Document:

Contract
      No. 840/20553876/11806-32

    06
      October 2006

    
      	 	 
	
              The
                Seller:

              FSUE
                “SSC- RESEARCH INSTITUTE OF ATOMIC REACTORS”

              Dimitrovgrad-10,
                Ulyanovsk region, 

              433510
                Russia, 

              Phone
                (84235) 6 58 55,

              Fax
                (84235) 6 56 58, (84235) 6 56 72

            	
              The
                Buyer:

              The
                Company, “IsoRay Medical Inc.”

              350
                Hills Street, Suite 106

              Richland,
                WA 99354-5411 USA

            

    

    
      	
              Hereinafter
                referred as the Parties of the
                Contract.

            
	
              1.
                Subject of the Contract

              The
                Seller shall sell and the Buyer shall buy Cs-131 radionuclide preparation
                (hereinafter referred as the Goods) in accordance with the Specifications
                stated below:

            	 	 
	
              Denomination
                of the Goods and Specifications

            	
              Total
                activity, not 

              more
                than, Ci

            	
              Price,
                USD/Ci

            	
              Total,
                USD

            
	
              Cs-131*,
                a soluble salt of Cesium. There are no requirements for the determination
                of the specific chemical composition of the Cesium salt. Dried product
                with solids content of 1 mL per shipment. Radiochemical purity of
                the
                Goods: required activity ratios per calibration date:

              Cs-131
                not less than 99.99%

              [**].

              Sum
                of all other gamma emitters not more than 1x10-4.

              Calibration
                date: five days from the date of the Goods flight from departure
                airport./

            	
              [**]

            	
              [**]

            	
              6
                300 000.00

            
	
              Non-returnable
                type A transport packing set./

            	
              350
                pcs.

            	
              100.00
                USD/pc.

            	
              35
                000.00

            

    

    
      	
              Total

            	 	
              USD
                6 335 000.00

            	 
	 	
              (six
                millions three hundred thirty five thousand
                only)

            
	
               

              *
                This preparation is the product of experimental research and fabricated
                being based on FSUE “SSC RIAR” research activities.

            
	
              2.
                Delivery terms

            
	
              2.1
                The Goods under the Contract shall be delivered as lots from January
                2007
                till December 2013 in the Seller’s non-returnable type A transport packing
                sets by flight on FCA
                Samara Airport or Moscow Airport, Russia
                (INCOTERMS 2000). Every lot of the Goods shall be delivered according
                to
                the Buyer’s separate written order sent to the Seller not later than forty
                five days before the planned date of the ordered preparation delivery.
                The
                order shall contain the information as
                follows:

            

    

     

    

      [**]
        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. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 
	
              -     Contract
                No.;

              -     Maximum
                activity of the ordered preparation;

              -     name
                and address of the Consignee;

              -     delivery
                time.

               

              2.2
                The Goods shall be placed into the polymeric or glass ampoules, which
                are
                consumer packages of non-returnable type A transport packing
                sets.

               

              2.3
                The Goods delivery date shall mean the date of AirWay Bill.

              2.4
                The title as well as all risks, which the Goods may be subjected
                to, shall
                be transferred from the Seller to the Buyer from the Goods delivery
                date.

              2.5
                The Seller reserves all the intellectual property rights for the
                Goods.
                The Parties agreed that this Contract does not assign the transfer
                of the
                intellectual property or any rights for the Seller’s intellectual
                property.

               

              2.6
                The Goods deliveries under the present Contract will be implemented
                to the
                USA.

            
	
              3.
                Price of the Contract

            
	
              Total
                price of the Contract is USD
                6 335 000.00
                (six millions three hundred thirty five thousand only) and shall
                be
                construed as the price on FCA
                Samara Airport or Moscow Airport, Russia
                (INCOTERMS 2000).

            
	
              4.
                Payment

            
	
              4.1
                It is desirable that the payment for the delivered Goods shall be
                implemented by the Buyer within 30 (thirty) calendar days, but not
                later
                than 120 (one hundred and twenty) calendar days from the Goods delivery
                date.

