Unassociated Document


    Distributor
Agreement

    
      


      THIS
DISTRIBUTOR AGREEMENT (hereinafter "Agreement") is entered into this 10th day of
November, 2009, by and between:

    

    
      


      IsoRay Medical, Inc., a
Delaware corporation with its principal office at 350 Hills Street, Suite 106,
Richland, Washington 99354 (hereinafter the
"Company"),

    

    
       

      and

    

    
       

      Inter V Medical Inc., a
Canadian Company with its principal office at 5179 Metropolitain East, Montreal,
Quebec, Canada H1R 1Z7 (hereinafter the "Distributor").

    

    
      


       

      RECITALS

    

    
       

      WHEREAS,           
The Company is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware;

    

    
       

      WHEREAS,           
The Distributor is a company duly organized, validly existing, and in good
standing under the laws of Canada;

    

    
       

      WHEREAS,           
The Company manufactures or produces certain products or performs certain
services or owns certain licenses or patents to procedures, processes or tests
with medical applications, described on Exhibit A attached
hereto (collectively, the "Products");

    

    
       

      WHEREAS,           
The Company and the Distributor wish to enter into an agreement whereby the
Distributor will become the exclusive distributor of the Products and will
market the Products, and will promote and sell the Products in the "Territory"
as defined hereinafter in Exhibit B on the
terms and conditions set forth herein;


    

    
       

      WHEREAS,           
The Company from time to time may have products in development or clinical
trials which are pending marketing clearances and may require clinical trials or
governmental filings before full license approval is achievable in the
Territory, and Distributor shall not have the right to distribute Products for
any such trials, distribution rights for which shall be retained exclusively by
the Company until each trial is fully completed and paid for;

    

    
       

      
        WHEREAS,       
    The
Distributor is willing to work with the Company to take the necessary steps in
order to gain such license approvals for the Products in the
Territory.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

    
      


      NOW,
THEREFORE, the parties hereto agree as follows:

    

    
      


    

    
      Section
1.           Appointment of
Distributor. The Company appoints the Distributor, and the Distributor
accepts appointment, as the exclusive distributor of the Products in the
Territory, excluding all Products distributed for clinical trials and protocol
studies in the Territory, distribution rights for which shall be retained
exclusively by the Company until each trial is fully completed and paid for. The
Distributor may sell the Products of the Company covered by this Agreement as
defined in Exhibit
A, only within the Territory as defined in Exhibit B attached to
this Agreement.  Exhibit A shall
further include a description of users, purpose, features and usage associated
with the Products.  In exchange for this right of exclusive
distribution of the Products, Distributor agrees that it shall not sell,
represent or accept appointment as distributor for products having similar
users, isotopes, purpose, features and usage as the Products described in Exhibit A, in
accordance with Section 14.3 herein.

    

    
      


    

    
      Section
2.           Products Covered. The
Products covered by this Agreement are listed on Exhibit A. Each
Product is subject, at the Company's sole discretion, to modification or change
in the part number, design or specification.

    

    


    
      Section
3.           Duration of
Agreement. This Agreement shall become effective on the date first-above
written and shall continue for a period of two (2) years from said date unless
earlier terminated pursuant to Section 14 hereof.  The Agreement may
be renewed in its then-current form only if the parties mutually agree to
renewal in writing at least sixty (60) days prior to the expiration of the term
of the Agreement.

    

    
      


    

    
      Section
4.           Price List. The
current price list and terms are attached to this Agreement as Exhibit D. The
Company reserves the right to change the price list or terms at its sole
discretion with 30 days written notice to the Distributor. Documented orders
placed prior to the notification of price changes will be honored by the Company
at the original prices.

    

    
      


    

    
      Section
5.           Purchase and Sale of the
Products.


    

    
       

      
        	
                5.1

              	
                Purchase
      Quantities. The Distributor shall be responsible for maintaining
      any minimum purchase quantities or performance requirements shown in Exhibit C
      during the time periods specified (collectively, the "Minimum Performance
      Requirements").  In the event that the Minimum Performance
      Requirements shown on Exhibit C are
      not met, the Company shall have the right, but not the obligation, to
      convert this Agreement into a nonexclusive agreement effective the first
      day of the second calendar month following the end of any quarter in which
      Distributor fails to meet any of the Minimum Performance
      Requirements.  To exercise this right, the Company shall provide
      Distributor with written notice of the loss of its exclusive rights on or
      before the tenth day of the first month following the end of the quarter
      in which Distributor failed to meet a Minimum Performance
      Requirement.  In the event that Distributor fails to meet the
      Minimum Performance Requirements, the Company may choose, in its sole
      discretion, to offer the Distributor the option of removing certain
      Products from this Agreement or may choose to terminate the entire
      Agreement for cause as provided in Section 14.4.  If the Company
      provides Distributor with written notice of the loss of its exclusive
      rights pursuant to this Section 5.1, the Company shall no longer have the
      right to terminate the entire Agreement for cause for failure to meet the
      Minimum Performance
Requirements.

              


      

    

    
       

      
        
          
          

        

        
          P.
2

          
            

          

        

        
          
          

        

      

       

      
        	
                5.2

              	
                Purchase
      Orders. Orders for the Products shall be submitted on the Company's
      written Purchase Order Form and must be received by the Company not less
      than ten days prior to the ship date specified on the Purchase Order. All
      Purchase Orders shall be consistent with the provisions of this Agreement
      and any inconsistent terms shall be deemed stricken. All Purchase Orders
      are subject to acceptance or rejection by the Company at its sole and
      absolute discretion.

              


      

    

    
       

      
        	
                5.3

              	
                Order
      Cancellation. The Company may cancel any accepted orders or refuse
      or delay shipment of any orders if the Distributor fails to meet any
      obligation arising under this Agreement including the failure of the
      Distributor to pay for invoices within the period specified in Section
      5.6.

              


      

    

    
       

      
        	
                5.4

              	
                Product
      Delivery. Within fifteen days from acceptance by the Company of
      Distributor's valid Purchase Order, the Products purchased by the
      Distributor hereunder are quoted, and shall be shipped FOB point of
      origin, using a carrier mutually acceptable to the Company and
      Distributor, directly to Distributor's end user
      customer.  Distributor shall notify Company of the means of
      shipping required and shall pay costs of shipping and any other related
      expenses from point of origin.  The Company shall not be
      responsible for any failure of a carrier to meet its delivery
      schedule.

