Document:

Exhibit
      4.9

     

    REGISTRATION
      RIGHTS AGREEMENT

     

    
      THIS
        REGISTRATION RIGHTS AGREEMENT(the
        "Agreement") is entered into as of the 15th
        day of October, 2004, by and among ISORAY
        MEDICAL, INC.,
        a Delaware corporation (the "Corporation"), MEYERS
        ASSOCIATES, L.P.,
        a New York limited partnership (the
        "Placement Agent"), and each of the Corporation's shareholders (collectively,
        the "Signing Shareholders") who is a signatory hereto.

       

      RECITALS

       

    

     

    WHEREAS,
      the Corporation desires to raise $3,000,000 of equity to fund its working
      capital requirements.

     

    WHEREAS,
      the Placement Agent desires to raise up to $2,000,000 in the Corporation in
      the
      form of Common Stock (the "Common Stock") and warrants to purchase Common Stock,
      and certain officers of the Corporation desire to raise up to $1,000,000 in
      the
      Corporation in the form of Common Stock and warrants to purchase Common
      Stock.

     

    WHEREAS,
      the Corporation has agreed to provide piggyback registration rights to the
      investors who purchase the shares of Common Stock placed by the Placement Agent
      or sold by officers of the Corporation.

     

    NOW,
      THEREFORE, in
      consideration of the foregoing and the mutual promises contained herein, and
      for
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the parties hereto agree as follows:

     

    
      SECTION
        1.  GENERAL.

       

      1.1 
Definitions.
        As
        used in this Agreement, the following terms shall have the following respective
        meanings:

    

     

    "Board"
      shall mean the board of directors of the Corporation.

     

    "Common
      Stock" or "Shares" shall mean the Corporation's Common Stock, or any other
      class
      of stock exchanged for Common Stock of the Corporation.

     

    "Conversion
      Shares" shall mean those certain shares of Common Stock issued upon exercise
      of
      the common stock purchase warrants placed by Placement Agent or sold by officers
      of the Corporation.

     

    "GAAP"
      shall mean those generally accepted accounting principles and practices which
      are recognized by the American Institute of Certified Public Accountants and
      which are consistently applied for all periods so as to properly reflect the
      financial condition, and the results of operations and changes in financial
      position, of the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    "Holder"
      means any person or entity owning of record Registrable Securities that have
      not
      been sold to the public or any assignee of record of such Registrable Securities
      in accordance with Section 2.6 hereof.

     

    "Initial
      Offering" means the Corporation's first firm commitment underwritten or best
      efforts public offering of its Common Stock registered under the Securities
      Act
      which is actually sold and placed.

     

    "Qualified
      Offering" means an Initial Offering whereby not less than $10 million in gross
      proceeds is raised by the underwriters retained by the Corporation.

     

    "Register,"
      "registered," and "registration" refer to a registration effected by preparing
      and filing a registration statement in compliance with the Securities Act,
      and
      the declaration or ordering of effectiveness of such registration statement
      or
      document.

     

    "Registrable
      Securities" means (a) the Common Stock of the Corporation placed by
      Placement Agent or sold by officers of the Corporation; (b) the Conversion
      Shares; and (c) any Common Stock of the Corporation issued as (or issuable
      upon the conversion or exercise of any warrant, right or other security which
      is
      issued as) a dividend or other distribution with respect to, or in exchange
      for
      or in replacement of, such above-described securities. Notwithstanding the
      foregoing, Registrable Securities shall not include any securities sold by
      a
      person or entity to the public either pursuant to a registration statement
      or
      Rule 144 or sold in a private transaction in which the transferor's
      rights
      under Section 2 of this Agreement are not assigned.

     

    "Registrable
      Securities then outstanding" shall be the number of shares determined by
      calculating the total number of shares of the Corporation's Common Stock that
      are Registrable Securities and either (a) are then issued and outstanding
      or (b) are issuable pursuant to then exercisable or convertible
      securities.

     

    "Registration
      Expenses" shall mean all expenses incurred by the Corporation in complying
      with
      Section 2.1 hereof, including, without limitation, all registration
      and
      filing fees, printing expenses, fees and disbursements of counsel for the
      Corporation, reasonable fees and disbursements of special counsel for the
      Holders, blue sky fees and expenses and the expense of any special audits
      incident to or required by any such registration (but excluding the compensation
      of regular employees of the Corporation which shall be paid in any event by
      the
      Corporation).

     

    "SEC"
      or "Commission" means the Securities and Exchange Commission.

     

    "Securities
      Act" shall mean the Securities Act of 1933, as amended.

     

    "Selling
      Expenses" shall mean all underwriting discounts and selling commissions
      applicable to the sale of the Corporation's capital stock.

     

    "Shareholders"
      shall mean all of the holders of the Corporation's capital stock.

     

    
      
         

      

      
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    "Special
      Registration Statement" shall mean a registration statement relating to any
      employee benefit plan or with respect to any corporate reorganization or other
      transaction under Rule 145 of the Securities Act.

     

    "Termination
      Date" shall mean thirty-six (36) months after the Final Closing
      Date.

     

    
      SECTION
        2.  PIGGYBACK
        REGISTRATION.

    

     

    2.1  Piggyback
      Registrations.  The
      Corporation shall promptly notify all Holders of Registrable Securities in
      writing of any proposed filing of any registration statement under the
      Securities Act for purposes of a public offering of securities of the
      Corporation (including, but not limited to, registration statements relating
      to
      secondary offerings of securities of the Corporation, but excluding Special
      Registration Statements), which notice shall be made at least forty-five (45)
      days prior to such filing, and will afford each such Holder an opportunity
      to
      include in such registration statement all or part of such Registrable
      Securities held by such Holder. Each Holder desiring to include in any such
      registration statement all or any part of the Registrable Securities held by
      it
      shall, within twenty (20) days after receipt of the above-described notice
      from
      the Corporation, so notify the Corporation in writing. Such notice shall state
      the intended method of disposition of the Registrable Securities by such Holder.
      If a Holder decides not to include all of its Registrable Securities in any
      registration statement thereafter filed by the Corporation, such Holder shall
      forfeit all future right to include any Registrable Securities in any subsequent
      registration statement or registration statements as may be filed by the
      Corporation with respect to offerings of its securities.

     

    (a)  Underwriting.  If
      the registration statement under which the Corporation gives notice under this
      Section 2.1 is for an underwritten offering, the Corporation shall so
      advise the Holders of Registrable Securities. In such event, the right of any
      such Holder to be included in a registration pursuant to this Section 2.1
      shall be conditioned upon such Holder's participation in such underwriting
      and
      the inclusion of such Holder's Registrable Securities in the underwriting to
      the
      extent provided herein. All Holders proposing to distribute their Registrable
      Securities through such underwriting shall enter into an underwriting agreement
      in customary form with the underwriter or underwriters selected for such
      underwriting by the Corporation. Notwithstanding any other provision of this
      Agreement, if the underwriter determines in good faith that marketing factors
      require a limitation of the number of shares to be underwritten, the number
      of
      shares that may be included in the underwriting shall be allocated, first,
      to
      the Corporation; and second, to the Holders; and thereafter to any other
      Shareholders of the Corporation holding registration rights. If any Holder
      disapproves of the terms of any such underwriting, such Holder may elect to
      withdraw therefrom by written notice to the Corporation and the underwriter,
      delivered on or before the later of (i) five (5) business days after
      the
      receipt by all Holders and the Placement Agent of the underwriting agreement
      containing the terms thereof and (ii) ten (10) business days prior to
      the
      effective date of the registration statement. Any Registrable Securities
      excluded or withdrawn from such underwriting shall be excluded and withdrawn
      from the registration. For any Holder which is a partnership or corporation,
      the
      partners, retired partners and shareholders of such Holder, or the estates
      and
      family members of any such partners and retired partners and any trusts for
      the
      benefit of any of the foregoing shall be deemed to be a single "Holder," and
      any
pro
      rata
      reduction with respect to such "Holder" shall be based upon the aggregate amount
      of shares of Corporation capital stock carrying registration rights owned by
      all
      entities and individuals included in such “Holder,” as defined in this
      sentence.

