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      BENTON-FRANKLIN
        ECONOMIC DEVELOPMENT DISTRICT

      

      REGIONAL
        REVOLVING LOAN FUND

      

      

      DEVELOPMENT
        LOAN AGREEMENT

      

      

      

      THIS
        AGREEMENT made and entered into this 15th
        day of
        September, 2004, by and between BENTON-FRANKLIN ECONOMIC DEVELOPMENT DISTRICT,
        Richland, Washington, a component of the BENTON-FRANKLIN COUNCIL OF GOVERNMENTS
        (BFEDD), and IsoRay Medical, Inc.(BORROWER).

      

      W
        I T N E
        S S E T H:

      

      Throughout
        the term of this Agreement and related documents, the following terms are
        defined and hereinafter referred to as follows:

      

      

      
        	 	
                LENDER:

              	
                Benton-Franklin
                  Economic Development District

              	 
	 	 	 	 
	 	
                BORROWER:

              	
                IsoRay
                  Medical, Inc.

              	 
	 	 	 	 
	 	
                PROJECT:

              	
                Business
                  start-up Medical isotope production

              	 
	 	 	 	 
	 	
                GUARANTORS:

              	
                Lane
                  Bray, Michael Dunlop, Karen Thompson, Bob Schenter, Don Segna,
                  Linda
                  Bates, Dave Swanberg, Larry Fookes, Tom Collier, Alan Waltar, Marlene
                  Oliver, Roger Girard, John Hrobsky and John
                  Boland.

              	 
	 	 	 	 
	 	
                PROJECT
                  AREA:

              	
                Benton
                  County

              	 
	 	 	 	 
	 	
                PROGRAM
                  AUTHORITY:

              	
                This
                  loan is authorized pursuant to the provisions of Title IX of the
                  Economic
                  Development Act of 1965, as amended.

              	 

      

      

      WHEREAS,
        Borrower has filed with the BFEDD its formal application for a loan to be
        

      issued
        in
        accordance with the provisions of the Program Authority; and

      

      WHEREAS,
        the purpose of the loan is set forth in the Project application;
        and

      

      WHEREAS,
        BFEDD, in reliance on information submitted by Borrower in its 

      application,
        financial records, and supporting documentation has determined to loan

      funds
        to
        Borrower in accordance with the terms of this Agreement and supporting

      documents,
        which application and documents specifically disclose the only existing

      creditors
        (other than those acquired in the regular course of business);

      

      NOW,
        THEREFORE, the parties agree as follows:

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      I.

      TERM
        OF AGREEMENT

      

      The
        term
        of this Agreement shall be for a period of approximately Sixty
        (60)
        months and shall commence on the 15th
        day of
September,
        2004,
        and
        terminate, unless otherwise extended in writing by mutual agreement of the
        parties, on the 1st
        day of
October,
        2009;
        provided, however, that in no event shall this Agreement terminate until
        all
        sums loaned to Borrower by BFEDD, and other sums due under this Agreement
        and
        the Promissory Note (Exhibit “A”)
        have
        been paid to BFEDD.

      

      II.

      FUNDING
        PROVISIONS

      

      1. BFEDD
        will loan to Borrower the maximum sum of Two
        Hundred Thirty Thousand Dollars ($230,000),
        which
        will be paid to Borrower in accordance with the terms of this Agreement and
        as
        follows:

      

      
        	
                (a)

              	
                Each
                  disbursement of loan funds by BFEDD, whether in installments or
                  in a lump
                  sum, shall first be requested by Borrower, in writing, and shall
                  be in
                  such amount as is supported by invoices or other documents acceptable
                  to
                  BFEDD.

              
	 	 
	
                (b)

              	
                The
                  total cumulative amount of such disbursements shall not exceed
                  the maximum
                  amount of the loan as set forth above.

              
	 	 
	
                (c)

              	
                No
                  more than (1) disbursement of loan funds will be made each week,
                  and all
                  disbursement of funds will be accomplished by January
                  30th, 2005.
                  BFEDD is under no obligation to disburse funds to Borrower after
                  that
                  date. Additionally, if at any time during that six-month period
                  there
                  remain funds un-disbursed and, in the sole opinion of BFEDD, the
                  Borrower
                  is failing to meet any terms of this loan agreement and its exhibits,
                  including the promissory note, BFEDD has the option of refusing
                  to
                  disburse the balance of the funds and the Borrower will be obligated
                  only
                  for the funds drawn to date plus interest and fees on that
                  amount.

              
	 	 
	
                (d)

              	
                The
                  loan of funds shall be evidenced by a Promissory Note; a copy of
                  which is
                  attached hereto, marked Exhibit “A”,
                  and by this reference incorporated herein.

              
	 	 
	
                (e)

              	
                The
                  loan shall be repaid in accordance with the terms of the Promissory
                  Note.
                  BFEDD will provide an amortization schedule when final disbursement
                  of
                  loan funds is made.

              

      

      

       

      
        
          2.A
            loan organization fee of one and one-half percent (1-1/2%) of each disbursement
            will be charged and shall be deducted from the proceeds of such disbursement
            of
            loan funds to borrower.

        

      

      

      3. There
        shall be due on each required payment a loan maintenance fee of one-half
        of
        one
        percent (1/2%) per annum of the diminishing principal balance and said fee
        shall
        be deducted before any payment is credited to principal and
        interest.

