ DELIVERY MONTH" MEANS THE CALENDAR MONTH IN WHICH THE DELIVERY
OF A CERTAIN DZ BATCH SHOULD BE EFFECTED ACCORDING TO THE DELIVERY
SCHEDULE MUTUALLY AGREED UPON BY THE PARTIES.
3.1.7. "DZ LOT" MEANS A CERTAIN GROUP OF PACKAGES CONTAINING DZ OF
HOMOGENEOUS CHEMICAL COMPOSITION (BUT, POSSIBLY, OF A DIFFERENT
ISOTOPIC CONTENT).
3.1.8. "PURCHASE PRICE" MEANS PRICE, WHICH MUST BE PAID BY THE BUYER TO
THE SELLER FOR EACH GRAM OF, PRODUCED BY PROCESSING RAW MATERIAL, DZ
PRODUCT AND DELIVERED BY THE SELLER TO THE BUYER. THE PURCHASE PRICE
IS ALSO UNDERSTOOD BY THE PARTIES AS PAYMENT FOR THE DEPLETION AND
CONVERSION SERVICES.
3.1.9. "RAW MATERIAL" MEANS DIETHYL ZINC GAS (ZN(C2H5)2) WITH THE NATURAL
ISOTOPIC CONTENT TO BE DELIVERED BY THE BUYER TO THE SELLER FOR
DEPLETION AND CONVERSION.
3.1.10. "SECONDARY MATERIAL" MEANS DIETHYL ZINC GAS, REMAINING AFTER
processing of the Raw Material into DZ and differentiated from it by
the isotopic content.
3.1.11. "SPECIFICATION(S)" MEANS A MUTUALLY AGREED UPON SET OF TECHNICAL
requirements for the chemical composition or shape of DZ, DZ
packaging, and specific quantity of Raw Material required for
production of I kg of DZ.
4. AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual obligations
hereinafter described, and intending to be legally bound, the Parties agree as
follows:
Contract 08843672/70034-02D
page 4 of 16
5. SCOPE AND TERM
5.1. SCOPE: PURSUANT TO THE TERMS AND CONDITIONS SET FORTH HEREIN, THE SELLER
WILL SUPPLY THE BUYER WITH VARIOUS DZ PRODUCTS MEETING THE SPECIFICATIONS
BY MEANS OF PROCESSING THE RAW MATERIAL TO BE PROVIDED TO THE SELLER BY THE
BUYER AS SET FORTH HEREIN. THE FOLLOWING PRECONDITIONS SHALL APPLY AND WILL
BE BINDING UPON THE PARTIES:
5.1.1. The Buyer shall acquire from the Seller Depletion and Conversion
Services and may resell so obtained DZ for the ultimate consumption by its
customers. The Seller will not sell zinc depletion and conversion services
or depleted zinc directly or indirectly to parties located in North
America, nor to other parties for resale in North America.
5.1.2. During the term of this Contract, the Buyer will not buy depletion
and conversion services or depleted zinc from third parties located in the
Russian Federation for resale of these services or DZ in North America.
5.1.3. Unless the Buyer specifically agrees otherwise, the Seller cannot
use Raw Material for any other use than for providing the Seller with
Depletion and Conversion Services.
5.2. TERM: THIS CONTRACT SHALL BE EFFECTIVE AS OF THE DATE OF ITS SIGNING AND
SHALL CONTINUE FOR THREE YEARS, COVERING 1997, 1998, 1999 DELIVERIES.
6. QUANTITIES AND SCHEDULE
6.1. For purposes of the present Contract, all quantities of DZ, independent of
its chemical form, shall be expressed in kilograms or grams of zinc (metal)
weight in DZ. All quantities of the Raw Material shall be expressed in
kilograms of compound weight of diethyl Zinc (ZN(C2H5)2).
6.2. Within the term of the present Contract, the Seller shall deliver to the
Buyer and the Buyer shall accept the deliveries of the total nominal
quantity of [*] of DZ according to the following annual schedule.
CALENDAR YEAR OF DELIVERIES: DZ QUANTITIES:
[*] [*]
[*] [*]
[*] [*]
The Buyer has the right to acquire additional quantities [*], defined as
the "Optional Quantity".