     

    
      
         

      

      
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    (b)  Right
      to Terminate Registration. The
      Corporation shall have the right to terminate or withdraw any registration
      initiated by it under this Section 2.1 prior to the effectiveness of
      such
      registration whether or not any Holder has elected to include securities in
      such
      registration. The Registration Expenses of such withdrawn registration shall
      be
      borne by the Corporation in accordance with Section 2.2
      hereof.

     

    2.2  Expenses
      of Registration.  Except
      as specifically provided herein, all Registration Expenses incurred in
      connection with any registration pursuant to Sections 2.1 herein shall
      be
      borne by the Corporation. All Selling Expenses incurred in connection with
      any
      registrations hereunder shall be borne by the holders of the securities so
      registered pro
      rata
      on the basis of the number of Shares so registered. 

     

    2.3  Obligations
      of the Corporation.  Whenever
      required to effect the registration of any Registrable Securities, the
      Corporation shall, as expeditiously as reasonably possible:

     

    (a)  Furnish
      to the Holders such number of copies of a prospectus, including a preliminary
      prospectus, in conformity with the requirements of the Securities Act, and
      such
      other documents as they may reasonably request in order to facilitate the
      disposition of Registrable Securities owned by them.

     

    (b)  Use
      its reasonable efforts to register and qualify the securities covered by such
      registration statement under such other securities or Blue Sky laws of such
      jurisdictions as shall be reasonably requested by the Holders; provided
      that
      the Corporation shall not be required in connection therewith or as a condition
      thereto to qualify to do business or to file a general consent to service of
      process in any such states or jurisdictions.

     

    (c)  In
      the event of any underwritten public offering, enter into and perform its
      obligations under an underwriting agreement, in usual and customary form, with
      the managing underwriter(s) of such offering. Each Holder participating in
      such
      underwriting shall also enter into and perform its obligations under such an
      agreement.

     

    (d)  Notify
      each Holder of Registrable Securities covered by such registration statement
      at
      any time when a prospectus relating thereto is required to be delivered under
      the Securities Act of the happening of any event as a result of which the
      prospectus included in such registration statement, as then in effect, includes
      an untrue statement of a material fact or omits to state a material fact
      required to be stated therein or necessary to make the statements therein not
      misleading in the light of the circumstances then existing. The Corporation
      will
      use reasonable efforts to amend or supplement such prospectus in order to cause
      such prospectus not to include any untrue statement of a material fact or omit
      to state a material fact required to be stated therein or necessary to make
      the
      statements therein not misleading in the light of the circumstances then
      existing.

     

    
      
         

      

      
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    (e)  Use
      its reasonable efforts to furnish, on the date that such Registrable Securities
      are delivered to the underwriters for sale, if such securities are being sold
      through underwriters, (i) an opinion, dated as of such date, of the
      counsel
      representing the Corporation for the purposes of such registration, in form
      and
      substance as is customarily given to underwriters in an underwritten public
      offering, addressed to the underwriters, if any, and (ii) a letter dated
      as
      of such date, from the independent certified public accountants of the
      Corporation, in form and substance as is customarily given by independent
      certified public accountants to underwriters in an underwritten public offering
      addressed to the underwriters.

     

    2.4  Furnishing
      Information.  It
      shall
      be a condition precedent to the obligations of the Corporation to take any
      action pursuant to Section 2.1 that the selling Holders shall furnish
      to
      the Corporation such information regarding themselves and warrant the accuracy
      thereof, the Registrable Securities held by them and the intended method of
      disposition of such securities as shall be required to effect the registration
      of their Registrable Securities.

     

    2.5  Indemnification.  In
      the event any Registrable Securities are included in a registration statement
      under Section 2.1:

     

    (a)  To
      the extent permitted by law, the Corporation will indemnify and hold harmless
      each Holder, the partners, officers and directors of each Holder, any
      underwriter (as defined in the Securities Act) for such Holder and each person,
      if any, who controls such Holder or underwriter within the meaning of the
      Securities Act or the Exchange Act, against any losses, claims, damages, or
      liabilities (joint or several) to which they may become subject under the
      Securities Act, the Exchange Act or other federal or state law, insofar as
      such
      losses, claims, damages or liabilities (or actions in respect thereof) arise
      out
      of or are based upon any of the following statements, omissions or violations
      (collectively a "Violation") by the Corporation: (i) any untrue statement
      or alleged untrue statement of a material fact contained in such registration
      statement, including any preliminary prospectus or final prospectus contained
      therein or any amendments or supplements thereto, (ii) the omission
      or
      alleged omission to state therein a material fact required to be stated therein,
      or necessary to make the statements therein not misleading, or (iii) any
      violation or alleged violation by the Corporation of the Securities Act, the
      Exchange Act, any state securities law or any rule or regulation promulgated
      under the Securities Act, the Exchange Act or any state securities law in
      connection with the offering covered by such registration statement; and the
      Corporation will pay as incurred to each such Holder, partner, officer,
      director, underwriter or controlling person for any legal or other expenses
      reasonably incurred by them in connection with investigating or defending any
      such loss, claim, damage, liability or action; provided
      however,
      that the indemnity agreement contained in this Section 2.5(a) shall
      not
      apply to amounts paid in settlement of any such loss, claim, damage, liability
      or action if such settlement is effected without the consent of the Corporation,
      which consent shall not be unreasonably withheld, nor shall the Corporation
      be
      liable in any such case for any such loss, claim, damage, liability or action
      to
      the extent that it arises out of or is based upon a Violation which occurs
      in
      reliance upon and in conformity with written information furnished expressly
      for
      use in connection with such registration by such Holder, partner, officer,
      director, underwriter or controlling person of such Holder.

