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Form of WARRANT AGREEMENT    
    

THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE EXERCISED, SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. 

ISONICS CORPORATION  

 COMMON STOCK PURCHASE WARRANT  

        1.    Issuance; Certain Definitions.    In consideration of good and valuable consideration, the receipt of which is
hereby acknowledged by ISONICS CORPORATION, a California corporation (the "Company"),
                        or registered assigns (the "Holder") is hereby
granted the right to purchase at any time until 5:00 P.M., New York City time, on December 31, 2005 (the "Expiration Date"),
                        (            ) fully paid and
nonassessable shares of the Company's Common Stock, no par value per share (the "Common Stock"), at an initial exercise price per share (the "Exercise Price") of $1.25 per share, subject to further
adjustment as set forth herein. 

        2.    Exercise of Warrants.    This Warrant is exercisable in whole or in part at any time and from time to time,
prior to the earlier of the Expiration Date and the date fixed for redemption under Section 8(a), below. Such exercise shall be effectuated by submitting to the Company (either by delivery to
the Company or by facsimile transmission as provided in Section 8 hereof) a completed and duly executed Notice of Exercise (substantially in the form attached to this Warrant) as provided in
this paragraph. The date such Notice of Exercise is faxed or delivered to the Company shall be the "Exercise Date," provided that the Holder of this Warrant tenders this Warrant to the Company within
five business days thereafter. 

        (a)   The
Notice of Exercise shall be executed by the Holder of this Warrant and shall indicate the number of shares then being purchased pursuant to such exercise. Upon
surrender of this Warrant, together with appropriate payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for
the shares of Common Stock so purchased. 

        (b)   The
Holder must pay the Exercise Price per share of Common Stock for the shares then being exercised in cash or by certified or official bank check. 

        3.    Reservation of Shares.    The Company hereby agrees that at all times during the term of this Warrant there
shall be reserved for issuance upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 

        4.    Mutilation or Loss of Warrant.    Upon receipt by the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. 

        5.    Rights of the Holder.    The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in
the Company, either at law or equity. The rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 

        6.    Protection Against Dilution and Other Adjustments.    

        6.1    Adjustment Mechanism.    If an adjustment of the Exercise Price is required pursuant to Section 6.2, the
Holder shall be entitled to purchase such number of additional shares of Common Stock as will cause (i) the total number of shares of Common Stock that the Holder is entitled to purchase
pursuant to this Warrant, multiplied by (ii) the adjusted Exercise Price per share, to equal (iii) the dollar amount of the total number of shares of Common Stock that the Holder is
entitled to purchase before adjustment multiplied by the total Exercise Price before adjustment. 

        6.2    Capital Adjustments.    In case of any stock split or reverse stock split, stock dividend, reclassification of
the Common Stock, recapitalization, merger or consolidation, or like capital adjustment affecting the Common Stock of the Company, the provisions of this Section 6 shall be applied as if such
capital adjustment event had occurred immediately prior to the date of this Warrant and the original Exercise Price had been fairly allocated to the stock resulting from such capital adjustment. Where
the terms of the preceding sentence are not directly applicable, the board of directors of the Company will apply this Section in a fair, equitable and reasonable manner so as to give effect, as
nearly as may be, to the purposes hereof. A rights 

 

offering
to stockholders shall be deemed a stock dividend to the extent of the bargain purchase element of the rights. 

        6.3    Adjustment for Spin Off.    If, for any reason, prior to the exercise of this Warrant in full, the Company
spins off or otherwise divests itself of a part of its business or operations or disposes all or of a part of its assets in a transaction (the "Spin Off") in which the Company does not receive
compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then 

        (a)   the
Company shall cause (i) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder had all of the Holder's
unexercised Warrants outstanding on the record date (the "Record Date") for determining the amount and number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding
Warrants") been exercised as of the close of business on the trading day immediately before the Record Date (the "Reserved Spin Off Shares"), and (ii) to be issued to the Holder on the exercise
of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the
numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants; and 

        (b)   the
Exercise Price on the Outstanding Warrants shall be adjusted immediately after consummation of the Spin Off by multiplying the Exercise Price by a fraction (if, but
only if, such fraction is less than 1.0), the numerator of which is the numerator of which is the Average Market Price of the Common Stock for the five (5) trading days immediately following
the fifth trading day after the Record Date, and the denominator of which is the Average Market Price of the Common Stock on the five (5) trading days immediately following the fifth trading
day after the Record Date, and the denominator of which is the Average Market Price of the Common Stock on the five (5) trading days immediately preceding the Record Date; and such adjusted
Exercise Price shall be deemed to be the Exercise Price with respect to the Outstanding Warrants after the Record Date. 

        7.    Exercise and Transfer to Comply with the Securities Act; Registration Rights.    

        7.1    Exercise and Transfer.    This Warrant has not been registered under the Securities Act of 1933, as amended,
(the "Act") and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. This Warrant may not be exercised, and neither this
Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective
registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act. Each certificate for the Warrant,
the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company,
setting forth the restrictions on transfer contained in this Section 7. 

        7.2    Registration Rights.    Reference is made to Article V of the Securities Purchase Agreement between the
Holder and the Company pursuant to which this Warrant was issued. The Company's obligations under said Article V and the other terms and conditions thereof are incorporated herein by reference. 

        8.    Redemption.    (a) The Company may redeem this Warrant at its option at a redemption price of $0.10 per Warrant,
at any time during the term of this Warrant, provided that the Redemption Threshold shall have equaled or exceeded $3.75 per share for at least twenty of the thirty consecutive trading days ending not
later than the third day prior to the date on which the Notice of Redemption, as defined below, is given (subject to adjustment in the event of any stock splits or other similar events). Notice of
redemption (the "Notice of Redemption") shall be given not later than the 30th day before the date fixed for redemption. On and after the date fixed for redemption, the Holder shall have
no rights with respect to the Warrants except to receive the $0.10 per Warrant upon
surrender of this Warrant agreement. After Notice of Redemption is received by the Holder, but prior to the date fixed for redemption, the Holder may still exercise this Warrant. 