      

      4. BFEDD
        loan funds must be used by the Borrower for eligible Project costs consistent
        with those costs identified in the loan application and as set forth
        below:

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      5. Borrower
        may, at its option, at any time and without penalty, make advance payments
        on
        all or any part of the principal of the loan then remaining unpaid.

      
         

        6.
Payments
          shall be made payable to the order of and sent to:

      

      

      BENTON-FRANKLIN
        ECONOMIC DEVELOPMENT DISTRICT

      P.O.
        Box
        217

      Richland,
        Washington 99352

      

      or
        to
        such other address as BFEDD may direct in writing.

      

      7. Any
        payment to be made by the Borrower on the Promissory Note that has not been
        received by BFEDD within fifteen (15) days of the payment due date, shall
        be
        deemed late and a penalty of five percent (5%) of the current payment due
        will
        be assessed as a late charge and shall be deducted from such payment before
        any
        amount is credited to interest or principal.

       

      

      III.

      SECURITY

      

      1. As
        security for the repayment of the loan, Borrower shall provide, or cause
        to be
        provided prior to disbursement of any funds hereunder, the
        following

      

      
        	
                (a)

              	
                A
                  Promissory Note (Exhibit “A”)

              
	 	 
	
                (b)

              	
                A
                  security position in all equipment, materials and inventory as
                  evidenced
                  by a Security Agreement, which is attached hereto as Exhibit “B”,
                  and by this reference incorporated herein.

              
	 	 
	
                (c)

              	
                The
                  personal guarantee of Lane
                  Bray, Michael Dunlop, Karen Thompson, Don Segna, Linda Bates, Dave
                  Swanberg, Larry Fookes, Tom Collier, Alan Waltar, Marlene Oliver,
                  Bob
                  Schenter, Roger Girard, John Hrobsky, and John Boland,
                  said guarantee being attached hereto as Exhibit “C” -
                  C-10 and incorporated herein by
                  reference.

              

      

      

                          2.
Borrower
        agrees to timely execute all documents necessary to perfect said
security interest.

       

      
                  3.
This
          Agreement shall not become operative and no disbursements of any funds
          hereunder shall be made unless and until Borrower has fully
          executed and delivered to BFEDD Exhibits “A,” “B,”
          and
“C,”
          and any
          other documents required by BFEDD or necessary to perfect a security
          interest.

      

      

      IV.

      PRIORITY
        OF PROMISSORY NOTE

      

      The
        agreement between Borrower and BFEDD shall be as set forth herein and as
        set
        forth 

      on
        a
        Promissory Note dated (Exhibit “A”),
        and by
        various other attachments to this Agreement and security instruments and
        other
        terms and conditions set forth herein. Any conflict between said Promissory
        Note
        and other documents under the terms of this Agreement shall be resolved in
        favor
        of the terms contained in the Promissory Note.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      V.

      COVENANTS

      

                  1.
Compliance
        with the following covenants shall begin at the execution of this
Agreement, except for those items dependent upon the analysis
        of
        Borrower’s
        financial statements for which annual determination of compliance shall commence
        with Borrower’s
        fiscal
        year-end consolidated statement for its fiscal year. Borrower (including
        any
        subsidiaries as defined in Paragraph 2 below) hereby agrees that, without
        prior
        written consent of BFEDD:

      

      
        	
                (a)

              	
                As
                  defined by generally accepted accounting principles, the Borrower
                  will not
                  allow its net working capital position ratio of current assets
                  to current
                  liabilities to be less than 1.3 to 1.0.

              
	 	 
	
                (b)

              	
                It
                  will make no loans or advances to the Borrower’s
                  officers, employees, or owners, except those usually made in the
                  ordinary
                  course of business, and the total of all such loans and advances
                  outstanding shall not exceed Five Thousand Dollars ($5,000.00)
                  at any one
                  time.

              
	 	 
	
                (c)

              	
                It
                  will not become liable either directly or indirectly for obligations
                  of
                  others.

              
	 	 
	
                (d)

              	
                It
                  will pay no dividends and make no distributions on its ownership
                  interests.

              
	 	 
	
                (e)

              	
                It
                  will not further encumber its assets or incur indebtedness in addition
                  to
                  that now existing and that provided for in this Loan Agreement,
                  except
                  indebtedness regularly incurred in the ordinary course of business
                  and
                  payable within one (1) year without prior notification of the
                  BFEDD.

              
	 	 
	
                (f)

              	
                It
                  will not sell or transfer all or a substantial part of its assets,
                  except
                  those usually sold in the ordinary course of business.

              
	 	 
	
                (g)

              	
                It
                  will not pay annual compensation to its officers, directors (or
                  family
                  members of its officers, directors, or to any salaried individual,)
                  in
                  excess of One
                  Hundred Thousand
                  Dollars ($100,00.00)
                  annually for all of said persons combined during the life of the
                  loan.

              
	 	 
	
                (h)

              	
                It
                  will not purchase fixed assets or incur any additional long-term
                  lease and
                  lease-purchase obligations which require aggregate annual payments
                  exceeding twenty-four
                  Thousand Dollars ($24,000.00)
                  per year. No fixed asset expenditures shall be made or lease or
                  lease-purchase obligations incurred, the result of which would
                  be to
                  reduce Borrower’s
                  ratio of current assets to current liabilities below 1.3 to 1.0,
                  subject
                  to re-negotiation, depending upon the need and to be reviewed by
                  BFEDD.

