Document:

Exhibit 10.15

RESEARCH AND DEVELOPMENT AGREEMENT

THIS
RESEARCH AND DEVELOPMENT AGREEMENT (“Agreement”), effective
as of April 27, 2006 (“Effective Date”), is made by and between Isonics Homeland Security & Defense Corporation, a
corporation organized under the laws of Colorado, with offices located at 5906
McIntyre Street, Golden, Colorado 80403 (“HSDC”) and Institut für
Umwelttechnologien GmbH (“IUT”) a company duly organized and
existing under the laws of the Federal Republic of Germany and having its office
at Volmerstrasse 9 B, D-12489 Berlin-Adlershof, Federal Republic of
Germany.  IUT and HSDC are sometimes
referred to herein individually as a “Party” and collectively as the “Parties”.  The Parties agree as follows:

A.                                   Affiliates
of HSDC have entered into research and development agreements with IUT dated
December 4, 2002 and June 8, 2004, which agreements (the “Prior Agreements”)
were cancelled pursuant to that Cancellation Agreement dated effective as of
April 27, 2006.

B.                                     Pursuant
to the Prior Agreements, IUT has developed certain technology and products
using such technology and has knowledge and expertise in technology related to
homeland security applications, more specifically described on Schedule A.

C.                                     HSDC
and IUT desire to enter into a new agreement by which HSDC will continue to
fund certain research and development work by IUT for HSDC on technology and
products of interest to HSDC (the “Development Project”).

D.                                    As part of the work to be performed
under this Agreement, the Parties intend to define specific tasks,
deliverables, schedules and payments in mutually agreed-upon Statements of
Work.

E.                                      The
Parties wish to define their roles and responsibilities in connection with the
Development Project, and the fees and royalties to be paid to IUT.

NOW THEREFORE, the Parties hereto agree as
follows:

ARTICLE I

DEVELOPMENT PROJECT

1.01        Statements of Work

The Parties shall
from time-to-time negotiate in good faith and establish Statements of Work
which will define the work to be accomplished by IUT, the goals of such work,
the tangible product expected to result from such work (the “Developed Product”),
and the payments from HSDC to IUT to complete such Statement of Work.  Statements of Work may include work related
to development, improvements,

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modifications or
enhancements of or derivations from the technology and/or products  mentioned in Section 2.01.  Each
Statement of Work will be governed by and construed in accordance with the
terms and conditions of this Agreement, but to the extent there is any
inconsistency between the terms and conditions of a Statement of Work and those
of this Agreement, the terms and conditions of the Statement of Work shall take
precedence and control the rights and obligations of the Parties.  Unless a Statement of Work
specifically provides to the contrary, HSDC may terminate a Statement of Work
at any time, upon not less than 30 days’ notice.

1.02        Development Project

IUT shall, during the period in which IUT is operating
under Statements of Work for HSDC pursuant to this Agreement (the “Development
Period”), supply staff, facilities and equipment sufficient, in its sole
discretion, to perform the “Development Project” as described in the Statements
of Work agreed to between the Parties pursuant to this Agreement, as the
Statements of Work may be amended from time to time.  Representatives for IUT and HSDC shall meet
as needed, either in person or by telephone, to evaluate and discuss the
progress of the Development Project.  All
works created by IUT in the course of its
duties under this Agreement (“Works”) are subject to the “Work for Hire”
provisions contained in Sections 101 and 201 of the United States
Copyright Law, Title 17 of the United States Code.  All right, title and interest to copyrights
in all such Works belong to HSDC provided that the Development Fee according to
Section 3.01  has been paid by HDSC.  Subject to this condition, IUT must disclose
to HSDC all such Works.  In this case,
IUT further agrees to execute and deliver to HSDC all applications, registrations
and documents relating to the copyrights to such Works and provide assistance
to secure HSDC’s title to the copyrights or other intellectual property
protection in such Works.

ARTICLE II

INTELLECTUAL PROPERTY

2.01 Existing Intellectual Property and Developed
Products

(a)           All right, title and interest in and
to inventions, patents, works of authorship, trade secrets, know-how or any
other intellectual property (i) existing prior to the Effective Date of this
Agreement shall remain vested in the Party which owns it immediately prior to
the Effective Date, and (ii) developed independently by a Party outside of work
performed under Statements of Work issued pursuant to this Agreement shall
remain the property of the Party who developed it.

