Document:

Unassociated Document

     

    

      APPLIED
        PROCESS ENGINEERING LABORATORY

      APEL-TENANT
        LEASE AGREEMENT

      

      

        
          	
                  ISORAY, LLC

                	 	
                  G

                
	
                  (Tenant
                    Name)

                	 	
                  (Tenant
                    class)

                
	 	 	
                  (see
                    paragraph 5A)

                

        

      

       

      THIS
        LEASE, made and entered into this 23rd
        day of
        April 2001, by and between the ENERGY
        NORTHWEST,
        a
        municipal corporation and joint operating agency of the State of Washington,
        hereinafter called “Lessor”
        and
        IsoRay, LLC hereinafter called the “Lessee”.
        

      

      WITNESSETH:

      

      1 WHEREAS,
        the Lessor owns a multipurpose building in the City of Richland, Benton County,
        Washington, referred to hereinafter as the Applied Process Engineering
        Laboratory (“APEL”)
        which
        is to provide high quality laboratory and validation testing and development
        facilities and associated offices for research and development, testing of
        new
        processes and products, including but not limited to environmental restoration,
        waste treatment and energy conservation; and

      

      WHEREAS,
        the express purpose of APEL is to foster the deployment of new technology
        based
        businesses, product lines and jobs for the Tri-Cities, Washington area;
        and

      

      WHEREAS,
        Lessee is desirous of renting space in APEL, and Lessee is willing to lease
        such
        space upon the terms and conditions and for the purposes hereinafter set
        forth;
        and

      

      WHEREAS,
        Lessor finds that the Lessee’s
        intended activities within APEL are consistent with APEL charter and mission;
        and

      

      WHEREAS,
        Lessee has represented to Lessor an intent to form a business or venture
        in the
        local area should the research and/or development activities undertaken in
        APEL
        prove successful;

      

      NOW,
        THEREFORE, it is agreed:

      

      ARTICLE
        1 -
        DESCRIPTION OF PREMISES

      

      The
        Lessor, for and in consideration of the rental payments herein provided and
        the
        covenants and agreements herein contained, hereby agrees to lease to the
        Lessee
        one hundred forty five (145) Rentable Square Feet of particular space located
        in
        APEL (hereinafter called the Premises), as specifically described in Exhibit
        A,
“Description
        of Premises”,
        and by
        this reference made a part hereof. All parking areas provided for
        Lessee’s
        use are
        included in and subject to the terms and conditions of this
        Lease.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        2 -
        TERM

      

      A. The
        term
        of this Lease shall be for four (4) (months) beginning on May 1, 2001,
        (“Effective
        Date”)
        and
        naturally expiring on August 31, 2001. Should the Lessee require space for
        a
        longer period of time then the Lessee will relocate to another location
        specified by Lessor at Lessee’s
        expense.

      

      The
        Lessor shall make the space available to lessor for installation of new flooring
        for a period of one (1) week. Lessee’s
        equipment will be required to be moved to another space during this period.
        The
        rental period will be extended to accommodate the days displaced.

      

      Lessor
        will have access to the lab for installation of electrical wiring during
        the
        lease period. Both Lessee and Lessor will try to accommodate each
        other’s
        schedules.

      

      B. The
        Effective Date of this Lease shall coincide with the date of Beneficial
        Occupancy, and shall be amended by mutual agreement of the Parties if the
        Lessor
        cannot provide Beneficial Occupancy of the Premises by the beginning date
        specified in the preceding Paragraph A. In that event, the Effective Date
        of
        this Lease shall be changed by supplemental agreement to coincide with the
        date
        the Premises are ready for Beneficial Occupancy. Said supplemental agreement
        shall be attached hereto and become a part hereof to this Lease.

      

      C. If
        the
        rental period from the beginning date of this Lease to the beginning of the
        next
        calendar month is less that a full calendar month, the rental payment shall
        be
        prorated to cover the fractional part of the month from the beginning date
        through the last day of that calendar month.

      

      D. The
        term
“Beneficial
        Occupancy”
        means
        the time when the Lessor has met the requirements of the Lease in order to
        place
        the Premises in a condition of occupancy by the Lessee.

      

      E. In
        the
        event that Beneficial Occupancy cannot occur due to inability of Lessor to
        complete construction of the Premises in a reasonable manner as was anticipated
        by the Parties on the date of the execution of this Lease, this Lease shall
        terminate, and no rent payments shall be due from Lessee. Further, in such
        case,
        neither Party shall be liable for any expenses or obligations incurred by
        the
        other Party prior to the date of termination.

      

      ARTICLE
        3 -
        OPTION TO EXTEND LEASE

      

      The
        Lessee shall not have the option to extend this Lease for the space shown
        in
        Exhibit A. If space is needed for an extended period the Lessee and Lessor
        may
        agree on leasing other space in APEL for the extended period.

      

      ARTICLE
        4 -
        RENT

      

      A. MONTHLY
        RENT PAYMENTS -
        The
        Lessee covenants and agrees to pay Lessor as rental for said Premises a monthly
        Rent of one hundred fifty dollars and eighty cents ($150.80), payable in
        advance
        on the first day of each month during the term of this Lease, beginning on
        the
        Beneficial Occupancy. The Rent for successive terms of this Lease shall be
        mutually agreed upon by the Parties prior to the commencement of the new
        term.
        If the parties cannot agree upon such new Rent, then the Lease shall
        terminate.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                Rent
                  Space

                Type

              	
                Rented
                  Usable

                Square
                  Feet (USF)

              	
                Rental
                  Rate

                $/USF/MO

              	
                Monthly

                Rent

              
	
                Entrepreneur
                  Lab

              	
                145

              	
                $1.040

              	
                $150.80

              

      

      

      Interest
        shall accrue on all unpaid Rent more than thirty (30) days past due at a
        rate of
        1 1/2 % per month until such Rent, including accrued interest, is paid in
        full.

      

      B. FIRST
        AND
        LAST MONTH’S
        RENT
-
        Concurrently with the Lessee’s
        execution of this Lease, the Lessee shall deliver to the Lessor the sum of
        three
        hundred one dollars and sixty cents ($301.60) to be applied to the first
        and
        last month’s
        Rent,
        and for performance by Lessee of Lessee’s
        obligations hereunder, notwithstanding any other obligations of the Lessee
        as
        defined in this Lease. This amount shall not bear interest. Any balance shall
        be
        returned to Lessee at the expiration or sooner termination of this Lease,
        after
        satisfaction of any and all of Lessee’s
        obligations under this Lease.

      

      ARTICLE
        5 - USE OF PREMISES

      

      A. The
        following definitions apply to the three classes of APEL Lessees. The
        classification of this Lease is designated on the cover page
        hereto:

      

      
        	
                Class
                  G - 

              	
                Lessee’s
                  allowable use of Premises is limited to general research, development
                  and
                  testing not routinely involving the use of chemicals or the handling
                  or
                  generation of chemical or dangerous wastes or causing environmental
                  hazards. Certain materials that are incidental to Lessees activities
                  but
                  have specific handling and disposal requirements (such as lubricants
                  and
                  solvents) will be identified by the parties and subjected to applicable
                  APEL policies, protocols and procedures.

              
	 	 
	
                Class
                  W - 

              	
                Lessee’s
                  allowable use of Premises includes Class G activities, plus the
                  routine
                  handling and disposal of limited volumes of chemicals and hazardous
                  materials in solid, liquid or gaseous forms.

              
	 	 
	
                Class
                  R - 

              	
                Lessee’s
                  allowable use of Premises includes Class W activities, plus the
                  handling
                  and disposal of such volumes of dangerous wastes that the
                  Lessee’s
                  activities are subject to the requirements of the APEL special
                  RCRA./RD&D permit.

              

      

      

      B. Lessee
        agrees that the Premises are to be used for approved purposes only, and for
        no
        other purpose without the prior written consent of the Lessor. Lessee shall
        not
        allow use of the Premises in a manner inconsistent with those approved purposes.
        Lessee acknowledges that engaging in activities upon the Premises which are
        in
        any way inconsistent with approved purposes, or in any manner increase
        Lessor’s
        insurance premiums, or which are determined to be illegal, shall constitute
        breach of this Lease. Lessee further agrees to notify Lessor immediately
        upon
        identification of any condition or event that is inconsistent with the following
        approved purposes:

      

      Approved
        Purposes: Fabricating and testing encapsulated specimens.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Lessee
        shall comply with all local, state and federal laws, rules, orders, regulations
        or requirements relating to Lessee’s
        use and
        occupancy of the Premises, or any aspect of Lessee’s
        performance of its obligations under this Lease. Lessee shall indemnify and
        hold
        the Lessor harmless from all liability resulting from any violation thereof
        by
        the Lessee or any of its agents, officers, employees, subcontractors or
        invitees.

      

      C. Exhibit
        B
        sets forth by reference APEL policies, protocols and procedures and related
        documents for which Lessee must be in compliance while conducting activities
        on
        the Premises. Lessee acknowledges that all documents referenced in Exhibit
        B
        have been provided, and the limitations and responsibilities of the Lessee
        with
        respect to those documents are understood. Lessee commits to Lessor that
        all
        activities of the Lessee, its agents, officers, employees, subcontractors,
        licensees, and invitees conducted on the Premises shall be in full compliance
        with the requirements set forth in this Lease, including those documents
        applicable to Lessee’s
        activities as identified in Exhibit B, and to additions and updates to those
        documents that are provided in writing to the Lessee by the Lessor from time
        to
        time during the term of this Lease. Lessee further commits that all training
        and
        qualification requirements identified by the APEL Facility Director, as
        applicable, will be in place and maintained current during the conduct of
        approved activities per the terms of this Lease.

      

      D. Lessee
        agrees to comply with the Tenant Operating Agreement, Exhibit C, and to post
        said agreement in a prominent place upon the Premises and ensure that all
        Lessee
        employees, subcontractors and invitees are familiar with the terms of that
        agreement.

      

      E. Lessee
        agrees to reasonably cooperate with other APEL tenants and APEL management
        in
        coordinating test schedules, pooling inventories and sharing inventory in
        order
        to comply with permit related limits and in order to reduce the amount of
        space
        required to be activated under the various permits.

      

      F. Lessee
        shall be responsible to pay any fines or penalties levied by any entity with
        jurisdictional authority over APEL for which Lessee is determined to be
        responsible. If the Parties are unable to agree on responsibility, the Parties
        will proceed to resolve their disagreement per Article 26, “Disputes”.
        

      

      G. Lessee
        shall ensure that the following prohibited articles are not brought onto
        the
        APEL property and/or into the facility: firearms, non-prescriptive controlled
        drugs, alcoholic beverages.

      

      Failure
        to comply with the terms of this Article 5 shall be grounds for default as
        set
        forth in Article 27, “Default”.
        See
        also Article 23, “Inspection
        of Premises”,
        which
        defines Lessor’s
        right
        to inspect the Premises for compliance with this Article 5.

      

      ARTICLE
        6 -
        COMMON AREAS

      

      The
        Lessee shall have nonexclusive use of all areas of APEL designated by the
        Lessor
        as common areas for the use generally of the tenants of APEL. The Lessor
        shall
        maintain the common areas in good condition. 

      

      ARTICLE
        7 -
        ALTERATIONS TO AND RESTORATION OF PREMISES

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Prior
        to
        the commencement of the initial leasehold term, in order to ready the Premises
        for Beneficial Occupancy, the Lessor shall, at its own expense, complete
        any
        alterations to the Premises that are generally identified in Exhibit A. Upon
        early termination or expiration of any leasehold term, the Lessor, at its
        option, may require that the Premises, including alterations by Lessor, be
        restored, at the Lessee’s
        expense, to the condition of the Premises at the time of commencement of
        the
        respective leasehold term (including appropriate cleaning and disposal of
        any
        chemicals, wastes, residues and equipment), absent normal wear and tear by
        the
        Lessee.