[*] Confidential Treatment Requested
Contract 08843672/70034-02D
page 5 of 16
6.3. Parties have agreed to the following monthly delivery schedule for the
calendar year 1997:
--------------------------------------------------------------------------------
DZ BATCH # QUANTITY MONTH OF QUANTITY MONTH OF
OF SUPPLY OF DELIVERY
RAW OF RAW DZ IN KG OF DZ
MATERIAL MATERIAL
---------------------------------------------------------------------------------
[ * ]
---------------------------------------------------------------------------------
[ * ]
---------------------------------------------------------------------------------
[ * ]
---------------------------------------------------------------------------------
[ * ]
---------------------------------------------------------------------------------
Above described schedule is only for the base product, excluding Optional
Quantity.
6.4. In regards to calendar years 1998 and 1999 on or prior to November 30 of
the year preceding each calendar year of DZ deliveries within the term of
the Contract, the Parties shall agree on the Depletion and Conversion
Services prices for the following year and coordinate the month-by-month
Delivery Schedule of DZ and Raw Material for such calendar year. The
following basic principles shall apply:
. Delivery Schedule must be within the ECP's production ability,
. Raw Material in amounts sufficient for production of each DZ Batch shall be
delivered by the Buyer to the Seller not less than [*] prior
to DZ Delivery Month of each corresponding DZ Batch. The amount of Raw
material required for production of each DZ lot shall be calculated as the
product of [*].
. Any and each particular chemical composition and shape ordered by the Buyer
must be covered by a Specification agreed upon by the Parties and effective
as of the date on which the Delivery Schedule is signed.
6.5. Notwithstanding the above stipulations, the Parties, depending on newly
arisen circumstances, if any, such as signing of new Specifications to the
Contract, may mutually agree to amend a previously coordinated Delivery
Schedule for each particular year of deliveries with respect to chemical
compositions and shapes of DZ and deliveries dates.
6.6. Optional Quantity can be ordered by the Buyer in full or partially during
each calendar year covered by this contract by providing the Seller [*]
advance notice and making Raw Material available not later than [*] before
the requested delivery date. Should the Buyer order such Optional Quantity
in a DZ Batch [*], then such DZ Batch will be shipped together with the
next scheduled regular DZ Batch. All other terms of this contract will
apply to Optional Quantity.
[*] Confidential Treatment Requested
Contract 08843672/70034-02D
PAGE 6 OF 16
7. DELIVERY OF RAW MATERIAL
7.1. Raw Material shall be delivered by the Buyer to the Seller on DDU St.
Petersburg seaport ("Delivered Duty Unpaid" INCOTERMS 1990) basis to the
following Consignee address:
Electrochemical Plant,
Zelenogorsk, Krasnoyarsky Krai, Russia.
x/x XXX "XXXXXX"
000000, Xxxxxxxxxxx xx., 00,
Xx. Xxxxxxxxxx, Xxxxxx.
tel/fax #: 000-000-000-00-00
7.2. The Parties agree that the price of Raw Material and the transportation
cylinders stipulated in the Contract serves for customs purposes only and
no payment for Raw Material and the transportation cylinders delivered by
the Buyer to the Seller is required. The transportation cylinders
afterwards will [*]. Price for each Raw Material batch will be set by a
separate addendum to this Contract, which may be entered into using
facsimile signatures.
7.3. The Seller shall clear the Raw Material through the Russian customs
authorities as "import of goods for processing". Any taxes, fees and other
duties levied by the Russian customs authorities in respect to the Raw
Material shall be paid by the Seller and, with the exception of the Value
Added Tax (V.A.T.), shall be reimbursed by the Buyer to the Seller upon
presentation to the Buyer of the Seller's invoice as set forth in Section
8.4 below
7.4. On each delivery of Raw Material the Buyer shall produce to the Seller the
following set of documents.
. Original clean on board Xxxx of Lading in duplicate;
. Proforma invoice stipulating the quantity of delivered Raw Material, its
price and the total amount (for customs purposes only), and separately,
proforma invoice, stipulating the quantity of transportation cylinders
their price and a total amount (for customs purposes only) in duplicate;
. Packing List in duplicate;
. Quality and Quantity Certificates in duplicate
7.5. Not later than thirty (30) days prior to estimated date of delivery of
each lot of the Raw Material, the Buyer shall notify the Seller of the
estimated delivery date and provide the name of the vessel as soon as it is
booked.