        (b)   For
the purposes of Section 8(a), the term "Redemption Threshold" shall mean: (i) the last reported closing sale price for the Common Stock as officially
reported by the Nasdaq SmallCap Market, if the Common Stock is then traded on the Nasdaq SmallCap Market; or (ii) the last reported closing sale price on the Nasdaq National Market or a
national securities exchange, if the Common Stock is then traded on the Nasdaq National Market or a national securities exchange, in each case as officially reported by the Nasdaq National Market or
such national securities exchange; or (iii) if the Common Stock is not then traded on the 

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Nasdaq
SmallCap Market, the Nasdaq National Market or a national securities exchange, but is then traded in the over-the-counter market, then the average of the last reported
bid and asked prices of the Common Stock reported by the National Quotation Bureau, Inc. or similar bureau if the National Quotation Bureau, Inc. is no longer reporting such information. 

        9.    Notices.    Any notice or other communication required or permitted hereunder shall be in writing and shall be
delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, two days after the date of deposit in the United States mails, as follows: 

	(i)
	if
to the Company, to: 

Isonics
Corporation

5906 McIntyre Street

Golden,Colorado 80403

Attn: James E. Alexander, President

Telephone No.: (303) 279-7900

Telecopier No.: (303) 279-7300 

	(ii)
	if
to the Holder, to the address set below the Holder's acceptance on page 4, below. 

Any
party may be notice given in accordance with this Section 8 if any of the parties designates another address or person for receipt of notices hereunder. 

        10.    Supplements and Amendments; Whole Agreement.    This Warrant may be amended or supplemented only by an
instrument in writing signed by the parties hereto. This Warrant contains the full understanding of the parties
hereto with respect to the subject matter hereof and thereof and there are no representations, warranties, agreements or understandings other than expressly contained herein and therein. 

        11.    Governing Law.    This Warrant shall be deemed to be a contract made under the laws of the State of New York
for contracts to be wholly performed in such state and without giving effect to the principles thereof regarding the conflict of laws. Each of the parties consents to the jurisdiction of the federal
courts whose districts encompass any part of the City of New York, New York, or the state courts of the State of New York sitting in the City of New York, in connection with any dispute arising under
this Warrant. Each of the parties hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non
conveniens, to the bringing of any such proceeding in such jurisdictions. 

        12.    Jury Trial Waiver.    The Company and the Holder hereby waive a trial by jury in any action, proceeding or
counterclaim brought by either of the parties hereto against the other in respect of any matter arising out or in connection with this Warrant. 

        13.    Counterparts.    This Warrant may be executed in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 

        14.    Descriptive Headings.    Descriptive headings of the several Sections of this Warrant are inserted for
convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 

        IN
WITNESS WHEREOF, the parties hereto have executed this Warrant as of the    day of                        ,
2003. 

	

 	
 	
ISONICS CORPORATION
	

 	
 	

By:	
 	

3

 
Acceptance by Holder  

        The undersigned hereby accepts the Warrants described in the foregoing Warrant agreement in accordance with the terms of the foregoing Warrant agreement and in
accordance with the terms of the Securities Purchase Agreement between the undersigned and Isonics Corporation. 

	

  
	
 	

September            , 2003
	Name:	 	 
	

Address:	
 	

 
	  
	 	 
	

  
	
 	

 
	

  
	
 	

 
	Telephone:	 	 
	Facsimile:	 	 
	Social Security or FEIN number: 
	 	 

        (if joint ownership, both parties must sign and provide the relevant information)

4

 
 
 

NOTICE OF EXERCISE OF WARRANT    
    

        The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant dated as
of                        ,            , to purchase
                        shares of the Common Stock, no par value, of ISONICS CORPORATION and tenders herewith payment in accordance with Section 1 of
said Common Stock Purchase Warrant. 

        —
CASH:
$                                         
  = (Exercise Price × Exercise Shares) 

        Payment
is being made by: 

	—
	enclosed
check

	—
	wire
transfer

	—
	other

        I
understand that I may only exercise this Warrant if there is a registration statement relating to the exercise of this Warrant that is effective under federal and applicable state law,
or alternatively if there is an exemption from registration available under federal and applicable state (which exemption must be established to the satisfaction of Isonics). In each case, I
understand that Isonics may require that I provide it information regarding my financial status, state of residence, and other information necessary to determine whether the exercise is subject to an
effective registration statement or to determine whether an applicable exemption is available. 

        Please
deliver the stock certificate to: 

Dated:

[Name
of Holder] 

        By:

5

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Exhibit 10.12    
    

        PLACEMENT AGENT AGREEMENT  

        THIS PLACEMENT AGENT AGREEMENT is made and entered into as of this 23 day of September, 2003, by and
between Park Capital Securities, LLC with an office at 216 East 45th Street, 9TH Floor, New York, NY 10017 ("Park Capital"), vFinance, Inc. with an office at 3010
North Military Trail, Suite 300, Boca Raton, FL 33431 ("vFinance") and Isonics Corporation with an office at 5906 McIntyre Street, Golden, CO 80403 (the "Company"). Park Capital and vFinance are
collectively referred to as "Placement Agents". 

        WHEREAS, the proposed private placement offering (the "Offering") of the Company's securities is being made under Section 4(6) of
the Securities Act of 1933, as amended (the "Act") pursuant to the terms more fully set forth on Exhibit A. This Placement Agent Agreement (the "Agreement") sets forth the mutual agreements and
understandings between the Company and the Placement Agents relating to the Offering. 

        NOW THEREFORE, in consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 

        1.     The
Placement Agents, NASD member broker-dealers, will introduce the Company to "accredited investors" as defined in Section 2(a)(15) of the Act and
Rule 215 promulgated under the Act for the purchase of units for a minimum of $250,000 (the "Minimum Offering Amount") and a maximum of $1,200,000 (the "Maximum Offering Amount"). The units
consisting of five (5) shares of Common Stock and three (3) Warrants will be offered at $4.00 per unit and will be offered and sold pursuant to the terms more fully set forth on
Exhibit A, attached hereto and made a part hereof. 