      

      ARTICLE
        8 -
        IMPROVEMENTS TO AND RESTORATION OF PREMISES BY LESSEE

      

      A. After
        the
        commencement of any leasehold term, and at Lessee’s
        own
        expense, the Lessee may make additions or improvements to the Premises after
        having obtained Lessor’s
        prior
        written approval to do so. The design and installation and operation of such
        improvements shall be in compliance with all applicable codes and standards
        and
        APEL environmental commitments. Upon early termination or expiration of the
        respective leasehold term, all such improvements and additions shall become
        the
        property of Lessor; provided that upon termination or expiration of the
        respective leasehold term, the Lessor, at its option, may require, at
        Lessee’s
        expense, that all such additions and improvements be removed and the Premises
        restored to its condition at the time of commencement of the respective
        leasehold term, absent normal wear and tear by the Lessee. Prior to the
        construction of any additions or improvements, Lessee shall, at the reasonable
        request of the Lessor, obtain payment and performance bonds as required by
        law
        to assure payment to all contractors, subcontractors, laborers and material
        suppliers.

      

      B. Lessee
        may, during any leasehold term, and subject to Lessor’s
        prior
        written approval, such approval not be unreasonably withheld, install in
        the
        Premises such furnishing, machinery, equipment and fixtures as Lessee deems
        necessary for its use of the Premises, provided such furnishings, machinery,
        equipment, or fixtures do not materially damage the Premises, are not hazardous
        to other tenants or users of the property upon which the Premises are situated,
        are not in conflict with Lessor’s
        permits
        or any other applicable operating, code or regulatory requirements, and do
        not
        unduly interfere with any other tenant’s
        use and
        enjoyment of their premises. During the respective leasehold term, the
        furnishings, machinery, equipment, and fixtures shall remain the personal
        property of the Lessee. Upon early termination or expiration of the respective
        leasehold term, if there is no default by the Lessee in the Lease, the Lessee
        shall have the right to remove all such furnishings, machinery, equipment
        and
        fixtures from the Premises regardless of whether this personal property is
        attached to the Premises by piping, wiring, bolts or otherwise. After the
        removal of the furnishing, machinery, equipment or fixtures from the leased
        Premises, the Lessee shall restore, at its own expense, the Premises to its
        condition at the commencement of the respective leasehold term, absent normal
        wear and tear by the Lessee.

      

      ARTICLE
        9 -
        ACCEPTANCE OF PREMISES

      

      The
        taking of possession of the Premises by the Lessee shall constitute an
        acknowledgment by Lessee that the Premises are in good and habitable condition
        and as represented by Lessor.

      

      ARTICLE
        10 - MAINTENANCE AND REPAIR

      

      A. All
        matters regarding maintenance and repair of the Premises (and Common areas
        if
        applicable) shall be referred to:

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	 	
                Name:

              	
                Dennis
                  R. McCord

              
	 	 	 
	 	
                Office
                  Address:

              	
                P.O.
                  Box 968

              
	 	 	
                Richland,
                  WA 99352

              
	 	 	 
	 	
                Work
                  Phone Number:

              	
                (509)377-4127

              
	 	 	 
	 	
                Pager
                  Number:

              	
                 

              
	 	 	 
	 	
                After
                  Hours Number:

              	
                 

              

      

      

      Said
        individual or his/her designee shall be available at all times to receive
        such
        contracts.

      

      B. The
        Lessor shall provide and pay for maintenance, repair and replacement of the
        Premises, including the building interior, exterior, grounds, and all equipment,
        fixtures, and appurtenances furnished by the Lessor under this Lease in order
        to
        keep the same in good repair and habitable condition, except for damage
        resulting from willful abuse or negligence of the Lessee. The Lessor shall
        have
        the right to enter upon the Premises at reasonable times in order to inspect
        the
        same and to perform such maintenance and repair, as well as replacement,
        but
        this right shall be exercised in a manner that does not unreasonably interfere
        with Lessee’s
        use of
        the Premises.

      

      C. Maintenance,
        repair, and replacement services by the Lessor, in accordance with Paragraph
        B,
        include the following:

       

      
        	 	
                1.

              	
                Snow
                  removal and ice control in parking areas and sidewalks;

              
	 	 	 
	 	
                2.

              	
                Painting
                  of interior and exterior of the building as required for good maintenance
                  practice;

              
	 	 	 
	 	
                3.

              	
                Scheduled
                  routine preventive maintenance of existing building mechanical,
                  electrical
                  and heating, ventilation, and air conditioning (HVAC) systems to
                  minimize
                  breakdown;

              
	 	 	 
	 	
                4.

              	
                Repair
                  or replacement of existing building mechanical, electrical and
                  HVAC
                  systems caused by wear and tear during ordinary use of these systems.
                  This
                  includes required relamping of interior and exterior light
                  fixtures;

              
	 	 	 
	 	
                5.

              	
                Grounds
                  maintenance including complete grass, tree, and shrub care and
                  clean-up
                  plus maintenance and repair of automatic underground sprinkler
                  system;

              
	 	 	 
	 	
                6.

              	
                Pest
                  control on interior (sprays will not be used on interiors) and
                  exterior of
                  building to control ants, insects, rodents, or other common pests
                  to
                  maintain the Premises in habitable condition;

              
	 	 	 
	 	
                7.

              	
                Replacement/repair
                  of exterior and interior worn or failed structural components of
                  the
                  building.

              
	 	 	 
	 	
                8.

              	
                Replacement
                  of carpet and drapes and/or blinds as needed. Replacements should
                  be color
                  coordinated with the existing draperies and/or blinds and floor
                  coverings.

              
	 	 	 
	 	
                9.

              	
                Perform
                  or have performed all necessary inspections, periodic testing,
                  and
                  maintenance of elevators, fire extinguishers, fire alarm, and fire
                  preventive equipment and systems in accordance with applicable
                  laws,
                  regulations and warranties.

              
	 	 	 
	 	
                10.

              	
                Planned
                  electrical outages, of any duration, affecting the Premises, will
                  not be
                  initiated by the Lessor without notification of the Lessee at least
                  48
                  hours in advance of such outage.

              
	 	 	 
	 	
                11.

              	
                In
                  the event a fire suppression or detection system is out of service,
                  the
                  Lessor shall notify the Lessee and provide a manned fire watch
                  during
                  non-working hours. The fire watch shall be performed on a minimum
                  frequency of every two (2) hours.

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      D. In
        the
        event of emergencies or unscheduled utility service outages, the Lessee may
        perform such maintenance and/or repairs as are necessary to ensure continuity
        of
        critical operations or protection of equipment. Expenses incurred by the
        Lessee
        in such events shall be used, as a basis for determining the amount the Lessor
        shall reimburse the Lessee for such expenses or for determining an equitable
        reduction in the rent.

      

      ARTICLE
        11 -
        JANITORIAL SERVICES

      

      A. The
        Lessor shall provide and pay for all janitorial services for common use areas,
        and shall keep those portions of the Premises in good and habitable condition.
        Janitorial services shall be performed during normal working hours.

      

      B. Janitorial
        services by the Lessor, in accordance with Paragraph A, include as applicable,
        but are not limited to the following:

      

      
        	 	
                1.

              	
                Daily
                  (Monday through Friday)

              

      

      

      
        	 	
                a.

              	
                Trash
                  receptacles shall have plastic liners. Receptacles shall be emptied
                  every
                  other day with the trash removed from the building.

              
	 	 	 
	 	
                b.

              	
                Dust
                  desks, tables, and other office furniture and counter tops with
                  approved
                  treated wiping cloth. Do not dust desks if there are papers on
                  them. (Use
                  of feather dusters not permitted.)

              
	 	 	 
	 	
                c.

              	
                Dust
                  all ledges and other flat surfaces, except as noted in
                  2.a.

              
	 	 	 
	 	
                d.

              	
                Properly
                  arrange furniture, as applicable.

              
	 	 	 
	 	
                e.

              	
                Dust
                  mop all vinyl and linoleum floors with approved treated mop cover,
                  and
                  remove spots from spills or tracking.

              
	 	 	 
	 	
                f.

              	
                Vacuum
                  carpeted areas as required.

              
	 	 	 
	 	
                g.

              	
                Wash
                  and clean thoroughly all restrooms, including floors, fixtures
                  and
                  mirrors.

              
	 	 	 
	 	
                h.

              	
                Refill
                  paper towel racks, soap dispensers, toilet paper and toilet seat
                  cover
                  racks as needed.

              
	 	 	 
	 	
                i.

              	
                Clean
                  all lavatories and hardware; mop floors every other
                  day.

              
	 	 	 
	 	
                j.

              	
                Clean
                  drinking fountains.

              
	 	 	 
	 	
                k.

              	
                Clean
                  and refill sand urns.

              
	 	 	 
	 	
                l.

              	
                Remove
                  fingerprints from door glass as needed.

              
	 	 	 
	 	
                m.

              	
                Clean
                  entryways as needed; remove spider webs from entryways.

              
	 	 	 
	 	
                n.

              	
                Sweep
                  entryway landings and steps.

              
	 	 	 
	 	
                o.

              	
                Wash
                  and clean thoroughly lunchroom/vending room floors, table and counter
                  tops, sink, and exterior surfaces of
                  appliances.

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	 	
                2.

              	
                Once
                  a Week

              

      

      

      
        	 	
                a.

              	
                Clean
                  air vents.

              

      

      

      
        	 	
                3.

              	
                Once
                  a Month

              

      

      

      
        	 	
                a.

              	
                Clean
                  linoleum and vinyl floors and re-wax.

              
	 	 	 
	 	
                b.

              	
                Clean
                  venetian blinds.

              

      

      

      
        	 	
                4.

              	
                Once
                  Every Three (3) Months

              

      

      

      
        	 	
                a.

              	
                Wash
                  trashcans as required.

              

      

      

      
        	 	
                5.

              	
                Once
                  every Six (6) Months

              

      

      

      
        	 	
                a.

              	
                Vacuum
                  drapes.

              
	 	 	 
	 	
                b.

              	
                Wash
                  inside and outside of windows.

              

      

      

      
        	 	
                6.

              	
                Yearly

              

      

      

      
        	 	
                a.

              	
                Shampoo
                  carpet.

              
	 	 	 
	 	
                b.

              	
                Clean
                  drapes as required.

              
	 	 	 
	 	
                c.

              	
                Clean
                  light fixtures.

              

      

      

      ARTICLE
        12 -
        UTILITY CHARGES

      

      The
        Lessor shall pay utility charges, including but not limited to electricity,
        sewer and water, provided that each tenant has similar utility demands. Lessee
        shall pay any utility charges that are reasonably demonstrated by Lessor
        to be
        in excess of average tenant demands. Lessee shall provide, to the extent
        practical and at its sole expense, for separate utility metering of loads
        that
        can be reasonably expected to significantly exceed average tenant
        demands.

      

      ARTICLE
        13 - TAXES AND ASSESSMENTS

      

      The
        Lessee shall pay, and hold the Lessor harmless from, all state, federal and
        local taxes and assessments levied against the Lessee’s
        property, the improvements thereon, the leasehold interest, or any business
        activities performed by Lessee In APEL during the term of this Lease. Lessee
        may, in good faith, contest the validity or the amount of any tax or assessment
        which it is required to pay hereunder, and while such contest is continuing
        in
        good faith, the Lessee may, to the extent permitted by law, refuse to pay
        such
        tax or assessment. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        14- ASSUMPTION OF RISK

      

      A. The
        Lessee assumes all risk of injury to persons or damage to property occurring
        in
        or about the leased Premises as a result of Lessee’s
        use or
        occupancy of the leased Premises, the negligence or willful misconduct of
        Lessee, its agents, officers, employees, invitees or licenses, or as a result
        of
        Lessee’s
        failure
        to perform or abide by any of the covenants or conditions of this Lease.
        The
        Lessee shall reimburse Lessor for any costs or expenses, including
        attorney’s
        fees,
        which Lessor may incur in defending any such claim.

      

      B. The
        Lessor shall not be responsible for any injuries or damages incurred by Lessee,
        its agents, officers, employees, invitees or licensees arising from acts
        or
        omissions of any co-tenants or from any cause other than the negligence or
        willful misconduct of Lessor or its employees.

      

      ARTICLE
        15- LIENS

      

      The
        Lessee shall keep the Premises and the property in which the Premises are
        situated, free from any liens or encumbrances arising out of any work performed,
        materials furnished or obligations incurred by Lessee. If any such lien is
        filed
        against APEL, the Lessee’s
        leasehold interest, the Lessor or the Lessor’s
        property, the Lessee shall cause the same to be discharged within twenty
        (20)
        days after the date of filing the same.

