Page
1/7

     

    Contract
No
47/2009

    Date
of signature: 12.1.2009

    


    
      
        	
                THE
      SELLER

                 

                UralDial
      LLC

                 

                Juridical address:
      620042, Russia,

                Sverdlovskaya
      Region, Ekaterinburg, Industry

                Street
      28, Office 138

                 

                Post address: 620028,
      Russia, Sverdlovskaya

                Region,
      Ekaterinburg, Kirova Street 28/1

              	
                THE
      BUYER :

                 

                The
      company "IsoRay Medical Inc."

                 

                350
      Hills Street, Suite 106

                Richland,
      WA 99354-5411 USA

              


      

    

    


    Hereinafter
referred to as the Parties of the Contract.

     

    1.
SUBJECT OF THE CONTRACT

    


    The
Seller shall sell and the Buyer shall buy radioactive preparation Cesium-131
(hereinafter referred to as Goods) in accordance to specification provided in
Appendix 1 to this contract.

    


    2.
CONTRACT DURATION AND DELIVERY TERMS

    


    2.1 The
Goods under the Contract shall be delivered from 01 December 2009 through 31
December 2010 in the Seller’s non-returnable type A transport packaging by air
[**] (INCOTERMS
2000). The delivery terms can only be extended by mutual consent of the Parties
in writing.

    


    2.2 The
date and time of the Goods calibration is 12:00 p.m. local time in the airport
of departure on the date of the shipment plus 4 days and 12 hours (“Calibration
Date”).

    


    2.3 The
Seller is responsible for delivery of the Goods to the Buyer at 12:00 pm local
time in the designated airport of delivery on the first Monday following the
date of shipment.

    


    2.4 When
Seller becomes aware that delivery of the Goods will be delayed, the Seller
shall notify the Buyer about such delay by fax, phone or electronic mail no
later than five (5) days prior to the transfer of the Goods to the first
shipper.

    


    2.5
Ownership of the Goods shall be transferred to the Buyer upon customs’ clearance
at the Buyer’s [**].

    


    2.6 The
Buyer shall provide the Seller with the order forecast no later than 30 days
prior to date of delivery. Every order for Goods shall be delivered according to
the Buyer’s separate written purchase order sent to the Seller not later than 10
(ten) days before the planned date of the Goods delivery. The ordered amount of
Goods can be up to [**] less than the forecasted amount.

    


    2.7 The
order shall contain the following information:

    


    
      	
              -

            	
              Contract
      No.;

            


    

    
      	
              -

            	
              activity
      of the ordered isotope;

            


    

    
      	
              -

            	
              designated
      airport;

            


    

    
      	
              -

            	
              name
      and address of the consignee of the
Goods

            


    

    
      	
              -

            	
              date
      and time of delivery.

            


    

     

    
      
        

      

      
        
          	
                  [**]

                	
                  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.

                


        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

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    2.8
Seller shall individually nominate the forwarder at the border and shall send by
facsimile or electronic mail the copies of the Air Way Bill (AWB), Dangerous
Goods Declaration, Invoice, Packing Slip and Certificate of Quality to the Buyer
on the day of the Goods departure.

    


    3.
PURCHASE PRICE AND CONTRACT VALUE

    


    3.1 The
unit price of the Goods (one lot) shall be [**] 
US dollars ($[**]).

             For
the Goods made by Open joint-stock company «Institute of nuclear materials»
(Zarechny, Sverdlovsk region, 624250, Russia) One lot shall be one Curie (1 Ci)
as calculated on the calibration date and time.

    


             For
the Goods made «State Scientific Center- Research Institute of Atomic Reactors»
(Dimitrovgrad, Ulianovsk region, 433510, Russia) one lot shall be one Curie (1
Ci) [**] as calculated on the measurement date and time. The measurement date
and time shall be not sooner than the calibration date and time
[**].