              
	 	 
	
                (i)

              	
                It
                  will not permit its consolidated ratio of long-term debt (including
                  long-term lease and lease-purchase obligations that shall be capitalized
                  for the purposes of this Agreement) to equity (including subordinated
                  debt) to exceed at any time 3.0 to 1.0. Borrower certifies that
                  there is
                  currently no long-term debt except as may be disclosed on page
                  2
                  hereinabove.

              
	 	 
	
                (j)

              	
                It
                  will not purchase, retire, or acquire, except by gift, any of its
                  ownership interest, and it will not merge with any other corporation
                  or
                  business entity except as approved by the BFEDD, except in the
                  case of the
                  normal sale or acquiring of stock.

              
	 	 
	
                (k)

              	
                Borrower
                  will not pay annual rent on the premises at 350 Hills Street, Suite
                  106,
                  Richland, WA 99352, in excess of forty-five
                  Thousand Dollars ($45,000.00)
                  during the life of the loan.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
                  
2.
Borrower
            warrants that none of its principal and/or owners has been debarred or
            suspended, is ineligible, or has been voluntarily excluded from a transaction
            covered by 15 CFR 26.2315, 26.220, and/or 26.625. If, after date hereof,
            BFEDD
            determines that borrower or any principals and/or owners have been debarred
            or
            suspended, then any amounts due BFEDD under this Loan Agreement and/or
            the
            Promissory Note shall become immediately due and payable in
            full.

        

      

      

      3. For
        the
        purposes of this Agreement, Borrower’s
        consolidated financial statements, prepared in accordance with generally
        accepted accounting principles, shall include Borrower and all its subsidiaries
        (i.e., corporate, foreign and domestic, in which Borrower owns, directly
        or
        indirectly, more than fifty percent (50%) of the outstanding capital stock),
        and
        shall be consolidated in accordance with generally accepted accounting
        principles.

      

      4.
         Borrower
        shall submit to BFEDD, at least quarterly and more frequently if required
        by
        BFEDD, financial statements of Borrower, including an income, expense, and
        retained earnings statement covering the period having elapsed from the date
        of
        the last prior such submissions, and a balance sheet which is not more than
        thirty (30) days old. Where there is, in the opinion of BFEDD, evidence of
        inaccuracies in the Borrower’s
        accounting or noncompliance with the terms of this Agreement, BFEDD may,
        at its
        option, require Borrower’s
        financial statements to be audited by an independent certified public
        accountant. Should the audit verify the existence of such inaccuracies or
        noncompliance, Borrower shall be required to reimburse BFEDD for the services
        of
        such certified public accountant. On an annual basis, Borrower shall supply
        an
        annual financial review statement prepared by a certified public accountant.
        

      

      Based
        upon financial review statements supplied by the Borrower, the BFEDD may
        require
        up to 50% of net earnings after taxes be applied to the principal of the
        loan at
        the end of each fiscal year. 

      

      5. Borrower
        agrees that in any public announcements, other than paid advertising, concerning
        subject business, the financial support of the BFEDD and (where applicable)
        CDBG
        shall be acknowledged.

      

      6. Commencing
        on the 1st
        day of
        January, 2005, the Borrower shall submit to BFEDD the Employment Monitoring
        Form
        detailing the number of employees, including job classification, race, sex
        and
        household income on Borrower’s
        payroll
        during the preceding three (3) months and such other employment information
        as
        BFEDD may from time to time require. THIS
        PROVISION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.

      

      7. BFEDD
        shall make no disbursements to Borrower under the terms of this Agreement
        prior
        to receipt of evidence, satisfactory to BFEDD, of Borrower’s
        interest in and/or control of the real property which is part of the Project.
        Such evidence may include a lease, a policy of title insurance, or other
        evidence satisfactory to BFEDD indicating that Borrower has such interest
        in
        property as necessary for the operation of the Project during the term of
        this
        Agreement.

       

      8. Borrower
        warrants that there is no encumbrance, lien, easement, license, title cloud,
        or
        outstanding interest of any type which may in any way interfere with operations
        and/or maintenance of Project contemplated herein. The fact that BFEDD has
        required, examined, and/or passed on any document of title as described in
        paragraph 7 above shall in no manner diminish the effect of the preceding
        warranty, nor create any liability on the part of BFEDD, it being understood
        and
        agreed that the facts relating to control of the Project Area and related
        real
        estate interest are more readily available to Borrower than to
        BFEDD.

      

      9. Borrower
        warrants that there has been no un-remedied adverse change since the date
        of the
        application for this loan in the financial or any other condition of Borrower
        that would warrant withholding or not making any disbursements under this
        agreement.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      10. During
        the term of this Agreement, Borrower shall not sell, transfer, exchange,
        mortgage, lease, hypothecate, or otherwise encumber in any manner, all or
        a
        portion of the personal property, real property, or improvements now existing
        or
        hereafter acquired by Borrower as a part of Project, without prior written
        consent of BFEDD except for the property sold in the ordinary course of
        business.

      

      11. Borrower
        agrees that all contracts between Borrower and any other contractor or
        contractors related to Project shall:

      

       

      
        	
                (a)

              	
                Be
                  awarded in accordance with all applicable laws and
                  regulations.

              
	 	 
	
                (b)

              	
                Prohibit
                  discrimination against any person who is employed in the work covered
                  by
                  such contracts, or who is a candidate for such employment, because
                  of sex,
                  race, age, religion, color, physical handicap, national origin,
                  or marital
                  status. Such provisions shall include, but not be limited to, the
                  following: employment upgrading, promotion or transfer, recruitment,
                  advertising, layoff or termination, rates of pay or other forms
                  of
                  compensation, and selection for training, including apprenticeship.
                  