      

      ARTICLE
        16- LESSEE’S
        LIABILITY INSURANCE

      

      A. The
        Lessee shall, at Lessee’s
        expense, maintain commercial general liability insurance with an insurer
        acceptable to the Lessor, insuring against any and all claims for injury
        to or
        death of persons and loss of or damage to property occurring upon, in or
        about
        the Premises arising from an act or omission of the Lessee or any of its
        agents,
        contractors, representatives, licensees or invites. Such insurance shall
        have
        liability limits appropriate to Lessee’s
        Approved Purposes as set forth in Article 5, “Use
        of
        Premises”,
        but not
        less than one million dollars ($1,000,000.00) [Class
        G Lease = $1 million,]
        combined
        single limit for bodily injury and property damage per occurrence and in
        the
        aggregate.

      

      B. The
        Lessee shall, at Lessee’s
        expense, maintain environmental hazards insurance with an insurer acceptable
        to
        the Lessor, insuring against any and all claims for any environmental impairment
        caused by Lessee’s
        actions
        within APEL, including third party bodily injury, property damage and cleanup
        costs arising from a pollution occurrence. Such insurance shall have liability
        limits appropriate to Lessee’s
        Approved Purposes as set forth in Article 5, “Use
        of
        Premises”,
        but not
        less than ____ no _____ dollars ($ 0______) [Class G Lease = $0] combined
        single
        limit per occurrence and in the aggregate. If the policy is not a “claims
        made”
        policy,
        a minimum two-year discovery and reporting of claims period is
        required.

      Lessee
        or
        Lessee’s
        insurer
        shall have the option to perform any required remediation, or to pay for
        or
        reimburse the costs of any required remediation to the satisfaction of the
        Lessor, Lessor’s
        insurer
        and the responsible regulatory authorities.

      

      C. All
        insurance required per paragraph A and B above:

      

      
        	
                1.
                  

              	
                shall
                  be primary insurance as respects the Lessor for any and all covered
                  Lessee
                  liabilities arising from an act or omission of the Lessee or any
                  of its
                  agents, contractors, representatives, licenses, or invitees. Any
                  such
                  insurance maintained by the Lessor shall be excess of Lessee’s
                  insurance and shall not contribute to it. The liability of Lessee
                  and any
                  of its insures shall not be reduced, offset, or otherwise affected
                  by the
                  existence and/or collectability of any insurance maintained by
                  Lessor;
                  and

              
	 	 
	
                2.

              	
                shall
                  contain a provision whereby the carrier agrees not to cancel or
                  significantly modify the insurance without thirty (30) days prior
                  to
                  written notice to the Lessor; and

              
	 	 
	
                3.

              	
                shall
                  name the Lessor as additional insured; and

              
	 	 
	
                4.

              	
                shall
                  not contain a severability of interests
                  exclusion.

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      The
        Parties understand that they will be bound by the comparative fault laws
        of the
        State of Washington.

      

      D. On
        or
        before taking possession of the Premises pursuant to this Lease, the Lessee
        shall provide the Lessor with a copy of the insurance policies and certificates
        evidencing the aforesaid insurance coverage required per paragraphs A and
        B
        above, with underwriters acceptable to the Lessor, such acceptance by Lessor
        not
        to be unreasonably withheld. Renewal certificates and any changes in terms
        or
        underwriter shall be furnished to the Lessor for approval at least thirty
        (30)
        days prior to the expiration date of each policy for which a certificate
        was
        theretofore furnished.

      

      ARTICLE
        17 -
        LESSEE’S
        FIRE INSURANCE

      

      The
        Parties understand that Lessee assumes all responsibility for loss to its
        personal property and leasehold improvements and alterations on the Premises,
        and Lessee’s
        loss of
        income due to fire on the Premises. Lessor is in no way responsible for
        insuring, replacing or repairing Lessee’s
        personal property, leasehold improvements and alterations, or loss of income,
        except for loss to Lessee’s
        personal property as a direct result of Lessor’s
        negligent acts, errors or omissions.

      

      ARTICLE
        18 - LESSOR’S
        FIRE INSURANCE

      

      The
        Lessor shall, at Lessor’s
        expense, maintain for APEL a Commercial Property Policy including a Causes
        of
        Loss -
        Special
        Form, in an amount of the replacement value of the facility and permanently
        installed fixtures and equipment. All proceeds of any such insurance shall
        be
        payable to Lessor and shall be applied to the restoration of the Premises.
        Any
        proceeds of such insurance remaining after such restoration shall belong
        to the
        Lessor.

      

      ARTICLE
        19 - CONDEMNATION

      

      In
        the
        event that an authority superior to the Lessor, such as the State of Washington
        or the United States of America should condemn the Premises of the APEL facility
        for public use, whether the right condemned shall consist of the fee simple
        title or interest less than fee simple but of such nature as to render
        operations by the Lessee impractical or unfeasible, then this Lease Agreement
        shall forthwith terminate. Lessor shall not be obligated in any way to Lessee
        as
        a result of such condemnation, except to pay to Lessee any sums actually
        paid to
        Lessor by the condemning authority for rent paid by Lessee but not yet earned
        by
        Lessor, or for leasehold improvements owned by Lessee. Lessee shall be
        responsible for recovering any damages to which Lessee is legally entitled
        directly from the condemning authority. 

      

      ARTICLE
        20 - DAMAGE OR DESTRUCTION

      

      A. If
        the
        Premises or the APEL facility are damaged or destroyed by fire or any cause
        other than an act or omission of Lessee, its employees, agents, invitees,
        or
        licensees, the Lessor shall restore the Premises and the APEL facility, except
        for such fixtures, improvements and alterations as are installed by Lessee,
        as
        nearly as practicable to their condition immediately prior to such damage
        or
        destruction. The Lessee, at the Lessee’s
        expense, shall so restore all such fixtures, improvements, and alterations
        installed by the Lessee. The Lessor, at Lessee’s
        expense, shall so restore the Premises and the APEL facility with respect
        to all
        damage, including contamination of the APEL facility or the environment,
        caused
        by any act or omission of Lessee, its employees, agents, invitees or licenses,
        and the Lessee agrees to reimburse Lessor upon demand for all sums expended
        for
        such restoration. The obligations to restore provided in this paragraph shall
        be
        subject to Lessor’s
        termination rights provided below. Any restoration shall be promptly commenced
        and diligently prosecuted. The Lessor shall not be liable for any special,
        consequential or punitive damages by reason of any such damage or
        destruction.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      B. Notwithstanding
        any of the foregoing provisions of this Article 20, in the event the Premises
        or
        the APEL facility shall be destroyed or damaged to such an extent that the
        Lessor deems that it is not economically feasible to restore the same, then
        the
        Lessor may terminate this Lease as of the date of the damage or destruction
        by
        giving the Lessee notice to that effect.

      

      C. If
        the
        Lessor undertakes to restore the Premises or the APEL facility as provided
        within this Article 20, then commencing with the date of the damage or
        destruction and continuing throughout the period of restoration, the rent
        for
        the Premises shall be abated for such period in the same proportion as the
        untenable portion of each type of space within the Premises as defined in
        paragraph 4A, “MONTHLY
        RENT PAYMENTS”
        bears to
        the whole thereof, except that there shall be no abatement to the extent
        that
        any such damage or destruction is caused by any act or omission of the Lessee,
        its employees, agents, invitees or licensees.

      

      ARTICLE
        21 - ASSIGNMENT AND SUBLETTING

      

      Neither
        this Lease nor any right hereunder may be assigned, transferred, encumbered
        or
        sublet in whole or in part by the Lessee, by operation of law or otherwise,
        without the Lessor’s
        prior
        written consent, such consent not to be unreasonably withheld. The Lessor
        may
        assign its interest in this Lease.

      

      ARTICLE
        22 - CLOSURE AND SURRENDER OF PREMISES

      

      A. Subject
        to the covenants and conditions set forth within this Lease, the Lessee,
        at the
        expiration or sooner termination of this Lease, shall quit and surrender
        the
        Premises in good, neat, clean and sanitary condition, except for reasonable
        wear
        and tear, and damage not caused by acts or omissions by Lessee, its employees,
        agents, invitees or licensees.

      

      B. Lessee
        shall provide a level of financial assurance acceptable to Lessor, demonstrating
        Lessee’s
        ability
        to restore the Premises as required by paragraph 22A above. The amount of
        financial assurance shall be based on a closure plan with a corresponding
        cost
        estimate prepared by Lessee and accepted by Lessor. The closure plan and
        financial assurance shall be provided in a form acceptable to Lessor prior
        to
        Beneficial Occupancy. Such financial assurance may take the form
        of:

      

      1.
        Insurance

      2.
        Financial Test (Self-Insurance)

      3.
        Corporate Guarantee

      4.
        Irrevocable Letter of Credit

      5.
        Trust
        Fund

      6.
        Bond

      7.
        Combination of trust fund(s), bond(s), letter(s) of credit, and
        insurance.

      

      Unless
        otherwise required in writing by Lessor, the requirement for a closure plan
        and
        proof of financial assurance are required only for Class W and R
        tenants.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        23 -
        INSPECTION OF PREMISES

      

      Subject
        to the Security provisions of Article 33, “Security”,
        the
        Lessee shall allow Lessor free access at all reasonable times to said Premises
        for the purpose of inspection and to fulfill any of Lessor’s
        obligations under this Lease. Lessor shall have the right to inspect the
        Premises and review Lessee’s
        activities to provide reasonable assurance to the Lessor and/or regulatory
        authorities that such activities and condition of the Premises are in compliance
        with applicable environmental regulations and permit conditions or commitments,
        industrial safety, legal, policy, procedural and protocol requirements
        established for APEL and applicable to Lessee’s
        activities with APEL. Such review shall in no way relieve Lessee of primary
        responsibility or liability for such compliance, nor the consequences of
        any
        failure of Lessee to comply.

      

      ARTICLE
        24 - INSTALLATION OF SIGNS

      

      The
        Lessee will not cause or permit the display of any sign, notice or advertisement
        in or about the Premises or the APEL facility without Lessor’s
        prior
        written consent.

      

      Lessor
        shall have the right to place and maintain “For
        Rent”
        signs in
        a conspicuous place on said Premises for thirty (30) days prior to expiration
        of
        this Lease.

      

      ARTICLE
        25 -
        HOLDOVER

      

      If
        the
        Lessee lawfully holds over after the expiration of the term of this Lease,
        such
        tenancy shall be a month-to-month tenancy. During such tenancy the Lessee
        agrees
        to pay Lessor the same rate as provided herein, and to be bound by all the
        applicable terms, covenants and conditions herein specified. 

      

      ARTICLE
        26 -
        DISPUTES

      

      Pending
        resolution of a disputed matter, the Parties shall continue performance of
        their
        respective obligations pursuant to this Lease. Disputes regarding any factual
        matter relating to this Lease shall be discussed by the Parties’
        authorized representatives who shall use their reasonable efforts to amicably
        and promptly resolve the dispute. Should the authorized representatives be
        unable to resolve any controversy or claim arising out of or relating to
        this
        Lease, or the breach thereof, the Parties agree that the controversy or claim
        shall be settled by binding arbitration in accordance with the Commercial
        Arbitration Rules of the American Arbitration Association, and judgment upon
        the
        award rendered by the Arbitrator(s) shall be entered in any court having
        jurisdiction thereof.

      

      ARTICLE
        27 -
        DEFAULT

      

      A. If
        any
        rents reserved, or any part thereof, shall be and remain unpaid when the
        same
        shall become due, or if Lessee shall violate or default in any of the covenants
        and agreements herein contained and, after receiving written notice of such
        violation or default, fail to remedy in a timely matter, then the Lessor
        may
        terminate this Lease upon giving the notice required by law, and re-enter
        and
        take possession of said Premises. Notwithstanding such re-entry by Lessor,
        the
        liability of Lessee for the rent, leasehold tax, and utilities provided herein,
        as well as the financial obligations and guarantees set forth in Section
        4,
“Rent”,
        shall
        not be extinguished for the balance of the term of the Lease. Lessee shall
        continue to pay the rent, leasehold tax, and utilities as they due, and
        covenants and agrees to make good to the Lessor any deficiency arising after
        re-entry and re-letting of the Premises at a lessor rental than herein agreed
        to. The Lessee shall pay such deficiency each month as the amount thereof
        is
        ascertained by the Lessor.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      B. If
        by
        reason of any default on the part of the Lessee it becomes necessary for
        the
        Lessor to employ an attorney or in case Lessor shall bring suit to recover
        any
        rent due hereunder, or for breach of any provision of this Lease or to recover
        any rent due hereunder, or for breach of any provision of this Lease or to
        recover possession of the leased premises, or if Lessee shall bring any action
        for any relief against Lessor, declaratory or otherwise, arising out of this
        Lease, the prevailing party in such action shall be awarded reasonable
        attorney’s
        fees
        and all costs and expenses expended or incurred in connection with such
        action.