(b)           For clarity, IUT hereby assigns all
intellectual property in the products “NeutroTest I, II and III” as described
in Schedule A to HSDC and agrees to execute in the future such documents as may
be necessary to complete the assignment. 
That intellectual property is the property of HSDC and HSDC, in
consideration of the royalty described below, herewith grants

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to IUT the nonexclusive distribution
rights of products using such technology for Europe and the Middle East. In
addition, HDSC hereby grants to IUT a nonexclusive, non-transferable,
royalty-free license to the assigned Intellectual Property for research
purposes.

(c) In
addition, IUT has developed or is in the process of developing technology named
“Neutroscan” and Gamma-PET” as described in Schedule A.  The technology and Intellectual Property
relating to these projects is the sole property of IUT.  If HDSC is willing and in a position to fund
the entire development of these projects under this Agreement, IUT shall assign
all its intellectual property rights in the resulting products to HDSC in
exchange for the nonexclusive distribution rights in Europe and the Middle
East.

2.02 Rights in Foreground Technology

Except as
specifically provided otherwise in this Agreement, all works of authorship,
trade secrets, know-how or any other intellectual property first created and
reduced to tangible, recordable or permanent form, by employees, contractors,
consultants or agents of either Party during the Development Period and as a
direct result of work performed under this Agreement (all of which are included
within the definition of the term “Works” as used in Section 2.01, above),
shall be termed “Foreground Technology” and shall be owned solely by HSDC. To
the extent that IUT develops Foreground Technology under a Statement of Work,
IUT will assign that Foreground Technology to HSDC on HSDC’s request, but no
less often than annually.

2.03 Rights in Inventions

(a) Except as
specifically provided otherwise in this Agreement, all right, title and
interest in and to inventions created during the Development Period and arising
out of the Development Project either (i) solely by one Party, or (ii) jointly
by one or more of IUT’s employees, contractors, consultants or agents working
together with one or more of HSDC’s employees, contractors, consultants or
agents, shall be owned exclusively by HSDC if the Development Fee has been
paid.  Notwithstanding any other
provision of this Agreement, there is no intention in this Agreement to transfer
to HSDC any inventions, patents, patent applications, trade secrets, know-how,
or other intellectual property developed by IUT outside of the Development
Project during the term of this Agreement.

(b) HSDC shall
grant IUT a nonexclusive, non-transferable, worldwide and royalty-free license
with respect to all inventions made under this Agreement to use the invention
solely for IUT’s research purposes.

(c) If Isonics
ceases to fund these research and development activities, it will negotiate in
good faith a royalty-bearing license so IUT can continue its activities.

(d) HSDC may,
at its expense, file patent applications on inventions described in Section
2.03(a) in one or more countries.  IUT
agrees to cooperate in such filings, and to furnish all documents, information,
or other assistance that may be necessary for the preparation, filing and
prosecution of each such application. 
For the avoidance of doubt,

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HSDC shall not be required to file,
prosecute or maintain any patent application on inventions described in Section
2.03(a).  Nothing contained in the
Agreement shall require HSDC to enforce its rights in such inventions or any
resulting patents thereon, against any third party.

2.04 Licensed Technical Information

(a)           The
Parties acknowledge that certain of IUT’s work under this Agreement will be
based on intellectual property owned by HSDC as described in Section 2.01,
above (“HSDC Licensed Technical Information”). 
Subject to the provisions of this Agreement, for the duration of the
Development Period, HSDC hereby grants to IUT a personal, non-transferable,
worldwide and non-exclusive license (without any right to sublicense) to the
HSDC Licensed Technical Information for the purposes of performing the
Development Project, as defined in the Statements of Work, and for no other
purpose.

(b)           The
Parties acknowledge that certain of IUT’s work under this Agreement will be
based on intellectual property owned or to be developed by IUT (“IUT Licensed
Technical Information”).  Subject to the
provisions of this Agreement, IUT hereby grants to HSDC a personal, worldwide
and non-exclusive license (without any right to sublicense) to the IUT Licensed
Technical Information to the extent any such IUT Licensed Technical Information
is incorporated into or is useful with any Developed Product.

(c)           The
HSDC Licensed Technical Information and the IUT Licensed Technical Information
are collectively referred to herein as the Licensed Technical Information.

