**ENERGY        **

**NORTHWEST**

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**CONTRACT        MODIFICATION**

**QUALITY        CLASS G**

| **Issued                  by:**           | J.G.                  Paetel        |
|-------------------------------------------|-------------------------------------|
|                                      |                                |
| **CONTRACTOR**                            | **ISORAY,                  INC.**   |
|                                      | 350                  Hills Street   |
|                                      | Richland,                  WA 99354 |
|                                      |                                |
| **Contract                  Number:**     | X40224                              |
| **Modification                  Number:** | 12                                  |
| **Modification                  Date:**   | October                  25, 2005   |

**CONTRACT        PERIOD OF PERFORMANCE**

| State                  Date:                | January                  1, 2003   |
|---------------------------------------------|------------------------------------|
| Estimated                  Completion Date: | December                  31, 2006 |

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**1.**
**DESCRIPTION        OF MODIFICATION**

| cc:    | AR                  (PE60)  |
|--------|-----------------------------|
|   | APEL                  (350) |

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**ENERGY          NORTHWEST**

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|   | **Contract                  Number:**     | **X40224** |
|--------|-------------------------------------------|------------|
|   | **Modification                  Number:** | **12**     |

| Effective                  January 1, 2006                |   |                         |   |                                 |   |                                  |   |
|-----------------------------------------------------------|--------|------------------------------|--------|--------------------------------------|--------|---------------------------------------|--------|
| **Rented                    Space Type**                  |   | **Sq                    Ft** |   | **Rate,                    $/SF/MO** |   | **Monthly                    Charge** |   |
| Entrepreneur                    Lab 221                   |   |                         | 524    |                                 | $      | 1.138                                 |   | $ | 596.31 |   |
| Entrepreneur                    Lab 253                   |   |                         | 624    |                                 | $      | 1.138                                 |   | $ | 710.11 |   |
| Entrepreneur                    Lab 236                   |   |                         | 760    |                                 | $      | 1.138                                 |   | $ | 864.88 |   |
| Entrepreneur                    Lab 255 (N. Half)         |   |                         | 296    |                                 | $      | 1.138                                 |   | $ | 336.85 |   |
| *Entrepreneur                    Lab 255 (S. Half)        |   |                         | 296    |                                 | $      | 1.138                                 |   | $ | 336.84 |   |
| *High                    Bay -                    General |   |                         | 208    |                                 | $      | 1.436                                 |   | $ | 298.69 |   |
| **Total                    for Labs**                     |   |                         |   |                                 |   |                                  |   | **$** | **3,143.68** |   |
| *Office                    252-2                          |   |                         | 133    |                                 | $      | 1.722                                 |   | $ | 229.03 |   |
| *Office                    252-3                          |   |                         | 133    |                                 | $      | 2.292                                 |   | $ | 304.84 |   |
| *Office                    252-4                          |   |                         | 158    |                                 | $      | 2.292                                 |   | $ | 362.14 |   |
| **Total                    for Offices**                  |   |                         |   |                                 |   |                                  |   | **$** | **896.00** |   |
| Janitorial                    Lab 253                     |   |                         | 624    |                                 | $      | 0.083                                 |   | $ | 51.79 |   |
| Janitorial                    Lab 221                     |   |                         | 524    |                                 | $      | 0.083                                 |   | $ | 43.49 |   |
| Janitorial                    Lab 236                     |   |                         | 760    |                                 | $      | 0.083                                 |   | $ | 63.08 |   |
| Janitorial                    Lab 255 (N. Half)           |   |                         | 296    |                                 | $      | 0.083                                 |   | $ | 24.57 |   |
| *Janitorial                    Lab 255 (S. Half)          |   |                         | 296    |                                 | $      | 0.083                                 |   | $ | 24.56 |   |
| *Janitorial                    Lab 2-252-2                |   |                         | 133    |                                 | $      | 0.083                                 |   | $ | 11.04 |   |
| *Janitorial                    Lab 2-252-3                |   |                         | 133    |                                 | $      | 0.083                                 |   | $ | 11.04 |   |
| *Janitorial                    Lab 2-25-24                |   |                         | 158    |                                 | $      | 0.083                                 |   | $ | 13.11 |   |
| **Total                    for Janitorial**               |   |                         |   |                                 |   |                                  |   | $ | 262.68 |   |
| Grand                    Total                            |   |                         |   |                                 |   |                                  |   | **$** | **4,282.36** |   |
| *Previously                    at 2005 Rate               |   |                         |   |                                 |   |                                  |   |   |   |   |