              


      

    

    
       

      
        	
                5.5

              	
                Title and Risk
      of
      Loss. The Distributor shall take title to the Products upon
      shipment from the point of origin as defined in Section 5.4 hereof and all
      risks of loss and expenses in connection with the Products shall
      thereafter rest upon the Distributor including storage, cartage and
      transportation of the Products as well as all insurance, fees, charges,
      and taxes. Any such expenses paid for by the Company to expedite the
      delivery of the Products will be invoiced to the
    Distributor.

              


      

    

    
       

      
        	
                5.6

              	
                Payment Terms.
      The Distributor shall be extended terms of net 30 days from the invoice
      date. Distributor shall make all payments required under this Agreement in
      U.S. Dollars.  The Company reserves the right to delay shipment
      of orders, or make partial shipment of orders, to ensure that the account
      balance does not exceed the maximum dollar limit or the payment terms are
      not met.  If Distributor is delinquent, without basis or without
      prior written mutual agreement that such delinquency is acceptable to
      Company, and payment is not received within 35 days of invoice or shipment
      date, whichever is later, Company may ship subsequent shipments on a
      pre-pay basis until Distributor has made payments to cure such
      delinquency; further, Company may charge, and Distributor shall timely
      pay, a late fee in the amount of 1.5% of the delinquent balance per month
      for amounts over forty-five (45) days.  Delinquency shall be
      cause for termination of this Agreement by the Company as provided in
      Section 14.4.

              


      

    

    
       

      
        	
                5.7

              	
                Records
      Retention.  Distributor shall maintain complete and
      accurate records pertaining to the purchase of the Products for a period
      of three calendar years after the year in which such purchases occurred,
      and in sufficient detail to permit the Company to confirm the accuracy of
      each of the foregoing.

              


      

    

    
       

      
        
          
          

        

        
          P.
3

          
            

          

        

        
          
          

        

      

       

      
        	
                5.8

              	
                Taxes.  In
      the event that Distributor is required to withhold any tax to the tax or
      revenue authorities in any country or other governmental division in the
      Territory regarding any payment to the Company due to the laws of such
      governmental division, such amount shall be deducted from the payment to
      be made and Distributor shall promptly notify the Company of such
      withholding and, within a reasonable amount of time after making such
      deduction, shall furnish the Company with copies of any tax certificate or
      other documentation evidencing such withholding.  Each party
      agrees to cooperate with the other party in claiming exemptions from such
      deductions or withholdings under any agreement or treaty from time to time
      in effect.  Regardless of the withholding requirements imposed
      by authorities in the Territory, Distributor shall be solely responsible
      for all currency conversions taxes and border crossing fees incurred.
      

              


      

    

    


    
      Section
6.           Design Changes. The
Company shall advise the Distributor of all major contemplated changes of design
in the Products with thirty (30) days prior written notice to the date such
redesigned product is first shipped to the Distributor.

    

    
      


    

    
      Section
7.           General Obligations of the
Company. As an inducement to the Distributor to enter into this Agreement
and to consummate the transactions contemplated hereby, the Company hereby
represents, warrants, and covenants to the Distributor as
follows:

    

    
       

      
        	
                7.1

              	
                The
      Company has the full right, title and in some cases, proprietary interest
      in, and to, the Products; and the consummation of the transactions
      contemplated herein and the granting by the Company to the Distributor of
      the right to sell the Products does not require the consent, waiver,
      approval, or authorization of any person or authority and, to the
      Company's knowledge, does not violate any other agreements, instruments,
      patents, or rights of any third
party.

              


      

    

    
       

      
        	
                7.2

              	
                The
      Company shall provide the English language artwork for sales and
      promotional materials; as well as technical sales support by Company
      personnel in the Territory on at least an annual basis, but such technical
      sales support shall not exceed three eight-hour days per year without the
      mutual consent of the
parties.

              


      

    

    
       

      
        	
                7.3

              	
                The
      Company shall provide technical information as reasonably required by the
      Distributor for marketing or regulatory purposes. The Company reserves the
      right to require the Distributor to sign a specific and redundant
      Nondisclosure Agreement for any specific technical information requested
      if such requested information is deemed by the Company to be so sensitive
      that additional safeguards are
warranted.

              


      

    

    
       

      
        	
                7.4

              	
                The
      Company shall be solely responsible for its expenses and those of its
      staff and agents unless otherwise agreed to by the
  parties.

              


      

    

    
       

      Section
8.           General Obligations of
Distributor.  As an inducement to the Company to enter into
this Agreement and to consummate the transactions contemplated hereby, the
Distributor hereby represents, warrants, and covenants to the Company as
follows:

    

    
       

      
        	
                8.1

              	
                The
      Distributor represents that it has experience and expertise in marketing
      and selling products similar to the Products, as well as the financial
      resources to market the Products, and shall use its reasonable best
      efforts to market and sell the Products in the Territory and to achieve
      the maximum sales potential of the Territory.  Distributor
      agrees to diligently and continuously promote the sale of the Products and
      shall: (i) avoid deceptive, unfair, misleading, or unethical trade
      practices that are or might be detrimental to the Company, the Products,
      its customers, or the public, including any disparagement of the Company
      or the Products; (ii) make no false or misleading representations with
      regard to the Company or the Products; (iii) refrain from publishing or
      employing any misleading or deceptive advertising material; (iv) refrain
      from disparaging the Company or the Products, or from otherwise injuring
      the reputation and good standing of the Company; and (v) conduct its
      business in a professional manner which will reflect positively upon the
      Company and its business.

              


      

    

    
       

      
        
          
          

        

        
          P.
4

          
            

          

        

        
          
          

        

      

       

      
        	
                8.2

              	
                The
      Distributor will maintain the Minimum Performance Requirements listed in
      Exhibit C
      hereto. The failure to meet Minimum Performance Requirements shall be a
      breach of this Agreement and may result in loss of exclusivity as provided
      in Section 5.1 or the Company's termination of this Agreement for cause as
      provided in Section 14.4.