8. DELIVERY OF DZ
8 1. Any and each DZ Batch shall be delivered by the Seller to the Buyer FCA
Moscow airport (INCOTERMS 1990) with shipping arranged to the Following
address:
[*] Confidential Treatment Requested
Contract 08843672/70034-02D
page 7 of 16
ISONICS Corporation
0000 Xxxxxxxx Xxx., Xxx Xxxx XX 00000
c/o AIRSCHOTT Customs Brokerage FTZ 000
Xxxxxxxxxx XX 00000, phone 000-000-0000
8.2. Unless otherwise agreed upon by the Parties, the Seller shall clear DZ
through the Russian customs authorities as "export". Any levies by the
Russian customs authorities in respect to the export of DZ, such as taxes,
fees and other duties shall be paid by the Seller. The Seller will enter
under standard terms into transportation agreements with a transport company
acceptable to the Buyer, for shipment from Moscow at the expense and risk of
the Buyer. The Buyer shall reimburse the Seller for air freight cost
associated with each DZ Batch from Moscow to Washington, or other
destination designated by the Buyer, upon presentation of the Seller's
invoice as set forth in Section 8.4 of the Contract.
8.3. Not later than fifteen (15) days prior to estimated date of delivery of
each DZ Batch, the Seller shall notify the Buyer of the estimated delivery
date and flight number. The Seller shall update the Buyer in respect of the
final delivery date of DZ Batch not later than 1 day prior to such final
delivery date.
8.4. For each and any DZ Batch the Seller shall provide the Buyer with the
following set of paperwork:
. Original Certificates of Quality and Quantity for each DZ package in
duplicate. One set should be delivered attached to the DZ shipment
marked as "Place #", the other by express mail along with other required
documents;
. The Seller's invoice in triplicate. One set with the shipment and the
others by express mail;
. Original Packing list in duplicate. One set should be delivered attached
to the DZ shipment marked as "Place #", the other by express mail;
original Air Waybill and 1 copy;
. Copy of the Air Waybill, invoice and packing list should be faxed to the
Seller as soon as shipment is scheduled and Air Waybill is prepared.
9. SPECIFICATIONS AND QUALITY ACCEPTANCE OF DZ
9.1. Specifications shall include the following data:
All controlled technical parameters, such as isotopic composition,
impurities content, and mechanical parameters;
Methods of measurement of the technical parameters and their acceptable
standard deviations as appropriate,
Raw Material required for production of DZ, losses, DZ yield and
quantity of remaining Secondary Material.
Contract 08843672/70034-02D
page 8 of 16
9.2. Should any parameter measured by ECP deviate from its value as per the
Specification, before effecting of the delivery of the corresponding DZ Lot
to the Buyer, the Seller must notify the Buyer of such deviation. The Buyer
shall, within five (5) working days of receipt of such notification, approve
or disapprove delivery of such DZ Lot. ("Approved DZ" and "Disapproved DZ"
respectively)
In the event the Buyer fails to notify the Seller of its approval or
disapproval within the above specified time frames, the pending delivery of
questioned DZ Lot is considered by the Seller as Approved DZ. In case of
Disapproved DZ, the Parties shall amicably discuss the possible alternative
actions.
Specification to the Approved DZ shall be considered by the Parties as
temporarily amended and applicable only for the particular Approved DZ Lot,
and only with respect to the parameters which were claimed by the Seller as
deviating from the Specification.
9.3. In the event the Buyer claims any DZ Lot or a portion thereof to be not
conforming to the corresponding Specification (the "Non-conforming DZ"), the
Buyer is entitled to return such Non-conforming DZ to the Seller for
replacement. The Buyer shall deliver, if requested by the Seller,
additional Raw Material sufficient for replacement of Non-Conforming DZ and
the Seller shall pay or reimburse the Buyer in U.S. Dollars for the cost of
such additional Raw Material. Notwithstanding the provisions of Section
7.1., the additional Raw Material shall be delivered FCA U. S. Seaport or
FCA US Airport (INCOTERMS 1990).
The Seller shall effect the replacement delivery of the equivalent quantity
of DZ conforming to Specification according to a schedule reasonably
acceptable to the Buyer. If the Buyer has already effected payment for the
Non-conforming DZ, then the replacement DZ will be free of charge to the
Buyer.
