NEITHER
      THIS WARRANT NOR THE STOCK FOR WHICH IT MAY BE EXERCISED HAS BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"), OR ANY OTHER
      FEDERAL OR STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED OF EXCEPT AS EXPRESSLY PROVIDED HEREIN. 

    


     

    ISORAY,
      INC.

     

    
      	 	
              COMMON
                STOCK PURCHASE
                WARRANT   

            	
              No._____

            


    

     

    This
      certifies that, for value received, __________________________ ("Holder"),
      is
      entitled to subscribe for and purchase from IsoRay, Inc., a Minnesota
      corporation ("Company"), ________ shares, subject to adjustment as set forth
      in
      Article II below
      ("Warrant Shares"), of Common Stock of the Company, par value $0.001 per share
      ("Common Stock"), at the exercise price of $6.00 per share, which price is
      subject to adjustment as set forth in Article II below
      (the "Exercise Price"), at any time and from time to time beginning on the
      date
      of this Warrant as set forth below ("Exercise Date"), and ending on the date
      that is two (2) years after the date of this Warrant ("Expiration Date"), upon
      written notice from the Holder to the Company ("Notice") and subject to the
      terms provided herein.

     

    This
      Warrant is subject to the following provisions, terms and conditions:


     

    ARTICLE
      I.

     

    EXERCISE;
      RESERVATION OF SHARES

     

    Section
      1.01 Warrant
      Exercise.
      The
      rights represented by this Warrant may be exercised by the Holder at any time
      and from time to time prior to the expiration of this Warrant, upon Notice,
      by
      the surrender at the principal office of the Company of this Warrant together
      with a duly executed subscription in the form annexed hereto as Exhibit A
      ("Subscription Form") and accompanied by payment, in certified or immediately
      available funds, of the Exercise Price for the number of Warrant Shares
      specified in the Subscription Form. The shares so purchased shall be deemed
      to
      be issued to the Holder as the record owner of such shares as of the close
      of
      business on the date on which this Warrant shall be exercised as hereinabove
      provided. No fractional shares or scrip representing fractional shares shall
      be
      issued upon exercise of this Warrant and the number of shares that shall be
      issued upon such exercise shall be rounded to the nearest whole share without
      the payment or receipt of any additional consideration. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
      1.02 Certificates. Certificates for the shares purchased pursuant to
      Section 1.01 shall be delivered to the Holder
      within ten (10) days after the rights represented by this Warrant shall have
      been so exercised, and a new Warrant in the name of the Holder representing
      the
      rights, if any, that shall not have been exercised prior to the Expiration
      Date
      with respect to this Warrant shall also be delivered to such Holder within
      such
      time, with such new Warrant to be identical in all other respects to this
      Warrant. The Holder shall for all purposes be deemed to have become the holder
      of record of the Warrant Shares on the date this Warrant was exercised (the
      date
      the Holder has fully complied with the requirements of Section 1.01),
      irrespective of the date of delivery of the certificate or certificates
      representing the Warrant Shares; provided that, if the date such exercise is
      made is a date when the stock transfer books of the Company are closed, such
      person shall be deemed to have become the holder of record of the Warrant Shares
      at the close of business on the next succeeding date on which the stock transfer
      books are open. The term "Warrant," as used herein, includes any Warrants into
      which this Warrant may be divided or combined and any subsequent Warrants issued
      upon the transfer or exchange or reissuance upon loss hereof.

     

    Section
      1.03 Optional
      Call.
      At any
      time after the date of this Warrant and following the first consecutive two
      month period thereafter in which the Company's common stock was trading at
      or
      above $9.00 per share, the Company shall have the option to call all or a
      portion of this Warrant (and as to which no Subscription Form has been received
      by the Company), at $0.01 per share (the "Call Price"). Notice of the call
      (the "Call Notice") shall be given to the Holder at least 30 days
      prior to the date on which the call will occur (the "Call Date"). Such notice
      shall be deemed received 2 days after it is deposited in the United States
      mail,
      certified or registered mail, postage prepaid, or 1 day after it is
      deposited with an express mail courier for overnight delivery, or on the same
      day that it is delivered via hand delivery or telefacsimile transmission. This
      Warrant may be exercised in accordance with Section 1.01 at any time prior
      to
      the Call Date. 