     

    
      
         

      

      
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    (b)  To
      the extent permitted by law, each Holder will, if Registrable Securities held
      by
      such Holder are included in the securities as to which such registration
      qualifications or compliance is being effected, indemnify and hold harmless
      the
      Corporation, each of its directors, its officers and each person, if any, who
      controls the Corporation within the meaning of the Securities Act, any
      underwriter and any other Holder selling securities under such registration
      statement or any of such other Holder's partners, directors or officers or
      any
      person who controls such Holder, against any losses, claims, damages or
      liabilities (joint or several) to which the Corporation or any such director,
      officer, controlling person, underwriter or other such Holder, or partner,
      director, officer or controlling person of such other Holder may become subject
      under the Securities Act, the Exchange Act or other federal or state law,
      insofar as such losses, claims, damages or liabilities (or actions in respect
      thereto) arise out of or are based upon any Violation, in each case to the
      extent (and only to the extent) that such Violation occurs in reliance upon
      and
      in conformity with written information furnished by such Holder under an
      instrument duly executed by such Holder and stated to be specifically for use
      in
      connection with such registration; and each such Holder will pay as incurred
      any
      legal or other expenses reasonably incurred by the Corporation or any such
      director, officer, controlling person, underwriter or other Holder, or partner,
      officer, director or controlling person of such other Holder in connection
      with
      investigating or defending any such loss, claim, damage, liability or action
      if
      it is judicially determined that there was such a Violation; provided,
      however,
      that the indemnity agreement contained in this Section 2.5(b) shall
      not
      apply to amounts paid in settlement of any such loss, claim, damage, liability
      or action if such settlement is effected without the consent of the Holder,
      which consent shall not be unreasonably withheld; provided
      further,
      that in no event shall any indemnity under this Section 2.5 exceed the
      net
      proceeds from the offering received by such Holder.

     

    (c)  Promptly
      after receipt by an indemnified party under this Section 2.5 of notice
      of
      the commencement of any action (including any governmental action), such
      indemnified party will, if a claim in respect thereof is to be made against
      any
      indemnifying party under this Section 2.5, deliver to the indemnifying
      party a written notice of the commencement thereof and the indemnifying party
      shall have the right to participate in, and, to the extent the indemnifying
      party so desires, jointly with any other indemnifying party similarly noticed,
      to assume the defense thereof with counsel mutually satisfactory to the parties;
      provided,
      however,
      that an indemnified party shall have the right to retain its own counsel, with
      the fees and expenses to be paid by the indemnifying party, if representation
      of
      such indemnified party by the counsel retained by the indemnifying party would
      be inappropriate due to actual or potential differing interests between such
      indemnified party and any other party represented by such counsel in such
      proceeding. The failure to deliver written notice to the indemnifying party
      within a reasonable time of the commencement of any such action, if materially
      prejudicial to its ability to defend such action, shall relieve such
      indemnifying party of any liability to the indemnified party under this
      Section 2.5, but the omission so to deliver written notice to the
      indemnifying party will not relieve it of any liability that it may have to
      any
      indemnified party otherwise than under this Section 2.5.

     

    
      
         

      

      
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    (d)  If
      the indemnification provided for in this Section 2.5 is held by a court
      of
      competent jurisdiction to be unavailable to an indemnified party with respect
      to
      any losses, claims, damages or liabilities referred to herein, the indemnifying
      party, in lieu of indemnifying such indemnified party thereunder, shall to
      the
      extent permitted by applicable law contribute to the amount paid or payable
      by
      such indemnified party as a result of such loss, claim, damage or liability
      in
      such proportion as is appropriate to reflect the relative fault of the
      indemnifying party on the one hand and of the indemnified party on the other
      in
      connection with the Violation(s) that resulted in such loss, claim, damage
      or
      liability, as well as any other relevant equitable considerations. The relative
      fault of the indemnifying party and of the indemnified party shall be determined
      by a court of law by reference to, among other things, whether the untrue or
      alleged untrue statement of a material fact or the omission to state a material
      fact relates to information supplied by the indemnifying party or by the
      indemnified party and the parties' relative intent, knowledge, access to
      information and opportunity to correct or prevent such statement or omission;
      provided,
      that in no event shall any contribution by a Holder hereunder exceed the net
      proceeds from the offering received by such Holder.

     

    (e)  The
      obligations of the Corporation and Holders under this Section 2.5 shall
      survive completion of any offering of Registrable Securities in a registration
      statement and the termination of this agreement. No Indemnifying Party, in
      the
      defense of any such claim or litigation, shall, except with the consent of
      each
      Indemnified Party, consent to entry of any judgment or enter into any settlement
      which does not include as an unconditional term thereof the giving by the
      claimant or plaintiff to such Indemnified Party of a release from all liability
      in respect to such claim or litigation.

     

    2.6  Assignment
      of Registration Rights.  The
      registration rights of the Holders under this Agreement may be transferred
      to
      any transferee if the Corporation is given written notice by the Holder at
      the
      time of such transfer stating the name and address of the transferee and
      identifying the securities with respect to which the rights under this Agreement
      are being assigned.

     

    2.7  Amendment
      of Registration Rights.  Any
      provision of this Section 2 may be amended and the observance thereof
      may
      be waived (either generally or in a particular instance and either retroactively
      or prospectively), only with the written consent of the Corporation and the
      holders of at least sixty-six and two-thirds percent (66-2/3%) of the
      Registrable Securities then outstanding. Any amendment or waiver effected in
      accordance with this Section 2.7 shall be binding upon each Holder and
      the
      Corporation. By acceptance of any benefits under this Section 2, Holders
      of
      Registrable Securities hereby agree to be bound by the provisions
      hereunder.

     

    2.8  Rule
      144 Reporting.  With
      a view to making available to the Holders the benefits of certain rules and
      regulations of the SEC which may permit the sale of the Registrable Securities
      to the public without registration, the Corporation agrees to use its best
      efforts to:

     

    (a)  Make
      and keep public information available, as those terms are understood and defined
      in SEC Rule 144 or any similar or analogous rule promulgated under the
      Securities Act, at all times after the effective date of the first registration
      filed by the Corporation for an offering of its securities to the general
      public;

     

    
      
         

      

      
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    (b)  File
      with the SEC, in a timely manner, all reports and other documents required
      of
      the Corporation under the Exchange Act; and

     

    (c)  So
      long as a Holder owns any Registrable Securities, furnish to such Holder
      forthwith upon request: a written statement by the Corporation as to its
      compliance with the reporting requirements of said Rule 144 of the Securities
      Act, and of the Exchange Act (at any time after it has become subject to such
      reporting requirements); a copy of the most recent annual or quarterly report
      of
      the Corporation; and such other reports and documents as a Holder may reasonably
      request in availing itself of any rule or regulation of the SEC allowing it
      to
      sell any such securities without registration.

     

    
      SECTION
        3.  MISCELLANEOUS.

    

     

    3.1  Governing
      Law.  This
      Agreement and
      the
      rights and obligations of the parties hereto, shall be governed, construed
      and
      interpreted according to the laws of the State of Delaware. The parties agree
      that any final judgment after exhaustion of all appeals or the expiration of
      time to appeal in any such action or proceeding shall be conclusive and binding,
      and may be enforced in any federal or state court in the United States by suit
      on the judgment or in any other manner provided by law. Nothing contained in
      this Agreement shall affect or limit the right of a party to serve any process
      or notice or motion or other application in any other manner permitted by law,
      or limit or affect the right of a party to bring any action or proceeding
      against the other parties or any of their respective property in the courts
      of
      any other jurisdiction. All parties hereby consent to the jurisdiction of the
      federal courts whose districts encompass any part of the City of Phoenix or
      the
      state courts of the State of Arizona sitting in the City of Phoenix in
      connection with any dispute arising under this Agreement, and hereby waives,
      to
      the maximum extent permitted by law, any objection, including any objections
      based on forum non
      conveniens, to
      the
      bringing of any such proceeding in such jurisdictions.