      

      C. The
        rights and remedies of the Lessor in this Article are in addition to any
        other
        rights or remedies provided by law and under the Lease.

      

      ARTICLE
        28 -
        TERMINATION

      

      Notwithstanding
        the provisions set forth in Article 27, “Default”,
        this
        Lease may be terminated in whole or from time to time in part by either party,
        whenever a party determines that such action is in its best interests. In
        the
        event of a partial termination of the Lease, the terminating party shall
        give
        the other party at least ninety (90) days advanced written notice of its
        intent
        to terminate. Rental payments after a partial termination shall be reduced
        in
        proportion to the related reduction in occupancy of the Premises. In the
        event
        of a termination of the total Lease, the terminating party shall make reasonable
        efforts to give the other party at least one hundred eighty (180 days) notice
        of
        its intent to terminate, but in no case shall less than ninety (90) days
        advanced written notice of its intent to terminate be given. Rent payments
        after
        a total termination shall be payable through the time Lessee occupies the
        Premises.

      

      

      ARTICLE
        29 -
        NOTICES

      

      All
        notices, demands, and requests to be given by either party to the other shall
        be
        in writing and served either personally or sent by United States mail, postage
        pre-paid, to the addresses listed below:

      

      
        	 	
                TO
                  LESSOR at:

              	
                Energy
                  Northwest

              	 	 
	 	 	
                Attention:
                  Mr. S.J. Newsom

              	 	 
	 	 	
                Mail
                  Drop 817

              	 	 
	 	 	
                P.O.
                  Box 968

              	 	 
	 	 	
                Richland,
                  WA 99352

              	 	 
	 	 	 	 	 
	 	
                TO
                  LESSEE at:

              	
                Dave
                  Swanberg

              	 	 
	 	 	
                IsoRay,
                  LLC

              	 	 
	 	 	
                1863
                  Alder

              	 	 
	 	 	
                Richland,
                  WA 99352

              	 	 

      

      

      ARTICLE
        30 -
        WAIVER OF RIGHTS

      

      The
        failure of either party to insist upon strict performance of any of the
        covenants and conditions of this Lease, or to exercise any option or right
        herin
        conferred, shall not be construed to be a waiver or relinquishment of any
        such
        option or right, or any other covenants or agreements, but the same shall
        be and
        remain in full force and effect.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        31- TRANSFER OF OBLIGATION

      

      The
        covenants and conditions of this Lease shall be binding upon the heirs, legal
        representatives, successors and agreed assigns of any or all the Parties
        hereto.

      

      ARTICLE
        32 -
        GOVERNING LAW

      

      This
        Lease shall be governed by the laws of the State of Washington.

      

      ARTICLE
        33 -
        SECURITY

      

      A. Both
        Lessor and Lessee, and their respective, employees, agents, invitees and
        licensees agree to comply with all security regulations and procedures
        established by the Lessor for the APEL facility. Lessor shall provide Lessee
        employees, and such other individuals designated by Lessee, with electronic
        security access and photo identification cards for access to the general
        APEL
        facility, including common use areas. Lessee shall pay Lessor thirty dollars
        ($30) for each electronic access key card with picture or twenty-five dollars
        ($25) for a keycard without a picture and ten dollars ($10) for a photo ID
        card
        only, or for replacements thereof due to damage or loss.

      

      B. Lessee
        shall provide and maintain at its sole expense its own security provisions
        specific to portions of the Lessee Premises for which Lessee security
        requirements exceed those general APEL facility security provisions provided
        by
        Lessor. Lessee shall provide Lessor reasonable access to such Lessee secured
        areas in case of emergency, and to provide Lessor with reasonable assurance
        that
        Lessee remains in compliance with the terms and conditions of this Lease,
        and to
        conduct routine facility maintenance and inspections in accordance with the
        terms and conditions of this Lease.

      

      ARTICLE
        34 -
        ENVIRONMENT, HEALTH AND SAFETY

      

      The
        Lessee shall be solely responsible for all Lessee activities conducted within
        APEL to ensure that such activities are, on an on-going basis, in compliance
        with the environmental/regulatory requirements of the Environmental Protection
        Agency or the Washington State Department of Ecology, the health and safety
        requirements of OSHA, WSHA, the city of Richland and Benton County, and with
        any
        environmental or personnel health and safety requirements that may be
        established and communicated in writing by APEL management.

      

      Lessee
        agrees to collect and dispose of any and all hazardous waste generated by
        his or
        her activities at APEL in compliance with local, state, and federal laws
        and
        regulations. If Lessee’s
        waste
        generation activity qualifies for Small Quantity Generator (SQG) status as
        described in WAC 173-303-070(8), Lessee may, in accordance with APEL Procedure
        16.0, arrange for disposal through the Benton County SQG Program (phone
        942-7387) at the Regional Moderate Risk Waste Facility located at the City
        of
        Richland Landfill. If the Lessee intends to arrange disposal at another
        facility, the APEL Director shall be so informed at least 30 days in advance
        of
        disposal. The Lessee agrees that all hazardous wastes will be accumulated
        in
        accordance with the satellite accumulation requirements of WAC 173-303-200(2).
        If the Lessee’s
        hazardous waste generation activity exceeds the small quantity generator
        criteria, the Lessee’s
        wastes
        shall be managed through the APEL 90-Day accumulation area in conformance
        with
        APEL Procedure 9.0 and this contract.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        35 -
        ORDER OF PRECEDENCE

      

      The
        Contract comprises the following documents in the order of precedence set
        forth
        below:

      

      
        	 	
                1.

              	
                Amendments
                  or Supplemental Agreements to APEL Lease

              
	 	 	 
	 	
                2.

              	
                APEL
                  Lease

              
	 	 	 
	 	
                3.

              	
                Exhibit
                  A, Description of Premises

              
	 	 	 
	 	
                4.
                  

              	
                Exhibit
                  B, Applicable Protocols, Policies, Procedures and Other
                  Documents

              

      

      

      The
        above
        order of precedence controls in the event of any conflict, inconsistency
        or
        ambiguity in the terms and conditions set forth within these
        documents.

      

      ARTICLE
        36 -
        ENTIRE AGREEMENT

      

      This
        document contains the entire and integrated agreement of the Parties and
        may not
        be modified or amended except in writing signed and acknowledged by both
        Parties.

      

      ARTICLE
        37 -
        SIGNATURES

      

      IN
        WITNESS WHEREOF, the Parties hereto have signed this Lease on the date(s)
        written below.

      

      
        	
                /s/
                  Samuel Newsom

              	 	
                Pr.
                  Contracting Officer

              	 	
                4/23/01

              
	
                LESSOR:

              	 	
                Title

              	 	
                Date

              
	 	 	 	 	 
	 	 	 	 	 
	
                /s/
                  David Swanberg

              	 	
                Assistant
                  Manager, IsoRay

              	 	
                4/23/01

              
	
                LESSEE:

              	 	
                Title

              	 	
                Date

              
	 	 	 	 	 
	
                Supply
                  System Contract #

              	 	
                Revision
                  No: 4

              	 	 
	
                Tenant
                  Lease Agreement #

              	 	
                Effective
                  Date _______

              	 	 

      

      

      
        	STATE OF WASHINGTON )	 
	 	
                )
                  ss.

              	 
	
                County
                  of Benton   )

              

      

      

      On
        this
        day of 23
        April, 2001,
        before
        me, the undersigned, a Notary Public in and for the state of Washington,
        duly
        commissioned and sworn, personally appeared D.J.
        Swanberg,
        to me
        known to be the Assistant
        Manager
        of
ISORAY,
        LLC,
        that
        executed the foregoing instrument, and acknowledged the said instrument to
        be
        the free and voluntary act and deed of said corporation, for the uses and
        purposes therein mentioned, and on oath stated that _____ was authorized
        to
        execute the said instrument and that the seal affixed (if any) is the corporate
        seal of said corporation.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Witness
        my hand and official seal hereto affixed the day and year above
        written.

       

       

      
        	 	/s/ Mary E.
                Zilar                                                                    
                	 
	 	NOTARY PUBLIC in and for the State
                of
                Washington, 	 
	 	Residing at Kennewick,
                WA 99336	 
	 	
                My
                  commission expires 11-29-03

              	 
	 	 	 
	 	 	 
	 STATE OF WASHINGTON
                )	 
	 	
                )
                  ss.

              	 
	
                County
                  of Benton   )

              	 

      

       

      On
        this
        25 day of April 2001, before me, the undersigned, a Notary Public in and
        for the
        state of Washington, duly commissioned and sworn, personally appeared
Samuel
        J. Newsom,
        to me
        known to be the Pr.
        Contracting Officer
        of the
        Energy Northwest, that executed the foregoing instrument, and acknowledged
        the
        said instrument to be the free and voluntary act and deed of said corporation,
        for the uses and purposes therein mentioned, and on oath stated that
he
        was
        authorized to execute the said instrument and that the seal affixed (if any)
        is
        the corporate seal of said corporation.

      

      Witness
        my hand and official seal hereto affixed the day and year above
        written.

      

      
        	 	/s/ Mary E.
                Zilar                                                                    
                	 
	 	NOTARY PUBLIC in and for the State
                of
                Washington, 	 
	 	Residing at Kennewick,
                WA 99336	 
	 	
                My
                  commission expires 11-29-03Unassociated Document

     

    

      Work
        for Others Agreement No. 45658, R2

      

      between

      

      Battelle
        Memorial Institute, Pacific Northwest Division

      which
        operates the

      PACIFIC
        NORTHWEST NATIONAL LABORATORY

      under
        Prime Contract No. DE-AC06-76RL01830

      for
        the U.S. Department of Energy

      

      and

      

      ISORAY
        PRODUCTS LLC

      

      The
        obligations of the above-identified DOE Contractor shall apply to any successor
        in interest to said Contractor continuing the operation of the DOE facility
        involved in this Work for Others Agreement.

      

      GENERAL
        TERMS AND CONDITIONS

      

      ARTICLE
        I. PARTIES TO THE AGREEMENT

      

      The
        U.S.
        Department of Energy’s
        Contractor, Battelle Memorial Institute, Pacific Northwest Division, hereinafter
        referred to as the “Contractor,”
        has been
        requested through DOE by IsoRay Products LLC hereinafter referred to as the
        “Sponsor,”
        to
        perform the work set forth in the Statement of Work, attached hereto as Appendix
        A. It is understood by the Parties that, except for the intellectual property
        provisions of this Agreement, the Contractor is obligated to comply with
        the
        terms and conditions of its M&O contract with the United States Government
        (hereinafter called the “Government”)
        represented by the United States Department of Energy (hereinafter called
        the
“Department”
        or
“DOE”)
        when
        providing goods, services, products, processes, materials, or information
        to the
        Sponsor under this Agreement.

      

      ARTICLE
        II. TERM OF THE AGREEMENT

      

      The
        Contractor estimated period of performance for completion of the Statement
        of
        Work is Nineteen months, through September
        30, 2005.
        The
        term of this Agreement shall be effective as of the latter date of (1) the
        date
        on which it is signed by the last of the Parties thereto, or (2) the date
        on
        which it is approved. 

      

      ARTICLE
        III. COSTS

      

      A.
        The
        Contractor estimated cost for the work to be performed under this Agreement
        is
$861,217.
        

      

      B.
        The
        Contractor has no obligation to continue or complete performance of the work
        at
        a cost in 

      excess
        of
        the original estimated cost or any subsequent amendment(s).

      

      C.
        The
        Contractor agrees to provide at least 30 days notice to the Sponsor if the
        actual cost to 

      complete
        performance is expected to exceed its estimated cost.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        IV. FUNDING AND PAYMENT

      

      The
        Sponsor shall provide sufficient funds in advance to maintain approximately
        a
        90-day period that is funded in advance. This advance shall also cover the
        anticipated termination cost that the Contractor would incur if the Agreement
        were terminated.

      

      The
        Sponsor shall pay the Contractor as follows:

      

      
        	
                A.
                  