              


      

    

    
       

      
        	
                8.3

              	
                The
      Distributor shall maintain an active, direct sales organization of a size
      that can fully exploit the potential of the Territory and keep the
      prospective customers informed of the availability of the Products and
      that is knowledgeable with respect to the clinical procedures in which the
      Products are used as well as the sales features and benefits of the
      Products and their correct operation and use.  Distributor shall
      ensure that the members of its sales organization maintain the skill
      levels, and product and clinical knowledge required to properly sell and
      service the Products.

              


      

    

    
       

      
        	
                8.4

              	
                The
      Distributor shall not promote or sell any of the Products outside the
      Territory and Distributor may not undertake distribution of or accept
      appointment as distributor for products having similar customers uses,
      purpose, features and usage as the Products set forth in Exhibit A, as
      amended from time to time as long as this Agreement has not been
      terminated. 

              


      

    

    
       

      
        	
                8.5

              	
                No
      less than annually during the Term of this Agreement, the Distributor
      shall provide to the Company forecasts of anticipated Product
      requirements. The initial forecast is due within 30 days of execution of
      this Agreement. The Distributor acknowledges that Purchase Orders in
      excess of the quantities set forth in the most recent forecast may require
      additional delivery time as may be mutually acceptable to the
      parties.

              


      

    

    
       

      
        	
                8.6

              	
                The
      Distributor shall cooperate with the Company to implement any marketing,
      promotion or sales strategies in the
Territory.

              


      

    

    
       

      
        	
                8.7

              	
                In
      the event that any documentation related to the Products, including
      without limitation the promotional materials, the technical sales support
      materials or any technical documents, to be printed or not, shall be
      translated into the French language in order to comply with the applicable
      legislation in the Territory or in order to effectively promote the
      Products in the Territory, the Distributor shall be responsible, at its
      own expense, for translation of the above-mentioned documentation and
      shall provide copies of all such translated documentation to the
      Company.

              


      

    

    
       

      
        
          
          

        

        
          P.
5

          
            

          

        

        
          
          

        

      

       

      
        	
                8.8

              	
                The
      Distributor shall, at its own discretion, use reasonable means to promote
      the Products in the Territory including, but not limited to: direct sales
      contact with customers, attendance at trade shows and clinical
      conferences, advertisements in professional publications,
    etc.

              


      

    

    
       

      
        	
                8.9

              	
                The
      Distributor shall take all measures necessary to ensure that the Products
      are handled and stored in an environment that will maintain the quality
      and cleanliness of the
Products.

              


      

    

    
       

      
        	
                8.10

              	
                In
      the possible event of any clinical complications involving the use of the
      Products, adverse reaction, malfunction, injury or other similar claims
      with respect to the Products, the Distributor will promptly gather as much
      information regarding the incident as possible (including the name and
      contact information of the doctor, the hospital, the patient, the
      circumstances, the factors contributing to the incident, and any other
      information reasonably requested by the Company) and report the matter to
      the Company and the local authorities within 24 hours of becoming aware of
      the incident.  Distributor will permit the Company's quality
      assurance personnel full access to all of Distributor's information and
      correspondence concerning the incident at all
  times.

              


      

    

    
       

      
        	
                8.11

              	
                As
      soon as practicable after receiving notice of any claim, action or inquiry
      by any applicable regulatory authority or court of law relating to alleged
      non-compliance with the Products' warranty or any notice with respect to
      any alleged violation of any law on the part of the Products, and of any
      adverse incidents or customer or patient complaints regarding the Products
      of which Distributor becomes aware — Distributor shall notify the Company
      as in writing, and shall consult with the Company regarding responses to
      such claims, actions or inquiries and shall also provide the Company with
      copies of all correspondence in response to such claims, actions or
      inquiries.

              


      

    

    
       

      
        	
                8.12

              	
                The
      Distributor will take all measures reasonably possible to ensure that its
      customers are educated as to the proper use of the Products and that they
      understand the recommendations, precautions and contraindications shown on
      all package inserts and labeling. Distributor
      acknowledges that the Products are medical devices regulated by the FDA
      and Health Canada and agrees to represent the Products in accordance with
      their labeling, manuals, and applicable
      regulations.  Distributor agrees that its sales representatives
      will instruct customers regarding the Products in accordance with the
      Product labeling. All of the duties of Distributor set forth in this
      paragraph shall be accomplished in conformance with usual and customary
      standards generally accepted in the medical device
      industry.  Distributor agrees to refrain from making any claims
      about the Products which do not conform to the specifications for the
      Products provided by the Company, directions for use, product labeling,
      and applicable governmental registrations for such
      Products.  Distributor further agrees to immediately cease,
      following written notice from the Company, making any claims which the
      Company reasonably objects to with respect to the
  Products.

              


      

    

    
       

      
        	
                8.13

              	
                The
      parties agree, warrant and represent that they will each comply with all
      applicable laws, regulations, rules, requirements and ordinances of all
      governmental authorities, including but not limited to ISO requirements,
      applicable to the use, re-use, manufacture, sale, distribution,
      transportation, exportation or importation of Products for their
      particular roles and responsibilities hereunder. All medical device
      licenses and future applications to distribute the Product in Canada are
      solely the responsibility of the Company pursuant to the Therapeutic
      Products Program (TPP) regulated under the laws of Canada. Distributor is
      solely and exclusively responsible for complying with all regulatory
      obligations for sale and/or use of Products in the Territory prior to the
      sale of Products by Distributor in the Territory. Each party agrees,
      warrants and represents that, with respect to the activities to be
      conducted by such party hereunder, it will maintain all licenses, permits
      and other approvals necessary to sell, manufacture, distribute, transport,
      export, import and ship Products.  Upon written request by the
      other party, each party agrees to provide the other party with copies of
      all appropriate documentation for confirmation of said authority to sell,
      manufacture, distribute, transport, export, import and ship
      Products.