(d)           Licenses
granted pursuant to Sections 2.04(a)(b) and (c) are not to be construed either
(i) as consent by the licensor to any act which may be performed by the
licensee, except to the extent impacted by a patent licensed herein to the
licensee, or (ii) to include licenses to contributorily infringe or induce
infringement under U.S. law or a foreign equivalent thereof.

2.05   No Other
Licenses

(a) No right is granted herein to either Party
to use any identification (such as, but not limited to, trade names,
trademarks, service marks or symbols, and abbreviations, contractions or
simulations thereof) owned by or used to identify the other Party or any of its
Subsidiaries or any of its or their products, services or organizations, and
that, with respect to the subject matter of this Agreement, each Party agrees
it will not without the express written permission of the other Party (i) use
any such identification in advertising, publicity, packaging, labeling or in
any other manner to identify itself or any of its products, services or
organizations; or (ii) represent directly or indirectly that any product, service
or organization of the receiving Party is a product, service or organization of
the other Party or any of its Subsidiaries, or that any product or service of

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such
Party is made in accordance with or utilizes any information of the other Party
or any of its Subsidiaries.

(b) Except as
expressly set forth in Article II, no other right or license is either granted
or implied by either party to the other with respect to any technical or
business information, or with respect to rights in any patents, trademarks,
copyrights, trade secrets, mask work protection rights, and other intellectual
property.

ARTICLE III

DEVELOPMENT
AND LICENSE FEES AND ROYALTIES

3.01 Development Fee

(a)           HSDC shall pay to IUT a “Development
Fee” in respect to IUT’s obligations hereunder to meet the development
obligations set forth in the Statements of Work (“SOW”) as agreed between HSDC
and IUT.  No Statement of Work will
require HSDC to make payments as a Development Fee to IUT that exceed $ 100,000
(U.S.) during any month, whether individually or in combination with other
Statements of Work.

(b)           IUT shall render invoices in order for
payments to be made.

(c)           All payments made in respect of the
Development Fee shall be non-refundable.

3.02 Royalties

(a)           In addition to the Development Fee,
HSDC agrees to pay IUT a royalty in an amount equal 2 % of the net selling
price of Developed Products that are sold, leased or otherwise put into use by
HSDC or any of its affiliated entities anywhere in the world as a result of
this Agreement.  Where a Developed Product is included with
other products for sale, the parties will allocate, in good faith, the sales
price between the Developed Product and other products included therewith.

3.03 Payments and Records

(a) Payments to
IUT shall be made in Euros to the address specified above as set forth in the
Statements of Work.

(b)
The royalty payments set forth in Section 3.02 shall be reportable and payable
within 30 days at the end of each semi-annual period ending on April 30th and October 31st. 
HSDC shall furnish to IUT a statement, certified by an authorized
representative of HSDC, identifying in a reasonable manner the number of units
of Developed Products that were subject to the royalty during such semi-annual
period, and the amount payable to IUT pursuant to Section 3.02.  Payments by HSDC shall be made to IUT by wire
to such account as IUT shall advise.

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(c)           HSDC
shall keep full, clear and accurate records of units of Developed
Products.  HSDC shall furnish whatever
additional information IUT may reasonably request from time to time to enable
IUT to ascertain the amounts of royalty fees payable pursuant hereto.

(d)           IUT shall have the right to make an
examination and audit during normal business hours, not more frequently than
annually and subject to prior clearance and coordination with HSDC, of all
records kept pursuant to this Section 3.03 by HSDC and such other records and
accounts that may, under recognized accounting practices, contain information
bearing upon the amounts of fees payable to IUT under this Agreement.  Prompt adjustment shall be made by the proper
party to compensate for any errors or omissions disclosed by such examination
or audit.  Neither such right to examine
and audit nor the right to receive such adjustment shall be affected by any
statement to the contrary appearing on checks or otherwise unless such
statement appears in a letter signed by the party having such right expressly
waiving such right and such letter is delivered to the other party. If such
audit discloses a reported error of 10% or greater with respect to the reported
sums paid to IUT by HSDC during the applicable period subject to such audit,
HSDC shall fully reimburse IUT, promptly upon demand, for the reasonable fees
and disbursements for completing such audit. 
Otherwise, IUT shall be responsible for the cost of each such audit.