              
	 	 
	
                (c)

              	
                Require
                  contractor compliance with all air pollution and environmental
                  control
                  rules, regulations, ordinances, and statutes that apply to work
                  performed
                  pursuant to the contract, including, but not limited to, both the
                  National
                  Environmental Protection Act and the Washington State Environmental
                  Protection Act.

              

      

       

      
                 
12.
BFEDD
          may, at any and all reasonable times during the term of this Agreement,
          enter Borrower’s
          business premises for the purpose of inspecting the Project during the
          course of
          or following the completion of the Project thereon, and for any other purpose
          arising from the performance of this Agreement.

      

      

      13. The
        respective successors and assigns of Borrower shall be bound to observe the
        terms of this Agreement, and Borrower shall deliver to BFEDD evidence that
        any
        successor or assign has agreed, in writing, to assume Borrower’s
        responsibilities hereunder.

      

      14. Borrower
        shall at times during the term of this Agreement:

      

      
        	
                (a)

              	
                Continuously
                  operate in an efficient and economical manner all Project facilities
                  acquired, improved, maintained, and completed in full or in part,
                  as a
                  result of the loan made hereunder.

              
	 	 
	
                (b)

              	
                Maintain
                  in full force and effect, at the time of final approval by BFEDD
                  and prior
                  to disbursement of funds, and effective fire and hazard insurance
                  policy
                  to the full insurable value, and a liability insurance policy in
                  the
                  minimum amount of $1,000,000. Such policy or policies shall be
                  in a form
                  satisfactory to BFEDD and

              

      

      

      
        	
                (1)

              	
                Borrower
                  shall, upon receipt thereof, forthwith submit to BFEDD copies thereof,
                  including any new or renewal policies effective during the term
                  of this
                  Agreement. Copies of such policy or policies shall be submitted
                  at least
                  twenty (20) days prior to the effective date or dates
                  thereof.

              
	 	 
	
                (2)

              	
                Such
                  policy or policies shall contain the following
                  endorsement:

              
	 	 
	 	
                “The
                  Benton-Franklin Economic Development District, its officers, employees,
                  and agents, are hereby declared to be additional insured, and
                  lender’s
                  loss payee under the terms of this policy, as to activities of
                  both
                  IsoRay
                  Medical, Inc.
                  and Benton-Franklin Economic Development District with respect
                  to the
                  Project, and this policy shall not be cancelled without thirty
                  (30)
                  days’
                  written notice to Benton-Franklin Economic Development
                  District.”

              
	 	 
	
                (3)

              	
                Loss
                  under said fire hazard and liability insurance policy or policies
                  shall be
                  payable to BFEDD, as its interest may appear, for deposit in an
                  appropriate trust fund. If BFEDD deems it appropriate, the proceeds
                  may be
                  paid to Borrower upon Borrower’s
                  application for the reconstruction of the destroyed or damaged
                  facilities.
                  

              
	 	 
	
                (4)

              	
                BFEDD
                  shall not be held liable for the payment of any premiums or assessments
                  of
                  such insurance policy or policies; EXCEPT THAT, should the Borrower
                  fail
                  to ay any insurance premiums when due, or fail to maintain in full
                  force
                  and effect insurance as provided for in this paragraph, BFEDD may
                  pay the
                  insurance premium, or provide insurance as provided for in this
                  paragraph,
                  and the amount so paid for said insurance with interest at the
                  rate set
                  forth in Exhibit “A”,
                  shall be added to and become a part of the amount due under the
                  terms of
                  Exhibit “A.”

              

      

      

      15. Maintain
        in full force and effect a life insurance policy on the life of Roger
        Girard
        in an
        amount sufficient to protect BFEDD’s
        interest herein, and naming BFEDD as primary beneficiary or, at
        BFEDD’s
        option,
        ensure that the proceeds thereof are assigned to BFEDD. This requirement
        shall
        extend to any successor in interest of Roger
        Girard.

      

      16. In
        the
        event that Borrower fails to make any payments as provided, or if the Borrower
        fails to follow or abide by any of the loan covenants agreed to in consideration
        of this Financing Agreement or breaches this agreement in any other manner
        and
        has been given fifteen (15) days written notice of such breach of, non-payment
        and/or inefficient operation or maintenance of the business, breach of loan
        covenants and has failed to correct the same, then the interest rate of any
        amount due on this Financing Agreement shall increase to thirteen (13%) per
        annum compounded on a monthly basis.

      

      17. In
        the
        event that Borrower fails to make any payment as provided, of if Borrower
        fails
        to efficiently operate and/or maintain the Project, or breaches this Agreement
        in any other manner and has been given fifteen (15) days’
        written
        notice of such breach, non-payment, or inefficient operation or maintenance,
        and
        has failed to correct the same, then all outstanding amounts of principal
        and
        interest of this loan shall become due and payable immediately, and BFEDD
        may
        pursue any legal remedy available to it to secure prompt payment of any and
        all
        monies owned by Borrower. Nothing herein shall preclude BFEDD from waiving
        any
        breach or breaches, which, in the sole judgment of BFEDD, are not substantial
        or
        do not affect the repayment of the loan herein prescribed. Waiver by BFEDD
        of
        any one or more breaches shall not be deemed a waiver of the right of BFEDD
        to
        pursue any legal remedy, which it may have with regard to any other breach
        or
        breaches. The remedies provided by this paragraph are cumulative and in addition
        to and independent of any other remedies given BFEDD by law, and may include
        the
        requirement that Borrower avail itself of management assistance available
        through sources other than Borrower’s.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      18. Borrower
        shall indemnify, hold harmless, and defend BFEDD, its officers, agents, and
        employees against any and all claims, demands, damages, and costs arising
        out of
        acquisition, development, operation, or maintenance of the property or Project
        described herein, except for liability arising out of the concurrent or sole
        negligence of the BFEDD, its officers, agents, or employees.