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**ENERGY        NORTHWEST**

**CONTRACT        MODIFICATION (CONTINUED)**

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|   | **Contract                  Number:**     | **X40224** |
|--------|-------------------------------------------|------------|
|   | **Modification                  Number:** | **12**     |

**2.        EXECUTION**

|                |                          |                                   |
|---------------------|-------------------------------|----------------------------------------|
|                | ISORAY,                INC.   |
|           |                     |                              |
| Date: 10/27/05 | By:                 | /s/ Michael                Dunlop |
|                | Michael                Dunlop |
|                | CFO                           |
|                |                                         |                                    |
|---------------------|----------------------------------------------|-----------------------------------------|
|                | ENERGY                NORTHWEST              |
|           |                                    |                               |
| Date: 10/27/05 | By:                                | /s/ Jerry                G. Paetel |
|                | J.                G. Paetel                  |
|                | Principal                Contracting Officer |

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**EXHIBIT        D**

**APEL        Graduation Policy 10.0**

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|   | · | The                  business typically requires more than 5 years to incubate (e.g.,                  biotech) |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | The                  tenant has a newly developed product line and requires additional                  time to                  develop and market. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  maturity of manufacture/marketing requires more time due to unpredictable                  circumstances. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | Goals                  shall be established in the initial                  lease |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | Detailed                  plan shall be provided within the first 2 years of the lease term                  and                  updated semi annually thereafter |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Graduation                  progress reports shall be provided every 6 months after the 2nd                  year of initial lease |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

| **10.2** | Terms                  and criteria |
|----------|-------------------------------------|

|   | · | Maximum                  term to be determined and inserted in initial lease (normal maximum                  lease                  shall be 5 years). |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Graduation                  criteria: |
|--------|--------|---------------------------------------|

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|   | · | 2                  years profitability |
|--------|--------|----------------------------------------|

|   | · | Sufficient                  FTEs and/or contracted work force to sustain                  operations |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | Sufficient                  sales to sustain operations |
|--------|--------|---------------------------------------------------------|

|   | · | Business                  requires more than 9,500 square feet of                  space |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | Business                  sold or ownership has transferred or                  changed |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | Reduced                  need for incubator features and                  services |
|--------|--------|------------------------------------------------------------------------------------|

|   | · | Failure                  to pay rent/debts |
|--------|--------|--------------------------------------------|

|   | · | Reduced                  need for incubator features |
|--------|--------|------------------------------------------------------|

|   | · | Failure                  to participate in annual reviews and/or failure to provide graduation                  status information |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

|   | · | >40%                  revenue from consulting |
|--------|--------|--------------------------------------------------|

|   | · | Not                  meeting growth objectives |
|--------|--------|------------------------------------------------|

|   | · | Waiting                  list of potential occupants |
|--------|--------|------------------------------------------------------|

|   | · | Available                  vacant space with no waiting list |
|--------|--------|--------------------------------------------------------------|

| **10.3** | **Original                  Tenants** |
|----------|---------------------------------------|

|   | · | Contract                  lease term may be extended fro one to three years, reflecting that                  graduation was not addressed during the first years of their                  tenure |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Contract                  renewals are to reflect current graduation                  policy |
|--------|--------|----------------------------------------------------------------------------------------------|

| **10.4** | **Appeals** |
|----------|-------------|

| **10.5** | **Anchor                  Tenants** |
|----------|-------------------------------------|

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