ARTICLE IV - TERM AND TERMINATION

4.01 Term

The development
activities for the Statements of Work contemplated by this Agreement shall be
completed in accordance with the descriptions and time periods contained in
such Statements of Work.  The “Term” for
the license rights granted in this Agreement shall continue until the last of
the licensed rights has expired or unless terminated in accordance with this
Agreement

4.02 Termination for Cause

Subject to termination provisions
otherwise set forth in this Agreement:

(a)       In
the event of any material breach of this Agreement by HSDC, or in the event of voluntary or involuntary
bankruptcy or insolvency of HSDC, or the appointment, with or without HSDC’s consent, of a
receiver or an assignee for the benefit of creditors,
IUT may, in addition to any other remedies that it may have, at any time
terminate this Agreement by not less than two months written notice to HSDC
specifying any such breach, unless within the period of such notice all
breaches specified therein shall have been remedied.

(b)       In
the event of any material breach of this Agreement by IUT, HSDC may, in
addition to any other remedies that HSDC may have, at any time terminate this

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Agreement by not less than two months
written notice to IUT specifying any such breach, unless within the period of
such notice all breaches specified therein shall have been remedied.

4.03 Survival

(a) The
rights and obligations of IUT and HSDC in Section 5.01 and Article VI shall
survive and continue after any such termination of this Agreement.

(b) In
the event of termination pursuant to Section 4.02, the breaching Party will be
liable to the non-breaching Party for damages as may be proved.

ARTICLE V

PROTECTION OF INFORMATION

5.01 IUT and HSDC Confidential Information

(a)           “Confidential
Information” shall mean the proprietary and confidential data or information of
a Party, other than trade secrets as such term is defined by applicable law (“Trade
Secrets”), which is of tangible or intangible value to that Party and is not
public information or is not generally known or available to that Party’s
competitors but is known only to that Party and those of its employees,
independent contractors, consultants or agents to whom it must be confided in
order to apply it to the uses intended, including, without limitation,
information regarding that Party’s customers or prospective customers,
marketing methods, business plans and/or rates gained by the other Party as a
result of the other Party’s participation in a Discussion.  In addition, the definition of “Confidential
Information” shall include those items specifically identified as “Trade
Secrets” if it is judicially determined that any such items are not trade
secrets, as defined by applicable law, and such items otherwise meet the
definition of “Confidential Information” as contained in this Section.  Confidential Information shall not include
information which: (i) at the time of disclosure to the party receiving the
information (the “Receiving Party”) is in the public domain through no act or
omission of Receiving Party; (ii) as shown by written records, is already known
by Receiving Party; or (iii) is revealed to Receiving Party by a third party
who does not thereby breach any obligation of confidentiality and who discloses
such information in good faith.

(b)           Each Party hereby acknowledges that
it is in the best business interests of the other Party to insist on the strict
confidentiality of any of its Trade Secrets and Confidential Information that
may be disclosed as a result of activities pursuant to this Agreement. Each
Party agrees not to circumvent the other with respect to any Trade Secrets and
Confidential Information that is developed or disclosed by way of this
Agreement.

(c)           In recognition of the Parties’ need
to protect their legitimate business interests, each Party hereby covenants and
agrees that it shall regard and treat each item of information or data
constituting a Trade Secret or Confidential Information of the

 

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other Party as
strictly confidential and wholly owned by the other Party and that it will not,
for any reason or purpose or in any manner, either directly or indirectly, use,
sell, lend, lease, distribute, license, give, transfer, assign, show, disclose,
disseminate, reproduce, copy, appropriate or otherwise communicate any such
item of information or data to any person or entity for any purpose other than
strictly in accordance with the express terms of this Agreement or any other
written agreement between the Parties. 
With regard to each item of information or data constituting a Trade
Secret, the covenant in the immediately preceding sentence shall apply at all
times during the Term of this Agreement and for as long after the cessation of
this Agreement as such item continues to constitute a Trade Secret under
applicable law; and with regard to any Confidential Information, the covenant
in the immediately preceding sentence shall apply at all times during the Term
of this Agreement and for three years after the termination of this Agreement.