              


      

    

    
       

      
        
          
          

        

        
          P.
6

          
            

          

        

        
          
          

        

      

       

      
        	
                8.14

              	
                Distributor
      shall submit for approval by the Company all promotional literature, ad
      copy, and marketing collateral items to be used by Distributor with
      respect to the promotion of Products, including all such items that use
      any of the Company's trademarks or logos for the Products, and shall
      obtain the Company's approval prior to dissemination or use of such
      items.  The Company shall approve or disapprove, in writing, all
      items submitted pursuant to the preceding sentence within fifteen (15)
      days after receipt, and shall not unreasonably withhold said
      approval.  Distributor shall provide the Company with at least
      three (3) copies of all approved materials concurrent with their
      deployment by Distributor.

              


      

    

    
       

      
        	
                8.15

              	
                The
      Distributor is a company duly organized, validly existing, and in good
      standing under the laws of Canada and Distributor has full corporate power
      and authority to enter into this Agreement and to carry out the provisions
      hereof.  Distributor shall provide all sales force (including,
      without limitation, sales administration and training), order entry,
      customer service, reimbursement management, medical affairs, medical
      information, marketing (including all advertising and promotional
      expenditures), warehousing, physical distribution, invoicing, credit and
      collections, production forecasting and other related facilities and
      services necessary or desirable for Distributor's distribution, marketing
      and sales of the Products in the
  Territory.  

              


      

    

    
       

      The
Distributor is a company duly organized, validly existing, and in good standing
under the laws of Canada and Distributor has full corporate power and authority
to enter into this Agreement and to carry out the provisions
hereof.

    

    
       

      
        	
                8.16

              	
                Distributor
      has taken all corporate action necessary to authorize the execution and
      delivery of this Agreement and the performance of its obligations under
      this Agreement.

              


      

    

    
      


    

    
      Section
9.           Additional Rights and Duties
of the Company and the Distributor.

    

    
       

    

    
      
        	
                9.1

              	
                Each
      of the parties hereto acknowledges that, from time to time during the term
      of this Agreement, the parties hereto may come into the possession of
      confidential information of the other party relating to such party's
      customers, operations, activities, intellectual property (including,
      without limitation, trade secrets and know-how), products and/or services,
      (collectively, the "Confidential Information"), and that such information
      is property valuable to the party that has developed it, and that the
      party that has developed it desires to retain it in confidence and
      withhold it from publication to others, and that such Party has a
      legitimate business interest in such intent.  The Distributor
      and the Company shall, to the best of their ability, maintain in strict
      confidence and duly safeguard any and all Confidential Information of the
      other party and shall not use or disclose said information to others. Each
      party shall be entitled, in addition to any other right or remedy it may
      have, at law or in equity, to an injunction, without the posting of any
      bond or other security, enjoining or restraining the disclosing party and
      its affiliates from any violation or threatened violation of this Section
      9.1.  In no event shall a party be entitled to use any of the
      other's Confidential Information, or any derivatives thereof, in
      connection with the sale or production of any products or services that
      are competitive with (direct or indirect) or similar to those products and
      services sold, produced, manufactured, offered for sale, designed or
      developed by the disclosing party or any of its affiliates or parent. Each
      party agrees to refrain from knowingly infringing, in any manner, directly
      or indirectly, on any Confidential Information of the other party (or any
      of its affiliates or parent), regardless of whether such Confidential
      Information has been registered, filed or recorded with the United States
      Patent and Trademark Office, or any similar federal, state or
      international agency or regulatory body.  Each party further
      agrees that it shall comply with all obligations imposed on it by the
      United States Patent and Trademark Office or any similar federal, state or
      international agency or regulatory body with respect to
      the  other party's intellectual property rights. The obligations
      of this provision shall survive the termination of this Agreement (a) for
      the life of the relevant intellectual property rights, in the case of
      patents and trademarks, and (b) for the applicable period described in
      Section 15.3, in the case of Confidential
  Information.

              


      

       

      
        
          
          

        

        
          P.
7

          
            

          

        

        
          
          

        

      

    

    
       

      
        	
                9.2

              	
                The
      Distributor and the Company shall be solely responsible for their
      respective expenses and those of their staff and agents as well as for any
      commitments made directly to customers by either party without the prior
      consent of the other.

              


      

       

    

    
      
        	
                9.3

              	
                The
      Company will supply the Distributor with technical and scientific
      materials and references sufficient to allow the Distributor to describe
      the Products, their correct clinical handling and use and the merits of
      the techniques proposed by the Company. The Company agrees, upon request
      by Distributor, to assist Distributor in ensuring that all technical and
      sales staff of the Distributor are fully educated as to the merits,
      correct use, limitations and contraindications for the use of the
      Products, provided that the Company shall not be obligated to provide
      greater than three eight-hour days of sales support or training to
      Distributor's staff in any twelve-month
period.

              


      

    

    
       

      
        	
                9.4

              	
                The
      Distributor shall use its reasonable efforts to cooperate with the Company
      to meet requests of the Company to participate in, or be present at, any
      procedure involving the Products in the
  Territory.

              


      

    

    
       

      
        	
                9.5

              	
                The
      Distributor acknowledges that in some cases there may be Products
      available for use or sale in the Territory on a "clinical evaluation"
      basis pending formal marketing approval. In such cases, at the Company's
      request, the Distributor will use its best effort to cooperate with the
      Company's regulatory strategy while meeting all required guidelines and
      regulations set forth by the responsible governing body in the Territory.
      In such cases the Distributor may be asked to, and will be responsible
      for, assisting with the accumulation of data and the communication of such
      data to the appropriate personnel at the Company.  Distributor
      acknowledges that it does not have distribution rights with respect to
      Products available for use or sale in the Territory on a "clinical
      evaluation" basis pending formal marketing approval and such distribution
      rights shall be retained by the
Company.

              


      

    

    
       

      
        
          
          

        

        
          P.
8

          
            

          

        

        
          
          

        

      

       

      
        	
                9.8

              	
                Both
      parties to this Agreement will make available to the other such records or
      inspections as are necessary to ensure the compliance of the terms binding
      each party under this
Agreement.

              


      

    

    
       

      
        	
                9.9

              	
                Each
      party agrees that during the term of this Agreement, and for two (2) years
      thereafter, it shall not:  (i) employ or retain on an
      independent contractor basis; or (ii) solicit for employment or for an
      independent contracting basis any person who was, at any time during the
      immediately preceding twelve (12) month period, employed by the other
      party or any of its
affiliates.