        2.     The
sale of Securities (the "Offering") will be made in a private placement through the Placement Agents on a "best efforts" basis pursuant to a Securities Purchase
Agreement and all supplements, amendments and exhibits thereto, all of which constitute an integral part thereof, in accordance with Section 4(6) of the Act and the regulations promulgated
thereunder. The Placement Agents further acknowledge that in connection with the Offering, they are not authorized to, and agree not to, provide any information or make any representation to any
potential purchaser of securities other than as set forth in the Securities Purchase Agreement and the related Offering documents. 

        3.     At
any time after receipt of subscriptions for at least the Minimum Offering Amount the Company may accept such subscriptions from each of the investors and may conduct a
closing (a "Closing") (the date of any such Closing a "Closing Date"). Following receipt of the Minimum Offering Amount the Company may conduct additional Closings until such time as the Company has
received up to the Maximum Offering Amount. Certificates representing shares of the Common Stock and Warrants shall be delivered to the investors no later than ten (10) calendar days after the
Closing Date. 

        4.     The
Company agrees that following execution of the Securities Purchase Agreements, the Park Capital Investors or vFinance Investors, as the case may be, (as defined below
in Section 6 hereof) shall be entitled to the registration rights described in the Securities Purchase Agreement. 

        5.     The
Company has paid $2,500 and has (upon breaking escrow of $250,000 in gross subscription proceeds) agreed to pay an additional $5,000 to Park Capital's counsel for all
legal fees and costs of Park Capital directly and necessarily incurred in connection with the proposed Offering, including but not limited to, the costs of preparing and printing the Securities
Purchase Agreement, review of any Registration Statement and amendments, post-effective amendments and supplements thereto, if any; preparing, printing and delivering all selling
documents, including but not limited to this Agreement, stock and warrant certificates; blue sky fees (for New York and two additional states), filing fees and legal fees and disbursements of Park
Capital's counsel. Park Capital will bear any and all other expenses it may incur in connection with this Offering ("Park's Expenses"). The Company will bear its own expenses incurred in connection
with this offering, including those expenses associated with any Registration Statement and amendments, post-effective amendments and supplements thereto, if any; preparing, printing and
delivering exhibits thereto and copies of the preliminary, final and supplemental prospectus (collectively, the "Company Expenses"). 

        6.     (a)
Upon the Closing of each investment (as defined below) in the Offering, by an investor first introduced to the Company by Park Capital (the "Park Capital Investors"),
Park Capital will receive cash commissions equal to 10% of the aggregate value of such investment. 

1

 

        (b)   Upon
the Closing of each investment (as defined below) in the Offering, by an investor first introduced to the Company by vFinance (the "vFinance Investors"), vFinance
will receive cash commissions equal to 10% of the aggregate value of such investment. 

        7.     Unless
required by law, any services and advice rendered by the Placement Agents pursuant to this Agreement (and the existence of this Agreement) shall not be disclosed
publicly in any manner without their prior written approval and shall be treated by the Company as confidential information except as otherwise provided in paragraph 14, below. The Company
shall not use the name of Park Capital or vFinance, or any officer, director, employee or shareholder thereof in any press release regarding the Offering without the express written permission of Park
Capital or vFinance, as the case may be. All material non-public information given to the Placement Agents by the Company shall be treated by the Placement Agents as confidential
information and shall not be used by the Placement Agents except in rendering its services pursuant to this Agreement. The Company will use its best efforts to clearly delineate to the Placement
Agents any such information. 

        8.     The
Placement Agents reserve the right to conduct legal, business and financial due diligence of the Company to the extent that the Placement Agents, in their sole
discretion, deem it necessary and appropriate. 

        9.     (a)
The Company agrees to indemnify each of the Placement Agents, the directors, officers, employees, shareholders, its attorneys, controlling persons under the Act,
affiliates and agents thereof (each a "Placement Agent Indemnitee," together, the "Placement Agent Indemnitees"), pay on demand and protect, defend, save and hold each Placement Agent Indemnitee
harmless from and against any and all liabilities, damages, losses, settlements, claims, actions, suits, penalties, fines, costs or expenses (and all actions in respect thereof) (including, without
limitation, reasonable attorneys' fees and related expenses) 

        (A)  incurred
by or asserted against any Placement Agent Indemnitee of whatever kind or nature, arising from, in connection with or occurring as a result of, this Agreement
or the matters contemplated by this Agreement, including without limitation, (i) the engagement of the Placement Agents pursuant to this Agreement or any other related agreement, including any
modifications or future additions to such engagement and related activities prior to the date hereof, (ii) any act by the Placement Agents or any Placement Agent Indemnitee taken in good faith
in connection with this Agreement or the transactions contemplated therein (including, without limitation, the purchase of securities of the Company) except to the extent any such act results from the
negligence or willful misconduct of the Placement Agents, (iii) a breach of any representation, warranty, covenant, or agreement of the Company contained in this Agreement, the Securities
Purchase Agreement or any of the other documents utilized in connection with the Offering, (iv) the employment by the Company or by any person affiliated, associated, or otherwise related to,
retained by, or working under the direction of the Company (not including any person who may be an indemnitor under paragraph 9(b), below) of any device, scheme or artifice to defraud, or the
engaging by the Company or by any person affiliated, associated, or otherwise related to, retained by, or working under the direction of the Company in any act, practice or course of business which
operates or would operate as a fraud or deceit, or any conspiracy with respect thereto, in connection with the Offering, or (v) any untrue statement or alleged untrue statement of a material
fact contained in any of the documents used in connection with or otherwise related to the Offering or the omission or alleged omission therefrom of a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading unless as a result of the negligence or willful misconduct of the Placement Agents. 