(d)           Each Party shall exercise reasonable
efforts to ensure the continued confidentiality of all Trade Secrets and
Confidential Information known by, disclosed or made available to that party or
that Party’s employees or personnel during the Term of this Agreement.  Each Party shall immediately notify the other
Party of any intended or unintended, unauthorized disclosure or use of any
Trade Secrets or Confidential Information by that Party or any other person of
which that Party becomes aware.  Each
Party shall assist the other Party, to the extent necessary, in the procurement
or any protection of the other Party’s rights to or in any of the Trade Secrets
or Confidential Information.

(e)           Upon termination of this Agreement,
or anytime at the specific request of the other Party, each Party shall return
to the other Party all written or descriptive materials of any kind that
contain or discuss any Confidential Information or Trade Secrets, and the
confidentiality obligations of this Agreement shall continue until their
expiration under the terms of this Agreement.

(f)            Each Party agrees that it shall not,
directly, unless the same is pursuant to an agreement between the Parties: (i)
interfere with, circumvent, avoid, by-pass, or obviate (or attempt to interfere
with, circumvent, avoid, by-pass, or obviate) the other Party’s interest (ii)
interfere with, circumvent, avoid, by-pass, or obviate (or attempt to interfere
with, circumvent, avoid, by-pass, or obviate) the interest or relationship
between the Parties or (iii) in any way or manner use any information or
advantages derived or derivable from activities under this Agreement in its
business or affairs or that of any subsidiary or affiliate.

ARTICLE VI

MISCELLANEOUS PROVISIONS

6.01 Compliance with Rules and Regulations and Indemnification

(a)           Each Party shall be solely responsible
for (i) its personnel’s remuneration, travel, living and other local expenses,
and (ii) payment of all federal, state, social

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security and other
payroll taxes in respect of its personnel, including contributions from them
when required by the law of the country or any political subdivisions thereof
in which such personnel is employed by such Party.

(b)           IUT and HSDC shall, at all times,
each retain the administrative supervision of their respective personnel.

(c)           The parties shall inform each other
promptly of any claim or suit brought by any third party alleging that a
Developed Product infringes any valid United States or international patent.
The parties will then decide whether to defend or settle such claims or suits
at IUT’s cost and expense.

(d)           If any Developed Products become, or
in IUT’s opinion are likely to become, the subject of a claim of infringement,
IUT will have the option to: (1) procure for HSDC the right to continue using
the applicable Developed Product; (2) replace the Developed Product with a
non-infringing Developed Product substantially complying with the products
specifications; or (3) modify the Developed Product so it becomes
non-infringing and performs in a substantially similar manner to the Developed
Product.

6.02 Warranty and Disclaimer

(a)           IUT represents that it owns or has a
right to license, the IUT Licensed Technical Information.

(b)           The Parties acknowledge that the Development
Project is a research-related activity and may not lead to a commercially
viable Developed Product.  All Licensed
Technical Information and other information furnished by IUT under this
Agreement is furnished “AS IS” with all faults, latent and patent, and without
any warranty of any type.

(c)           In addition, IUT represents that it
is not aware of any legal deficiencies of the Intellectual Property assigned in
Section 2.01 (b) and that it owns or has a right to license these rights.

(d)           Except as herein otherwise provided,
neither Party will under any circumstance, whether as a result of breach of
contract, breach of warranty, delay, negligence, tort or otherwise, be liable
to the other Party or to any third party for any consequential, incidental, special,
punitive or exemplary damages and/or loss of profits or revenues of the other
Party or any third party arising out of this Agreement, whether or not the
applicable Party has been advised of the possibility of such damages.

6.03
Addresses

(a)           All notices required or permitted
under this Agreement will be in writing, will reference this Agreement and will
be deemed given:  (i) when personally
delivered, (ii) when sent by confirmed facsimile; (iii) five (5) working days
after having been sent

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by registered or
certified mail, return receipt requested, postage prepaid; or (iv) one (1)
working day after deposit with a commercial overnight carrier, with written
verification of receipt to the addresses set forth in the first paragraph
above.

(b)           Changes in such addresses may be
specified by written notice.

6.04 Integration

This Agreement sets forth the entire
Agreement and understanding between the Parties as to the subject matter hereof
and merges all prior discussions and agreements between them.  Neither of the Parties shall be bound by any
warranties, understandings, modifications or representations with respect to
the subject matter hereof other than as expressly provided herein or in a
writing signed with or subsequent to the execution hereof by an authorized
representative of the Party to be bound thereby.