      

      19. In
        the
        event the BFEDD is named as co-defendant with Borrower in any court proceeding,
        Borrower shall bear any BFEDD costs incurred for any representation that
        BFEDD
        may require. In this regard, BFEDD shall include its associated
        entities.

      

      20. Borrower
        is a Washington Foreign profit corporation and agrees to do all things necessary
        to maintain its legal corporate status, and shall furnish to BFEDD evidence
        necessary to show that the corporate status is maintained during the term
        of
        this Agreement.

      

      21. Borrower
        warrants:

      

      (a) That
        this
        Project is or will be located within the boundaries of Benton County. If
        Borrower removes its 

      

        headquarters/head
          office/principal place of business of the Project facilities from this
          area, all
          principal and accrued interest then owed by Borrower hereunder will
          automatically become due and payable in full.

        

        (b) That
          this
          Project is in compliance with all applicable local, state, and federal
          land use
          and permit requirements.

        

        (a)  That
          if
          the Project involves construction then, if applicable, accessibility to
          the
          handicapped is assured by compliance with the standards of 41 CFR, Part
          01.

        

        (d) Borrower
          shall not discriminate against any employee or against any applicant for
          employment because of sex, race, religion, color, physical handicap, national
          origin, or marital status. Such provisions shall include, but not be limited
          to,
          the following: employment, layoff or termination, rates of pay or other
          forms of
          compensation, and selection for training, including apprenticeship.

        

        22.
           BFEDD
          shall be under no obligation to disburse funds unless Borrower is in compliance
          with the following requirements, and Borrower shall comply with and require
          each
          of his contractors and subcontractors employed in the completion of the
          Project
          to comply with all applicable federal and state laws. In complying with
          these
          laws, Borrower agrees, among other things it till take all positive steps
          necessary, when required by BFEDD, to conform to the respective regulations
          issued hereunder, including the institution of enforcement proceedings,
          said
          regulations being attached hereto as Exhibit “D”
          and
          incorporated herein by reference and including, but not limited to:

        

        	(a)  	
                The
                  Davis-Bacon Act, as amended (40 U.S.C. 276a-276a(5); 42 U.S.C.
                  3222).

              

        

        	(b)  	
                The
                  Contract Work Hours Standard Act, as amended (40 U.S.C.
                  327-332)

              

        

        	(c)  	
                The
                  Copeland “Anti-Kickback”
                  Act, as amended (40 U.S.C. 276(c); 18 U.S.C.
                  847)

              

        

        	(d)  	
                No
                  federally appropriated funds have been paid or will be paid by
                  or on
                  behalf of the undersigned to any person for influencing or attempting
                  to
                  influence an officer or employee of any agency, a member of Congress,
                  an
                  officer or employee of Congress, or an employee of a member of
                  Congress in
                  connection with the awarding of any Federal contract, the making
                  of any
                  Federal grant, the making of any Federal loan, the entering into
                  of any
                  cooperative agreement, and the extension, continuation, renewal,
                  amendment, or modification of any Federal contract, grant, loan,
                  or
                  cooperative agreement.

              

        

        	(e)  	
                If
                  any funds other than federally appropriated funds have been paid
                  or will
                  be paid to any person for influencing or attempting to influence
                  an
                  officer or employee of any agency, a member of Congress, an officer
                  or
                  employee of Congress, or an employee of a member of Congress in
                  connection
                  with this Federal contract, grant, or cooperative agreement, the
                  undersigned shall complete and submit Standard Form LLL, “Disclosure
                  Form to Report Lobbying,”
                  in
                  accordance with its instructions.

              

        

        	(f)  	
                Title
                  VI of the Civil Rights Act of 1964, as amended (42 U.S.C. 2000(d)
                  -
                  2000(d)(4)); and Executive Orders 11114, 11246, and
                  11375.

              

        

        	(g)  	
                All
                  applicable laws, rules, and regulations applicable under the Title
                  IX EDA
                  Revolving Loan Fund Grant to BFEDD.

              

        

        	(h)  	
                All
                  Block Grant Requirements (if applicable) under Exhibit “E”
                  (attached hereto and incorporated herein by reference). In this
                  regard,
                  Borrower shall be required to execute and shall be bound by Exhibit
                  “E”
                  and its attachments.

              

        

        23. In
          the
          event either party desires or is required to send notice to the other,
          such
          notice shall be deemed to have been given when mailed to the address set
          out
          below with first class postage fully prepaid thereon

        

        TO
          LENDER:  Benton-Franklin
          Economic Development District

        P.O.
          Box
          217

        Richland,
          Washington 99352

        

        TO
          BORROWER: IsoRay
          Medical, Inc.

        350
          Hills
          Street, Suite 106

        Richland,
          WA 99354

        

        or
          to
          such other address as may be directed in writing.