              


      

    

    
       

      
        	
                9.10

              	
                Distributor
      and the Company shall each shall continue to own all of their respective
      intellectual property in any form ("IP"), including IP developed or
      acquired by that party after the date hereof, and nothing in this
      Agreement shall be construed as transferring any IP of a
      party.  Nor shall this Agreement be construed to grant any
      license to any such IP, except as expressly provided for herein during the
      term hereof. Any derivative work, as relates to copyright, or improvement
      of a party's IP created by the other party pursuant to this Agreement,
      shall be the property of the party who owns the IP on which the derivative
      work or improvement is based, unless otherwise specifically agreed in
      advance.

              


      

    

    
       

      Section
10.           Health Canada Requirements
and Approval.

    

    
       

      
        	
                10.1

              	
                The
      Company shall work in good faith and shall use its best efforts to
      promptly obtain and maintain Marketing Clearance by Health Canada of any
      new Products.

              


      

    

    
       

      
        	
                10.2

              	
                The
      Distributor will use its best efforts to assist the Company in obtaining
      the approval for the Products in the Territory whether or not Health
      Canada has cleared the Products for
marketing.

              


      

    

    
       

      
        	
                10.3

              	
                The
      Distributor will use its best efforts to assist the Company in meeting any
      requirements set forth by Health Canada pursuant to the gathering of
      information related to any incident or pursuant to any recall of any
      Product mandated by Health Canada or related to the accumulation and
      reporting of clinical data relating to the use of the
      Products.

              


      

    

    
       

      Section
11.           Product Warranty and
Limitations of Liability.

    

    
       

      
        	
                11.1

              	
                The
      Company warrants to Distributor only that the Products, when delivered to
      Distributor's end user customers pursuant to this Agreement, shall be in
      accordance with their specifications as reflected on the labeling
      accompanying each unit of Product shipped, and shall be free of defect in
      materials or workmanship as specified in any applicable Warranty
      Statement.

              


      

    

    
       

      
        
          
          

        

        
          P.
9

          
            

          

        

        
          
          

        

      

       

      
        	
                11.2

              	
                The
      Company will replace at no charge any Product claimed by Distributor to be
      defective in which the Company is able to verify the reported defect, and
      the Company shall assume all costs and expenses related to the shipping
      back to the Company of defective Products by
  Distributor.

              


      

    

    
       

      
        	
                11.3

              	
                Non-defective
      Product is not eligible for return unless agreed to in writing by an
      authorized Company representative. Any non-defective Product which the
      Company may agree to take back will be subjected to a restocking fee of
      15% and must be received by the Company in a condition suitable for
      re-sale.  

              


      

    

    
       

      
        	
                11.4

              	
                Other
      than the indemnity provisions in Section 13 below and the warranty and
      other remedies expressly specified herein, the Company's and its
      affiliates' entire and collective liability arising out of or relating to
      this Agreement, including without limitation on account of performance or
      nonperformance of obligations hereunder, regardless of the form of the
      cause of action, whether in contract, tort (including without limitation
      gross negligence but not including intentional torts, fraud or bad faith),
      statute or otherwise, shall in no event exceed the amounts paid to the
      Company under this Agreement for the Products.  EXCEPT AS
      SPECIFIED IN THIS AGREEMENT, NEITHER PARTY NOR ITS AFFILIATES OR PARENTS
      SHALL, UNDER ANY CIRCUMSTANCES, BE LIABLE TO THE OTHER PARTY OR ITS
      AFFILIATES OR PARENTS FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT,
      PUNITIVE, EXEMPLARY OR SPECIAL DAMAGES OF ANY NATURE WHATSOEVER, OR FOR
      ANY DAMAGES ARISING OUT OF OR IN CONNECTION WITH ANY DELAYS, LOSS OF
      PROFIT, INTERRUPTION OF SERVICE OR LOSS OF BUSINESS OR ANTICIPATORY
      PROFITS, EVEN IF A PARTY OR ITS AFFILIATES HAVE BEEN APPRISED OF THE
      LIKELIHOOD OF SUCH DAMAGES OCCURRING.  No action, regardless of
      form, arising out of this Agreement may be brought by either party more
      than two (2) years after the cause of action has
  accrued.

              


      

    

    
       

      
        	
                Section
      12.

              	
                Insurance.

              


      

    

    
       

      
        	
                12.1

              	
                The
      Company and Distributor each agree to carry general product liability
      insurance in the minimum amount of $2 million per occurrence with a $2
      million aggregate limit
annually.

              


      

    

    
       

      
        	
                Section
      13.

              	
                Indemnification

              


      

    

    
       

      
        	
                13.1

              	
                The
      Company shall indemnify and hold the Distributor harmless from and against
      all costs, claims and damages, which are the result of negligence or
      willful misconduct of the Company in connection with the fulfillment of
      the Company's rights or obligations under this Agreement, with the
      exclusion of defense costs, as determined in a final and non-appealable
      judgment or a settlement agreement which the Company approved. However,
      the Company shall not be obligated to indemnify the Distributor
      unless:

              


      

    

    
       

      
        	
              	
                (a)

              	
                the
      Distributor gives the Company prompt written notice of any claim for which
      it seeks indemnification;

              


      

    

    
      


      
        
          
          

        

        
          P.
10

          
            

          

        

        
          
          

        

      

       

      
        	
              	
                (b)

              	
                the
      Company has been offered the possibility of intervention in a lawsuit
      between Distributor and a third party in connection with the Products at
      its own cost or has approved a settlement releasing both
      Parties.

              


      

    

    
       

      
        	
                13.2

              	
                In
      no event will the Company have any obligation or liability to Distributor
      under Section 13.1 for any of the
following:

              


      

    

     

    
      	
               
      

            	
              (a)

            	
              costs,
      claims and damages due to the Distributor's own negligence, recklessness,
      wrongful intentional acts or omissions, or
  intent;

            


    

     

    
      	
               
      

            	
              (b)

            	
              use
      of the Products or promotion of the Products not in conformity with such
      Product's labeling by Distributor or Distributor's
    customers;

            


    

     

    
      	
               
      

            	
              (c)

            	
              breach
      of any of Distributor's representations or warranties contained in this
      Agreement; or

            


    

     

    
      	
               
      

            	
              (d)

            	
              improper
      storage, handling, or transportation of a Product by the Distributor or
      its agents or customers, including, but not limited to, repackaging or
      removal of a Product from its original
  packaging.