    


               For
the purpose of customs clearаnce it is
determined, that cost of the non-returnable transport packaging set of type A
(used by «State Scientific Center- Research Institute of Atomic Reactors»
(Dimitrovgrad, Ulianovsk region, 433510, Russia)) shall be one hundred US
dollars ($100.00), the cost being included into cost of the Goods and is not
paid separately. The quantity of non-returnable transport packaging of type A is
one piece per delivery.

    


    3.2 The
unit price of the Goods is based on the minimum order volume of [**] Ci per
month as averaged over any consecutive two month period.

    


    3.3
Solely for the purposes of ascertaining a total contract value but subject to
actual delivery of Goods to Buyer as set forth herein, the contract value for
the period of its duration is [**] for the quantity of the Goods delivered in
the amount of [**] Ci of Cs 131.  The above mentioned quantity of Goods and
contract value are considered as maximum values only, whereas the actual
quantity of Goods and the contract value will be based on the Buyer’s written
purchase orders.

    


    3.4
Parties agree that if the minimum order volume increases to [**] Ci per week the
unit price of the Goods shall be [**] per Ci and if the order volume increases
to [**] Ci per week the unit price of the Goods shall be [**] per Ci.  The
Buyer shall provide 2 months advance written notification to Seller of an
increase in the minimum order volume.

    


    4.
PAYMENT

    


    4.1 The
payment for the delivered Goods shall be executed by the Buyer within 30
calendar days from the Goods’ delivery date.

    


    4.2 The
payment shall be made in US dollars via wire transfer to the bank account of the
Seller, after the Seller provides the following documents to Buyer:

    


    -certificate
of quality of the Goods

    -invoice

    -shipping
paperwork

     

    
      
        

      

    

    
      
        
          	
                  [**]

                	
                  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.

                


        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
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    4.3 The
bank account information of the Seller is:

    


    UralDial,
LLC, 620042, Russia, Sverdlovskaya Region, Ekaterinburg, Industry Street, 28,
Office 138 

    VAT-number
[**]

    


    Beneficiary
Institution

    OJSC BANK
URALSIB

    SWIFT:
[**]

    MOSCOW,
RUSSIA

    Ekaterinburg
branch

    SWIFT:
[**]

    Ekaterinburg,
Russia

    Account #
[**]

    


    Intermediary
Institution

    AMERICAN
EXPRESS BANK, LTD

    SWIFT:
[**]

    New York,
USA

    


    4.4 The
bank account information of the Buyer is:

     

    The
Company “IsoRay Medical Inc.”

    350 Hills
Street, Suite 106

    Richland,
WA 99354-5411 USA

     

    Bank
Information:

    Columbia
River Bank

    Kennewick,
WA, USA

    Account
#[**]

    Routing #
[**]

    


    4.5 The
date of the payments for the goods is the date of the initiation of the wire
transfer by the Buyer.  Buyer shall make the payment against the Seller's
Invoice and notify the Buyer within twenty four (24) hours about the number and
date of the wire transfer and the name and address of the bank which made the
transfer. The Contract number and the Invoice number must be indicated in the
outgoing payment-transfer document.

    


    4.6 All
expenses and commissions of the Buyer’s Bank are responsibilities of the Buyer.
Other expenses and commissions of all other Banks are responsibilities of the
Seller.

    


    4.7 In
the event of late payments, the Buyer is responsible for a late payment fee in
the amount of [**] for each day past the payment due date not to exceed [**] of
the invoice amount for the lot of Goods for which payment is late.

    

      
        


    

    
      
        
          	
                  [**]

                	
                  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.

                


        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

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    5.
QUANTITY OF THE GOODS AND QUALITY

    


    5.1 The
quality of the Goods shipped by the Seller shall comply with the Buyer
Specifications as provided in Appendix 1 to this contract.

    


    5.2 The
Certificate of Quality shall be attached to each description of the Goods in a
lot for each shipment.

    


    5.3 The
quantity of the Goods delivered to the Consignee shall meet the requirements
specified in the Purchase Order by the Buyer. The quantity of the Goods shall be
measured by Seller with an error of no more than [**] of
the specified quantity and shall be the amount on the Calibration
Date.