              4.2
                The payment for the Goods shall be effected in USD by bank transfer
                into
                account of the Seller No. [**] in SBERBANK (Povolzhsky Head Office)
                Samara, Russian Federation Dimitrovgradskoye Branch No. 4272, Build.
                6,
                Gagarin street, Dimitrovgrad, SWIFT code [**].

              4.3
                The Buyer’s Bank essentials:

              Columbia
                River Bank

              Kennewick,
                WA, USA

              Account
                # [**]

              Routing
                # [**]

              4.4
                Date of payment for the Goods shall mean date of the initiation of
                the
                electronic funds transfer from the Buyer’s account. The Buyer shall fax to
                the Seller’s address an informative letter confirming payment making for
                the Goods and confirmation by the bank that transfer has been initiated.
                The informative letter shall contain numbers of corresponding invoice
                and
                Contract.

              4.5
                All expenses and commissions of the Buyer’s Bank under the Contract shall
                be paid by the Buyer, all expenses and commissions of other Banks
                shall be
                paid by the Seller.

              4.6
                In case of delay in payment the Buyer shall pay the penalty amounted
                to
                0.1% (one tenth of percent) for each delayed day after 120 days gone
                from
                the Goods delivery date. Maximal total sum of penalties shall be
                10% (ten
                percents) of the Goods delivered value.

              In
                addition, in case of delay in payment after 120 days gone, the Buyer
                shall
                pay the penalty amounted to the sum equivalent to total of all penalties
                for violation of foreign-economic activity rules imposed on the Seller
                by
                Russian authorities under Russian laws.

              Provisions
                of this Clause shall remain in effect at the Contract expiration
                till the
                penalty payment obligations are
                met.

            

    

    [**]
      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. 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      	 
	
              5.
                Quantity of Goods and Quality

            
	
              5.1
                The quantity of delivered Goods and commodities shall be attested
                either
                by the Shipping specifications or the Commercial Invoice drawn up
                by the
                Seller and delivered along with the Goods.

              5.2
                The Goods provided by the Seller to the Buyer should meet the requirements
                of the Specifications and shall be confirmed by a Quality Certificate
                for
                radioactive preparation issued by the Seller where it is certified
                that
                the Goods delivered meets the specifications and this Certificate
                shall be
                delivered with the Goods.

            
	
              6.
                Packing and Labeling

            
	
              6.1
                Packing and labeling of the Goods shall be effected in accordance
                with the
                International Regulations for the safe transport of radioactive materials
                (IAEA, TS-R-1, 2005) and provided the Goods safety when transporting.
                

               

              6.2
                The Goods shall be loaded into the Seller’s
                special non-returnable type A transport packing sets.

            
	
              7.
                Shipment

            
	
              7.1
                The Seller shall inform the Buyer about the Goods readiness for shipment
                not later than 2 days before the shipment beginning.

              7.2
                Within one working day after the shipment is forwarded to the air
                carrier
                the Seller shall notify the Buyer by fax/cable/e-mail of the following
                data: 

              -
                date of the shipment;

              -
                Contract No;

              -
                denomination of Goods and commodities;

              -
                quantity of Goods;

              -
                quantity of packages;

              -
                flight and AirWay Bill No.

              7.3
                In addition to the above, the Seller shall also notify the Buyer
                by
                sending a copy of the Shipping Specifications, the Commercial Invoice,
                the
                Shipper’s Declaration for Dangerous Goods (DGD), the Notification for
                Shipments of Radioactive Materials (DGN) and the Quality Certificate
                as
                provided with the shipment for use by the Buyer in customs
                clearance.

            
	
              8.
                Claims

            
	
              8.1
                The Goods shall be considered as delivered by the Seller and accepted
                by
                the Buyer as consistent with the Buyer’s rights onwards, provided that the
                following condition are fulfilled:

              -
                in respect of quantity of Goods as defined in the Contract and in
                the
                product specifications as provided to the Buyer and as stated by
                the
                Seller on the Certificate and Shipping Specifications;

               

              -
                in respect of quality of the Goods as defined in the Certificate
                provided
                by the Seller.