     

    Section
      1.04 Company
      Covenants.
      The
      Company represents, warrants, covenants and agrees: 

     

    (a) That
      all
      shares of Common Stock that may be issued upon exercise of this Warrant will,
      upon issuance, be validly issued, fully paid and nonassessable and free from
      all
      taxes, liens and charges with respect to the issue thereof; and

     

    (b) That
      during the period the rights represented by this Warrant may be exercised,
      the
      Company will at all times have authorized, and reserved for the purpose of
      issue
      and delivery upon exercise of the rights evidenced by this Warrant, a sufficient
      number of shares of Common Stock to provide for the exercise of the rights
      represented by this Warrant. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II.


     

    ADJUSTMENTS

     

    Section
      2.01 Adjustment
      Events.

     

    (a) Capital
      Events.
      If any
      reorganization or reclassification of the capital stock of the Company, or
      any
      consolidation or merger of the Company with another corporation, or the sale
      of
      all or substantially all of its assets to another corporation (in any instance,
      a "Capital Event") shall be effected in such a way that holders of Common Stock
      shall be entitled to receive stock, securities or assets (including cash) with
      respect to or in exchange for their Common Stock, then, as a condition of such
      Capital Event, lawful and adequate provisions shall be made whereby the Holder
      hereof shall thereafter have the right to purchase and receive upon the basis
      and upon the terms and conditions specified in this Warrant and in lieu of
      the
      shares of the Common Stock of the Company immediately theretofore purchasable
      and receivable upon the exercise of the rights represented hereby, an amount
      of
      such shares of stock, securities or assets (including cash) as may have been
      issued or payable with respect to or in exchange for a number of outstanding
      shares of such Common Stock equal to the number of shares of such stock
      immediately theretofore purchasable and receivable upon the exercise of the
      rights represented hereby had such Capital Event not taken place. 

     

    (b) Preservation
      of Value.
      In the
      case of any Capital Event, appropriate provision shall be made with respect
      to
      the rights and interests of the Holder of this Warrant to the end that the
      provisions hereof (including, without limitation, provisions for adjustment
      of
      the number of shares that may be issued upon exercise of this Warrant and the
      Exercise Price hereof) shall thereafter be applicable, as nearly as may be,
      in
      relation to any shares of stock, securities or assets (including cash)
      thereafter deliverable upon the exercise of the rights represented hereby.
      

     

    (c) Obligation
      Expressly Assumed.
      The
      Company shall not effect any consolidation, merger or sale of all or
      substantially all of its assets, unless prior to the consummation thereof the
      successor corporation (if other than the Company) resulting from such
      consolidation or merger, or the corporation into or for the securities of which
      the previously outstanding stock of the Company shall be changed in connection
      with such consolidation or merger, or the corporation purchasing such assets,
      as
      the case may be, shall assume by written instrument executed and mailed or
      delivered to the registered Holder at the last address of such Holder appearing
      on the books of the Company, the obligation to deliver to such Holder, upon
      exercise of this Warrant, such shares of stock, securities or assets (including
      cash) as, in accordance with the foregoing provisions, such Holder may be
      entitled to purchase. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    Section
      2.02 Subdivision
      or Combination of Stock.
      In the
      event that the Company shall at any time subdivide or split its outstanding
      shares of Common Stock into a greater number of shares, the number of Warrant
      Shares subject to issuance upon exercise of this Warrant at the opening of
      business on the day upon which such subdivision becomes effective shall be
      proportionately increased. In the event that the outstanding shares of Common
      Stock of the Company shall be combined into a smaller number of shares, the
      number of shares subject to issuance upon exercise of this Warrant at the
      opening of business on the day upon which such subdivision becomes effective
      shall be proportionately decreased. Any such increase or decrease, as the case
      may be, shall become effective immediately after the opening of business on
      the
      day following the day upon which such subdivision or combination, as the case
      may be, becomes effective.

     

    Section
      2.03 Stock
      Dividends.
      In the
      event that the Company shall at any time declare any dividend or distribution
      upon its Common Stock payable in stock, the number of Warrant Shares subject
      to
      issuance upon exercise of this Warrant shall be increased by the number (and
      the
      kind) of shares which would have been issued to the holder of this Warrant
      if
      this Warrant were exercised immediately prior to such dividend. Such increase
      shall become effective immediately after the opening of business on the day
      following the record date for such dividend or distribution. 