        

        24. Borrower
          agrees to make affirmative effort to hire low and moderate income persons
          and
          the long-term unemployed. Borrower will furnish to BFEDD documentation
          on
          persons hired as a result of the expansion, establishing whether newly
          hired
          employees meet this criterion. The form of reporting is attached hereto
          as
          Exhibit “F”,
          however, this form may be changed by BFEDD during the term of this Agreement.
          

        

        25. Borrower
          warrants that, as a result of this loan, it intends to be able to increase
          its
          employment to forty (40)
          persons
          within forty-eight (48)
          months.
          This intent has been taken into consideration in granting this loan, and
          if
          Borrower is unable, for any reason, to attain this employment increase,
          BFEDD
          may, at its option, increase the interest on this loan by three and one-half
          percent (3-1/2%) to a total of Eleven
          percent
          (11%).

      

      

      26. Borrower
        understands that this Agreement and the obligation of BFEDD to disburse funds
        pursuant to this Agreement are based entirely upon the availability of funds
        under the Economic Development Administration Title IX of the Public Works
        and
        Economic Development Act of 1965, as amended, and if for some reason the
        funds
        or any portion thereof cease to be available at any time, then the BFEDD
        is not
        liable for failure to complete the terms of this loan.

      

      27. Borrower
        waives any claim or causes of action it may have against BFEDD for failure
        to
        advance the monies as provided for in this Agreement.

      

      28. Failure
        to BFEDD to exercise any right—whether
        once or often—shall
        not
        be construed as a waiver of any covenant or condition or of the breach of
        such
        covenant or condition. Such failure shall also not affect the exercise of
        such
        rights without notice upon any subsequent breach of the same or any other
        covenant or condition. 

      

      29. Time
        is
        of the essence in this Agreement and its supporting documentation, including
        the
        Promissory Note and security instruments. This Agreement constitutes the
        only
        agreement between the parties and there are no other agreements, oral or
        written, pertaining to the subject matter herein.

      

      30. ORAL
        AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR
        FROM
        ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW AND
        BORROWER WILL MAKE NO CLAIM AGAINST BFEDD AS TO ANY ALLEGED ORAL AGREEMENTS
        OR
        COMMITMENTS BY OR FROM BFEDD, ITS AGENTS, EMPLOYEES, EMPLOYEES, OR OTHERS
        CLAIMING TO REPRESENT BFEDD.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF, the parties have executed this Agreement the day and year
        first
        above written.

      

      

      BENTON-FRANKLIN
        ECONOMIC DISTRICT  IsoRay
        Medical, Inc.

      

      

      

       

      
        	 	
                By:
                  /s/ Gwen Luper

              	 	
                By:
                  /s/ Roger Girard

              
	 	
                Gwen
                  Luper

              	 	
                 
                  Roger Girard, President, CEO

              
	 	
                Title:
                  Executive Director

              	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	
                 
                  /s/ Michael Dunlop

              
	 	 	 	
                 
                  Michael Dunlop,
                  Secretary/Treasurer/CFO

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      EXHIBIT
        A

      

      BENTON-FRANKLIN
        ECONOMIC DEVELOPMENT DISTRICT

      REGIONAL
        REVOLVING LOAN FUND

      PROMISSORY
        NOTE

      

      
        	$230,000 	 	 	
                 15th
                  September, 2004

              
	Richland,
                Washington	 	 	 

      

       

      This
        Promissory Note is given as evidence of the obligation of the undersigned
        to
        repay all sums which the BENTON-FRANKLIN ECONOMIC DEVELOPMENT DISTRICT (BFEDD)
        may advance to IsoRay,
        Medical, Inc.
        (BORROWER), pursuant to the terms of a Development Loan Agreement between
        BFEDD
        and BORROWER dated the 15th
        day of
September,
        2004
        for
Two
        Hundred Thirty Thousand Dollars
        ($230,000),
        which
        is the maximum amount to be loaned.

      

      For
        value
        received, the undersigned promises to pay to the order of the BENTON-FRANKLIN
        ECONOMIC DEVELOPMENT DISTRICT at its office at 1622 Terminal Drive (P.O.
        Box
        217), Richland, Washington 99352, or such other address as may be directed,
        the
        total unpaid principal balance of all advances, plus interest thereon at
        the
        rate of Seven
        and one-half percent
        (7.5%) per annum from the date funds are advanced, plus a loan servicing
        fee of
        one-half of one-percent (1/2%) per annum on the unpaid principal balance.
        Principal, interest, and service fees are payable in installments as
        follows:

      

      

      1. Commencing
        on the 1st day of October 2004, and on the 1st day of each month for
sixty
        (60)
        consecutive months thereafter, there shall be due monthly the payment
        of
        $2,855.00.

      

      Each
        monthly payment shall be applied first to service charges, then interest,
        and
        then to principal. The entire balance, including principal, interest, and
        service charge shall be payable in full on or before the 1st
        day of
October,
        2009.

      

      2. In
        the
        event Borrower fails to meet the employment projections set out in Paragraph
        25
        of the Development Loan Agreement of even date, BFEDD has the option of
        increasing, from date of written notice of intent to do so, the interest
        rate of
        7.5 herein to eleven
        percent
        (11%).
        

      

      Any
        payment hereunder that has not been received by BFEDD within fifteen (15)
        days
        of the due date shall be deemed to be late and a penalty of five percent
        (5%) of
        the payment due will be assessed as a late charge and shall be deducted before
        any application of the funds to principal or interest or service
        charges.