6.05 Assignability

(a) HSDC
may assign this Agreement and its obligations hereunder to any of its
affiliates provided HSDC remains financially responsible for such affiliates’
performance hereunder.

(b)
During the term of the Agreement, and before completion of all Statements of
Work under the Development Project, IUT may not assign its rights or duties
under the Agreement.

6.06 Choice of Law

The
Parties agree that the law of the State of Colorado, exclusive of its conflict
of laws provisions, shall apply in any dispute or controversy arising with
respect to this Agreement.

 6.07 Escalation and Dispute Resolution

(a)
If a dispute that arises out of or relates to performance under this Agreement,
the following escalation procedure shall be initiated:  The Party raising the dispute shall provide
the other Party with written notice stating in detail the nature of the
dispute.  Within fifteen (15) business
days of the date of such notice, the Parties will designate individuals in
senior management positions who have not previously been involved in day-to-day
operations in the Development Project who shall thereafter meet and negotiate
in good faith to resolve such dispute within the fifteen day period.  If the parties are unable to resolve the
disagreement within such period, the Parties will submit such dispute to
mediation and then (if no resolution by mediation) to arbitration before a
panel of three arbitrators, both to be conducted in New York City, New York in
accordance with the rules of JAMS Endispute, Inc. (www.jamsadr.com).

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(b)   Any award
made (i) shall be a bare award limited to a holding for or against a Party and
affording such remedy as is deemed equitable, just and within the scope of the
Agreement; (ii) shall be without findings as to issues (including but not
limited to patent validity and/or infringement) or a statement of the reasoning
on which the award rests; (iii) may in appropriate circumstances (other than
patent disputes) include injunctive relief; 
(iv) shall be made within four months of the appointment of the
arbitrator; and (v) may be entered in any court of competent jurisdiction.

(c)   The
requirement for mediation and arbitration shall not be deemed a waiver of any
right of termination under this Agreement and the arbitrator is not empowered
to act or make any award other than based solely on the rights and obligations
of the Parties prior to any such termination.

(d) The arbitrators shall be knowledgeable in the
legal and technical aspects of this Agreement and shall determine issues of
arbitrability but may not limit, expand or otherwise modify the terms of this
Agreement.

(e)   Each Party
shall bear its own expenses but those related to the compensation and expenses
of the mediator and arbitrators shall be borne equally.

(f) A request by a Party to a court for injunctive
relief shall not be deemed a waiver of the obligation to mediate and arbitrate.

(g) The arbitrators shall have authority to award
compensatory damages only.  The arbitrators
shall have no authority to award punitive or other damages, and each Party
irrevocably waives any claim thereto.

(h)   Except as
required by law, the Parties, their representatives, other participants and the
mediator and arbitrators shall hold the existence, content and result of
mediation and arbitration in confidence.

6.08 Relationship Between Parties

Neither Party to this Agreement shall
have the power to accept purchase orders on behalf of the other, bind the other
by any guarantee or representation that it may give, or to incur any debts or
liabilities in the name of or on behalf of the other Party.  The Parties acknowledge and agree that
nothing contained in this Agreement shall be deemed or construed to constitute
or create between the Parties hereto a partnership, association, joint venture
or other agency.

6.09 Force Majeure

Except as otherwise provided herein,
Neither IUT nor HSDC shall be liable for any loss, damage, delay or failure of
performance resulting directly or indirectly from any cause which is beyond its
reasonable control, including but not limited to acts of God, extraordinary
shipping or transportation conditions, riots, civil disturbances, wars, states

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of belligerency or acts of the public
enemy, strikes, work stoppages, or the laws, regulations, acts or failure to
act of any governmental authority.  In
the event that performance under this Agreement is prevented for a continuous
period of two months or longer by any of the foregoing causes, either Party
shall have the right to terminate this Agreement by giving written notice to
the other Party.

6.10 Headings

Section and subsection headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of
this Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.

6.11 Waiver

Except as specifically provided for herein, the waiver from time to
time by a Party of any of their rights or their failure to exercise any remedy
shall not operate or be construed as a continuing waiver of the same or of any
other of such Party’s rights or remedies provided in this Agreement.

6.12 Severability

If any term, covenant or condition of this
Agreement or the application thereof to any Party or circumstances shall, to
any extent, be held to be invalid or unenforceable, then the remainder of this
Agreement, or the application of such term, covenant or condition to parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by
law.