              8.2
                In case of nonconformity of the Goods quantity or quality to the
                documents
                mentioned above and any other nonconformity, e.g. damage or loss
                when
                transporting etc., the Buyer shall inform the Seller about it within
                ten
                days after the date of delivery.

              8.3
                Claims in respect of the Goods Quality and Quantity shall be accompanied
                with the Statement drawn up at the place of destination with the
                participation of the Seller’s representative or with the Statement of an
                official control organization or non-interested competent Authority
                of the
                Buyer’s country.

              8.4
                The Seller is liable for alteration in quality or quantity of the
                Goods
                after the risks pass to the Buyer only in case if they occurred through
                the fault of the Seller.

              The
                liability of the Seller is restricted by the claimed lot of the
                Goods.

            
	
              9.
                Force-Majeure

            

    

    

    [**]
      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. 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      	 
	
              9.1
                Neither party shall bear responsibility for the complete or partial
                non-performance of any of its obligations, if the non-performance
                results
                from such circumstances as flood, fire, earthquake and other acts
                of God
                as well as war, military operations, blockade, acts or actions of
                state
                authorities or any other circumstances beyond the Parties’ control that
                have arisen after the conclusion of the Contract.

              9.2
                The Party for which the performance of obligation become impossible
                shall
                immediately notify in written form the other Party of the beginning,
                expected time of duration and cessation of above circumstances.
                Certificate of a Chamber of Commerce (Commerce and Industry) or other
                competent authority or organization of the respective country shall
                be a
                sufficient proof of commencement and cessation of the above
                circumstances.

            
	
              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. This Contract will be governed by and construed in accordance
                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 shall remain in effect until May
                01,
                2014. During the time of validity of this Contract, two months before
                the
                end of a current calendar year the Parties shall sign an appropriate
                addendum to the Contract, where main terms and conditions of the
                Contract
                will be mutually reconsidered and stated for next calendar year of
                its
                validity.

              11.2
                Neither of the Parties is entitled to transfer its rights and obligations
                under the Contract to any third Party.

              11.3
                Any alterations and/or appendixes to the Contract are valid only
                if they
                are made out in written form and signed by the duly authorized
                representatives of the Parties.

              11.4
                The Contract shall be considered legally binding if provided by a
                facsimile transmission.

              11.5
                After signing the Contract all preceding negotiations and correspondence
                connected with it are out of force.

              11.6
                Dimitrovgrad is considered to be the place of signing the Contract.
                

              11.7
                This Contract has been signed in two copies, one original for each
                Party
                concerned in Russian and English, both texts being authentic and
                having
                the equal force.

            

    

    
      	
              12.
                Legal addresses of the
                Parties

            
	
              The
                Seller (The Consignor):

              FSUE
                “SSC -
                RESEARCH INSTITUTE OF ATOMIC REACTORS”

              Dimitrovgrad-10,
                Ulyanovsk region, 433510 Russia, 

              Phone
                (84235) 6 58 55

              Fax
                (84235) 6 56 58, (84235) 6 56 72

            	
              The
                Buyer:

              The
                Company “IsoRay Medical Inc.”

              350
                Hills Street, Suite 106

              Richland,
                WA 99354-5411 USA

               

              The
                Consignee:

              will
                be agreed additionally for every delivery of the Goods.

            
	
              THE
                SELLER

               

              Director
                General

              RIAR

               

              /s/
                A. Bykov 

            	
              THE
                BUYER

               

              CEO
                & Chairman

              IsoRay
                Medical Inc.

               

              /s/
                Roger E. GirardAgreement
                for exclusive right to buy

            
	
              Dimitrovgrad       06
                October 2006

            
	
              The
                Exporter:

              FSUE
                “SSC- RESEARCH INSTITUTE OF ATOMIC REACTORS”

              Dimitrovgrad-10,
                Ulyanovsk region, 

              433510
                Russia,

              Phone
                (84235) 6 58 55,

              Fax
                (84245) 6 56 58, (84235) 6 56 72

            	
              The
                Firm:

              IsoRay
                Medical Inc.