     

    3.2  Successors
      and Assigns.  Except
      as otherwise expressly provided herein, the provisions hereof shall inure to
      the
      benefit of, and be binding upon, the successors, assigns, heirs, executors,
      and
      administrators of the parties hereto and shall inure to the benefit of and
      be
      enforceable by each person who shall be a holder of Registrable Securities
      or
      any successor to any of the Placement Agent's respective rights hereunder,
      from
      time to time; provided,
      however,
      that prior to the receipt by the Corporation of adequate written notice of
      the
      transfer of any Registrable Securities or any rights hereunder specifying the
      full name and address of the transferee, the Corporation may deem and treat
      the
      person listed as the holder of such shares in its records as the absolute owner
      and holder of such shares for all purposes, including the payment of dividends
      or any redemption price.

     

    3.3  Severability.  In
      the event one or more of the provisions of this Agreement should, for any
      reason, be held to be invalid, illegal or unenforceable in any respect, such
      invalidity, illegality, or unenforceability shall not affect any other
      provisions of this Agreement, and this Agreement shall be construed as if such
      invalid, illegal or unenforceable provision had never been contained
      herein.

     

    
      
         

      

      
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    3.4  Amendment
      and Waiver.

     

    (a)  Except
      as otherwise expressly provided, this Agreement may be amended or modified
      only
      upon the written consent of the Corporation and the holders of at least a
      majority of the Registrable Securities.

     

    (b)  Except
      as otherwise expressly provided herein, the obligations of the Corporation
      and
      the rights of the Holders under this Agreement may be waived only with the
      written consent of the Holders of at least sixty-six and two-thirds percent
      (66-2/3%) of
      the Registrable Securities.

     

    3.5  Delays
      or Omissions.  It
      is agreed that no delay or omission to exercise any right, power, or remedy
      accruing to any Holder, upon any breach, default or noncompliance of the
      Corporation under this Agreement shall impair any such right, power, or remedy,
      nor shall it be construed to be a waiver of any such breach, default or
      noncompliance, or any acquiescence therein, or of any similar breach, default
      or
      noncompliance thereafter occurring. It is further agreed that any waiver,
      permit, consent, or approval of any kind or character on any Holder's part
      of
      any breach, default or noncompliance under the Agreement or any waiver on such
      Holder's part of any provisions or conditions of this Agreement must be in
      writing and shall be effective only to the extent specifically set forth in
      such
      writing. All remedies, either under this Agreement, by law, or otherwise
      afforded to Holders, shall be cumulative and not alternative.

     

    3.6  Notices.
      All
      notices required or permitted hereunder shall be in writing and shall be deemed
      effectively given: (a) upon personal delivery to the party to be notified,
      (b) three (3) days after having been sent by registered or certified
      mail,
      return receipt requested, postage prepaid, or (c) one (1) day after
      deposit
      with a nationally recognized overnight courier, specifying next day delivery,
      with written verification of receipt. All communications shall be sent to the
      party to be notified at the address as set forth on either the signature pages
      hereof, Exhibit A hereto or at such other address as such party may designate
      by
      ten (10) days advance written notice to the other parties hereto. 

     

    3.7  Attorneys'
      Fees.  In
      the event that any suit or action is instituted to enforce any provision in
      this
      Agreement, the prevailing party in such dispute shall be entitled to recover
      from the losing party all fees, costs and expenses of enforcing any right of
      such prevailing party under or with respect to this Agreement, including without
      limitation, such reasonable fees and expenses of attorneys and accountants,
      which shall include, without limitation, all fees, costs and expenses of
      appeals.

     

    3.8  Construction.
      The
      terms of this Agreement constitute the written expression of the mutual
      agreement of the parties and shall be construed neutrally and not for or against
      either party. Whenever a noun or pronoun is used in this Agreement in the
      singular and when required by the context, the same shall include the plural,
      and the masculine gender shall include the feminine and neuter genders and
      vice
      versa. As used in this Agreement, the term "party" or "parties" shall mean
      the
      parties to this Agreement. The term "person" shall include any individual,
      entity, trust or association. The headings in this Agreement are inserted for
      convenience; the provisions of this Agreement shall control in determining
      the
      intent hereof.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

       

    

    3.9  Enforcement;
      Specific Performance; Remedies Cumulative.
      

     

    (a)  In
      case
      any one or more defaults shall occur and be continuing, a party may proceed
      to
      protect and enforce its rights by an action at law, suit in equity or other
      appropriate proceeding, whether for the specific performance of any agreement
      contained herein or for an injunction against a violation of any of the terms
      hereof or thereof, or in aid of the exercise of any power granted hereby or
      thereby or by law.

     

    (b)  The
      parties expressly agrees that each party may not have adequate remedies at
      law
      if the other parties do not perform its obligations under this Agreement. Upon
      a
      party's breach of the terms or covenants of this Agreement, the other parties
      shall, each in addition to all other remedies, be entitled to obtain injunctive
      relief, and an order for specific performance of the breaching party's
      obligations hereunder. 

     

    3.10  Counterparts.  This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original, but all of which together shall constitute one
      instrument.

     

    [Signature
      page to follow]

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, the
      parties hereto have executed this REGISTRATION
      RIGHTS AGREEMENT as
      of the date set forth in the first paragraph hereof.

     

    
      	
              MEYERS
                ASSOCIATES, L.P.

               

               

              By:
                ______________________________

              Name:
                ____________________________

              Title:
                _____________________________

            	
              ISORAY
                MEDICAL, INC.

               

               

              
                By:
                  ______________________________

                Name:
                  ____________________________

                Title:
                  _____________________________

              

            

       

      
        	
                Address: 
45
                  Broadway Avenue, 2nd
                  Floor 

                New
                  York, NY 10006

              	
                Address: 
350
                  Hills Street, 

                Suite
                  106

                Richland,
                  WA 99354

              

         

        
          	
                  SHAREHOLDERS

                   

                   

                  By:
                    ______________________________

                  Name:
                    

                  Address:
                    ______________________

                   ______________________

                   

                   

                  
                    By:
                      ______________________________

                    Name:
                      

                    Address:
                      ______________________

                     ______________________

                  

                   

                   

                  
                    By:
                      ______________________________

                    Name:
                      

                    Address:
                      ______________________

                     ______________________

                  

                   

                   

                  
                    By:
                      ______________________________

                    Name:
                      

                    Address:
                      ______________________

                     ______________________

                  

                   

                   

                  
                    By:
                      ______________________________

                    Name:
                      

                    Address:
                      ______________________

                     ______________________

                  

                	
                  SHAREHOLDERS

                   

                   

                  
                    By:
                      ______________________________

                    Name:
                      

                    Address:
                      ______________________

                     ______________________

                     

                     

                    By:
                      ______________________________

                    Name:
                      

                    Address:
                      ______________________

                     ______________________

                     

                     

                    By:
                      ______________________________

                    Name:
                      

                    Address:
                      ______________________

                     ______________________

                     

                     

                    By:
                      ______________________________

                    Name:
                      

                    Address:
                      ______________________

                     ______________________

                     

                     

                    By:
                      ______________________________

                    Name:
                      

                    Address:
                      ______________________

                     ______________________

                  

                

        

      

    

    

    
      
         

      

      
        11Exhibit
      10.2

    
      ___________________________

      Mountain
        View, CA 94043

      (650)
        968-4870 

       

      Universal
        License Agreement

       

      NOTE:
        License Agreement assigned to IsoRay in LLC-001, as
        permitted by Part 18 of this Agreement. 