6.13
Non-Solicitation

During the Development Period and a period of one
year thereafter, neither Party will, directly or indirectly, employ, or solicit
to employ or initiate contact with any employees of the other Party that are
performing or may reasonably be expected to perform work in furtherance of the
Development Project, for the purpose of inducing them to terminate their
employment with the current employing Party, or to become employed by the other
(non-employing) Party.  This restriction
shall not apply to any employee whose employment with a Party is involuntarily terminated
or who has retired in good standing from such Party.  The term “solicit to employ” shall not be
deemed to include generalized searches for employees through media
advertisements, employment firms or otherwise, that are not focused on persons
employed by a Party.  For purposes
hereof, “employ” shall include any employment, consultant, independent
contractor, agent or similar relationship.

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6.14 Execution in Counterparts

This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original (including
facsimile copies), but all of which together shall constitute one and the same
instrument.

IN
WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be executed in duplicate originals by their duly authorized
representatives on the respective dates entered below.

 

	
  Institut für Umwelttechnologien GmbH

  	
   

  	
  Isonics
  Homeland Security & Defense

  
	
   

  	
   

  	
   

  	
   

  	
  Corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Prof. Dr. Jurgen Leonhardt, Managing

  	
   

  	
  Boris Rubizhevsky, President

  
	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
  Date: April 27, 2006

  
	
  Date: April 27, 2006

  	
   

  	
   

  

 

THIS
AGREEMENT DOES NOT BIND OR OBLIGATE EITHER PARTY IN ANY MANNER UNLESS DULY
EXECUTED BY AUTHORIZED REPRESENTATIVES OF BOTH PARTIES

 

 13Exhibit
10.16

CANCELLATION
AGREEMENT and ASSIGNMENT

THIS CANCELLATION
AGREEMENT and ASSIGNMENT is made as of the 27th day of April 2006 between Isonics Corporation (“Isonics”), a California corporation
whose principal place of business is 5906 McIntyre Street, Golden, CO 80403, IUT Detection Technologies, Inc. (“IUTDT”), a Colorado
corporation whose address is identical to Isonics, and Institut für
Umwelttechnologien GmbH (“IUT”), a company duly organized and
existing under the laws of the Federal Republic of Germany and having its
office at Volmerstrasse 9 B, D-12489 Berlin-Adlershof, Federal Republic of
Germany.

RECITALS

A.             Isonics and IUT entered into an
Agreement dated December 4, 2002 for research and development activities (the “2002
Agreement”), which agreement Isonics intended to and did assign to IUTDT; and

B.             IUTDT and IUT entered into a
Confidential Research and Development Agreement dated June 8, 2004 (the “2004
Agreement”).

C.             The parties desire to cancel and
terminate both the 2002 Agreement and the 2004 Agreement, and to replace such
agreements with a new agreement being entered into simultaneously herewith
between IUT and Isonics Homeland Security & Defense Corporation, a Delaware
corporation (the “2005 Agreement”).

NOW THEREFORE, it
is hereby agreed that, subject to IUT and Isonics Homeland Security &
Defense Corporation entering into the 2005 Agreement:

1.             Isonics
and IUTDT each hereby assign all of their rights, interest, assets, and other
things of value owned, received or that may be received under the 2002
Agreement and the 2004 Agreement to Isonics Homeland Security & Defense
Corporation; and

2.             Isonics,
IUTDT, and IUT each further agree that:

(i)                                     The
2002 Agreement be and hereby is cancelled and terminated and is of no further
force or effect;

(ii)                                  The
2004 Agreement be and hereby is cancelled and terminated and is of no further
force or effect; and

(iii)                               Each of the undersigned
releases each other from any obligations remaining due under either the 2002
Agreement or the 2004 Agreement.

(Signatures on the following page)

 1
 

 

(Signatures to Cancellation Agreement and Assignment)

 

	
  Isonics Corporation

  	
   

  	
  Institut für Umwelttechnologien GmbH

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Boris Rubizhevsky, Senior

  	
   

  	
  Prof. Dr. Jurgen Leonhardt, Managing Director

  
	
  Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  IUT Detection Technologies, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Boris Rubizhevsky, Vice President

  	
   

  	
   

  
					

 

 2

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