            


    

    
       

      
        	
                13.3

              	
                In
      all of the above circumstances, Distributor and Manufacturer shall
      indemnify, defend and save each other hold harmless the Company from all
      loss, damage, cost or expense of any nature, arising from or in any way
      connected with any injury to persons or property caused by or resulting
      from any act of negligence of the other, or its agents, in the use of the
      Products and against any and all liabilities, damages, losses, costs and
      expenses (including the reasonable fees of attorneys and other
      professionals) to the extent arising out of or resulting from any of the
      items specified in Section 13.2(a) through
  (d).  

              


      

    

    
       

      Section
14.           Termination.

    

    
       

      
        	
                14.1

              	
                Either
      party may terminate this Agreement by giving written notice to such effect
      to the other party if bankruptcy, insolvency or reorganization
      proceedings, or other proceedings analogous in nature or effect, are
      instituted by or against the other party, or if the other party is
      dissolved or liquidated or acquired due to insolvency or reorganization
      proceedings, whether voluntarily or involuntarily, or if a receiver or
      trustee is appointed for all, or a substantial part of, the assets of the
      other party or the other party makes an assignment for the benefit of
      creditors.

              


      

    

    
       

      
        	
                14.2

              	
                Either
      party may terminate this Agreement for cause, by giving written
      termination notice to the other party of breach of any term or condition
      contained in this Agreement in accordance with the provisions of this
      Section 14.  The terminating party shall provide the other party
      an opportunity to cure the breach, and where such cure can be demonstrated
      to both parties' satisfaction within thirty (30) days of the written
      termination notice, termination shall not occur. In the event of the
      termination of this Agreement, the Distributor shall have thirty (30) days
      to close any pending business during which time the company shall honor
      the terms of this Distributor Agreement.


              


      

    

    
      


      
        
          
          

        

        
          P.
11

          
            

          

        

        
          
          

        

      

       

      
        	
                14.3

              	
                Company
      may terminate this Agreement for cause in the event that Distributor sells
      products having similar users, purpose, features and usage as the Products
      described in Exhibit A,
      subsequent to the date of this Agreement in accordance with Section 1
      above.

              


      

    

    
       

      
        	
                14.4

              	
                Company
      may terminate this Agreement for cause in the event that: (i) Distributor
      fails to meet the Minimum Performance Requirements as described in Exhibit C of
      the Agreement; or, (ii) Distributor has payments to Company that are
      delinquent for a period of more than sixty (60)
  days.

              


      

    

    
       

      
        	
                14.5

              	
                Either
      party may terminate this Agreement in the event of a Change in Control of
      the other party. "Change in
      Control" means the
      acquisition by any person or group of persons acting jointly or in concert
      of more than 50% of the issued and outstanding voting securities of the
      Company, where such acquisition is not due to insolvency or liquidation
      proceedings.

              


      

    

    
       

      
        	
                14.6

              	
                In
      the event Distributor terminates the Agreement without cause, or if
      Company terminates the Agreement for cause, Distributor may not undertake
      distribution of or accept appointment as distributor for products having
      similar customers, users, purpose, features and usage as the Products
      described in Exhibit A for a
      period of twenty-four (24) months following termination
      date.  Distributor shall also, within thirty (30) days of
      termination date, provide to Company a list of customers who have
      purchased any of the Products in the Territory during the thirty-six (36)
      months preceding termination
date.

              


      

    

    
       

      Section
15.           Rights and Obligations After
Termination or Expiration.

    

    
       

    

    
      
        	
                15.1

              	
                In
      the event of the termination or expiration of this Agreement for any
      reason, Distributor shall immediately cease selling the
      Products.  For a period of not more than thirty days following
      termination or expiration, the Company shall complete shipments for orders
      placed prior to termination or expiration, but shall not be obligated to
      accept any new orders from Distributor.  Distributor agrees that
      the payment and other terms of this Agreement shall apply to orders placed
      prior to termination or expiration but shipped after termination or
      expiration.

              


      

    

     

    
      
        	
                15.2

              	
                In
      the event of the termination or expiration of this Agreement for any
      reason, Distributor will, within thirty (30) days, remove the Company's
      logos, trademarks or other markings from any printed material, or other
      property which links the Company to the
  Distributor.

              


      

    

     

    
      
        	
                15.3

              	
                In
      the event of the termination or expiration of this Agreement for any
      reason, the confidentiality provisions herein, including those specified
      in Sections 9.1 and 21, shall continue to be in force for a period of
      three (3) years following termination
date.

              


      

    

     

    
      
        	
                15.4

              	
                Upon
      termination or expiration of this Agreement for any reason, Distributor
      shall promptly return to the Company copies of all data, reports, records
      and materials in its possession or control that relate to the Products and
      return to the Company all relevant records and materials in its possession
      or control containing any Confidential Information of the Company
      (provided that Distributor may keep one copy of such Confidential
      Information of the Company for archival purposes only); and Distributor
      shall transfer to the Company ownership of all registration applications,
      registrations and other regulatory filings made or filed for any of the
      Products (to the extent that any are held in Distributor's name), if
      permitted by applicable laws and
regulations.

              


      

    

    
       

      
        
          
          

        

        
          P.
12

          
            

          

        

        
          
          

        

      

       

    

    
      
        Section
16.           Notices. All notices,
requests or other communications required or permitted hereunder shall be deemed
officially sent when delivered by certified airmail letter postage prepaid, or
by facsimile transmission with documentation of successful transmission to the
address or facsimile number set forth below:

      

    

    
       

    

    
      
        	Company:     	
                IsoRay
      Medical, Inc.