      

      Disbursements
        under this loan shall be made in accordance with the Development Loan Agreement.
        Any such disbursements in conformity with the Development Loan Agreement
        shall
        be conclusively presumed to have been made to, or for the benefit of,
IsoRay
        Medical, Inc.,
        the
        BORROWER. The undersigned warrants that this loan is, and the disbursements
        hereunder are, for the purposes set forth in the Loan Agreement.

      

      For
        value
        received, each party signing or endorsing this Promissory Note waives
        presentment, demand, protest and notice of non-payment and agrees to be bound
        as
        a principal and not as a surety and promises to pay all costs of collection,
        including reasonable attorney fees, whether or not suit is commenced. Should
        default be made in a payment of any installment when due, the whole sum of
        principal, interest, late fees, and loan maintenance fees shall become
        immediately due at the option of BFEDD, without notice.

      In
        case
        of suit or action to enforce the terms of this Promissory Note, each party
        signing or endorsing this Promissory Note consents to the personal jurisdiction
        of the Washington courts and the federal courts located in the State of
        Washington and, at the option of the holder of this Promissory Note, venue
        may
        be in either Benton or Franklin County, Washington.

      

      DATED
        this 15th
        day of
September,
        2004.

      

      
        	 	 	
                IsoRay
                  Medical, Inc.

              
	 	
              	
                By:
                  /s/ Roger Girard

              
	 	
                 

              	Roger
                Girard,
                President, CEO
	 	 	 
	 	 	
                By:
                  /s/
                  Michael Dunlop

              
	 	 	
                 Michael
                  Dunlop, Secretary/Treasurer

              
	 	 	 
	
                Exhibit
                  “A” -
                  Page 1

              	 	
                Initials
                  /s/ MFD

              
	 	 	
                Initials
                  /s/ RG

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SECURITY
        AGREEMENT -
        EQUIPMENT

      (Except
        Aircraft)

      

      

      As
        security for the payment by IsoRay
        Medical, Inc.,
        a
        Washington corporation (“Borrower”)
        to
Benton-Franklin
        Economic Development District (“Bank”)
        of a
        promissory note executed by Borrower in favor of Bank now, in the past or
        in the
        future, together with interest thereon, and all renewals, modifications,
        or
        extensions thereof, (a) all existing and future obligations of any Borrower
        hereunder to Bank, direct, indirect or contingent, joint or several, whether
        or
        not such obligations are related to the original obligations being secured,
        by
        class or kind, are now contemplated by Borrower and Bank or are identified
        as
        being secured by the Collateral; and (b) all amounts advanced or expended
        by
        Bank for the maintenance or preservation of the Collateral, Borrower hereby
        grants to Bank a security interest in the following property (herein called
        “Collateral”):

      

      IN
        ALL OF
        BORROWER’S
        EQUIPMENT, INCLUDING MACHINERY AND OFFICE EQUIPMENT, TOGETHER WITH ALL PARTS,
        FITTINGS, ACCESSORIES, AND SPECIAL TOOLS, AND RENEWALS OR REPLACEMENTS OF
        ALL OR
        ANY PART THEREOF; AND IN ALL WORK IN PROCESS AND FINISHED GOODS, WHETHER
        NOW
        OWNED OR HEREAFTER ACQUIRED BY BORROWER, AND LOCATED IN KENNEWICK,
        WASHINGTON
        including all current and future patents.

      

      together
        with any and all accessories, equipment, parts, appliances and appurtenances
        now
        or hereafter a part thereof, substitutions therefore, accessions and repairs
        thereto, and the increase and increment thereof, and in case this Agreement
        specifically describes furniture, furnishings, machinery, equipment or
        appliances, then, in addition, Borrower grants Bank a security interest in
        all
        of the furniture, furnishings, equipment, appliances, and personal property
        of
        every kind and nature not specifically described herein, but not or hereafter
        owned by Borrower, or in which Borrower may have or may hereafter acquire
        any
        interest, and now or hereafter located at, upon or about, or located in or
        attached to buildings on, the premises at the address set forth below; Provided,
        however, that Bank’s
        security interest shall not attach to consumer goods, other than accessions
        or
        replacements, in which Borrower acquires an interest ten days subsequent
        to the
        time Bank gives value under the terms hereof.

      

      THE
        BORROWER UNDERSTANDS AND AGREES THAT THE PROVISIONS APPEARING ON THE ATTACHED
        HEREOF CONSTITUTE A PART OF THIS INSTRUMENT AS FULLY AS IF THEY WERE PRINTED
        ON
        THE FACE HEREOF ABOVE THE BORROWER’S
        SIGNATURE.

      

      DATED
        this 15th
        day of
        September, 2004.

       

      
        	 	 	
                IsoRay
                  Medical, Inc.

              
	 	
              	
                By:
                  /s/ Roger Girard

              
	 	
                 

              	Roger
                Girard,
                President, CEO
	 	 	 
	 	 	
                By:
                  /s/
                  Michael Dunlop

              
	 	 	
                 Michael
                  Dunlop,
                  Secretary/Treasurer/CFO

              

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      EXHIBIT
        “B”

      

      TERMS
        AND
        CONDITIONS

      

      
        	
                1.

              	
                Borrower
                  hereby warrants that Borrower is the sole owner and in possession
                  of all
                  the Collateral, and that the Collateral is free of all liens,
                  encumbrances, and adverse claims, with the exception of the security
                  agreements herein created. Borrower agrees, at his or her own expense,
                  to
                  appear in and defend any and all actions and proceedings affecting
                  title
                  to the Collateral or any part thereof, or affecting the security
                  interest
                  of Bank therein.