     

    Section
      2.04 Treasury
      Shares.
      The
      number of shares of Common Stock outstanding at any given time shall not include
      shares of the Company owned or held by or for the account of the Company.


     

    Section
      2.05 Minimum
      Adjustment.
      No
      adjustment in the number of shares that may be issued upon exercise of this
      Warrant as provided in this Article II shall be required unless such adjustment
      would require an increase or decrease in such number of shares of at least
      one
      percent (1%) of the then adjusted number of shares of Common Stock that may
      be
      issued upon exercise of this Warrant; provided, however, that any such
      adjustments that by reason of the foregoing are not required to be made shall
      be
      carried forward and taken into account and included in determining the amount
      of
      any subsequent adjustment; and provided further, that if the Company shall
      at
      any time subdivide or combine the outstanding shares of Common Stock or issue
      additional shares of Common Stock as a dividend, said percentage shall forthwith
      be proportionately adjusted so as to appropriately reflect the same.


     

    Section
      2.06 Adjustment
      of Exercise Price.
      Whenever the number of shares of Common Stock that may be issued upon exercise
      of this Warrant is adjusted, and effective at the time such adjustment is
      effective, as provided in Sections 2.01, 2.02 and 2.03 of this Article II,
      the Exercise Price shall be adjusted (to the nearest whole cent) by multiplying
      each such Exercise Price immediately prior to such adjustment by a fraction
      (x)
      the numerator of which shall be the number of shares of Common Stock which
      may
      be issued upon the exercise of each such Warrant immediately prior to such
      adjustment, and (y) the denominator of which shall be the number of shares
      of
      Common Stock so purchasable immediately thereafter. The Company may retain
      a
      firm of independent certified public accountants (which may not be the regular
      accountants employed by the Company) to make any required computation, and
      a
      certificate signed by such firm shall be conclusive evidence of the correctness
      of such adjustment. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    Section
      2.07 Record
      Date.
      In the
      event that the Company shall not take a record of the holders of its Common
      Stock for the purpose of entitling them to receive a dividend payable in Common
      Stock, then such record date shall be deemed for the purposes of this Article
      II
      to be the date of the issue or sale of the shares of Common Stock deemed to
      have
      been issued or sold upon the declaration of such dividend. 

     

    Section
      2.8 Officer's
      Certificate.
      Whenever the Exercise Price shall be adjusted as provided in this Article II,
      the Company shall forthwith file with its Secretary and retain in the permanent
      records of the Company, an officer's certificate showing the adjusted Exercise
      Price determined as provided in this Article II, setting forth in reasonable
      detail the facts requiring such adjustment, including a statement of the number
      of additional or fewer shares of Common Stock, and such other facts as may
      be
      reasonably necessary to show the reason for and the method of computing such
      adjustment. Each such officer's certificate shall be made available at all
      reasonable times for inspection by the Holder. 

     

    Section
      2.9 Notice
      of Adjustment.
      Upon
      any adjustment of the number of shares that may be issued upon exercise of
      this
      Warrant or the Exercise Price, the Company shall give notice thereof to the
      Holder, which notice shall state the increase or decrease, if any, in the number
      of shares that may be issued upon the exercise of this Warrant and the Exercise
      Price, setting forth in reasonable detail the method of calculation and the
      facts upon which such calculation is based. 

     

    Section
      2.10 Definition
      of "Common Stock".
      As used
      in this Article II, the term "Common Stock" shall mean and include all of the
      Company's authorized Common Stock of any class as constituted on the date of
      this Warrant as set forth below, and shall also include any capital stock of
      any
      class of the Company thereafter authorized that shall not be limited to a fixed
      sum or stated value in respect of the rights of the holders thereof to
      participate in dividends or the distribution of assets upon the voluntary or
      involuntary liquidation, dissolution or winding up of the Company. 

     

    ARTICLE
      III.