        (B)  The
Company further agrees that it will not, without the prior written consent of the Placement Agents, settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not the Placement Agents or any Placement Agent Indemnitee is an
actual or potential party to such claim, action, suit or proceeding) unless such settlement, compromise or consent (i) includes an unconditional release of the Placement Agents and each other
Placement Agent Indemnitee hereunder from all liability arising out of such claim, action, suit or proceeding, (ii) does not include any finding, concession, evidence or admission of any
liability, wrongdoing of any nature, violation of any law, rule, regulation or the rights of any person or entity, which could be used in any way as, or deemed to be evidence of, an admission or
concession that any person has or has not suffered any damage, and (iii) does not include any other term or condition that could be detrimental to, injure or adversely affect the business or
reputation of a Placement Agent Indemnitee. 

        (b)   Park
Capital and vFinance, as may be applicable, severally and not jointly, agree to indemnify each of the Company, the directors, officers, employees, shareholders, its
attorneys, controlling persons under the Act, affiliates and agents thereof (each a "Company Indemnitee," together, the "Company Indemnitees"), pay on demand and protect, defend, save and hold each
Company Indemnitee harmless from and against any and all 

2

 

liabilities,
damages, losses, settlements, claims, actions, suits, penalties, fines, costs or expenses (and all actions in respect thereof) (including, without limitation, reasonable attorneys' fees
and related expenses) 

        (A)  incurred
by or asserted against any Company Indemnitee of whatever kind or nature, arising from, in connection with or occurring as a result of, this Agreement or the
matters contemplated by this Agreement, including without limitation, (i) any act by Park Capital or vFinance or any person affiliated, associated, or otherwise related to, retained by, or
working under the direction of Park Capital or vFinance, taken in good faith in connection with this Agreement or the transactions contemplated therein (including, without limitation, the purchase of
securities of the Company) which liability results from the negligence or willful misconduct of Park Capital or vFinance or of any person affiliated, associated, or otherwise related to, retained by,
or working under the direction of Park Capital or vFinance, (ii) a breach of any representation, warranty, covenant, or agreement of Park Capital or vFinance contained in this Agreement, the
Securities Purchase Agreement or any of the other documents utilized in connection with the Offering, (iii) the employment by Park Capital or vFinance or by any person affiliated, associated,
or otherwise related to, retained by, or working under the direction of Park Capital or vFinance of any device, scheme or artifice to defraud, or the engaging by Park Capital or vFinance or by any
person affiliated, associated, or otherwise related to, retained by, or working under the direction of Park Capital or vFinance in any act, practice or course of business which operates or would
operate as a fraud or deceit, or any conspiracy with respect thereto, in connection with the Offering, or (v) any untrue statement or alleged untrue statement of a material fact contained in
any of the documents used in connection with or otherwise related to the Offering or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading to the extent such information was provided to the Company by Park Capital or vFinance for use in the Securities Purchase
Agreement. 

        (B)  Park
Capital and vFinance each further agree that they will not, without the prior written consent of the Company, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not the Company or any Company Indemnitee is an actual
or potential party to such claim, action, suit or proceeding) unless such settlement, compromise or consent (i) includes an unconditional release of the Company and each other Company
Indemnitee hereunder from all liability arising out of such claim, action, suit or proceeding, (ii) does not include any finding, concession, evidence or admission of any liability, wrongdoing
of any nature, violation of any law, rule, regulation or the rights of any person or entity, which could be used in any way as, or deemed to be evidence of, an admission or concession that any person
has or has not suffered any damage, and (iii) does not include any other term or condition that could be detrimental to, injure or adversely affect the business or reputation of a Company
Indemnitee. 

        (c)   Promptly
upon receipt by any Indemnitee (which term includes a Placement Agent Indemnitee or a Company Indemnitee, as the context may require) of notice of any complaint
or the assertion or institution of any claim with respect to which indemnification is being sought hereunder, such Indemnitee shall notify the Company and the Placement Agents in writing of such
complaint or of such assertion or institution, but failure to so notify the Company or the Placement Agents shall not relieve the appropriate party from any obligation such party may have hereunder,
unless, and only to the extent that, such failure results in the forfeiture by such party of substantial rights and defenses, and such failure to so notify the Company or the Placement Agents will not
in any event relieve the Company or the Placement Agents (as appropriate) from any other obligation or liability the Company or the Placement Agents may have to any Indemnitee otherwise than under
this Agreement. If the Company or the Placement Agents (as appropriate) so elect or are requested by such Indemnitee, the Company or the Placement Agents (as appropriate) will assume the defense of
such claim, including the employment of counsel reasonably satisfactory to such Indemnitee and the payment of the fees and expenses of such counsel. In the event, however, that such Indemnitee
reasonably determines in its sole judgment that having common counsel would present such counsel with a conflict of interest or such Indemnitee concludes that there may be legal defenses available to
it or other Indemnitees that are different from or in addition to those available to the Company or the Placement Agents (as appropriate), then such Indemnitee may employ its own separate counsel to
represent or defend it in any such claim and the Company or the Placement Agents (as appropriate) shall pay the reasonable fees and expenses of such counsel. Notwithstanding anything herein to the
contrary, if the Company or the Placement Agents (as appropriate) fail timely or diligently to defend, contest, or otherwise protect against any claim, the relevant Indemnitee shall have the right,
but not the obligation, to defend, contest, compromise, settle, assert crossclaims or counterclaims, or otherwise protect against the same, and shall be fully indemnified by the Company or the
Placement Agents (as appropriate) therefor, including, but not limited to, for 

3

 

the
fees and expenses of its counsel and all amounts paid as a result of such claim or the compromise or settlement thereof. In any claim in which the Company or the Placement Agents (as appropriate)
assume the defense, the Indemnitee shall have the right to participate in such defense and to retain its own counsel therefor at its own expense. 

        (d)   To
the extent any indemnification pursuant to the preceding paragraphs (or any of them) is prohibited or limited by law, the Company and the Placement Agents (as
appropriate) agree to make the maximum contribution with respect to any amounts for which it would otherwise be liable under this Section 9 to the fullest extent permitted by law. 