In the event of disputes between the Parties as to conformance of the Non-
conforming DZ to the Specification, an independent testing laboratory shall
be appointed by the Buyer, provided such laboratory (i) is located outside
Russia and the U.S., and (ii) will use testing methods similar to those used
by the Seller, additionally, the Seller must provide these testing methods
to such independent testing laboratory. If results obtained by such
independent laboratory conform to the Specification, the Non-conforming DZ
must be accepted by the Buyer as fully conforming to the Specification and
all testing expenses incurred shall be paid by the Buyer. Otherwise, the
measures specified above shall apply with respect to such non-conforming DZ
and all testing expenses incurred shall be paid by the Seller.
9.4. On the Buyer's request the Seller shall endeavor improvement of technical
parameters of DZ products. The Buyer will attempt to help the Seller to
obtain necessary materials, samples and consulting services as requested by
the Seller.
Contract 08843672/70034-02D
page 9 of 16
10. PACKAGING
10.1. The Basic Product shall be packaged as follows: (i) maximum of 1000 grams
of the Basic Product in each of heat-sealed, double walled (thick)
polyethylene bags (ii) maximum of 16 bags or 16000 grams of the Basic
Product shall be placed inside of a large polyethylene bag which is then
placed in a strong wooden box free of bark and free from apparent live
plant pests and suitable for export shipment.
10.2. Weight error of packed Basic Product on a dry basis shall be +/- 1%. The
packaging material in contact with the Basic Product shall be polyethylene
or equivalent material free of halides or sulfur. The seal shall prevent
dusting of the Product on the outside of the package. The Basic Product
shall be shipped in boxes not exceeding 22 kg gross weight and shall meet
air carrier's regulations.
10.3. The packing requirements for other DZ products shall be either
incorporated into the corresponding Specifications or issued as separate
addendum to the Contract.
11. DISPOSITION OF THE SECONDARY MATERIAL
11.1. For the duration of this Contract, the Buyer can issue any instructions
regarding Secondary Material or any part thereof, ownership for which will
remain with the Buyer in accordance with the section 14.3 of this Contract
until the following instructions are property documented by the Parties:
(i) "Deeper" processing of the Secondary Material, or any part thereof,
by ECP and delivery to the Buyer of resulting zinc containing
materials;
(ii) Return of Secondary Material to the Buyer. All related and
consequent expenses from such return of Secondary Material,
including taxes will be paid by the Buyer.
(iii) Transferring ownership to the Seller of Secondary Material or part
thereof
Specific terms for disposition of Secondary Material or any part thereof
must be agreed to by a separate agreement, which must be discussed and
concluded no later than 30 days from the issuance of an export permit for
the corresponding DZ Batch. Should the Parties fail to conclude such
agreement, then ownership of Secondary Material will be transferred to the
Seller.
11.2. During the term of this Contract, Secondary Material must be stored at ECP
at no charge to the Buyer.
11.3. Should the Buyer not issue any instruction listed in section 11.1. above
for any part of the Secondary Material before the end of the Contract
term, then its ownership will be automatically transferred to the Seller.
Contract 08843672/70034-02D
page 10 of 16
12. PRICE AND PAYMENT
12.1. For the deliveries scheduled for 1997 calendar year, the Buyer shall pay
to the Seller a Purchase Price of [*] of depleted zinc metal contained in
the Basic Product, and a Purchase Price of [*] of depleted zinc metal
contained in zinc oxide [*], the supply of which is subject to written
agreement on the corresponding specification.
12.2. All payments to the Seller under this contract must be paid to TSE's bank
account at AO CONVERSBANK (109172, Xxxxxxxxxxxxxxx 00 - 0, Xxxxxx Xxxxxx
telex 911591 CCB) through Bankers Trust Co. New York, NY, account of AO
CONVERSBANK # 00-0000-000, for further credit to Xxxxxx, xxxxxxx xx XX
Xxxxxxxxxxxxxx # 0000/0.
12.3. Should TSE change their bank, TSE must provide a 30 day advance notice to
the Buyer.
12.4. The Buyer shall pay to the Seller the amount owed by wire transfer in
immediately available funds, within [*] and against presentation by the
Seller of the following documents:
(I) Commercial invoice in triplicate
(II) Air Waybill evidencing delivery
(III) Quality and quantity certificate
(IV) Packing list.
12.5. All banking expenses, payments and commissions related to performance of
corresponding transactions under this contract on the territory of Russian
Federation must be paid by TSE. All other banking expenses, payments and
commissions must be made by the Buyer.