       

      
        	1.	
                Parties,
                  Terms, and Summary:
                  

              

      

       

      This
        agreement is between: 

       

      Licensor:
        Donald
        C. Lawrence,
        of
        _________________________________________________

       

      Licensee:
        William
        J. Stokes, of Pacific Management Associates Corp.
        

       

      
        	Summary:
                Royalty Rate (%): 2%	
                %
                  x
                  Est. 1st
                  Yr’s Sales (units): 5,000
                  x
                  

              

      

      
        	Estimated
                Unit Price $20.00 =	
                Resulting
                  Licensing Fee $2,000.00 

              

      

       

      
        	Type
                of License: x
                Exclusive	
                o Nonexclusive
                  

              

      

       

      Invention
        Title: Method
        for manufacturing and using Cs-131 seeds for radiotherapy WJS

       

      
        	Patent
                Application Ser. Nr.: N/A 	
                Filing
                  Date: In Process 

              

      

       

      Minimum
        Nr. Of Units to Be Sold to Compute Min. Annual Royalty: 10,000

       

      Minimum
        Annual Royalties Start Year Commencing 2001: WJS $4,000.00

       

      
        
          	x
Option
                  Granted:
                  Premium: $200 	
                  For
                    Term of (months): 18 

                

        

      

       

      
        x
Know-How
          Licensed: Know-How Royalty Rate (%): 1% 

      

       

      Running
        Royalty (Patent Royalty and Know-How Royalty, if applicable) (%): 2% 

       

      
        	2.	
                EffectiveDate:
                  This Agreement shall be effective as of the latter of the signature
                  dates
                  below written and shall be referred to as the Agreement of such
                  date.
                  

              

      

       

      
        	3.	
                Recitals:
                  

              

      

       

      
        	
              	A.	
                LICENSOR
                  has
                  developed an invention having the above title and warrants that
                  LICENSOR
                  has filed a patent application on such invention in the U.S. Patent
                  and
                  Trademark Office, which patent application is identified by the
                  above
                  title, Serial Number, and Filing Date. LICENSOR warrants that LICENSOR
                  has
                  full and exclusive right to grant this license on this invention
                  and
                  LICENSOR’S patent application. If the “Know-How Licensed” box above is
                  checked, LICENSOR has also developed know-how in connection with
                  said
                  invention and warrants that LICENSOR owns and has the right to
                  license
                  said know-how. 

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      
        	
              	
                B.

              	
                LICENSEE
                  desires,
                  if the “Option Granted” box above is checked, to exclusively investigate
                  LICENSOR’S above invention for the term indicated. If said “Option
                  Granted” box is not checked, or if said box is checked and LICENSEE
                  investigates LICENSOR’S invention for the term indicated and such
                  investigation is favorable, LICENSEE desires to make, use and sell
                  the
                  products embodying such invention and covered by the claims of
                  LICENSOR’S
                  patent application and any patent(s) issuing thereon (hereinafter
                  “Licensed Product”). 

              

      

       

      
        	4.	
                If
                  Option Granted: If
                  the “Option Granted” box above is checked, then (A) the patent license
                  grant of Part 5 below shall not take effect except as defined in
                  this
                  part, and (B) LICENSOR hereby grants LICENSEE, for the option premium
                  stated above, an exclusive option to investigate LICENSOR’S invention for
                  the term indicated above, such term to commence from the date of
                  this
                  Agreement. LICENSOR will furnish LICENSEE with all information
                  and
                  know-how (if any) concerning LICENSOR’S invention in LICENSOR’S
                  possession. LICENSEE will investigate LICENSOR’S invention for
                  operability, costing, marketing, etc. LICENSEE shall report the
                  results of
                  its investigation to LICENSOR at any time before the end of the
                  option
                  term. If LICENSEE’S determination is favorable, it may thereupon exercise
                  this option and the patent license grant of Part 5 below shall
                  become
                  effective. If LICENSEE’S determination is unfavorable, then said option
                  shall not be exercised and no patent license grant shall take effect
                  and
                  all rights hereunder shall revert to LICENSOR and LICENSEE shall
                  deliver
                  to LICENSOR all results of its investigations for LICENSOR’S benefit.
                  

              

      

       

      
        	5.	
                Patent
                  License if Option Exercised or if Option Not Granted:
                  If
                  the “Option Granted” box above is checked and LICENSEE has investigated
                  LICENSOR’S invention and such investigation is favorable and LICENSEE has
                  exercised its option, or if said box is not checked, then LICENSOR
                  hereby
                  grants to LICENSEE, subject to the terms and conditions herein,
                  a patent
                  license of the type (Exclusive or Nonexclusive) checked above.
                  Such patent
                  license shall include the right to grant sublicenses, to make,
                  have made,
                  use, and sell the Licensed Product throughout the United States,
                  its
                  territories, and possessions. Such patent license shall be under
                  LICENSOR’S patent application, any continuations, divisions,
                  continuations-in-part, substitutes, reissues of any patent from
                  any of
                  such applications (hereinafter and hereinbefore LICENSOR’S patent
                  application), any patent(s) issuing thereon, and if the “Know-How
                  Licensed” box is checked above, any
                  know-how transferred to LICENSEE.
                  

              

      

       

      
        	6.	
                If
                  Know-How Licensed:
                  If the “Know-How” box above is checked, LICENSOR shall communicate to
                  LICENSEE all of LICENSOR’S know-how in respect of LICENSOR’S invention
                  within one month after the date of this Agreement and shall be
                  available
                  to consult with LICENSEE, for up to 80 hours, with respect to the
                  licensed
                  invention and know-how. All travel and other expenses of LICENSOR
                  for such
                  consultation shall be reimbursed by LICENSEE within one month after
                  LICENSOR
                  submits its voucher therefor.
                  LICENSOR makes no warranty regarding the value, suitability, or
                  workability of such know-how. The royalty applicable for such know-how
                  shall be paid, at
                  the rate indicated above, for a minimum of three years from the
                  date of
                  this Agreement if no option is granted,
                  N/A
                  or
                  for
                  three years from the date of exercise if an option is granted and
                  exercised by LICENSOR,
                  and thereafter for so long as LICENSEE makes, uses, or sells Licensed
                  Products and has a share in the United States for or at least 15%
                  of the
                  competitive market for Licensed Products. Applicable 

              

      

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

         

      

      
        	
                7.