     

    TRANSFER
      RESTRICTIONS

     

    Section
      3.01 Securities
      Law Transfer Restrictions.
      By
      taking and holding this Warrant, the Holder (i) acknowledges that neither this
      Warrant nor any shares of Common Stock that may be issued upon exercise of
      this
      Warrant have been registered under the Securities Act or any applicable state
      securities or blue sky law (collectively, "Securities Laws"); (ii) agrees not
      to
      sell, transfer or otherwise dispose of this Warrant, and agrees not to sell,
      transfer or otherwise dispose of any such shares of Common Stock without
      registration unless the sale, transfer or disposition of such shares can be
      effected without registration and in compliance with the Securities Laws; and
      (iii) agrees not to sell, transfer or otherwise dispose of this Warrant or
      any
      portion thereof or interest therein except as otherwise expressly permitted
      herein. No part of this Warrant or any portion thereof or interest therein
      may
      be transferred, whether voluntarily, involuntarily or by operation of law,
      except to a Permitted Transferee as hereinafter defined. “Permitted Transferee”
shall mean a transferee or assignee that (a)(i) is an entity as to which the
      Holder is the beneficial owner of at least a majority of the equity therein
      and
      the Holder has voting control thereover, (ii) is a member of the Holder's family
      or a trust for the benefit of an individual Holder or (iii) a successor by
      inheritance or intestate succession to any interest in this Warrant or any
      portion thereof and (b) accepts by written instrument reasonably acceptable
      to
      the Company each of the terms and conditions that govern this Warrant. Any
      certificate for shares of Common Stock issued upon exercise of this Warrant
      shall bear an appropriate legend describing the foregoing restrictions, unless
      such shares of Common Stock have been effectively registered under the
      applicable Securities Laws. 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    Section
      3.02 Provision
      of Information by Holder.
      The
      Holder shall make available to the Company such written information, presented
      in form and content satisfactory to the Company, as the Company may reasonably
      request, from time to time, in order to make the determination provided for
      in
      Section 3.01. 

     

    ARTICLE
      IV.


     

    MISCELLANEOUS

     

    Section
      4.01 Transfer
      of Warrants.
      No
      right or interest in this Warrant shall be transferable except as provided
      in
      Article III. 

     

    Section
      4.02 Notices.
      Any
      notice or communication to be given pursuant to this Warrant shall be in writing
      and shall be delivered in person or by certified mail, return receipt requested,
      in the United States mail, postage prepaid. Notices to the Company shall be
      addressed to the Company's principal office. Notices to the Holder shall be
      addressed to the Holder's address as reflected in the records of the Company.
      Notices shall be effective upon delivery in person, or, if mailed, at midnight
      on the fifth business day after mailing.

     

    Section
      4.03 No
      Shareholder Rights.
      This
      Warrant shall not entitle the Holder to any voting rights or other rights as
      a
      shareholder of the Company.

     

    Section
      4.04 Governing
      Law.
      This
      Warrant shall be governed by and construed in accordance with the laws of the
      State of Washington.

     

    Section
      4.05 Headings;
      Interpretation.
      The
      section headings used herein are for convenience of reference only and are
      not
      intended to define, limit or describe the scope or intent of any provision
      of
      this Warrant. When used in this Warrant, the term "including" shall mean
      "including, without limitation.” 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    Section
      4.06 Successors.
      The
      covenants, agreements and provisions of this Warrant shall bind the parties
      hereto and their respective successors and permitted assigns.

     

    Section
      4.07 Integrated
      Agreement; Modification.
      This
      Warrant is a complete statement of the agreement of the parties with respect
      to
      the subject matter hereof and may be modified only by written instrument
      executed by the parties.

     

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be issued effective
      as
      of the _____ day of _____, 2005.

     

    
      	 	 	 
	 	
              IsoRay,
                Inc.,
                a
                Minnesota corporation

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Roger
                E. Girard, CEO

            
	 	 


    

     

    
 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    


    Exhibit
      A

     

    SUBSCRIPTION
      FORM

     

    (To
      be Executed only upon Exercise of Warrant)

     

    The
      undersigned registered owner of this Warrant irrevocably exercises this Warrant
      and purchases __________ shares of Common Stock of IsoRay, Inc., a Minnesota
      corporation, that may be issued under this Warrant and herewith delivers the
      sum
      of $____________ in full payment of the Exercise Price for such shares, all
      on
      the terms and conditions specified in this Warrant. Such shares are to be
      delivered to such holder at the address reflected in the records of the Company
      unless contrary instructions are herein given.

     

    Deliver
      certificates to:

     

     

    ________________________

    Dated: ______________________   

    __________________________________

    (Signature
      of Registered Owner)

     

    __________________________________

    (Street
      Address)

     

    __________________________________

    (City)
      (State) (Zip Code)