              
	 	
                350
      Hills Street, Suite 106

              


      

    

    
      
        	 	
                Richland,
      Washington 99354

              


      

    

    
      
        	 	
                Tel:

              	
                509-375-1202

              


      

    

    
      
        	 	
                Fax:

              	
                509-375-3473

              


      

    

    
      
        	 	
                Email:

              	
                _____________

              


      

    

    
      
        	
              	
                Attn:

              	
                _____________

              


      

    

    
       

    

    
      
        	Distributor:  	Inter
      V medical, Inc.
	 	
                5179
      Metropolitain East

              


      

    

    
      
        	 	
                Montreal,
      Quebec, Canada H1R 1Z7

              


      

    

    
      
        	 	
                Tel:

              	
                514-955-3410

              


      

    

    
      
        	 	
                Fax:

              	
                514-955-3411

              


      

    

    
      
        	 	
                Email:
      genevieb@intervmedical.com

              


      

    

    
      
        	
              	
                Attn:

              	
                Geneviève
      Bédard

              


      

    

    
       

      Section
17.           Distributor Not an
Agent. This Agreement does not establish the Distributor as the agent or
legal representative of the Company, nor the Company as the agent or
representative of the Distributor for any purpose whatsoever. Neither party is
granted any express or implied right or authority by the other party to assume
or to create any obligation or responsibility on behalf of or in the name of the
other party, or to bind the other party in any manner or thing
whatsoever.

    

    
      


      Section
18.           Jurisdiction. This
Agreement and the rights, obligations and relations of the parties shall be
governed by and construed in accordance with the laws of the State of Washington
and the laws of the United States applicable therein. The parties agree that the
courts of the State of Washington located in Benton County shall have
jurisdiction to entertain any action or other legal proceedings based on any
provision of this Agreement.  

    

    
      


      Section
19.           Entire Agreement.
This Agreement constitutes the entire agreement between the parties hereto and
wholly cancels, terminates and supersedes all previous negotiations, agreements
and commitments, whether formal or informal, oral or written, with respect to
the subject matter hereof. All of the terms, provisions, and conditions agreed
on by the parties hereto are expressed herein and except as contained in this
instrument, there are no other further understandings. Any terms stated on any
Purchase Order which conflict with the terms of this Agreement shall be deemed
void and the terms of this Agreement shall prevail.

       

      
        
          
          

        

        
          P.
13

          
            

          

        

        
          
          

        

      

    

    
      


      Section
20.           Distributor
Compensation. The Distributor's sole compensation under this Agreement
shall be derived by marking up the price of the products and re-selling them for
a profit, unless otherwise provided for in a written document from the
Company.

    

    
      


      Section
21.           Non-applicability.
The obligations set forth in Section 9.1 above shall not apply to any
Confidential Information disclosed hereunder which:

    

    
       

      
        	
              	
                (a)

              	
                at
      the time of disclosure, was generally available to the public or has
      become, after the time of disclosure, part of the public domain by
      publication or otherwise through no fault of the party to which the
      information was disclosed, and is thus communicated to the party who
      disclosed the information;

              


      

    

    
       

      
        	
              	
                (b)

              	
                is
      demonstrated by the party, at the time of disclosure, to already be known
      to the party and not acquired, directly or indirectly from the other
      party;

              


      

    

    
       

      
        	
              	
                (c)

              	
                is
      demonstrated, at the time of disclosure, to have been pre-existing
      information already independently developed by the party and not as a
      result of disclosure of the Confidential Information by a party to the
      other;

              


      

    

    
       

      
        	
              	
                (d)

              	
                is
      demonstrated by the party, after the time of disclosure, to have been
      acquired in good faith without any restriction of confidentiality from a
      third party who is under no secrecy obligation to the other party with
      respect thereto, or

              


      

    

    
       

      
        	
              	
                (e)

              	
                is
      no longer treated as confidential by the party and such treatment has been
      confirmed in writing.

              


      

    

    
       

      
        Section
22.           No Waiver. No failure
to exercise or delay in exercising any right or remedy under this Agreement by
either party shall operate as a waiver thereof or of any other right or remedy
which such party may have hereunder, nor shall any single or partial exercise of
such right or remedy preclude any further exercise thereof or of any other right
or remedy which such party may have hereunder. The rights and remedies provided
herein are cumulative and not exclusive of any rights and remedies provided by
law, in equity or otherwise.

      

    

    
       

      
        Section
23.           Severability. In the
event that any provision or any portion of any provision of this Agreement is
adjudged, by a court of competent jurisdiction, to be invalid, illegal or
unenforceable under any applicable law, such provision or portion thereof shall
be deemed to be deleted from this Agreement and the validity of the remainder of
this Agreement shall remain unaffected thereby.

      

    

    
       

      
        Section
24.           Headings. The
descriptive headings of this Agreement have been inserted for convenience and
shall not be deemed to limit or otherwise affect the construction of any
provision hereof.

      

    

    
       

      
        Section
25.           Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original and all of which together shall constitute but one and the
same instrument.

      

    

    
       

      
        
          
          

        

        
          P.
14

          
            

          

        

        
          
          

        

      

       

      
        Section
26.           Company Trademarks and
Logos. The Company hereby grants Distributor the non-exclusive right to
use the Company's trademarks and logos related to the Products in the Territory
solely in connection with the promotion and sale of the Products, subject to the
provisions of this Agreement and for the term hereof.  In the event
that this Agreement expires or is terminated for any reason, Distributor's
rights to use the Company's trademarks and logos pursuant to this Section 26
shall terminate as well.  Whenever Distributor uses the Company's
trademarks or logos in advertising or in any other manner in connection with the
marketing and sale of the Products, Distributor shall clearly indicate the
Company's ownership of the trademarks and logos. When using the Company's
trademarks or logos under this Agreement, Distributor agrees to comply with all
laws pertaining to trademarks in force at any time in the
Territory.  Distributor acknowledges that the Company is the owner of
the Company's trademarks and logos.  Distributor shall not at any time
do, cause to be done, or permit any act or thing inconsistent with, contesting
or in any way impairing or tending to impair such
ownership.