        (e)   (A)
If (i) Park Capital or vFinance, other than by reason of their negligence or willful misconduct, becomes involved in any capacity in any action, proceeding or
investigation brought by any shareholder of the Company, in connection with or as a result of the consummation of the transactions contemplated by this Agreement, or if Park Capital or vFinance are
impleaded in any such action, proceeding or investigation by any person, or (ii) Park Capital or vFinance, other than by reason of their negligence or willful misconduct, becomes involved in
any capacity in any action, proceeding or investigation brought by the Securities and Exchange Commission ("SEC") against or involving the Company or in connection with or as a result of the
consummation of the transactions contemplated by this Agreement, or if Park Capital is impleaded in any such action, proceeding or investigation by any person, then in any such case, the Company will
reimburse Park Capital and/or vFinance, as the case may be, for their reasonable legal and other expenses (including the cost of any investigation and preparation) incurred in connection therewith, as
such expenses are incurred. The reimbursement obligations of the Company under this section shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms
and conditions to any affiliates of Park Capital and/or vFinance, as the case may be, that are actually named in such action, proceeding or investigation, and partners, directors, agents, employees,
attorneys, accountants, auditors and controlling persons (if any), of Park Capital and/or vFinance, as the case may be, and any such affiliate, and shall be binding upon and inure to the benefit of
any successors of the Company, Park Capital and/or vFinance and any such affiliate and any such person. 

        (B)  If
(i) the Company, other than by reason of its negligence or willful misconduct, becomes involved in any capacity in any action, proceeding or investigation
brought by any shareholder or affiliate of Park Capital and/orvFinance, in connection with or as a result of the consummation of the transactions contemplated by this Agreement, or if the Company is
impleaded in any such action, proceeding or investigation by any person, or (ii) the Company, other than by reason of its negligence or willful misconduct, becomes involved in any capacity in
any action, proceeding or investigation brought by the Securities and Exchange Commission ("SEC") against or involving Park Capital or in connection with or as a result of the consummation of the
transactions contemplated by this Agreement, or if the Company is impleaded in any such action, proceeding or investigation by any person, then in any such case, Park Capital and/or vFinance, as the
case may be, will reimburse the Company for its reasonable legal and other expenses (including the cost of any investigation and preparation) incurred in connection therewith, as such expenses are
incurred. The reimbursement obligations of Park Capital and/or vFinance, as the case may be, under this section shall be in addition to any liability which Park Capital and/or vFinance, as the case
may be, may otherwise have, shall extend upon the same terms and conditions to any affiliates of the Company that are actually named in such action, proceeding or investigation, and partners,
directors, agents, employees, attorneys, accountants, auditors and controlling persons (if any), as the case may be, of the Company and any such affiliate, and shall be binding upon and inure to the
benefit of any successors of the Company, Park Capital or vFinance and any such affiliate and any such person. 

        (f)    (A)
Should Park Capital, vFinance or any of their directors, officers, partners, shareholders, agents or employees, other than by reason of its or their negligence or
willful misconduct, be required or be requested by us to provide documentary evidence or testimony in connection with any proceeding arising from or relating to the engagement of the Placement Agents
under this Agreement, the Company agrees to pay all reasonable expenses (including, but not limited to, fees and expenses of counsel) in complying therewith, payable in advance. 

        (B)  Should
the Company, or any of its directors, officers, partners, shareholders, agents or employees, other than by reason of its or their negligence or willful
misconduct, be required or be requested by us to provide documentary evidence or testimony in connection with any proceeding arising from or relating to the engagement of the Placement Agents under
this Agreement, the Placement Agents agree severally and not jointly to pay all reasonable expenses (including, but not limited to, fees and expenses of counsel) in complying therewith, payable in
advance. 

4

 

        (g)   The
Company and Park Capital and vFinance each hereby consent to personal jurisdiction and service and venue in any court in which any claim which is subject to this
Agreement is brought against any Indemnitee. 

        (h)   All
the terms set forth in this Section 9 shall apply severally and not jointly to Park Capital and vFinance, as may be applicable. 

        10.   The
parties anticipate September 30, 2003 to be the final Closing Date of the Offering, however the parties may extend the Offering date upon mutual agreement
without notice to the investors. The provisions of Section 9 of this Agreement shall survive the term of this Agreement. 

        11.    Closing; Placement and Fees.    

        (a)    Conditions to the Placement Agent's Obligations.    The obligations of the Placement Agents hereunder are
subject to the accuracy of the representations and warranties of the Company contained in this Agreement and the Securities Purchase Agreement, and, as of the Closing Date, to the performance by the
Company of its obligations hereunder and to the following additional conditions: 

        (i)    No Material Misstatements.    The Company's public filings ("SEC Documents") do not contain an untrue statement
of a fact, which in the opinion of the Placement Agents, is material, or omit to state a fact, which, in the opinion of the Placement Agents, is material and is required to be stated therein, or is,
in the opinion of the Placement Agents, necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; 

        (ii)    Compliance with Agreements.    The Company shall have complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder and under the Securities Purchase Agreement at or prior to each Closing; 

        (iii)    Corporate Action.    The Company shall have taken all corporate action necessary in order to permit the valid
execution, delivery and performance of the SEC Documents by the Company, including, without limitation, obtaining the approval of the Company's board of directors, for the execution and delivery of
the SEC Documents, the performance by the Company of its obligations hereunder and the Offering contemplated hereby; 

        (iv)    Opinion of Counsel to the Company.    The Placement Agents shall have received an opinion of counsel to the
Company with respect to the fact that the securities sold in the offering are (or will be) legally and validly authorized, fully-paid, and non-assessable, stating that each of
the Investors may rely thereon as though addressed directly to such Investor, dated as of each Closing Date; and 

        (v)    Officer's Certificate.    The Placement Agents shall receive an Officer's Certificate, signed by the
appropriate parties and dated as of the Closing Date. These certificates shall state, among other things, that the representations and warranties contained herein hereof are true and accurate in all
material respects at such Closing Date with the same effect as though expressly made at such Closing Date. 