              	
                Royalties:
                  

              

      

       

      
        	
              	A.	
                Licensing
                  Fee:
                  Unless the “Option Granted” box above is checked, LICENSEE shall pay to
                  LICENSOR, upon execution of this Agreement, a nonrefundable Licensing
                  Fee.
                  This Licensing Fee shall also serve as an advance against future
                  royalties. Such Licensing Fee shall be computed as follows: (A)
                  Take the
                  Running Royal Rate in percent, as stated above. (B) Multiply by
                  LICENSEE’S
                  Estimate of its First Year’s Sales, in units of Licensed Product, as
                  stated above. (C) Multiply by LICENSEE’S Estimated Unit Price of Licensed
                  Product, in dollars, as stated above. (D) The combined product
                  shall be
                  the Resultant Licensing Fee, in dollars, as stated above. When
                  LICENSEE
                  begins actual sales of the Licensed Product, it shall certify its
                  Actual
                  Net Factory Sales Price of Licensed Product to LICENSOR in writing
                  and
                  shall either (1) simultaneously pay LICENSOR any difference due
                  if the
                  Actual Net Factory Sales Price of Licensed Product is more than
                  the
                  Estimated Unit Price, stated above, or (2) advise LICENSOR of any
                  credit
                  to which LICENSEE is entitled if the Actual Net Factory Sales Price
                  of
                  Licensed Product is less than the above Estimated Unit Price. In
                  the
                  latter case, LICENSEE may deduct such credit from its first royalty
                  remittance to LICENSOR, under subpart B below. If an option is
                  granted and
                  exercised under Part 4 above, then Licensee shall pay this Resultant
                  Licensing Fee to LICENSOR if and when LICENSEE exercises its option.
                  

              

      

       

      
        	
              	B.	
                Running
                  Royalty:
                  If
                  the “Option Granted” box above is not checked, or is said box is checked
                  and LICENSEE has exercised its option under Part 4, LICENSEE shall
                  also
                  pay to LICENSOR a Running Royalty at the rate stated above. Such
                  royalty
                  shall be at the Patent Royalty Rate stated in Part 1 above, plus,
                  if the
                  “Know-How Licensed” box above is checked, a Know-How Royalty at the
                  Know-How Royalty Rate stated above. Said Running Royalty shall
                  be computed
                  on LICENSEE’S Net Factory Sales Price of Licensed Product. Such Running
                  Royalty shall accrue when the Licensed Products are first sold
                  or disposed
                  of by LICENSEE, or by any sublicensee of LICENSEE. LICENSEE shall
                  pay the
                  Running Royalty due to LICENSOR within one month after the end
                  of each
                  calendar quarter, together with a written report to LICENSOR of
                  the number
                  of units, respective sales prices, and total sales made in such
                  quarter,
                  together with a full itemization of any adjustments made pursuant
                  to
                  subpart F below. LICENSEE’S first report and payment shall be made within
                  one month after the end of the first calendar quarter following
                  the
                  execution of this Agreement. No royalties shall be paid by LICENSEE
                  to
                  LICENSOR until after the Licensing Fee under subpart A above has
                  been
                  earned, but LICENSEE shall make a quarterly report hereunder for
                  every
                  calendar quarter after the execution hereof, whether or not any
                  royalty
                  payment is due for such quarter, except that if an option is granted,
                  LICENSEE shall not make any royalty reports until and if LICENSEE
                  exercises its option. 

              

      

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

         

      

      
        	
              	C.	
                Minimum
                  Annual Royalties:
                  If
                  the “Exclusive” box above is checked, so that this is an exclusive
                  license, then this subpart C and subpart D shall be applicable.
                  But if the
                  “Nonexclusive” box is checked above, then these subparts C and D shall be
                  inapplicable. There shall be no minimum annual royalties due under
                  this
                  Agreement until the “Year Commencing,” as identified in Part 1 above. For
                  the exclusivity privilege of the patent license grant under Part
                  5 above,
                  a minimum annual royalty shall be due beginning with such royalty
                  year and
                  for each royalty year ending on the anniversary of such royalty
                  year
                  thereafter. Such minimum annual royalty shall be equal to the royalty
                  which would have been due if the “Minimum Number of Units (of Licensed
                  Product) to Be Sold to Compute Minimum Annual Royalty” identified in Part
                  1 above were sold during such royalty year. If less than such number
                  of
                  units of Licensed Product are sold in any royalty year, then the
                  royalty
                  payable for the fourth quarter of such year shall be increased
                  so as to
                  cause the royalty payments for such year to equal said minimum
                  annual
                  royalty. If an option is granted under Parts 1 and 4, Exercised
                  May 1999.
                  then no minimum annual royalties shall be due in any case until
                  and if
                  LICENSEE exercises its option. If
                  the U.S. Food & Drug Administration requires human trials before
                  allowing this concept to be implemented into general practice,
                  Running
                  Royalty shall not apply until FDA approve the product of this License
                  Agreement. WJS 

              

      

       

      
        	
              	D.	
                *If
                  Minimum Not Paid:
                  If this part is applicable and if sales of Licensed Product in
                  any royalty
                  year do not equal or exceed the minimum number of units identified
                  in Part
                  1 above, LICENSEE may choose not to pay the minimum annual royalty
                  under
                  subpart C above. In this case, LICENSEE shall so notify LICENSOR
                  by the
                  date on which the last royalty for such year is due, i.e., within
                  one
                  month after any anniversary of the date identified in Part 1 above.
                  Thereupon the license grant under Part 4 above shall be converted
                  to a
                  nonexclusive grant, and LICENSOR may immediately license others
                  under the
                  above patent. 

              

      

       

      
        	
              	E.	
                Most
                  Favored Licensee:
                  If this License is nonexclusive, or if it becomes nonexclusive
                  under
                  subpart D above, then (a) LICENSOR shall not grant any other license
                  under
                  the above patent to any other party under any terms which are more
                  favorable than those which LICENSEE pays or enjoys under this Agreement,
                  and (b) LICENSOR shall promptly advise LICENSEE of any such other
                  grant
                  and the terms thereof. 

              

      

       

      
        	
              	F.	
                When
                  No Royalties Due:
                  No Patent Royalties shall be due under this Agreement after the
                  above
                  patent expires or if it is declared invalid by a court of competent
                  jurisdiction from which no appeal can be taken. *Also,
                  if LICENSOR’S patent application becomes finally abandoned without any
                  patent issuing, then the Patent Royalty under this Agreement shall
                  be
                  terminated as of the date of abandonment. Any Know-How Royalties
                  under
                  Part 6 above shall continue after any Patent Royalties terminate,
                  provided
                  such Know-How Royalties are otherwise due under such Part
                  6.
                  

              

      

       

      
        	
              	G.	
                Late
                  Payments:
                  If any payment due under this Agreement is not timely paid, then
                  the
                  unpaid balance shall bear interest until paid at an annual rate
                  of 10%
                  until the delinquent balance is paid. Such interest shall be compounded
                  monthly. 

              

      

       

      
        	
              	H.	
                Net
                  Factory Sales Price:
                  “Net Factory Sales Price” is defined as the gross factory selling price of
                  Licensed Product, or the U.S. importer’s gross selling price if Licensed
                  Product is made abroad, less usual trade discounts actually allowed,
                  but
                  not including advertising allowances or fees or commissions paid
                  to
                  employees or agents of LICENSEE. The Net Factory Sales Price shall
                  not
                  include (1) packing costs, if itemized separately, (2) import and
                  export
                  taxes, excise and other sales taxes, and custom duties, and (3)
                  costs of
                  insurance and transportation, if separately billed, from the place
                  of
                  manufacture if in the U.S., or from the place of importation if
                  manufactured abroad, to the customer’s premises or next point of
                  distribution or sale. Bona fide returns may be deducted from units
                  shipped
                  in computing the royalty payable after such returns are made.
                  