      

    

    
       

      
        Section
27.           Force
Majeure.  Neither party shall be held liable or responsible to
the other party nor be deemed to be in default under, or in breach of any
provision of, this Agreement for failure or delay in fulfilling or performing
any obligation of this Agreement when such failure or delay is due to force
majeure, and without the fault or negligence of the party so failing or
delaying. For purposes of this Agreement, force majeure is defined as causes
beyond the control of the party, including, without limitation, acts of God;
acts, regulations, or laws of any government; war; civil commotion; destruction
of production facilities or materials by fire, flood, earthquake, explosion or
storm; labor disturbances; epidemic; and failure of public utilities or common
carriers. In such event Distributor or the Company, as the case may be, shall
immediately notify the other party of such inability and of the period for which
such inability is expected to continue. The party giving such notice shall
thereupon be excused from such of its obligations under this Agreement as it is
thereby disabled from performing for so long as it is so disabled and the 30
days thereafter. To the extent possible, each party shall use reasonable efforts
to minimize the duration of any force majeure.

      

    

    
       

       [Signature
Page Follows]

       

      
        
          
          

        

        
          P.
15

          
            

          

        

        
          
          

        

      

    

    
       

      IN
WITNESS WHEREOF, the parties hereto, hereby execute this Agreement as of the
date set forth above

    

    
      


    

    
      


    

    
      


    

    
      IsoRay
Medical, Inc., a Delaware corporation

    

    
      


    

    
      


    

    
      
        
          	 	 	 	 	 
	By: 	/s/
      Dwight Babcock	 	Date: Nov. 13, 2009	 
	 	Dwight
      Babcock	 	 	 
	
                   

                	CEO,
      IsoRay Medical, Inc.	 	
                   

                	 


        

         

      

    

    
       

    

    
      Distributor:
Inter V médical,
Inc.

    

    
                      
    A Canadian Company

    

    
       

    

    
      
        
          	 	 	 	 	 
	By: 	/s/
      Geneviève Bédard 	 	Date: Nov. 10th,
      2009	 
	 	Geneviève Bédard	 	 	 
	
                   

                	President	 	
                   

                	 


        

      

      
        
          
          

        

        
          P.
16

          
            

          

        

        
          
          

        

      

    

    
                 

    

    
      EXHIBIT
A

    

    
      PRODUCTS

    

    
       

    

    
      
         

        
          
            	
                    Product Code

                  	
                    Description

                  	
                    Per Seed

                  
	 
      	 
      	 
      
	
                    CS1LNN

                  	
                    Cesium131  Loose
    Seed

                  	
                    [**]

                  
	 
      	
                    Shipped
      non sterile

                  	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    CS1LCS

                  	
                    Cesium131  Loose
    Seed

                  	
                    [**]

                  
	 
      	
                    Shipped
      sterile w/confirmation
      assay

                  	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    CS1MNN

                  	
                    Cesium131
      Seed pre-loaded in Disposable

                  	
                    [**]

                  
	
                  	MickÒ Cartridge	 
      
	 
      	
                    Shipped
      non sterile

                  	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    CS1MCN

                  	
                    Cesium131  Seed
      pre-loaded in Disposable

                  	
                    [**]

                  
	 
      	
                    MickÒ
      Cartridge

                  	 
      
	 
      	
                    Shipped
      sterile

                  	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    CS1MNS

                  	
                    Cesium131  Seed
      pre-loaded in Disposable

                  	
                    [**]

                  
	 
      	
                    MickÒ
      Cartridge

                  	 
      
	 
      	
                    Shipped
      non-sterile w/confirmation assay

                  	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    CS1MCS

                  	
                    Cesium131  Seed
      pre-loaded in Disposable

                  	
                    [**]

                  
	 
      	
                    MickÒ
      Cartridge

                  	 
      
	 
      	
                    Shipped
      sterile w/confirmation assay

                  	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    CSPCS

                  	
                    Cesium131  Seed pre-loaded in
      Needle

                  	
                    [**]

                  
	 
      	
                    Shipped
      sterile w/confirmation assay

                  	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    CS1SCS

                  	
                    Cesium131  Seed Stranded and pre-loaded in
      Needle

                  	
                    [**]

                  
	 
      	
                    Shipped
      sterile w/confirmation assay

                  	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    CS1CNN

                  	
                    Cesium131  Calibration
      Seed

                  	
                     [**]

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    CS131SH

                  	
                    Cesium131  Handling and
      Shipping

                  	
                    [**]

                  
	 
      	 
      	 
      
	
                    XXXX

                  	
                    Iodine-125
      seeds in any configuration

                  	
                    [**]

                  


          

          

            

          

            
            [**]Certain
information in this document has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

             

            
              
                
                

              

              
                P.
17

                
                  

                

              

              
                
                

              

            

          

        

        
EXHIBIT
B

      

    

    
      TERRITORY

    

    
       

      All
provinces and territories of Canada

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      EXHIBIT
C

    

    
       

      MINIMUM  PERFORMANCE  REQUIREMENTS

    

    


     

    Sales
volume of the Products sold by Distributor pursuant to this Agreement during the
quarter ending December 31, 2009 (the "Trial Period Target") must equal or
exceed  [**]
cases.

     

    Future
minimum sales volumes shall be as follows (the "Initial Sales
Targets"):

     

                          


      
        	
                Quarter
      Ending

              	
                Number of
      Cases

              
	
                March
      31, 2010

              	
                [**]

              
	
                June
      30, 2010

              	
                [**]

              
	
                September
      30, 2010

              	
                [**]

              
	
                December
      31, 2010

              	
                [**]

              
	
                March
      31, 2011

              	
                [**]

              
	
                June
      30, 2011

              	
                [**]

              
	
                September
      30, 2011

              	
                [**]

              


      

    

     

     

    If the
Agreement is renewed, during each subsequent quarter following the quarter ended
September 30, 2011, the number of cases sold will be subject to a new
addendum  as mutually agreed to by the parties (the "Subsequent Sales
Targets").  The Trial Period Target, Initial Sales Targets and
Subsequent Sales Targets shall together be referred to in the Agreement as the
"Minimum Performance Requirements."

     

    
      


        
        [**]Certain
information in this document has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      EXHIBIT
D

    

    
      DISTRIBUTOR
PRICE LIST

    

    
      


       

      


       

      


    

    
      [intentionally
omitted]