        12.    Press Releases, Etc.    Except as otherwise required by applicable law or the rules of a regulatory body, the
Company shall not, during the period commencing on the date hereof and ending thirty (30) days after the Closing Date, issue any press release or other communication, make any written or oral
statement to any media organization or publication or hold any press conference, presentation or seminar, or engage in any other publicity with respect to the Company, their financial condition,
results of operations, business, properties, assets, or liabilities, or the Offering, without the prior written consent of the Placement Agents except in the ordinary course of business and not for
the purpose of soliciting any interest in the Offering. 

        13.    Liability of Placement Agents:    (a) The Company acknowledges that all opinions and advice (written or oral)
given by the Placement Agents to the Company in connection with the engagement of the Placement Agents are intended solely for the benefit and use of the Company in considering the transaction to
which they relate, and the Company agrees that no person or entity other than the Company shall be entitled to make use of or rely
upon the advice of the Placement Agents to be given hereunder, and no such opinion or advice shall be used for any other purpose or reproduced, disseminated, quoted or referred to at any time, in any
manner or for any purpose, nor may the Company make any public references to the Placement Agents, or use the name of Park Capital of vFinance in any annual reports or any other reports or releases of
the Company without the prior written consent of Park Capital of vFinance, as the case may be. 

        (b)   The
Placement Agents represent to the Company that they are broker-dealers registered as such under the Securities Exchange Act of 1934 and applicable state laws, and
they are members in good standing of the 

5

 

National
Association of Securities Dealers, Inc. Each of the Placement Agents further represents and warrants to the Company that they will cause the Offering to be conducted in a manner in
compliance with all applicable laws governing offerings to accredited investors only. In that connection, the Company and the Placement Agents understand that the Company has recently filed a
registration statement with the Securities and Exchange Commission for the registration of shares being offered by the Company and certain selling securityholders. 

        14.   The
Company agrees not to use the name of either of the Placement Agents in any written document used externally without their prior consent, which shall not be
unreasonably withheld, except as otherwise required by law. The Placement Agents recognize that the Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended,
and consequently will be required to make all disclosures required by or that the Company deems is appropriate under the Securities Exchange Act of 1934 and the rules and regulations thereunder. 

        15.   (A)
The Company hereby represents and warrants to the Placement Agents that all representation and warrantees made in the Securities Purchase Agreement shall be true and
correct as of each closing date. 

        (B)  To
the extent the Securities Purchase Agreement contains any representations and warranties by the Placement Agents (including, without limitation, with respect to the
plan of distribution, the manner of the Offering, and other similar sections), they each hereby represent and warrant to the Company that all representation and warrantees made by them in the
Securities Purchase Agreement shall be true and correct as of each closing date. 

        16.   This
Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of law. The parties
hereby irrevocably submit to the exclusive jurisdiction of the Courts of the State of New York. The Company and the Placement Agents hereby waive a trial by jury in any action, proceeding or
counterclaim brought by either of the parties hereto against the other in respect of any matter arising out or in connection with this Warrant. 

        17.   This
Agreement shall be binding upon and inure to the benefit of Park Capital, vFinance and the Company and each of their successors and assigns. This Agreement may not
be assigned by either party without the prior written consent of the other. 

        18.   Park
Capital, vFinance or the Company may terminate this Agreement at any time after September 30, 2003, if the minimum amount of $250,000 is not raised and
anytime after October 10, 2003, if the maximum of $1,200,000 is not raised, but the Company must close on the funds received in escrow if the gross amount is more than $250,000 on or before
September 30, 2003. 

        19.   Nothing
herein shall restrict or otherwise limit Park Capital or vFinance from performing similar or dissimilar services for any other private or publicly listed
companies or for its own account. The provisions of this paragraph 19 shall be enforceable to the fullest extent permitted by law. 

        20.   Once
the minimum of $250,000 is raised and the initial closing takes place, each of the Placement Agents severally shall provide non-exclusive consulting
services to the Company up to and including March 30, 2004 under a separate agreement to be negotiated by the parties. Although each of the Placement Agents shall be obligated to render the
advice contemplated by this Agreement upon reasonable request of the Company, each of the Placement Agents shall not be obligated to spend any specific amount of time in so doing. Each of the
Placement Agents' duties may include but will not necessarily be limited to, providing recommendations concerning 

	(a)
	changes
in the capitalization of the Company;

	(b)
	changes
in the Company's corporate structure;

	(c)
	offerings
of securities in public and private transactions;

	(d)
	alternative
uses of corporate assets;

	(e)
	structure
and use of debt;

	(f)
	sales
of stock by insiders pursuant to Rule 144 or otherwise;

	(g)
	strategic
relationships; and

	(h)
	mergers
and acquisitions. 

6

 

        In
consideration of these services the Company has agreed that the Placement Agent shall receive the fees set forth in Section 6 of this Agreement. Except as contemplated by the
terms hereof or as required by applicable law, the Placement Agents shall keep confidential all material non-public information provided to it by the Company, and shall not disclose such
information to any third party, other than such of its employees and advisors as the Placement Agents determine to have a need to know. 

        21.   This
Agreement, including Exhibit A attached hereto and made a part hereof, embodies the entire agreement and understanding between the parties hereto and
supersedes any prior agreements or understandings, oral or written, relating to the subject matter hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any
respect, such determination will not affect such provision in any other respect or any other provision of this Agreement, which will remain in full force and effect. This Agreement may not be amended
or otherwise modified or waived except by an instrument in writing signed by the Company, Park Capital and vFinance. This Agreement may be executed in any number of counterparts, each of which
together shall constitute one and the same original document and a facsimile copy of a signed counterpart shall be deemed an original. 

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written. 

	

 	
PARK CAPITAL SECURITIES, LLC
	

 	

By:	

/s/ Philip Orlando

	 	 	Name:	Philip Orlando
	 	 	Title:	President and CEO
	

 	
vFINANCE, INC.
	