              

      

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

         

      

      
        	
                8.

              	
                Records:
                  LICENSEE and any of its sublicensees shall keep full, clear, and
                  accurate
                  records with respect to sales subject to royalty under this Agreement.
                  The
                  records shall be made in a manner such that the royalty reports
                  made
                  pursuant to Part 7B can be verified. LICENSOR, or its authorized
                  agent,
                  shall have the right to examine and audit such records upon reasonable
                  notice during normal business hours, but not more than twice per
                  year. In
                  case of any dispute as to the sufficiency or accuracy of such records.
                  LICENSOR may have any independent auditor examine and certify such
                  records. LICENSEE shall make prompt adjustment to compensate for
                  any
                  errors or omissions disclosed by any such examination and certification
                  of
                  LICENSEE’S records. If LICENSOR does not examine LICENSEE’S records or
                  question any royalty report within two years from the date thereof,
                  then
                  such report shall be considered final and LICENSOR shall have no
                  further
                  right to contest such report. 

              

      

       

      
        	9.	
                Sublicensees:
                  If LICENSEE grants any sublicenses hereunder, it shall notify LICENSOR
                  within one month from any such grant and shall provide LICENSOR
                  with a
                  true copy of any sublicense agreement. Any sublicensee of LICENSEE
                  under
                  this Agreement shall be bound by all of the terms applying to LICENSEE
                  hereunder and LICENSEE shall be responsible for the obligations
                  and duties
                  of any of its sublicensees. 

              

      

       

      
        	10.	
                Patent
                  Prosecution:
                  

              

      

       

      
        	
              	A.	
                Domestic:
                  LICENSOR
                  shall, at LICENSOR’S own expense, prosecute its above U.S. patent
                  application, and any continuations, divisions, continuations in-part,
                  substitutes, and reissues of such patent application or any patent
                  thereon, at its own expense, until all applicable patents issue
                  or any
                  patent application becomes finally abandoned. LICENSOR shall also
                  pay any
                  maintenance fees which are due on any patent(s) which issue on
                  said patent
                  application. If for any reason LICENSOR intends to abandon any
                  patent
                  application hereunder, it shall notify LICENSEE at least two months
                  in
                  advance of any such abandonment so as to give LICENSEE the opportunity
                  to
                  take over prosecution of any such application and maintenance of
                  any
                  patent. If LICENSEE takes over prosecution, LICENSOR shall cooperate
                  with
                  LICENSEE in any manner LICENSEE requires, at LICENSEE’S expense.
                  

              

      

       

      
        	
              	B.	
                Foreign:
                  LICENSOR shall have the opportunity, but not the obligation, to
                  file
                  corresponding foreign patent applications to any patent application
                  under
                  subpart A above. If LICENSOR files any such foreign patent applications,
                  LICENSOR may license, sell, or otherwise exploit the invention,
                  Licensed
                  Product, or any such foreign application in any countries foreign
                  to the
                  United States as it chooses, provided that LICENSOR must give LICENSEE
                  a
                  right of first refusal and at least one month to exercise this
                  right
                  before undertaking any such foreign exploitation. If LICENSOR chooses
                  not
                  to file any corresponding foreign applications under this part,
                  it shall
                  notify LICENSEE at least one month prior to the first anniversary
                  of the
                  above patent application so as to give LICENSEE the opportunity
                  to file
                  corresponding foreign patent applications if it so chooses.
                  

              

      

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

         

      

      
        	
              	
                C.

              	
                If
                  Licensee Acts:
                  If
                  LICENSEE takes over prosecution of any U.S. patent application
                  under
                  subpart A above, and LICENSEE is successful so that a patent issues,
                  then
                  LICENSEE shall pay LICENSOR royalties thereafter at a rate of 75%
                  of the
                  royalty rate and any applicable minimum under Part 7C above and
                  LICENSEE
                  shall be entitled to deduct prosecution and maintenance expenses
                  from its
                  royalty payments. If LICENSEE elects to prosecute any foreign patent
                  applications under subpart B above, then LICENSEE shall pay LICENSOR
                  royalties of 50% of the royalty rate under Part 7 above for any
                  applicable
                  foreign sales, less all foreign prosecution and maintenance expenses
                  incurred by LICENSEE. 

              

      

       

      
        	11.	
                Marking:
                  LICENSEE
                  shall mark all units of Licensed Product, or its container if direct
                  marking is not leasible, with the legend “Patent Pending” until any
                  patent(s) issue from the above patent application. When any patent(s)
                  issue, LICENSOR shall promptly notify LICENSEE and thereafter LICENSEE
                  shall mark all units of Licensed Product which it sells with proper
                  notice
                  of patent marking under 35 U.S.C. Section 287.

              

      

       

      
        	12.	
                If
                  Infringement Occurs:
                  If either party discovers that the above patent is infringed, it
                  shall
                  communicate the details to the other party. LICENSOR shall thereupon
                  have
                  the right, but not the obligation, to take whatever action it deems
                  necessary, including the filing of lawsuits, to protect the rights
                  of the
                  parties to this Agreement and to terminate such infringement. LICENSEE
                  shall cooperate with LICENSOR if LICENSOR takes any such action,
                  but all
                  expenses of LICENSOR shall be borne by LICENSOR. If LICENSOR recovers
                  any
                  damages or compensation for any action it takes hereunder, LICENSOR
                  shall
                  retain 100% of such damages. If LICENSOR does not wish to take
                  any action
                  hereunder, LICENSEE shall also have the right, but not the obligation,
                  to
                  take any such action, in which case LICENSOR shall cooperate with
                  LICENSEE, but all of LICENSEE’S expenses shall be borne by LICENSEE.
                  LICENSEE shall receive 75% of any damages or compensation it recovers
                  for
                  any such infringement and shall pay 25% of such damages or compensation
                  to
                  LICENSOR, after deducting its costs, including attorney fees.
                  

              

      

       

      
        	13.	
                Disclaimer
                  and Hold Harmless:
                  

              

      

       

      
        	
              	A.	
                Disclaimer
                  of Warranty:
                  Nothing herein shall be construed as a warranty or representation
                  by
                  LICENSOR as to the scope or validity of the above patent application
                  or
                  any patent issuing thereon. 

              

      

       

      
        	
              	B.	
                Product
                  Liability:
                  LICENSEE shall hold LICENSOR harmless from any product liability
                  actions
                  involving Licensed Product. 

              

      

       

      
        	14.	
                Term:
                  The term of this Agreement shall end with the expiration of the
                  last of
                  any patent(s) which issues on LICENSOR’S patent application, unless
                  terminated sooner for any reason provided herein, or unless know-how
                  is
                  licensed, in which case the terms of Part 6 shall cover the term
                  of this
                  Agreement. 

              

      

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

         

      

      
        	
                15.