              	
                Advance
                  Payment.
                  The Sponsor shall advance Eighty
                  Thousand dollars ($80,000) payable
                  upon execution of the Agreement. Advance payment shall be recorded
                  in the
                  Contractor’s
                  account. 

              

      

      

      
        
          
            	
                    B.

                  	
                    Monthly
                      Payments.
                      The Sponsor shall pay monthly thereafter upon submittal of
                      invoices
                      
                      representing
                        actual costs incurred until the last three months of the
                        Agreement term.
                        At this time, the advance payment account shall be liquidated
                        by charging
                        costs incurred during this last period. Advance payment in
                        excess of total
                        costs incurred by the Contractor under this Agreement shall
                        be refunded to
                        the Sponsor at the conclusion of the
                        project.

                    

                  

 

        

      

      
        	 	
                1.

              	
                Invoices
                  will be submitted to the Sponsor at the following
                  address:

              

      

      

      IsoRay
        Products LLC

      350
        Hills
        Street, Suite 106

      Richland,
        WA 99352

      

      
        	 	
                2.

              	
                Payments
                  by the Sponsor will be directed as
                  follows:

              

      

      

      Check
        Payment:   Wire
        Transfer:

      Battelle    U.S.
        Bank

      For
        Project Number. 45648  Richland,
        WA 99352

      P.O.
        Box
        84391, ATTN:              
        Cashier ABA
        No.

      Seattle,
        WA 98124-5691   
Account
        No. 

                                  SWIFT
        Code:

      

      For
        check
        payments, include Project Number 45658 and all invoice numbers being paid
        on the
        check. For wire transfers, include contract number and invoice number on
        the
        receiver info-line and list all invoice numbers being paid on the sender
        info-line.

      

      
        	
                C.

              	
                Applicable
                  Currency.
                  All payments due the Contractor under this Agreement, including
                  cost
                  estimates and obligations of funds, shall be in United States dollars
                  ($
                  U.S.).

              

      

      

      ARTICLE
        V. SOURCE OF FUNDS

      

      The
        Sponsor hereby warrants and represents that, if the funding it brings to this
        Agreement has been secured through other agreements or is being secured through
        existing international agreements, such other agreements do not have any
        terms
        and conditions (including intellectual property) that conflict with the terms
        of
        this Agreement. If this Work for Others Agreement entered into conflicts
        with
        existing International Agreements, the International Agreement terms and
        conditions will take precedence.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        VI. PROPERTY

      

      Upon
        termination of this Agreement, property or equipment produced or acquired
        in
        conducting the work under this Agreement shall be owned as follows: Property
        or
        equipment supplied by Sponsor shall remain property of Sponsor. Miscellaneous
        materials and supplies purchased by Contractor shall remain property of
        Contractor. No Federal funds will be used to purchase property or equipment
        for
        this agreement. Property or equipment produced or acquired as part of this
        Agreement will be accounted for and maintained during the term of the Agreement
        in the same manner as Department property or equipment. Disposition of
        contamination existing on Contractor’s
        facility or equipment prior to the performance of this Contract will be the
        responsibility of the Contractor. Disposition of Sponsor-caused contamination
        during the performance of this contract, including any decontamination and
        disposal, will be the responsibility of Sponsor.

      

      ARTICLE
        VII. PUBLICATION MATTERS

      

      The
        publishing Party shall provide the other Party a 30-day period in which to
        review and comment on proposed publications that either disclose technical
        developments and/or research findings generated in the course of this agreement,
        or identify Proprietary Information (as defined in paragraph 1.B of Article
        XV).
        The publishing Party shall not publish or otherwise disclose Proprietary
        Information identified by the other Party, except as provided by
        law.

      

      ARTICLE
        VIII. LEGAL NOTICE

      

      The
        Parties agree that the following Legal Disclaimer Notice shall be affixed
        to
        each report furnished to the Sponsor under this Agreement and to any report
        resulting from this Agreement which may be distributed by the
        Sponsor.

      

      DISCLAIMER

      

      This
        report was prepared as an account of work sponsored by an agency of the United
        States Government. Neither the United States Government nor any agency thereof,
        nor Battelle Memorial Institute, nor any of their employees, makes any warranty,
        express or implied, or assumes any legal liability or responsibility for
        the
        accuracy, completeness, or usefulness of any information, apparatus, product,
        or
        process disclosed, or represents that its use would not infringe privately
        owned
        rights. Reference herein to any specific commercial product process, or service
        by trade name, trademark, manufacturer, or otherwise does not necessarily
        constitute or imply its endorsement, recommendation, or favoring by the United
        States Government or any agency thereof, or Battelle Memorial Institute.
        The
        views and opinions of authors expressed herein do not necessarily state or
        reflect those of the United States Government or any agency
        thereof.

      

      PACIFIC
        NORTHWEST NATIONAL LABORATORY

      operated
        by

      BATTELLE

      for
        the

      UNITED
        STATES DEPARTMENT OF ENERGY

      under
        Contract DE-AC06-76RL01830

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      ARTICLE
        IX. DISCLAIMER

      

      THE
        GOVERNMENT AND THE CONTRACTOR MAKE NO EXPRESS OR IMPLIED WARRANTY AS TO THE
        CONDITIONS OF THE RESEARCH OR ANY INTELLECTUAL PROPERTY, GENERATED INFORMATION,
        OR PRODUCT MADE OR DEVELOPED UNDER THIS WORK FOR OTHERS AGREEMENT, OR THE
        OWNERSHIP, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE RESEARCH
        OR RESULTING PRODUCT; THAT THE GOODS, SERVICES MATERIALS, PRODUCTS, PROCESSES,
        INFORMATION, OR DATA TO BE FURNISHED HEREUNDER WILL ACCOMPLISH INTENDED RESULTS
        OR ARE SAFE FOR ANY PURPOSE INCLUDING THE INTENDED PURPOSE; OR THAT ANY OF
        THE
        ABOVE WILL NOT INTERFERE WITH PRIVATELY OWNED RIGHTS OF OTHERS. NEITHER THE
        GOVERNMENT NOR THE CONTRACTOR SHALL BE LIABLE FOR SPECIAL, CONSEQUENTIAL,
        OR
        INCIDENTAL DAMAGES ATTRIBUTED TO SUCH RESEARCH OR RESULTING PRODUCT,
        INTELLECTUAL PROPERTY, GENERATED INFORMATION, OR PRODUCT MADE OR DELIVERED
        UNDER
        THIS WORK FOR OTHERS AGREEMENT.

      

      ARTICLE
        X. GENERAL INDEMNITY

      

      The
        Sponsor agrees to indemnify and hold harmless the Government, the Department,
        the Contractor, and persons acting on their behalf from all liability, including
        costs and expenses incurred, to any person, including the Sponsor, for injury
        to
        or death of persons or other living things or injury to or destruction of
        property arising out of the performance of the Agreement by the Government,
        the
        Department, the Contractor, or persons acting on their behalf, or arising
        out of
        the use of the services performed, materials supplied, or information given
        hereunder by any person including the Sponsor, and not directly resulting
        from
        the fault or negligence of the Government, the Department, the Contractor,
        or
        persons acting on their behalf.

      

      ARTICLE
        XI. PRODUCT LIABILITY INDEMNITY

      

      Except
        for any liability resulting from any negligent acts or omissions of the
        Government or the Contractor, the Sponsor agrees to indemnify the Government
        and
        the Contractor for all damages, costs, and expenses, including
        attorney’s
        fees,
        arising from personal injury or property damage occurring as a result of
        the
        making, using, or selling of a product, process, or service by or on behalf
        of
        the Sponsor, its assignees, or licensees, which was derived from the work
        performed under this Work for Others Agreement. In respect to this Article,
        neither the Government nor the Contractor shall be considered assignees or
        licensees of the Sponsor, as a result of reserved Government and Contractor
        rights. The indemnity set forth in this paragraph shall apply only if the
        Sponsor shall have been informed as soon and as completely as practical by
        the
        Contractor and/or the Government of the action alleging such claim and shall
        have been given an opportunity, to the maximum extent afforded by applicable
        laws, rules, or regulations, to participate in and control its defense, and
        the
        Contractor and/or Government shall have provided all reasonably available
        information and reasonable assistance requested by the Sponsor. No settlement
        for which the Sponsor would be responsible shall be made without the
        Sponsor’s
        consent, unless required by final decree of a court of competent
        jurisdiction.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      The
        Sponsor agrees to obtain and maintain product liability insurance in the
        minimum
        amount
        of Five
        Million Dollars ($5,000,000)
        during
        the life of this Agreement and subsequently for the life of any products,
        processes, or services resulting from work under the Agreement. The Government
        and the Contractor shall be covered against any claims for product liability
        as
        a result of this insurance. A copy of this product liability insurance policy
        shall be provided to both the Government and the Contractor, including any
        material modifications thereto, including any notices of termination. Such
        insurance shall provide that it cannot be materially reduced or cancelled
        without prior written notice to the Government and the Contractor of at least
        thirty (30) days.

      

      The
        cost
        for this insurance shall not be charged directly or indirectly to the
        Government.

      

      ARTICLE
        XII. INTELLECTUAL PROPERTY INDEMBITY -
        LIMITED

      

      The
        Sponsor shall indemnify the Government and the Contractor and their officers,
        agents, and employees against liability, including costs, for infringement
        of
        any United States patent, copyright, or other intellectual property arising
        out
        of any acts required or directed by the Sponsor to be performed under this
        Agreement to the extent such acts are not already performed at the facility.
        Such indemnity shall not apply to a claimed infringement that is settled
        without
        the consent of the Sponsor unless required by a court of competent
        jurisdiction.

      

      ARTICLE
        XIII. NOTICE AND ASSISTANCE REGARDING PATENT AND

      COPYRIGHT
        INFRINGEMENT

      

      The
        Sponsor shall report to the Department and the Contractor, promptly and in
        reasonable written detail, each claim of patent or copyright infringement
        based
        on the performance of this Agreement of which the Sponsor has knowledge.
        The
        Sponsor shall furnish to the Department and the Contractor, when requested
        by
        the Department or the Contractor, all evidence and information in the possession
        of the Sponsor pertaining to such claim.

      

      ARTICLE
        XIV. PATENT RIGHTS -
        USE OF FACILITIES

      

      1. Definitions.

      

      
        	 	
                A.

              	
                “Subject
                  Invention”
                  means any invention or discovery of the Contractor, or, to the
                  extent the
                  Sponsor is performing any work under this Agreement, of the Sponsor,
                  conceived in the course of or under this Agreement, or, in the
                  case of an
                  invention previously conceived by the Sponsor, first actually reduced
                  to
                  practice in the course of or under this Agreement. “Subject
                  Invention”
                  includes any art, method, process, machine, manufacture, design
                  or
                  composition of matter, or any new and useful improvement thereof,
                  or any
                  variety of plant, whether patented under the patent laws of the
                  United
                  States of America or any foreign country, or
                  unpatented.

              

      

      

      
        	 	
                B.

              	
                “Patent
                  Counsel”
                  means the DOE Patent Counsel assisting the procuring activity which
                  has
                  the administrative responsibility for the facility where the work
                  under
                  this Agreement is to be performed.

              

      

      

      2. Rights
        of
        the Sponsor; election to retain rights.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Subject
        to the provisions of paragraph 3 with respect to any Subject Invention reported
        and elected in accordance with paragraph 4 of this article, the Sponsor may
        elect to obtain the entire right, title, and interest throughout the world
        to
        each Subject Invention and any patent application filed in any country on
        a
        Subject Invention and in any resulting patent secured by the Sponsor. Where
        appropriate, the filing of patent applications by the Sponsor is subject
        to DOE
        and other Government security regulations and requirements.

      

      3. Rights
        of
        Contractor and Government

      

      A. Assignment
        to either the Contractor or the Government.

      

      The
        Sponsor agrees to assign to either the Contractor or the Government, as
        requested by the Contractor, the entire right, title, and interest in any
        country to each Subject Invention of the Sponsor and to each Subject Invention
        of the Contractor, where the Sponsor: does not elect pursuant to this article
        to
        retain such rights; or elects to obtain title to a Subject Invention pursuant
        to
        paragraph 2 but fails to have a patent application filed in that country
        on the
        Subject Invention or decides not to continue prosecution or not to pay any
        maintenance fees covering the invention. 

      

      B. Terms
        and
        Conditions of Waived Rights.

      

      
        	 	
                1.