    


    6.
PACKING AND LABELING

    


    6.1 The
Goods shall be packed into a Type-A Package Design, which is provided by the
Seller. The Type-A Package Design is a non-returnable package.

    


    6.2 The
Seller shall label the Type-A Package Design in conformity with the ICAO and
IATA regulations and the IAEA safety standards, Safety series No. 6
(1990).

    


    6.3 The
Seller is responsible for the safety of the package and compliance with all
applicable laws.

    


    7.
SHIPMENT AND TRANSPORTATION

    


    7.1 The
Seller or its appointed person shall inform the Buyer in writing of the Good’s
readiness for shipment no later than 2 days before the shipment.

    


    7.2
Within one working day after the shipment is transferred to the air carrier the
Seller or its appointed person shall provide the Buyer via fax/cable/e-mail with
the following information:

    


    - date of
shipment;

    -
Contract No;

    -
denomination of Goods;

    -
quantity of Goods;

    -
quantity of packaging;

    - flight
No. and Airway Bill No.

    


    7.3 In
addition to the above, the Seller or its appointed person shall provide the
Buyer a copy of the Shipping Specification, Commercial Invoice, Shipper’s
Declaration for Dangerous Goods (DGD), Notification on Shipments of Radioactive
Materials (DGN) Quality Certificate (originals included with the shipment) and
any other required or necessary documentation to assure the customs clearance of
the goods by the Buyer.

    


    7.4
According to this contract Producers and Shippers are Open joint-stock company
«Institute of nuclear materials» (Zarechny, Sverdlovsk region, 624250, Russia),
«State Scientific Center- Research Institute of Atomic Reactors» (Dimitrovgrad,
Ulianovsk region, 433510, Russia).

    The
indicated entities shall draw up and provide the Seller with all documents,
necessary and required for customs clearance, including the packing list,
specifications, certificate of conformity, declaration of dangerous goods, as
well as other documentation.

     

      
        


    

    
      
        
          	
                  [**]

                	
                  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.

                


        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

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    8.
ACCEPTANCE OF THE GOODS, CLAIMS

    


    8.1 The
Goods are considered delivered by the Seller or the Shipper and accepted by the
Buyer with respect to quality and quantity in accordance with the Certificate of
Quality and Shipping Specifications including an invoice.

    


    8.2 In
case of nonconformity of the Goods quantity or quality to the documents
referenced in Section 8.1 above or any other nonconformity, (e.g. damage or loss
in transit), the Buyer shall inform the Seller no later than ten days after the
receipt of the defective Goods by the Buyer.

    


    8.3
Claims in respect of the Goods quality and quantity shall be accompanied with a
written statement drawn up at the place of destination with the participation of
the Seller’s representatives and quality control department.

    


    8.4 The
Claim must specify:

    


    - 
         the numbers and dates of
the following documents: the Contract, the Purchase Order, the AWB, the Packing
Slip and the Certificate of Quality;

    -           information
on the integrity of the Type-A Shipping package and its internal
contents;

    -           detailed
results of the analytical measurements including analysis methods
used;

    -           the
Buyer's conclusions regarding failure to meet the quality and/or quantity
requirements of the Goods;

      
the cost calculation of a missing quantity of the Goods or the Quantity that
cannot be used in production.

    


    The Claim
must be signed by the Buyer.

    


    Each
claim shall be provided in English and Russian.

    One copy
of the claim shall be sent to the Seller via express mail and another copy shall
be sent via fax or electronic mail.

    


    8.5
Seller shall confirm the Claim receipt via fax or electronic mail and issue a
reply no later than 7 (seven) business days after the Claim receipt.  The
reply must be sent in the same manner as the Claim, as described in Section 8.3
above.

    


    8.6 Other
than with respect to Goods which are damaged in transit by the Shipper or
delayed beyond the time for delivery as required by Section 2.3 as a result of
Shipper’s sole actions alone, the Buyer shall pay only for the Goods actually
received that can be used in production. Payment amounts shall be based on the
corrected invoice provided by the Seller, as adjusted for failures in quantity
and quality described in Section 8.2 above. The copy of the corrected invoice
shall be sent to the Buyer via fax or electronic mail.