              	
                Termination:
                  This Agreement may be terminated under and according to any of
                  the
                  following contingencies: 

              

      

       

      
        	
              	A.	
                Default:
                  If
                  LICENSEE fails to make any payment on the date such payment is
                  due under
                  this Agreement, or if LICENSEE makes any other default under or
                  breach of
                  this Agreement, LICENSOR shall have the right to terminate this
                  Agreement
                  upon giving three months’ written Notice of Intent to Terminate,
                  specifying such failure, breach, or default to LICENSEE. If LICENSEE
                  fails
                  to make any payment in arrears, or otherwise fails to cure the
                  breach or
                  default within such three-month period, then LICENSOR may then
                  send a
                  written Notice of Termination to LICENSEE, whereupon this Agreement
                  shall
                  terminate in one month from the date of such Notice of Termination.
                  If
                  this Agreement is terminated hereunder, LICENSEE shall not be relieved
                  of
                  any of its obligations to the date of termination and LICENSOR
                  may act to
                  enforce LICENSEE’S obligations after any such termination.
                  

              

      

       

      
        	
              	B.	
                Bankruptcy,
                  Etc.
                  If
                  LICENSEE shall go into receivership, bankruptcy, or insolvency,
                  or make an
                  assignment for the benefit of creditors, or go out of business,
                  this
                  Agreement shall be immediately terminable by LICENSOR by written
                  notice,
                  but without prejudice to any rights of LICENSOR hereunder.
                  

              

      

       

      
        	
              	C.	
                Antishelving:
                  If
                  LICENSEE discontinues its sales or manufacture of Licensed Product
                  without
                  intent to resume, it shall so notify LICENSOR within one month
                  of such
                  discontinuance whereupon LICENSOR shall have the right to terminate
                  this
                  agreement upon one months’ written notice, even if this Agreement has been
                  converted to a nonexclusive grant under Part 7D above. If LICENSEE
                  does
                  not begin manufacture or sales of Licensed Product within one and
                  one-half
                  years from the date of this Agreement or the date of its option
                  exercise
                  if an option is granted, or, after commencing manufacture and sales
                  of
                  Licensed Product, discontinues its manufacturer and sales of Licensed
                  Product for one and one-half years, LICENSOR shall have the right
                  to
                  terminate this Agreement upon one months’ written notice, unless LICENSEE
                  can show that it in good faith intends and is actually working
                  to resume
                  or begin manufacture or sales, and has a reasonable basis to justify
                  its
                  delay. In such case LICENSEE shall advise LICENSOR in writing,
                  before the
                  end of such one-and one-half year period, of the circumstances
                  involved
                  and LICENSEE shall thereupon have up to an additional year to resume
                  or
                  begin manufacture or sales. It is the intent of the parties hereto
                  that
                  LICENSOR shall not be deprived of the opportunity, for an unreasonable
                  length of time, to exclusively license its patent if LICENSEE has
                  discontinued or has not commenced manufacture or sales of Licensed
                  Product. In no case shall LICENSOR have the right to terminate
                  this
                  Agreement if and so long as LICENSEE is paying LICENSOR minimum
                  annual
                  royalties under Part 7C above. 

              

      

       

      
        	16.	
                Notices:
                  All
                  notices, payments, or statements under this Agreement shall be
                  in writing
                  and shall be sent by first-class certified mail, return receipt
                  requested,
                  postage prepaid to the party concerned at the above address, or
                  to any
                  substituted address given by notice hereunder. Any such notice,
                  payment,
                  or statement shall be considered sent or made on the day deposited
                  in the
                  mails. Payments and statements may be sent by ordinary mail.
                  

              

      

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

         

      

      
        	
                17.

              	
                Mediation
                  and Arbitration: If
                  any dispute arises under this Agreement, the parties shall negotiate
                  in
                  good faith to settle such dispute. If the parties cannot resolve
                  such
                  dispute themselves, then either party may submit the dispute to
                  mediation
                  by a mediator approved by both parties. The parties shall both
                  cooperate
                  with the mediator. If the parties cannot agree to any mediator,
                  or if
                  either party does not wish to abide by any decision of the mediator,
                  then
                  they shall submit the dispute to arbitration by any mutually acceptable
                  arbitrator. If no arbitrator is mutually acceptable, then they
                  shall
                  submit the matter to arbitration under the rules of the American
                  Arbitration Associate (AAA). Under any arbitration, both parties
                  shall
                  cooperate with and agree to abide finally by any decision of the
                  arbitration proceeding. If the AAA is selected, the arbitration
                  shall take
                  place under the auspices of the nearest branch of the AAA to the
                  other
                  party. The costs of the arbitration proceeding shall be borne according
                  to
                  the decision of the arbitrator, who may apportion costs equally,
                  or in
                  accordance with any finding of fault of lack of good faith of either
                  party. The arbitrator’s award shall be non-appealable and enforceable in
                  any court of competent jurisdiction.

              

      

       

      
        	18.	
                Assignment.
                  The rights of LICENSOR under this Agreement shall be assignable
                  or
                  otherwise transferable, in whole or in part, by LICENSOR and shall
                  vest
                  LICENSOR’S assigns or transferees with the same rights and obligations as
                  were held by LICENSOR. This Agreement shall be assignable by LICENSEE
                  to
                  any entity that succeeds to the business of LICENSEE to which Licensed
                  Products relate or to any other entity if LICENSOR’S permission is first
                  obtained in writing. 

              

      

       

      
        	19.	
                Jurisdiction
                  and Venue:
                  This Agreement shall be interpreted under the laws of LICENSOR’S state, as
                  given in Part 1 above. Any action related to this Agreement shall
                  be
                  brought in the county of LICENSOR’S above address; LICENSEE hereby
                  consents to such venue. 

              

      

       

      
        	20.	
                Non-Frustration:
                  Neither party to this Agreement shall commit any act or take any
                  action
                  which frustrates or hampers the rights of the other party under
                  this
                  Agreement. Each party shall act in good faith and engage in fair
                  dealing
                  when taking any action under or related to this Agreement.
                  

              

      

       

      
        	21.	
                Rectification:
                  In
                  case of any mistake in this Agreement, including any error, ambiguity,
                  illegality, contradiction, or omission, this Agreement shall be
                  interpreted as if such mistake were rectified in a manner which
                  implements
                  the intent of the parties as nearly as possible and effects substantial
                  fairness, considering all pertinent circumstances.
                  

              

      

       

      
        	22.	
                Entire
                  Agreement:
                  This Agreement sets forth the entire understanding between the
                  parties and
                  supersedes any prior or contemporaneous oral understandings and
                  any prior
                  written agreements. 

              

      

       

      
        	23.	
                Signatures:
                  The parties, having carefully read this Agreement and having consulted
                  or
                  have been given an opportunity to consult counsel, have indicated
                  their
                  agreement to all of the above terms by signing this Agreement on
                  the
                  respective dates below indicated. LICENSEE and LICENSOR have each
                  received
                  a copy of this Agreement with both LICENSEE’S and LICENSOR’S original ink
                  signatures thereon. 

              

      

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

         

      

      
        	
                Licensor:
                  /s/ Donald C. Lawrence

              	
                 Date:
                  10/31/97 

              

      

       

      Print
        Licensor’s Name: Donald
        C. Lawrence 

       

      
        	
                Licensee:
                  /s/
                  William J. Stokes 

              	
                 Date:
                  11/26/97 

              

      

       

      Print
        Licensee’s Name: William
        J. Stokes, President - ANMS & PMAC 

       

       

      D.C.
        Lawrence

      RADIOLOGICAL
        PHYSICS

      1075
        Space Park Way, #349

      Mountain
        View, CA 94043

      (650)
        968-4870

       

      
        
           

        

        
          9

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