 	

By:	

/s/ Richard Rosenblum

	 	 	Name:	Richard Rosenblum
	 	 	Title:	Senior Vice President
	

 	
ISONICS CORPORATION
	

 	

By:	

/s/ Boris Rubizhevsky

	 	 	Name:	Boris Rubizhevsky
	 	 	Title:	Senior Vice President

EXHIBIT A  

        IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. NO FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY HAS RECOMMENDED THESE SECURITIES. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR
DETERMINED THE ADEQUACY OF THIS TRANSACTION. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

        THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. PURCHASERS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

ISONICS CORPORATION  

 SALE OF COMMON STOCK AND WARRANTS  

 SUMMARY OF TERMS  

	Issuer:	 	Isonics Corporation (the "Company").
	 	 	 

7

 

	

Placement Agents:	
 	

Park Capital Securities, LLC ("Park Capital") and vFinance, Inc. ("vFinance")
	

Amount of Financing:	
 	

A minimum of $250,000 and a maximum of $1,200,000 (the "Offering").
	

Type of Securities:	
 	

A unit consisting of five (5) shares of Common Stock and three (3) Warrants.
	

 	
 	

Each Warrant will have an exercise price of $1.25 and will entitle the Warrant holder to receive one (1) share of Common Stock. The Warrants if not exercised sooner will expire on December 31, 2005. The Warrants are redeemable by the
Company at $.10 per share if the underlying Common Stock trades at or above $3.75 for any 20 trading days in a 30 consecutive trading day period.
	

Offering Price:	
 	

The Offering Price per unit will be $4.00
	

Anticipated Closing Date:	
 	

September 30, 2003, for closing on the $250,000 minimum and October 10, 2003, for closing on balance of up to $1,200,000 gross proceeds in the Offering.
	

Distribution of Stock

Certificates and Warrants:	
 	

Subsequent to the final Closing and receipt of original signatures on all required documents from investors, the Company will distribute all stock certificates and warrants to the investors.
	

Use of Proceeds:	
 	

General working capital.
	

Accredited Investors:	
 	

Neither Park Capital nor vFinance will solicit any person in connection with the Offering who is not known to Park Capital or vFinance to be an accredited investor.
	

Purchase Agreement:	
 	

The investment will be made pursuant to a securities purchase agreement reasonably acceptable to the Company and the investors, which securities purchase agreement will contain, among other things, appropriate representations and warranties of the
Company, covenants of the Company reflecting the provisions set forth herein and appropriate conditions of Closing. Additionally, the investors will make such representations and warranties as are customary in transactions of this kind, including,
without limitation, representations regarding due organization, authorization, purchase for investment and not for resale or distribution, and investment experience. Park Capital and vFinance will offer, and the Company will sell the securities to
accredited investors only pursuant to Rule 506 of Regulation D promulgated under the Securities Act of 1933, as amended.
	

Placement Fees:	
 	

In connection with the Offering, the Company will pay to Park Capital a placement fee on investments made by investors who are Park Capital clients in this Offering. The fee shall consist of a cash payment equal to ten percent (10%) of the amount of
such investment.
	

 	
 	

In connection with the Offering, the Company will pay to vFinance a placement fee on investments made by investors who are vFinance clients in this Offering. The fee shall consist of a cash payment equal to ten percent (10%) of the amount of such
investment.
	

Registration:	
 	

The Company shall use its best efforts to ensure that a registration statement (the "Registration Statement") is filed on or before thirty (30) calendar days after the final Closing Date of the Offering as described in paragraph 10 of the
Placement Agent Agreement (which date is referred to herein as the "Registration Filing Deadline"). The Registration Statement will include for resale by the holders in accordance with the plan of distribution set forth therein the Common Stock
included within the Units and the Common Stock underlying the Warrants (the "Registrable Securities"), but not the Warrants themselves. In the event the Registration Statement covering this Offering is not filed on or before the Registration Filing
Deadline, the Company shall pay the Investor, as liquidated damages, 2% of the purchase price of the units for every 30 calendar day period that the Registration Statement is not filed. No payment shall be required if the delay is ten days or less;
the liquidated damages will be 1% if the delay is more than ten days but not more than twenty days.
	 	 	 

8

 

	

 	
 	

The Company shall use its best efforts to cause such Registration Statement to become effective no later than ninety (90) calendar days following the Registration Filing Deadline. In the event the Registration Statement is not declared effective
within ninety (90) calendar days following the Registration Filing Deadline (unless the delay was caused by the failure of any person named in the Registration Statement as a selling securityholder to provide the Company with information
regarding the selling securityholder necessary to be included therein or to agree to a customary cross indemnification agreement), the Company shall pay the Investor, as liquidated damages, 2% of the purchase price of the units for every 30 calendar
day period, or portion thereof, that the registration statement is not declared effective. No payment shall be required if the delay is ten days or less; the liquidated damages will be 1% if the delay is more than ten days but not more than twenty
days. Any liquidated damages shall be paid in cash or freely trading common stock at the Company's option, and such damages shall continue until the obligation is fulfilled, subject to a maximum of 12 months from the Closing Date.
	

 	
 	

The Company shall respond to all SEC comments promptly, and will keep Park Capital and vFinance advised with respect to the SEC's review of the Registration Statement.
	

 	
 	

The Company agrees to make such filings as are necessary to keep the Registration Statement effective until the earlier of (i) the second anniversary of the first date on which no Warrants remain unexercised or unexpired or (ii) the date
all shares of Common Stock and shares of Common Stock underlying the Warrants, purchased by the investors in this Offering, may be sold under Rule 144 without volume limitations.
	