12.6. [*]
12.7. [*]
12.8. Should the Buyer refuse to accept delivery of any DZ Batch per agreed to
schedule and quantities and the total amount of DZ delivered during that
calendar
[*] Confidential Treatment Requested
Contract 08843672/70034-02D
page 11 of 16
year will be less than nominally agreed to amounts, then the Seller has the
right to issue the xxxx for the revised invoice. This invoice amount is
calculated as [*] .
12.9. Price for each gram of Raw Material must be shown by the Buyer in the
shipping documents required by the Seller for the customs clearance of the
Raw Material.
12.10. The Purchase Price for DZ for 1998 and 1999 calendar years should be
agreed to by the Parties as a result of good faith negotiations prior to
November 30th of the preceding year. Among others, the following factors
must be taken into account:
. Purchase Price for the previous year
. Change in the US Consumer Price Index
. Quantity scheduled for that year
Competitive pricing, if known to Parties
Should during the term of this Contract, either Party receive information
on any negative developments in the market conditions, or on competitive
activities, which may significantly affect fulfillment of this Party's
obligations, then this Party should inform other Parties in order to
initiate in a short time amicable and fair negotiations to prevent any
possible negative consequences.
12.11. Should the Parties agree on the changes of the scope of work under this
Contract and/or specification and prices for different DZ products are
agreed to, then a separate agreement must be reached on the scope and the
terms of such work.
13. REPRESENTATION AND WARRANTIES.
13.1. The Seller hereby represents and warrants to the Buyer- that:
(i) All DZ will be conveyed with good and marketable title thereto,
free and clear of all liens, charges and encumbrances of any
description.
(ii) All DZ delivered to the Buyer will meet the applicable
Specification in effect as of the date of delivery and will be
in full conformity with corresponding Certificates of Quality
and Quantity.
13.2. The Buyer hereby represents and warrants to the Seller that:
(i) All Raw Material will be conveyed with good and marketable title
thereto, free and clear of all liens, charges and encumbrances of any
description,
(ii) All Raw Material delivered to the Seller is applicable for zinc
conversion and depletion.
13.3. The express warranties set forth herein are exclusive, and no other
warranties of any kind, whether statutory, written, oral or implied
(including warranties of fitness for a particular purpose or
merchantability), shall apply.
[*] Confidential Treatment Requested
Contract 08843672/70034-02D
page 12 of 16
14. PERMITS, TITLE, AND RISK OF LOSS
14 1. Each Party shall, at its own expense, be responsible for obtaining all
approvals, authorizations, consents, licenses, and permits necessary to
carry out its obligations hereunder, and to the extent necessary, the other
Party shall cooperate as to the obtaining of such approvals,
authorizations, consents, licenses, and permits.
14.2. Title to DZ as well as all risk of loss or damage to persons or property
occasioned by DZ shall pass to the Buyer upon its delivery to the Buyer
pursuant to Section 8.1.
14.3. Title to Raw Material and Secondary Material shall at all times remain
with the Buyer. Risk of loss or damage to persons, or property occasioned
by Raw Material shall pass to the Seller upon its delivery to the Seller
pursuant to Section 7.1. Risk of loss or damage to persons or property
occasioned by Secondary Material shall remain with the Seller until such
Secondary Material is used in accordance with Articles 11.1 and 11.3.
15. CONSEQUENTIAL DAMAGES
Except as otherwise specifically set forth herein, in no event, whether under
contract, tort (including negligence or strict liability), warranty, or
otherwise, shall either party to this Contract be liable to the other party for
any incidental or consequential damages of any nature arising out of or
connected with or resulting from the performance of or failure to perform this
Contract, including without limitation, loss of profits, loss of use of
facilities, or costs of capital.
16. IMPEDIMENT TO PERFORMANCE (FORCE-MAJEURE)
16.l. Either party shall be relieved of any liability for partial or complete
non-performance or delay in performance of its obligations under this
Contract, if such non-performance or delay in performance is caused by an
impediment of any extraordinary nature that has arisen after the effective
date of this Contract, and which impediment the party could neither
reasonably have foreseen nor could have prevented through reasonable
measures and could not reasonably have been expected to take into account
at the, time this Contract came into force. The party whose performance is
affected shall use all reasonable efforts to avoid or minimize the
consequences of such impediment and shall continue its obligations
hereunder after the cause for such impediment has ceased to exist.