              	
                To
                  preserve the Contractor’s
                  and the Government’s
                  residual rights to Subject Inventions, and in patent applications
                  and
                  patents on Subject Inventions, the Sponsor shall take all actions
                  in
                  reporting, electing, filing on, prosecuting, and maintaining invention
                  rights promptly, but in any event, in sufficient time to satisfy
                  domestic
                  and foreign statutory and regulatory time requirements, or, if
                  the Sponsor
                  decides not to take appropriate steps to protect the invention
                  rights, it
                  shall notify the Contractor in sufficient time to permit either
                  the
                  Contractor or the Government to file, prosecute, and maintain patent
                  applications and any resulting patents prior to the end of such
                  domestic
                  or foreign statutory or regulatory time
                  requirements.

              

      

      

      
        	 	
                2.

              	
                The
                  Sponsor shall convey or ensure the conveyance of any executed instruments
                  necessary to vest in either the Contractor or the Government the
                  rights
                  set forth in this article.

              

      

      

      
        	 	
                3.

              	
                With
                  respect to any Subject Invention in which the Sponsor obtains title,
                  the
                  Sponsor hereby grants to the Government a non-exclusive, nontransferable,
                  irrevocable, paid-up license to practice or have practiced by or
                  on behalf
                  of the United States the Subject Invention throughout the
                  world.

              

      

      

      
        	 	
                4.

              	
                The
                  Sponsor shall provide the Government a copy of any patent application
                  filed on a Subject Invention within 6 months after such application
                  is
                  filed, including its serial number and filing
                  date.

              

        	 	 	 

      

      
        	 	
                5.

              	 Preference for U.S. Industry. Notwithstanding
                any
                other provision of this article, the Sponsor agrees that neither
                it nor
                any assignee will grant to any person the exclusive right to use
                or sell
                any Subject Invention in the United States unless such person agrees
                that
                any products embodying the Subject Invention or produced through
                the use
                of the Subject Invention will be manufactured substantially in the
                United
                States. However, in individual cases, the requirement for such an
                agreement may be waived by DOE upon a showing by the Sponsor or its
                assignee that reasonable by unsuccessful efforts have been made to
                grant
                licenses on similar terms to potential licensees that would be likely
                to
                manufacture substantially in the United States or that under the
                circumstances domestic manufacture is not commercially
                feasible.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	 	
                6.

              	
                March-In
                  Rights. The Sponsor agrees that with respect to any Subject Invention
                  of
                  the Contractor in which it has acquired title, the DOE shall retain
                  the
                  right to require the Sponsor to grant a responsible applicant a
                  nonexclusive, partially exclusive, or exclusive license to use
                  the Subject
                  Invention in any field of use, on terms that are reasonable under
                  the
                  circumstances, or if the Sponsor fails to grant such a license,
                  to grant
                  the license itself. DOE may exercise this right only in exceptional
                  circumstances and only if DOE determines
                  that:

              

      

      

      
        	 	
                a.

              	
                the
                  action is necessary to meet health or safety needs that are not
                  reasonably
                  satisfied by the Sponsor; or

              

      

      

      
        	 	
                b.

              	
                the
                  action is necessary to meet the requirements for public use specified
                  by
                  Federal regulations and such requirements are not reasonably satisfied
                  by
                  the Sponsor; or

              

      

      

      
        	 	
                c.

              	
                such
                  action is necessary because a licensee of the exclusive right to
                  use or
                  sell any Subject Invention in the United States is in breach of
                  the
                  agreement required by paragraph
                  B(5).

              

      

      

      
        	 	
                7.

              	
                The
                  Sponsor agrees to refund any amounts received as royalty charges
                  on any
                  Subject Invention in procurement by or on behalf of the Government
                  and to
                  provide for that refund in any instrument transferring rights to
                  my party
                  in the invention.

              

      

      

      
        	 	
                8.

              	
                The
                  Sponsor agrees to include, within the specification of any U.S.
                  patent
                  applications and any patent issuing thereon covering a Subject
                  Invention,
                  the following statement. “The
                  Government has rights in this invention pursuant to (specify this
                  underlying Agreement).”

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      4. Invention,
        Identification, Disclosures, and Reports.

      

      
        	 	
                A.

              	
                The
                  Sponsor shall furnish the Patent Counsel a written report containing
                  full
                  and complete technical information concerning each Subject Invention
                  it
                  makes within 6 months after conception or first actual reduction
                  to
                  practice, whichever occurs first, in the course of or under this
                  Agreement, but in any event prior to any on sale, public use, or
                  public
                  disclosure of such invention known to the Sponsor. The report shall
                  identify the contract and inventor and shall be sufficiently complete
                  in
                  technical detail and appropriately illustrated by sketch or diagram
                  to
                  convey to one skilled in the art to which the invention pertains
                  a clear
                  understanding to the extent known at the time of disclosure, of
                  the
                  nature, purpose, operation, and the physical, chemical, biological,
                  or
                  electrical characteristics of the invention. The report should
                  also
                  include any election of invention rights under this article. When
                  an
                  invention is reported under this paragraph 4.A, it shall be presumed
                  to
                  have been made in the manner specified in Section (a)(1) and (2)
                  of 42
                  U.S.C. 5908.

              

      

      

      
        	 	
                B.

              	
                The
                  Contractor shall report Subject Inventions it makes in accordance
                  with the
                  procedures set forth in contract DE-AC06-76RL01830. In addition,
                  the
                  Contractor shall disclose to the Sponsor at the same time as disclosure
                  to
                  the Department any Subject Inventions made by the Contractor under
                  this
                  Agreement and the Sponsor shall notify the Department within 6
                  months of
                  receipt of such disclosure by the Sponsor of any election of patent
                  rights
                  under this article.

              

      

      

      
        	 	
                C.

              	
                Requests
                  for extension of time for election under subparagraphs A and B
                  may be
                  granted by Patent Counsel for good cause shown in
                  writing.

              

      

      

      5. Limitation
        of Rights.

      

      Nothing
        contained in this patent rights article shall be deemed to give the Government
        any rights with respect to any invention other than a Subject Invention except
        as set forth in the Facilities License of paragraph 6.

      

      6. Facilities
        License.

      

      In
        addition to the rights of the Parties with respect to inventions or discoveries
        conceived or first actually reduced to practice in the course of or under
        this
        Agreement, the Sponsor agrees to and does hereby grant to the Government
        an
        irrevocable, non-exclusive, paid-up license in and to any inventions or
        discoveries regardless of when conceived or first actually reduced to practice
        or acquired by the Sponsor, which at any time, through completion of this
        Agreement, are owned or controlled by the Sponsor and are incorporated in
        the
        facility as a result of this Agreement to such an extent that the facility
        is
        not restored to the condition existing prior to the Agreement (1) to practice
        or
        to have practiced by or for the Government at the facility, and (2) to transfer
        such license with the transfer of the facility. The acceptance or exercise
        by
        the Government of the aforesaid rights and license shall not prevent the
        Government at any time from contesting the enforceability, validity, or scope
        of, or title to, any rights or patents herein licensed.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      7. Early
        Termination of Agreement.

      

      The
        terms
        and conditions of this article shall survive the Agreement, in the event
        that
        the Agreement is terminated before completion of the Statement of
        Work.

      

      ARTICLE
        XV. RIGHTS IN TECHNICAL DATA -
        USE OF FACILITY

      

      
        	 	
                1.

              	
                The
                  following definitions shall be
                  used.

              

      

      

      
        	 	
                A.

              	
                “Generated
                  Information”
                  means information produced in the performance of this
                  Agreement.

              

      

      

      
        	 	
                B.

              	
                “Proprietary
                  Information”
                  means information which is developed at private expense, is marked
                  as
                  Proprietary Information, and embodies (1) trade secrets or (2)
                  commercial
                  or financial information which is privileged or confidential under
                  the
                  Freedom of Information Act (5 U.S.C.
                  552(b)(4)).

              

      

      

      
        	 	
                C.

              	
                “Unlimited
                  Rights”
                  means the right to use, disclose, reproduce, prepare derivative
                  works,
                  distribute copies to the public, and perform publicly and display
                  publicly, in any manner and for any purpose, and to have or permit
                  others
                  to do so.

              

      

      

      
        	 	
                2.

              	
                The
                  Sponsor agrees to furnish to the Contractor or leave at the facility
                  that
                  information, if any, which is (1) essential to the performance
                  of work by
                  the Contractor personnel or (2) necessary for the health and safety
                  of
                  such personnel in the performance of the work. Any information
                  furnished
                  to the Contractor shall be deemed to have been delivered with Unlimited
                  Rights unless marked as Proprietary Information. The Sponsor agrees
                  that
                  it has the sole responsibility for appropriately identifying and
                  marking
                  all documents containing Proprietary Information, whether such
                  documents
                  are furnished by the Sponsor or produced under this Agreement and made
                  available to the Sponsor for
                  review.

              

      

      

      
        	 	
                3.

              	
                The
                  Sponsor may designate as Proprietary Information any Generated
                  Information
                  where such data would embody trade secrets or would comprise commercial
                  or
                  financial information that is privileged or confidential if it
                  were
                  obtained from the Sponsor. Such Proprietary Information will, to
                  the
                  extent permitted by law, be maintained in confidence and disclosed
                  or used
                  by the Contractor (under suitable protective conditions) only for
                  the
                  purpose of carrying out the Contractor’s
                  responsibilities under this Agreement. Upon completion of activities
                  under
                  this Agreement, such Proprietary Information will be disposed of
                  as
                  requested by the Sponsor. Before the Contractor releases data associated
                  with this Agreement to anyone, the Sponsor will be afforded the
                  opportunity to review that data to ascertain whether it is Proprietary
                  Information and if so, to mark it as
                  such.

              

      

      
        	 	 	 

        	 	
                4.

              	
                The
                  Government and Contractor agree not to disclose properly marked
                  Proprietary Information to anyone other than the Sponsor without
                  written
                  approval of the Sponsor, except to Government employees who are
                  subject to
                  the statutory provisions against disclosure of confidential information
                  set forth in the Trade Secrets Act (18 U.S.C. 1905). The Government
                  and
                  Contractor shall have the right, at reasonable times up to 3 years
                  after
                  the termination or completion of the Agreement, to inspect any
                  information
                  designated as Proprietary Information by the Sponsor, for the purpose
                  of
                  verifying that such information has been properly identified as
                  Proprietary Information.

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	 	
                5.

              	
                The
                  Sponsor is solely responsible for the removal of all of its Proprietary
                  Information from the facility by or before termination of this
                  Agreement.
                  The Government and Contractor shall have Unlimited Rights in any
                  information which is not removed from the facility by termination
                  of this
                  Agreement. The Government and Contractor shall have Unlimited Rights
                  in
                  any Proprietary Information which is incorporated into the facility
                  or
                  equipment under this Agreement to such extent that the facility
                  or
                  equipment is not restored to the condition existing prior to such
                  incorporation.

              

      

      

      
        	 	
                6.

              	
                The
                  Sponsor agrees that the Contractor will provide to the Department
                  a
                  nonproprietary description of the work performed under this
                  Agreement.

              

      

      

      
        	 	
                7.

              	
                The
                  Government shall have Unlimited Rights in all Generated Information
                  produced or information provided by the Parties under this Agreement,
                  except for information which is disclosed in a Subject Invention
                  disclosure being considered for patent protection, or which is
                  marked as
                  being Proprietary Information. 

              

      

      

      
        	 	
                8.

              	
                Copyrights.
                  The Sponsor may assert copyright in any of its Generated Information,
                  and
                  may also require the Contractor, at the Sponsor’s
                  expense, to register copyright and assign copyright in any Generated
                  Information produced by the Contractor which the Sponsor wishes
                  to
                  copyright. Subject to the other provisions of this article, and
                  to the
                  extent that copyright is asserted, the Government reserves for
                  itself a
                  royalty-free, worldwide, irrevocable, non-exclusive license for
                  Governmental purposes to publish, disclose, distribute, translate,
                  duplicate, exhibit, prepare derivative works, and perform any such
                  data
                  assigned to the Sponsor.

              

      

      

      
        	 	
                9.

              	
                The
                  terms and conditions of this article shall survive the Agreement,
                  in the
                  event that the Agreement is terminated before completion of the
                  Statement
                  of Work.