 	
 	

The Company shall bear registration expenses of the Registration Statement and its counsel shall prepare and file the Registration Statement. Park Capital, vFinance and any other person for whom Registrable Securities are included in the Registration
Statement will bear their own expenses. Each such person will also provide the Company with information regarding "Selling Securityholders" and "Plan of Distribution" and other information required to be included about them, their stock and warrant
ownership, and otherwise that is necessary to be included in the Registration Statement. Park Capital and vFinance understand that they and persons associated with them will likely be considered to be underwriters by the SEC and the SEC will likely
require this disclosure in the Registration Statement. The Company and each person for whom Registrable Securities are included in the Registration Statement will enter into mutual indemnification agreements.
	

Share Issuance:	
 	

At all times, the Company shall keep available Common Stock duly authorized for issuance against the Warrants. If at any time, the Company does not have available an amount of authorized and unissued Common Stock necessary to satisfy the full
exercise of the then outstanding Warrants, the Company shall call and hold a special meeting within 30 days of such occurrence, for the purpose of increasing the number of shares authorized. Management of the Company shall recommend to
shareholders, officers and directors to vote in favor of increasing the number of common shares authorized.
	

Legal Fees:	
 	

The Company agrees to pay for legal expenses in the amount of $7,500 associated with document preparation, review of the Registration Statement to be prepared by the Company's counsel and all amendments thereto. $2,500 shall be payable immediately
prior to document preparation and the balance of $5,000 shall be payable upon funding of the first funds to be released from escrow and shall not be payable unless at least $250,000 is released from escrow.
	

Escrow:	
 	

Wachovia Bank shall act as Escrow Agent and the Company shall be responsible for escrow fees which will be assessed in accordance with a schedule to be provided by Wachovia Bank before the Company has any binding obligation of any nature to Park
Capital or to Wachovia Bank.
	 	 	 

9

 

	

Blue Sky Laws:	
 	

Counsel for Park Capital shall be responsible for filing the necessary forms for Blue Sky filings for the Offering with New York and two additional states, but the Company shall be responsible for all filing fees and fees for specific consents for
the service of process. The Company will pay Park Capital's counsel for each state thereafter the amount of $500 plus all filing fees and fees for specific consents for the service of process. The Company's counsel shall prepare and file the
Form D. The Company, Park Capital and vFinance agree that no sales will be made to any Investor in a state in which the Blue Sky filing requires that the Company generally consent to the service of process as a condition of Blue Sky
qualification, or that may impose an escrow or other requirements on the Company or its affiliates of the sort that are generally referred to as "merit requirements". Counsel for Park Capital and vFinance will provide counsel to the Company with
copies of all communications to and from any blue sky administrator relating to this Offering prior to submitting to any such blue sky administrator, and promptly after receipt from any blue sky administrator.
	

Notice and Convertibles:	
 	

The Company agrees to give Park Capital and vFinance written notice of any financing that it closes until the earlier of (a) ninety (90) calendar days following the date the Registration Statement is declared effective or (b) eighteen
(18) calendar months following the date closing of the Offering, the earlier of (a) and (b) being referred to as the "Notice Period". Such written notice shall include the amount of the financing, the date the closing of the financing
occurred, the names of the investors and the general terms of the financing.
	

 	
 	

The Company agrees that during the Notice Period it (i) shall not enter into any other financing transactions with other investors prior to December 31, 2003, (except with respect to financing that is currently being negotiated through
Quivira Venture Partners and its affiliates); (ii) shall not enter into any convertible financing, equity line financing, common stock with a reset financing or warrant with a reset financing and (iii) shall not sell any common stock,
warrants, units or preferred stock for less than $.80.
	

Regulation D Offering:	
 	

The Securities offered hereby have not been registered under the Securities Act of 1933 as amended, or any State Securities Laws and are being offered and sold in reliance on exemptions from the Registration requirements of such laws for sales of
securities to accredited investors only. The Securities are subject to the restrictions of transferability and resale and may not be transferred or resold except as permitted under such laws pursuant to registration or an exemption therefrom. The
Securities have not been approved or disapproved by the Securities and Exchange Commission or any other regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of this offering or the accuracy or adequacy of
the offering materials. Any representation to the contrary is unlawful.
	

Legal Compliance:	
 	

The Company, Park Capital and vFinance understand that the Company has recently filed a registration statement with the Securities and Exchange Commission for the registration of shares being offered by the Company and certain selling
securityholders. Counsel for the Company, Park Capital and vFinance will review these issues before commencing on any aspect of the Offering to determine whether the Offering can be completed in the light of the guidance given by the Securities and
Exchange Commission in Current Issues and Rulemaking Projects (Div. Corp. Fin. At §VIII.A.9 (pg 55), "Integration of Registered and Unregistered Offerings", Rel. 33-7606A; and Black Box, Inc., (SEC No Act. Pub. Avail. 6/26/1990) and their progeny.
	

 	
 	

To the extent that Park Capital and vFinance undertake the Offering, they will do so in compliance with all laws, rules, and regulations applicable to the conduct and completion of an offering to a limited number of accredited investors
only.
	 	 	 

10

 

	

Mutual Indemnification:	
 	

The Company, Park Capital and vFinance will enter into a mutual indemnification agreement that is appropriate to these circumstances. Such indemnification agreement may be included in the Purchase Agreement discussed above or in a separate
agreement.
	

Non-binding Term Sheet:	
 	

This term sheet is not binding on the parties. The Securities Purchase Agreement between the Company and the accredited investors, and a Placement Agent Agreement between the Company, Park Capital and vFinance, when prepared and executed, will be
binding upon the parties.

	

ISONICS CORPORATION	
 	

PARK CAPITAL SECURITIES, LLC
	

By:	
 	

/s/ Boris Rubizhevsky
	
 	

By:	
 	

/s/ Philip Orlando

	 	 	Name: Boris Rubizhevsky

Title: Senior Vice President	 	 	 	Name: Philip Orlando

Title: President and CEO
	

 	
 	

 	
 	

vFINANCE, INC.
	

 	
 	

 	
 	

By:	
 	

/s/ Richard Rosenblum

	 	 	 	 	 	 	Name: Richard Rosenblum

Title: Senior Vice President

11

QuickLinks

Exhibit 10.12

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