16.2. A party will not be relieved of its liability for PARTIAL OR COMPLETE
NON-PERFORMANCE OR DELAY IN PERFORMANCE OF ITS OBLIGATIONS TO THE EXTENT
THAT SUCH NONPERFORMANCE OR DELAY IN PERFORMANCE IS CAUSED BY ITS OWN
ACTION, FAULTS OR NEGLIGENCE.
Contract 08843672/70034-02D
page 13 of 16
16.3. With the beginning (and cessation) of any such impediment, a party shall
without delay notify the other party in writing. Such notification must
inform the other party of the nature of the impediment and, where possible,
its influence on the capability of performance by the party of its
obligations hereunder, as well as the expected duration of such non-
performance or delay in performance of its obligations. If a party fails
to provide such notification within a reasonable period of time after it
learned or should have learned of the beginning (and cessation) of such
impediment, it shall be liable for any damages caused by untimely
notification or failure to notify.
16.4. A party shall, within a reasonable period of time, provide to the other
party, at its request, a certificate of a Chamber of Commerce (or Chamber
of Commerce and Industry), or other similar competent authority or
organization of the respective country, certifying the beginning (and
cessation) of any such impediment.
16.5. In the event of such an impediment, the time period for the performance
by the parties of their obligations under this Contract shall be extended
correspondingly for a period during which any such impediment and its
consequences last.
16.6. Where any such impediment and its consequences remain effective for more
than ninety (90) days or at the beginning of such impediment it becomes
clear that it and its consequences will be effective in excess of ninety
(90) days, the other party is entitled, at its option, to terminate, at no
cost, any obligations under this Contract, the performance of which is
prevented for such period of time by such impediment. Notification of such
termination must be provided to the impeded party prior to commencement of
performance or resumption of performance of such obligation(s) under this
Contract after removal of such impediment which caused non-performance or
delay in performance of such obligation(s).
16.7. In case of any such termination, neither party is entitled to claim
damages from the other party, except for any payments due to the Buyer for
Raw Material delivered to the Seller and except for any damages which are
related solely to untimely notification or failure to notify of the
beginning (and cessation) of such impediment. However, each party may
demand from the other party return (in whole or in part) of that which has
been delivered or paid by it under this Contract without receiving due
consideration as provided for pursuant to the terms of this Contract. In
case of any such termination, return of any Raw Material or payment shall
be effected by an equitable arrangement, as both partics shall at such time
agree. The return shall be effected at the expense of the party to whom
any such material is being returned. Where it is impossible to return Raw
Material in essentially the same condition as received, the respective
party must pay the other party the price of such Raw Material, with
exception of extraordinary conditions listed in the section 16.1.
Contract 08843672/70034-02D
page 14 of 16
17. NOTICES
17.1. Any notice, invoice, or other written communication required or permitted
to be given hereunder shall be in writing and either be delivered
personally to the party to whom it is directed or sent by facsimile and
shall be effective on the day of receipt of the notice if received during
normal business hours of the addressee, and if not received during such
normal business hours, then on the first business day of the addressee
after such receipt.
17.2. The addresses of the parties to which all such notices shall be forwarded
are as follows:
to the Seller:
if to TSE A/O Techsnabexport
Staromonetnyj per. 26
Moscow, Russian Federation, 1091 80
Attention: Director, Uranservice
Facsimile: (7-095) 233-2412
if to ECP: Electrochemical Plant,
Zelenogorsk, Krasnoyarsky Krai
Attention, General Director
Facsimile: (7-39169) 212-62
to the Buyer: ISONICS Corporation
0000 Xxxxxxxx Xxx., Xxx Xxxx XX 00000
Attention: Director- Quality Programs
Facsimile: (000) 000-0000
18. ASSIGNMENT
18. 1. Neither party may assign any of its rights or obligations under this
Contract without the prior written consent of the other party, which
consent shall not unreasonably be withheld; provided, however, that either
party may assign any of its rights or delegate its obligations hereunder
without such consent to its parent company, its affiliates, the Producer,
or any party providing financing. No such assignment or delegation shall
relieve the assignor from any of its obligations hereunder.
18.2. This Contract shall inure to the benefit of and be binding upon the
parties and their respective successors and permitted assigns.