              

      

      

      ARTICLE
        XVI. ASSIGNMENT

      

      Neither
        this Agreement nor any interest therein or claim thereunder shall be assigned
        or
        transferred by either Party, except as authorized in writing by the other
        Party
        to this Agreement, provided, the Contractor may transfer it to the Department,
        or its designee, with notice of such transfer to the Sponsor, and the Contractor
        shall have no further responsibilities except for the confidentiality, use,
        and/or non-disclosure obligations of this Agreement.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        XVII. SIMILAR OR IDENTICAL SERVICES

      

      The
        Government and/or Contractor shall have the right to perform similar or
        identical services in the Statement of Work for other Sponsors as long as
        the
        Sponsor’s
        Proprietary Information is not utilized.

      

      ARTICLE
        XVIII. LIST OF SPONSOR’S
        BACKGROUND

      INTELLECTUAL
        PROPERTY

      

      U.S.
        Patent No. 6,066,302 (Method of Separation of Cs-131 from Barium)

      

      Pending
        U.S. Patent Application, Serial No. xx/yyyyyyy, entitled “Methods
        of Fabricating Brachytherapy implant Seeds, Methods of Fabricating Brachytherapy
        Implant Seed Cores, and Brachytherapy implant Seeds,”
        (inventors Bales, Bray, Brown, Draper, Lawrence, Madsen, and Swanberg), filed
        by
        Sponsor November 13, 2003. A determination of whether this patent application
        is
        actually Sponsor’s
        solely
        owned Background IP is pending an analysis to assess if this patent application
        teaches or claims Subject Inventions, if any, that arose under the terms
        and
        conditions of CRADAs No. PNNL/174, 186, or 208. If so, then Contractor and
        the
        Government may have certain rights in the patent application. Such determination
        will be made by Contractor after Sponsor provides notification to Contractor
        of
        the publication of the patent application.

      

      ARTICLE
        XIX. EXPORT CONTROL

      

      Each
        Party is responsible for its own compliance with laws and regulations governing
        export control.

      

      

      

      ARTICLE
        XX. FORCE MAJEURE

      

      Neither
        the Government, the Contractor, nor the Sponsor shall be liable in any way
        for
        failure to perform any provision of this Agreement (except payment of monetary
        obligations) if such failure is caused by any law, rule, or regulation, or
        any
        cause beyond the control of the party in default.

      

      ARTICLE
        XXI. TERMINATION

      

      Performance
        of work under this Agreement may be terminated at any time by either Party,
        without liability, except as provided above, upon giving a 60-day written
        notice
        to the other Party. The Contractor shall terminate this Agreement only when
        the
        Contractor determines, after direction from DOE, that such termination is
        in the
        best interest of the Government, provided however, that the Contractor shall
        have the right to terminate unilaterally if the Sponsor shall have failed
        to
        advance the funds required by Article IV. In the event of termination, the
        Sponsor shall be responsible for the Contractor’s
        costs
        (including closeout costs) through the effective date of termination, but,
        except as provided in Articles X, XI, and XII, in no event shall the
        Sponsor’s
        cost
        responsibility exceed the total cost to the Sponsor as described in Article
        III,
        above.

      

      It
        is
        agreed that any obligations of the Parties regarding Proprietary Information
        or
        other intellectual property will remain in effect, despite early termination
        of
        the Agreement. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        XXII. ALTERNATE DISPUTE RESOLUTION

      

      Step
        1.
        NEGOTIATION

      

      The
        Parties shall attempt in good faith to resolve any dispute arising out of
        or
        relating to this Agreement by negotiating between executives and/or officials
        who have authority to settle the controversy and who are at a higher level
        of
        management than the persons with direct responsibility for administration
        of
        this contract. Either Party may give the other Party written notice of any
        dispute not resolved in the normal course of business. Within 15 days after
        delivery of the notice, the receiving Party shall submit to the other a written
        response. The notice and the response shall include (a) a statement of each
        Party’s
        position and a summary of arguments supporting that position, and (b) the
        name
        and title of the executive or official who will represent that Party and
        of any
        other person(s) who will accompany the executive or official. Within 30 days
        after delivery of the disputing Party’s
        notice,
        the executives of both Parties shall meet at a mutually acceptable time and
        place, and thereafter as often as they reasonably deem necessary, to attempt
        to
        resolve the dispute. All reasonable requests for information made by one
        Party
        to the other will be honored.

      

      If
        the
        matter has not been resolved within 60 days of the disputing Party’s
        notice,
        or if the Parties fail to meet within 30 days, either party may mediation
        of the
        controversy or claim as provided hereafter.

      

      All
        negotiations pursuant to this Agreement are confidential and shall be treated
        as
        compromise and settlement negotiations for purposes of the Federal Rules
        of
        Evidence and State rules of evidence.

      

      Step
        2.
        MEDIATION

      

      In
        the
        event the dispute has not been resolved by negotiation as provided herein,
        the
        Parties agree to participate in at lease 4 hours of mediation, using a mutually
        agreed-upon mediator. The mediator will not render a decision, but will assist
        the Parties in reaching a mutually satisfactory agreement.

      

      The
        Parties agree to equally split the costs of the mediation. The first mediation
        session shall commence within 30 days from the agreement. The Parties may
        contact the DOE Office of Dispute Resolution with questions, or for assistance
        with selection of neutrals or samples of Agreements to mediate. 

      

      All
        meditations are confidential and shall be treated as compromise and settlement
        negotiations for purposes of the Federal Rules of Evidence and State rules
        of
        evidence.

      

      Step
        3.
        ARBITRATION

      

      Any
        dispute not otherwise satisfactorily resolved may be submitted to arbitration
        through the American Arbitration Association. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        XXIII. GOVERNMENT FACILITY AVAILABILITY

      

      Work
        will
        be performed in the Radiochemical Processing Laboratory (RPL) at Richland,
        Washington. Sponsor acknowledges, by signature below, that they have been
        advised that in the event of conflict with Government work at that facility,
        the
        Government work will take precedence, and in the event that future Government
        decisions render the RPL unavailable for further performance under this
        Agreement, neither the Government nor the Contractor shall be liable for
        any
        resultant damage to Sponsor’s
        business.

      

      

      

      In
        witness whereof, the Parties hereto have executed this
        Agreement.

      

      
        	BATTELLE MEMORIAL
                INSTITUTE	ISORAY
                PRODUCTS LLC
	PACIFIC NORTHWEST
                DIVISION	 
	Name /s/
                Alta Jones 	Name
                /s/ Donald Segna
	Title
                Contracting Officer     	Title
                PRESIDENT
	Date
                4-27-04      	
                Date
                  4/27/04

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      APPENDIX
        A -
        STATEMENT OF WORK 45658, R2

      dated
        April 7, 2004

      PACIFIC
        NORTHWEST NATIONAL LABORATORY (PNNL)

      AND

      ISORAY
        PRODUCTS LLC. (IsoRay)

      

      Medical
        Isotope Support for IsoRay

      

      

      During
        the past five years, PNNL supported IsoRay in the development of brachytherapy
        seeds containing Cesium 131. IsoRay subsequently received FDA approval for
        use
        of their seeds and now requires additional support from PNNL for a limited
        production of seeds in order to fine-tune the manufacturing process for scale
        up
        and training of IsoRay personnel for the transfer of manufacturing to IsoRay
        facilities.

      

      IsoRay
        has requested support from PNNL in the limited area of performing the chemical
        separations required to obtain the Cs-131 for IsoRay’s
        insertion into the seeds. IsoRay has developed a novel technique for the
        separation of Cs-131 that is not currently available in the private sector,
        and
        PNNL staff are uniquely qualified to perform this work due to our previous
        experience with IsoRay. That capability, combined with the unique hot cell
        facilities, related equipment and advanced instrumentation available in
        DOE’s
        Radiochemical Processing Laboratory (RPL) will be critical to the development
        of
        the standards and protocols needed for IsoRay to successfully transfer and
        perform the separations work in the private sector. PNNL will not be responsible
        for the packaging or testing of the final seeds.

      

      I.
        PURPOSE

      

      The
        IsoRay project work scope, which PNNL will be supporting, includes the
        preparation, assembly, quality control, and distribution of a limited number
        of
        IsoRay Brachytherapy seeds. The seeds are rice grain sized sealed radioactive
        medical devices designed for permanent placement in cancer patients. The
        seeds
        contain Cs-131, a short-lived radioisotope which radiates localized energy,
        killed cancerous cells. PNNL’s
        work
        scope will be to purify Cs-131 from irradiated targets owned and provided
        by
        IsoRay and to provide radiological facilities so that IsoRay can manufacture
        the
        seeds. Additional PNNL support will be limited to those activities as discussed
        in this statement of work, in accordance with IsoRay direction.

      

      Brachytherapy
        is a rapidly growing technology for treating various types of cancer. Several
        companies are currently producing seeds with different configurations and
        isotopes than the IsoRay Seed. The IsoRay Seed is expected to provide improved
        effectiveness for the treatment of certain cancers, with reduced side effects
        compared to existing seeds.

      

      The
        ultimate objective of the IsoRay project is the production and distribution
        of
        seeds to a select and limited patient population (approximately 300 patients).
        The seeds will be distributed to urologists or radiation oncologists selected
        by
        IsoRay at nationally recognized medical research and brachytherapy treatment
        facilities. To meet this objective, irradiated targets will be received by
        PNNL
        and the short-lived isotope will be separated, purified and assayed by PNNL
        staff. The resulting radiochemical solution will be chemically bound to a
        proprietary core. The cores will be placed into titanium cans which will
        be
        hermetically sealed with a laser welder by IsoRay in PNNL facilities. IsoRay
        will test the seeds to confirm leak-tightness, assay for strength of therapeutic
        radiation emission, and distribute to the physicians. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Work
        has
        conducted by PNNL previously for IsoRay under CRADA Nos. PNNL/174, PNNL/186,
        and
        PNNL/208. This previous work included testing of isotope separations methods,
        evaluation of internal seed configurations, isotope attachment methods,
        production of prototype seeds by precision laser welding, and collection
        of
        near-surface dosimetry data for regulatory approval.

      

      II.
        APPROACH

      

      PNNL
        will
        provide isotope separation and analytical services using existing hot cells
        and
        equipment at the RPL. IsoRay will utilize laboratory space and equipment
        within
        the RPL to fabricate the seeds using IsoRay personnel. IsoRay will conduct
        all
        work according to RPL safety, training, and regulatory requirements. PNNL
        will
        provide certified radioactive shipper and radiation control technician (RCT)
        services to support IsoRay work within the facility. IsoRay will be responsible
        for final fabrication, testing, assay, certifications, and quality assurance
        of
        the seeds. IsoRay will use this development phase for the verification and
        fine-tuning of their manufacturing process. IsoRay will further train staff
        in
        preparation for the eventual transfer to their own facility. The transition
        phase may include operations at both PNNL and a private facility until the
        technology can be safely transferred and training has been
        completed.

      

      IsoRay
        will provide unique materials and equipment for the performance of this project.
        PNNL will make a best effort to make appropriate laboratory space (hot cell,
        glovebox, fume hood, and lab space) available to IsoRay on a continuous basis.
        However, IsoRay has been informed that DOE work must be given priority at
        PNNL
        and has the potential to disrupt their work. The 325 building currently operates
        13 hot cells, 20 gloveboxes, and over 100 fume hoods such that the IsoRay
        work
        will have a negligible impact on our ability to perform DOE work. Furthermore,
        IsoRay will pay to upgrade our hot cell and glovebox facilities for their
        work.
        However, in the unlikely event that laboratory facilities are required for
        DOE
        work, PNNL will provide IsoRay with reasonable advance notice of the disruption
        to their work. PNNL will dedicate, segregate and control IsoRay materials,
        data,
        and equipment per IsoRay-approved operating procedures. This will include
        chemicals (acetic acid, sodium carbonate, barium carbonate, isopropyl alcohol,
        etc.), certain consumables (glassware, filters, pipette tips, etc.) and
        equipment (pumps, pipettes, heat lamp, pH meter, balance, etc.), and data
        records as required by procedures. Certain facilities (hot cell, fume hood,
        storage cabinets) must be controlled in order to avoid cross-contamination
        or
        unauthorized access. IsoRay must comply with current good manufacturing
        processes (cGMP) as required by 21 CFR Part 820. Requirements applicable
        to PNNL
        will be flowed-down through the IsoRay Quality Assurance Manual and
        IsoRay-approved operating procedures.