              350
                Hills Street, Suite 106

              Richland,
                WA 99354-5411

            
	
              Hereinafter
                referred as the Parties of the Agreement.

            
	
              1.
                Subject of the Agreement.

              The
                Exporter grants the Firm an exclusive right to buy the Cs-131 (hereinafter
                referred as the Goods) manufactured by the Exporter.

               

               

              To
                perform this Agreement the Parties will conclude between themselves
                separate contracts for the delivery of Goods that would determine
                the
                Goods price and volume to be purchased annually. These contracts
                will
                specify the certain price, delivery time, terms of payment and other
                conditions for delivery of Goods from Exporter to the Firm.

               

               

              This
                Agreement will be deemed to have commenced on the date of its signing
                by
                authorised representatives of the Parties. 

               

               

              This
                Agreement will be valid for the period of seven years from the date
                of its
                signing and will be extended annually providing the obligations of
                the
                Parties are met.

            
	
              2.
                Obligations of the Parties.

              2.1.
                The
                Firm undertakes:

              2.1.1.
                Protect the interests of the Exporter by purchasing the goods [**].
                

              2.1.2.
                To renew the commercial contract for the purchase of Goods no later
                then
                October 1 of each year.

              2.2.
                The
                Exporter undertakes:

              2.2.1.
                To timely obtain the export licenses for the Goods.

              2.2.2.
                To deliver timely and in full volume the Goods of the acceptable
                quality
                to the Firm according to the concluded delivery contracts.

              2.2.3.
                To maintain the exclusivity for supply of Cs-131 to the firm unless
                the
                following conditions are violated:

              a)
                the Firm refuses to buy the Goods on terms of this present
                Agreement;

              c)
                the present Agreement has terminated.

              d)
                the firm has bought less than 50% of the Goods volume stated in Clause
                2.1.1. of this Agreement.

              If
                the other Party, despite the written notice, does not comply within
                60
                days with the Obligations of this Agreement, each Party has the right
                to
                cancel this Agreement before the expiration of the period of its
                duration.

            

    

    

[**]
    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. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	 
	
              3.
                Arbitration.

              All
                disputes or differences which arise out of or in connection with
                the
                Agreement 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 in accordance with the UNCITRAL Rules as at present
                in
                force. The place of Arbitration shall be Stockholm, Sweden. The appointing
                authority shall be Arbitration Institute of the Chamber of Commerce.
                The
                award of the Arbitration is final and binding upon both Parties.
                This
                Agreement shall be governed by law of Sweden. 

            	 
	
              4.
                Miscellaneous Provisions.

              Both
                parties guarantee exclusivity in protection of any and all intellectual
                property related to production and utilization of Cs-131. Terms and
                conditions for exclusive protection and mutual transfer of the
                intellectual property will be set forth in separate agreements. These
                agreements will be set forth in writing within one year of written
                notice
                of intent. 

               

              Any
                alterations and/or appendixes to the Agreement are valid only if
                they are
                made out in written form and signed by the duly authorized representatives
                of each party to this agreement.

               

               

              Dimitrovgrad
                is considered to be the place of signing the Agreement.

               

              The
                Agreement can also be considered legally binding if the signature
                is
                provided by a facsimile transmission.

               

              The
                Agreement has been signed in two copies, one original for each Party
                concerned in Russian and English, both texts being authentic and
                having
                the equal force.

            	 

    

    
      	
              5.
                Legal addresses of the Parties.

               

              The
                Exporter:

              FSUE
                “SSC- RESEARCH INSTITUTE OF ATOMIC REACTORS”

              Dimitrovgrad-10,
                Ulyanovsk region, 

              433510
                Russia,

              Phone
                (84235) 6 58 55,

              Fax
                (84245) 6 56 58, (84235) 6 56 72

            	
               

               

              The
                Firm:

              IsoRay
                Medical Inc.

              350
                Hills Street, Suite 106

              Richland,
                WA 99354-5411

            
	
              THE
                EXPORTER

              Director
                General

               

              /s/
                A. Bykov

            	
              THE
                FIRM

              CEO
                & Chairman

               

              /s/
                Roger E. Girard

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