ISORAY,
INC.

     

    Form
of Lock-Up Agreement

     

    November
22, 2010

     

    IsoRay,
Inc.

    350 Hills
St., Suite 106

    Richland,
Washington  99354

    


    
      Re:  IsoRay, Inc. – Lock-Up
Agreement

    

     

    Dear
Sirs:

     

    This Lock-Up Agreement is being
delivered to you in connection with the Securities Purchase Agreement (the
"Purchase Agreement"),
dated as of November 22, 2010 by and among IsoRay, Inc. (the "Company") and the investors
party thereto (the "Buyers"), with respect to the
issuance of (i) shares of Common Stock, par value $0.001 per share (the "Common Stock") and (ii) series
A, series B, series C and series D warrants (collectively, the "Warrants") which Warrants will
be exercisable to purchase Common Stock.  Capitalized terms used
herein and not otherwise defined herein shall have the respective meanings set
forth in the Purchase Agreement.

     

    In order to induce the Buyers to enter
into the Purchase Agreement, the undersigned agrees that, commencing on the date
hereof and ending on the six month anniversary of the Closing Date (the "Lock-Up Period"), the
undersigned will not, and will cause all "affiliates" (as defined in Rule 144 of
the Securities Act of 1933, as amended and the rules and regulations of the
Securities Exchange Commission promulgated thereunder) of the undersigned or any
person in privity with the undersigned or any affiliate of the undersigned not
to, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge,
grant any option to purchase, make any short sale or otherwise dispose of or
agree to dispose of, directly or indirectly, any shares of Common Stock, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities and
Exchange Act of 1934, as amended and the rules and regulations of the Securities
and Exchange Commission promulgated thereunder with respect to any shares of
Common Stock owned directly by the undersigned (including holding as a
custodian) or with respect to which the undersigned has beneficial ownership
within the rules and regulations of the Securities and Exchange Commission
(collectively, the "Undersigned's Shares'), (ii)
enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of any of the
Undersigned's Shares, whether any such transaction described in clauses (i) or
(ii) above is to be settled by delivery of such securities, in cash or otherwise
or (iii) publicly disclose the intention to do any of the
foregoing.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    The foregoing restriction is expressly
agreed to preclude the undersigned or any affiliate of the undersigned from
engaging in any hedging or other transaction which is designed to or which
reasonably could be expected to lead to or result in a sale or disposition of
the Undersigned's Shares even if the Undersigned's Shares would be disposed of
by someone other than the undersigned.  Such prohibited hedging or
other transactions would include, without limitation, any short sale or any
purchase, sale or grant of any right (including, without limitation, any put or
call option) with respect to any of the Undersigned's Shares or with respect to
any security that includes, relates to, or derives any significant part of its
value from the Undersigned's Shares.

     

    Notwithstanding the foregoing, the
undersigned may transfer the Undersigned's Shares as a bona fide gift or gifts,
provided that the donee or donees thereof agree to be bound in writing by the
restrictions set forth herein.  The undersigned now has, and, except
as contemplated by the immediately preceding sentence, for the duration of this
Lock-Up Agreement will have, good and marketable title to the Undersigned's
Shares, free and clear of all liens, encumbrances, and claims
whatsoever.  The undersigned also agrees and consents to the entry of
stop transfer instructions with the Company's transfer agent and registrar
against the transfer of the Undersigned's Shares except in compliance with the
foregoing restrictions.

     

    In order to enforce this covenant, the
Company shall impose irrevocable stop-transfer instructions preventing the
Transfer Agent from effecting any actions in violation of this Lock-Up
Agreement.

     

    The undersigned acknowledges that the
execution, delivery and performance of this Lock-Up Agreement is a material
inducement to the Buyers to complete the transactions contemplated by the
Purchase Agreement and that the Company shall be entitled to specific
performance of the undersigned’s obligations hereunder.  The
undersigned hereby represents that the undersigned has the power and authority
to execute, deliver and perform this Lock-Up Agreement, that the undersigned has
received adequate consideration therefor and that the undersigned will
indirectly benefit from the closing of the transactions contemplated by the
Purchase Agreement.

     

    The undersigned understands and agrees
that this Lock-Up Agreement is irrevocable and shall be binding upon the
undersigned's heirs, legal representatives, successors, and
assigns.

     

    If the Closing (as defined in the
Purchase Agreement) has not occurred on or prior to November 29, 2010, this
Lock-Up Agreement shall immediately terminate and shall be of no further force
and effect.

     

    This Lock-Up Agreement may be executed
in two counterparts, each of which shall be deemed an original but both of which
shall be considered one and the same instrument.

     

    This Lock-Up Agreement will be governed
by and construed in accordance with the laws of the State of New York, without
giving effect to any choice of law or conflicting provision or rule (whether of
the State of New York, or any other jurisdiction) that would cause the laws of
any jurisdiction other than the State of New York to be applied.  In
furtherance of the foregoing, the internal laws of the State of New York will
control the interpretation and construction of this Lock-Up Agreement, even if
under such jurisdiction's choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily apply.

     

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                      Very
      truly yours,

                    
	 
      
	 
      
	
                      Exact
      Name of Stockholder

                    
	 
      
	 
      
	
                      Authorized
      Signature

                    
	 
      
	 
      
	
                      Title

                    


            

          

        

      

    

    


    
      Agreed to
and Acknowledged:

    

    


    
      
        
          	
                  ISORAY,
      INC.

                
	 
      	 
      
	
                  By: 

                	 
      
	 
      	
                  Name:  Dwight
      Babcock

                
	 
      	
                  Title:  CEO
      and Chairman