    


    8.7
Notwithstanding that title to the Goods does not transfer to Buyer until [**].

    


    9.
TERMINATION

    


    9.1 Buyer
may terminate this Contract upon 5 days written notice to Seller, upon failure
to deliver the Goods meeting the quality and quantity specifications set forth
in Section 8.1 above, requested by Buyer for shipment within 7 days of the
Monday scheduled for delivery over any consecutive four (4) week period
regardless of the reason delivery has not occurred whether as a result of delays
caused by a shipper, closure of reactor facilities, or any other factors outside
control of the Buyer causing the delay in receipt of the Goods.

    
       

      
        


    

    
      
        
          	
                  [**]

                	
                  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.

                


        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

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    9.2 
Seller may terminate this Contract upon 5 days written notice if Buyer fails to
pay any Invoice within 10 days of the due date, provided that no invoice
involving a shipment subject to a Claim shall be due until after such claim is
either mutually resolved by the Parties or settled by Arbitration under Section
10.

    


    10.
ARBITRATION

    


    All
disputes or differences, which arise out of or in connection with the Contract,
shall be settled by means of negotiations between the Parties. If the Parties
can not settle any such dispute or differences within 21 days from beginning
negotiations, then such dispute or difference shall be subjected to settlement,
jurisdiction of ordinary courts being excluded, by arbitration conducted in
accordance with the International Commercial Arbitration Court at the Chamber of
Commerce and Industry of Russian Federation in Moscow in compliance with the
rules and procedure of the said Court and in compliance with the Laws of
Russia.

    


    The award
of the Court is final and binding upon both Parties.

     

    11.
MISCELLANEOUS PROVISIONS

    


    11.1 This
Contract shall commence on the date of its signing by the authorized
representatives of the Parties and unless terminated pursuant to Section 9 shall
remain in effect until December 31, 2010. The contract is extendable by mutual
consent of the parties in writing.

    


    11.2 The
Seller applies all reasonable efforts to ensure availability of supply of the
Goods from 2 (two) reactor facilities at all times.

    


    11.3 The
Seller ensures supply of the Goods to the Buyer on exclusive basis regardless of
the reactor facility used in the Goods production.

    


    11.4 Any
changes and/or appendixes to the Contract are valid only if they are made in
writing and signed by the duly authorized representatives of the
Parties.

    


    11.5 The
Contract shall be considered legally binding if provided by a facsimile
transmission.

    


    11.6
After signing the Contract all preceding negotiations and correspondence
connected with this Contract is considered annulled.

    


    11.7
Ekaterinburg is considered to be the place of signing the Contract.

    


    11.8 This
Contract is originally drafted and signed in English and Russian. Both the
English and Russian versions of the Contract are of equal
force.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

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                        THE
      SELLER

                      	
                        THE
      BUYER

                      
	 
      	 
      
	
                        UralDial
      LLC

                      	
                        The
      company "IsoRay Medical Inc."

                      
	 
      	 
      
	
                        Juridical address:
      620042, Russia,

                        Sverdlovskaya
      Region, Ekaterinburg, Industry

                        Street
      28, Office 138

                      	
                        350
      Hills Street, Suite 106

                        Richland,
      WA 99354-5411 USA

                        Phone: (509)
      375-1202

                      
	 
      	 
      
	
                        Post address: 
      620028, Russia, Sverdlovskaya

                        Region,
      Ekaterinburg, Kirova Street 28/1

                      	
                        E-mail: :
      isotope@isoray.com

                      
	 
      	 
      
	
                        Phone: (343)
      270-75-29

                      	
                        Signed
      by:

                      
	 
      	
                        

                      
	
                        Fax:        (343)
      246-91-56

                      
	 
      
	
                        E-mail: d_bugaev@mail.ru

                      
	 
      
	
                        Signed
      by:

                      
	 
      	
                        Dwight Babcock,
      СЕО

                      
	
                        

                      	 
      
	
                        D.P.
      Bugayev, General Director