19. CONFIDENTIALITY
The parties shall treat this Contract as confidential, and neither party shall
disclose its contents without the prior written consent of the other party to
any person, except to its affiliates, legal advisors, auditors, or financing
sources.
Contract 08843672/70034-02D
page 15 of 16
If disclosure is required to comply with the laws or regulations of a
government or government agency or by a court having jurisdiction over one
of the parties, such party may so disclose notwithstanding the foregoing
upon prior notice to the other party.
20. GOVERNING LAW AND ARBITRATION
20.1. The present Contract shall to the exclusion of United States (or any
specific State of the United States) or Russian law be governed by the
substantive law of Sweden.
20.2. The Parties shall endeavor to settle any dispute arising from the
execution of or in connection with this Contract amicably by friendly
negotiation.
20.3. In the event that either Party declares by written notice after a period
of 60 days from the date of the first written notice specifying such
dispute, that a resolution cannot be reached, any dispute, controversy or
claim arising out of or relating to this Contract or the breach,
termination or invalidity thereof, shall be exclusively settled by
arbitration in accordance with the Rules of the Arbitration Institute of
the Stockholm Chamber of Commerce as in force at that time.
20.4. The place of arbitration shall be Stockholm, Sweden and the hearings
shall be conducted, and all evidence presented, in the English language.
20.5. The arbitration award is final and binding upon the Parties. The
arbitration fee shall be borne by the losing Party, except as otherwise
provided in the arbitration award.
21. GENERAL TERMS
21.1. If any provision in this Contract shall be held to be invalid or
unenforceable, the remaining portions shall remain in effect. In the event
such invalid or unenforceable provision is considered an essential element
of this Contract, the Parties shall promptly negotiate a replacement
provision.
21.2. No waiver of the terms and conditions of this Contract, or the failure of
either Party strictly to enforce any such term or condition on one or more
occasions shall be construed as a waiver of the same or of any other term
or condition of this Contract on any other occasion.
21.3. The relationship between the Buyer and the Seller is that of independent
contractors. The Buyer and the Seller are not joint venturers, partners,
principal and agent, master and servant, employer or employee, and have no
other relationship to each other than independent contracting parties.
21.4. The Parties agree that time is of the essence in this Contract.
Contract 08843672/70034-02D
page 16 OF 16
21.5. The terms and conditions contained in this Contract supersede all prior
oral or written understandings between the Parties with respect to the
subject matter thereof and constitute the entire agreement of the Parties
with respect to such subject matter. Such terms and conditions shall not be
modified or amended except by a writing signed by authorized
representatives of both parties.
IN WITNESS THEREOF the Parties executed the present Contract in three
counterparts in English and Russian, both text being authentic. In case of
any inconsistence between English and Russian versions the English should
control.
FOR AND BEHALF OF FOR AND BEHALF OF
ELECTROCHEMICAL PLANT ISONICS CORPORATION
By: _____________________ By: _______________________
Name: ___________________ Name: _____________________
Title: __________________ Title: ____________________
FOR AND ON BEHALF OF
TECHSNABEXPORT CO., LTD.
By: __________________________
Name: ________________________
Title: _______________________
By: __________________________
Name: ________________________
Title: _______________________
SPECIFICATION NO. 01
TO CONTRACT NO. 08843672/70034-02D
FOR ZINC OXIDE IN THE FORM OF POWDER
1. GENERAL DESCRIPTION:
The material specified herein is zinc oxide (DZ oxide), with a reduced content
of isotope Zn-64 and consisting of particles which are generally equiaxed in
shape when viewed under 1000X magnification.
2. QUALITY CHARACTERISTICS:
Characteristic Value Method of measurement
---------------------------------------------------------------------------------------------
[*] [*] [*]
[*] Confidential Treatment Requested
3. MATERIAL BALANCE:
[*]
FOR AND ON BEHALF OF FOR AND ON BEHALF OF
ELECTROCEHMICAL PLANT ISONICS CORPORATION
By: ________________________ By: ____________________
Name: ______________________ Name: __________________
Title: _____________________ Title: _________________
FOR AND BEHALF OF
TECHSNABEXPORT CO., LTD.
By: ________________________
Name: ______________________
Title: _____________________
By: ________________________
Name: ______________________
Title: _____________________
[*] Confidential Treatment Requested