      

      In
        turn,
        any IsoRay-specific operating procedures will be consistent with requirements
        for operations within the RPL including the Integrated Safety Management
        System.

      

      Materials

      

      IsoRay
        will supply materials and components for fabrication of the brachytherapy
        seeds
        including, but not limited to, titanium tubes/lids, pre-manufactured cores
        for
        isotope attachment, laboratory reagents, shipping materials, labels, etc.
        IsoRay
        will coordinate the transfer of barium carbonate targets to one or more reactors
        for irradiation services and delivery of irradiated barium targets to PNNL
        for
        isotope separation. PNNL will supply laboratory reagents and supplies as
        well as
        radioactive standards per IsoRay specifications for the quality control
        determination of radionuclidic and/or radiochemical purity of critical
        reagents.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Equipment

      

      IsoRay
        will provide any specialized equipment for isotope separation from irradiated
        targets, equipment for radioactive labeling (isotope attachment) of seed
        cores,
        laser and tooling equipment for seed welding, and laboratory equipment for
        decontamination and leak testing. PNNL will provide shipping and receiving
        services, laboratories, hot cells, glove box, fume hoods, and analytical
        capabilities for radioactive work including seed assay dose calibrators and
        gamma and liquid scintillation counters, per IsoRay specifications. IsoRay
        will
        fabricate a new hot cell airlock and pay for the installation on
        PNNL’s
        hot
        cell. PNNL will provide a currently unused glovebox and IsoRay will pay for
        the
        installation in a selected laboratory.

      

      Documentation

      

      IsoRay
        will provide operating procedures and batch records (test instructions with
        data
        collection sheets) for production and quality-related operations. IsoRay
        will
        submit Work Authorization Orders with scheduling approximately ten working
        days
        before initiation of each isotope separation/seed production cycle. PNNL
        will
        provide operating procedures and data sheets for analytical
        equipment.

      

      Quality
        Control

      

      IsoRay
        has a Quality Assurance Program that is consistent with ISO-9000 requirements
        to
        ensure that work is adequately defined, that proper controls are in place
        to
        govern the work, and that the work is properly documented. Quality requirements
        will be incorporated in operating procedures for this work. All analytical
        work
        performed by PNNL will be conducted according to ASO-QAP-001, as required
        by
        IsoRay.

      

      Future
        Work in the Radiochemical Processing Laboratory (RPL)

      

      DOE
        is
        currently planning to issue a contract to clean up the 300 area where the
        RPL is
        sited. Current information is that the RPL may be closed as early as the
        end of
        2007. However, since the 300 area cleanup contract has not yet been issued,
        PNNL
        cannot guarantee that the RPL will be available to complete work as specified
        in
        this contract. PNNL plans to retain and move as many of our capabilities
        as
        possible prior to closure of the RPL. However, we cannot guarantee that we
        will
        be able to provide facilities for future work with IsoRay after closure of
        the
        RPL. IsoRay will be advised of changes as such information becomes available
        in
        the future.

      

      Task
        1. Process and Procedures Preparation

      

      
        	
                ·

              	
                PNNL
                  and IsoRay personnel will identify laboratory space and equipment
                  appropriate for isotope separation and seed production. PNNL will
                  prepare
                  any required facility modification documentation.

              
	 	 
	
                ·

              	
                A
                  mini-hot cell located in Room 203 of the Shielded Analytical Laboratory
                  (SAL) in the RPL was used previously for Cs-131 isotope separation.
                  PNNL
                  will remove any existing equipment and decontaminate the hot cell
                  as
                  needed for IsoRay use. IsoRay will arrange for the fabrication
                  of a new
                  airlock using drawings approved by PNNL. IsoRay will pay for the
                  installation of the airlock.

              
	 	 
	
                ·

              	
                Procedures
                  for isotope separations, isotope attachment, seed assembly, laser
                  welding,
                  seed decontamination/leak testing, seed assay will be updated as
                  necessary
                  to support larger quantity operations.

              
	 	 
	
                ·

              	
                Radiological
                  work permits (RWPs) will be updated from the previous 5 to 10 seed
                  research and development phase to weekly isotope separation cycles
                  and
                  production lots of 100 to 1000 seeds. This work will be approved
                  for
                  completion in the 325 Building Radiochemical Processing Laboratory
                  (RPL).

              
	 	 
	
                ·

              	
                This
                  task will include testing of updated equipment and seed components
                  for
                  safety, operability, and ALARA. 

              

      

      

      

      Task
        2. Equipment Modification and Installation

      

      
        	
                ·

              	
                Equipment
                  modifications identified in Task 1 will be conducted. This will
                  entail
                  installation of target transfer mechanism (air lock) in the mini
                  hot cell
                  in SAL 203 and installation or decontamination of a glove box for
                  housing
                  the seed welder. PNNL will provide a currently used glovebox. IsoRay
                  will
                  pay for the installation of the glovebox in SAL 203 or other laboratory
                  space provided by PNNL.

              
	 	 
	
                ·

              	
                Glassware,
                  piping, pumps, hot plates, heat lamps, off-gas traps, etc, will
                  be
                  installed in the SAL mini-hot cell at IsoRay expense to support
                  the
                  isotope separation and purification
                  process.

              

      

      

      Task
        3. Isotope Separation and Seed Production

      

      PNNL’s
        task
        will consist of separating Cs-131 from irradiated BaCO3
        targets
        and IsoRay will then use the purified isotope to produce brachytherpay seeds.
        IsoRay will contract separately with reactor facilities for irradiation
        services. Isotope separation will be conducted by PNNL personnel, while seed
        production will be conducted by IsoRay personnel. Projected costs are based
        on
        labor and materials to be provided by PNNL on a per cycle basis, multiplied
        by
        the number of cycles during the period of performance. This task is divided
        into
        subtasks according to quantities of seeds produced and number of
        cycles.

      

      NOTE:
        The
        isotopes for this work have short half-lives and the rate of decay is key
        to
        this process. Activities within each isotope/seed production cycle must occur
        in
        sequence according to prescribed timelines. IsoRay will coordinate with PNNL
        to
        assure the appropriate resources are available prior to the start of each
        cycle.

      

      A
        typical
        isotope separation/seed production cycle will consist of the following
        activities, to be conducted by PNNL personnel, except as noted:

      

      
        	
                ·

              	
                Radiochemical
                  separations will be conducted in the SAL mini-hot cell. Each cycle
                  will
                  begin with receipt or irradiated barium carbonate targets. Targets
                  will be
                  processed in batches of approximately 200 to 500 g. Each target
                  will be
                  “milked”
                  for an average of four cycles.

              
	 	 
	
                ·

              	
                Isotope
                  processing involves two separation and boil-down states followed
                  by
                  sampling and analysis to determine purity. Once separated from
                  the barium,
                  cesium-131 can be processed in a fume hood due to the relatively
                  low
                  energy of the radiation emissions (~
                  30
                  KeV X-Rays).

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                ·

              	
                The
                  purity and activity of the cesium-131 product will be determined
                  by gamma
                  and/or X-ray spectroscopy and other analytical methods for quality
                  control. Purified isotope that meets IsoRay purity specifications
                  is then
                  ready for transfer to another location within the RPL for seed
                  production.
                  Requirements for radiochemical purity of the brachytherapy seeds
                  are as
                  indicated on the product labeling which has been reviewed and approved
                  by
                  the US Food and Drug Administration (>99.9% Cs-131, <0.01% other
                  isotopes). In addition, the brachytherapy seeds are considered
                  to be
                  sealed sources of therapeutic radiation. All seeds will be tested
                  for leak
                  tightness in accordance with ISO 9978, “Radiation
                  Protection -
                  Sealed Radioactive Sources -
                  Leakage Test Methods.”
                  The activity of the seeds will be determined by assay using a well
                  ionization chamber calibrated against a standard traceable to
                  NIST.

              
	 	 
	
                ·

              	
                The
                  initial step in seed production will be loading cesium-131 onto
                  pre-manufactured seed cores. The cores will be loaded by contacting
                  with
                  cesium-bearing solution. The loaded cores will then be dried and
                  inserted
                  into pre-welded titanium “cans”
                  (tubes with one end welded) provided by IsoRay.

              
	 	 
	
                ·

              	
                Cans
                  with cores inserted will be transferred to a welding station where
                  the
                  second end of the seed will be welded to form a sealed radioactive
                  source.
                  The last welding equipment will be similar to that used previously
                  at the
                  RPL to produce the prototype radioactive seeds. Personnel will
                  follow
                  approved laser safety procedures and radiation work permits at
                  all times.
                  The welding equipment will be provided, operated, and maintained
                  by
                  IsoRay. Welding will be performed by IsoRay personnel utilizing
                  an
                  IsoRay-developed procedure in a glove box provided by PNNL. The
                  procedure
                  will be reviewed by PNNL to ensure compliance with safe operations
                  and
                  requirements within the Radiochemical Processing Laboratory.
                  PNNL’s
                  support during welding of seeds will be limited to operational
                  oversight
                  to ensure compliance to PNNL procedures and operational protocol.
                  PNNL
                  will retain shutdown authority for any activity conducted by IsoRay
                  that
                  is deemed noncompliant with such procedures and
                  protocol.

              
	 	 
	
                ·

              	
                Each
                  seed will be leak tested and decontaminated by IsoRay personnel
                  according
                  to established procedures developed by IsoRay. PNNL will review
                  such
                  procedures to ensure compliance with safe operations and requirements
                  within the Radiochemical Processing Laboratory. PNNL will provide
                  analytical support to IsoRay for leak testing and seed decontamination
                  activities. A representative number of seeds will be assayed for
                  apparent
                  activity using a dose calibrator and segregated based on assay
                  amount and
                  batch number. IsoRay, alone, will certify conformance to leak testing
                  and
                  decontamination requirements.

              
	 	 
	
                ·

              	
                Following
                  certification by IsoRay, finished seeds will be packaged in shielded
                  containers for shipment to physicians and medical research centers.
                  IsoRay
                  will coordinate with users to determine quantities and seed delivery
                  dates. IsoRay will provide packaging and seed labeling materials
                  including
                  labeling of the final packages for shipment. PNNL will support
                  the
                  packaging/shipping activity by providing staff labor for packaging
                  and
                  radiation control. PNNL certified shipping personnel will provide
                  instructions and oversight to IsoRay in preparing materials for
                  shipment
                  and will approve the actual shipments.

              
	 	 
	
                ·

              	
                All
                  regulated wastes associated with this project will be properly
                  disposed of
                  by PNNL personnel at IsoRay
                  expense.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      NOTE:
        Details of the specific activities, equipment, materials, personnel, and
        other
        resources required to accomplish these activities are included in operating
        procedures for this project. Those procedures were developed previously to
        support work under CRADA 208 between IsoRay and PNNL and will be modified
        as
        needed for the scale of operation anticipated under this project, under
        IsoRay’s
        guidance. The cost and schedule for this work is based on experience gained
        from
        the prior work.

      

      Task
        3
        includes the following three phases, which are designed to increase the seed
        production in three phases, as staff are trained and gain more experience
        with
        the procedures. The final phases will produce far lower seed quantities than
        required for full scale commercial seed production (which is approximately
        1,000
        patients per day).

      

      Task
        3.a. Initial Isotope Separation and Seed Production

      

      The
        initial phase will consist of one to two isotope separation/seed production
        cycles per month as describe above. Quantities sufficient for two to four
        shipments of seeds per cycle at an average of 100 seeds per shipment will
        be
        produced. This period is expected to have a duration of three months with
        six
        isotope separation/seed production cycles occurring during that
        time.

      

      Task
        3.b. Regular Isotope Separation and Seed Production

      

      This
        phase will consist of four isotope separation/seed production cycles per
        month
        as described above leading to quantities sufficient to produce up to 10
        shipments of seeds per cycle at an average of 100 seeds per shipment. This
        period is expected to have a duration of six months with 24 cycles occurring
        during that time.

      

      Task
        3.c. Enhanced Isotope Separation and Seed Production

      

      This
        phase will consist of four isotope separation/seed production cycles per
        month,
        as described above, with two additional separation runs per month. This will
        supply quantities sufficient to produce up to 20 shipments of seeds per week
        at
        an average of 100 seeds per shipment which is the standard quantity required
        for
        one patient. Seed shipments would occur up to four days per week. Costs are
        estimated for the first three months of this period with 18 cycles occurring
        during that time. Additional cycles would be estimated on a per-cycle or
        per-month basis.

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