              

      

      

      
        	
                2.

              	
                Borrower
                  hereby agrees: To do all acts which may be necessary to maintain,
                  preserve, and protect the Collateral and to keep the Collateral
                  in good
                  condition and repair; not to cause or permit any waste or unusual
                  or
                  unreasonable depreciation thereof or any act for which the Collateral
                  might be confiscated; to pay before delinquency all taxes, assessments,
                  and liens now or hereafter imposed upon the Collateral; not to
                  sell,
                  lease, encumber, or dispose of all or any part of the Collateral;
                  at any
                  time upon demand of Bank, to exhibit to and allow inspection by
                  Bank of
                  the Collateral; not to remove or permit the removal of the Collateral,
                  other than motor vehicles, from the premises where it is now located,
                  nor
                  of any motor vehicle from the State of Washington, nor to change
                  the
                  address where any motor vehicle is regularly garaged, without the
                  prior
                  written consent of Bank; to provide, maintain, and deliver to Bank
                  policies insuring the Collateral against loss or damage by such
                  risks in
                  such amounts, forms, and companies as Bank requires with loss payable
                  solely to Bank. If Bank takes possession of the Collateral, the
                  insurance
                  policy or policies and any unearned or returned premium thereon
                  shall, at
                  the option of the Bank, become the sole property of Bank upon Bank
                  crediting the amount of any unearned premium upon the obligations
                  secured
                  hereby, such policies being hereby assigned to Bank.
                  

              

      

      

      
        	
                3.

              	
                If
                  Borrower fails to make any payment or do any act as herein required,
                  then
                  Bank, but without obligation so to do, and without notice to or
                  demand
                  upon Borrower, may make such payments and do such acts as Bank
                  may deem
                  necessary to protect its security interest in the Collateral, Bank
                  being
                  hereby authorized (without limiting the general nature of the authority
                  herein conferred) to take possession of the Collateral, to pay,
                  purchase,
                  contest, and compromise any encumbrances, charge or lien which
                  in the
                  judgment of Bank appears to be prior or superior to its security
                  interest,
                  and in exercising any such powers and authority to pay necessary
                  expenses,
                  employ counsel and pay reasonable fees therefor, Borrower hereby
                  agrees to
                  repay immediately, and without demand, all sums so expended by
                  Bank,
                  including all reasonable attorney fees (including reasonable value
                  of
                  staff counsel) and related costs whether or not a suit is filed,
                  an appeal
                  is sought, or the matter is referred to arbitration, with interest
                  from
                  date of expenditure at the rate of twelve percent (12%) per
                  annum.

              

      

      

      
        	
                4.

              	
                Any
                  officer or employee of Bank is hereby irrevocably appointed the
                  attorney-in-fact of Borrower, with full power of substitution,
                  to sign any
                  certificate of ownership, registration card, application therefor,
                  affidavits, or documents necessary to transfer title to any of
                  the
                  Collateral, to receive and receipt for all licenses, registration
                  cards,
                  and certificates of ownership, and to do all acts necessary or
                  incident to
                  the powers granted to Bank herein, as fully as Borrower might.
                  Borrower
                  agrees to deliver to Bank all such certificates of ownership not
                  in
                  Bank’s
                  possession.

              

      

      

      
        	
                5.

              	
                Borrower
                  hereby assigns to Bank all rents, issues, income and profits of
                  or from
                  the Collateral. Any moneys received by Bank under the provisions
                  hereof
                  may at its option be applied upon any indebtedness secured hereby,
                  or
                  released.

              

      

      

      
        	
                6.

              	
                It
                  is specifically understood and agreed by each and every person
                  who is a
                  Borrower hereunder or Guarantor hereof that Bank may from time
                  to time and
                  without notice release or otherwise deal with any person now or
                  hereafter
                  liable for the payment or performance of any obligation hereunder
                  or
                  secured hereby, and renew, extend, or alter the time of terms of
                  payment
                  of any such obligation, and release, surrender, or substitute any
                  property
                  or other security for such obligation, or accept any type of further
                  security therefor, without in any way affecting the obligation
                  hereunder
                  of any Borrower or Guarantor; and consent is hereby given to delay
                  or
                  indulgence in enforcing payment or performance of any such obligation,
                  and
                  diligence, presentment, protest and demand and notice of every
                  kind, as
                  well as the right to require Bank to proceed against any person
                  liable for
                  the payment of any such obligation or to foreclose upon, dispose,
                  or
                  otherwise realize upon or collect or apply any other property,
                  real or
                  personal, securing any such obligation, as a condition or prior
                  to
                  proceeding hereunder, are hereby
                  waived.

              

      

      

      
        	
                7.

              	
                Should:
                  (1) default be made in the payment of any obligation, or breach
                  be made of
                  any warranty, statement, promise, term, or condition, contained
                  herein or
                  hereby secured; (2) any statement or representation made for the
                  purpose
                  of obtaining credit hereunder is determined by Bank to be false;
                  or (3)
                  Bank deem the Collateral inadequate or unsafe or in danger of misuse;
                  the
                  in any such event; Bank may, at its option and without demand first
                  made
                  and without notice to Borrower (if given, notice by ordinary mail
                  to
                  Borrower’s
                  address shown herein being sufficient), do any one or more of the
                  following: (a) Declare all sums secured hereby immediately due
                  and
                  payable; (b) immediately take possession of the Collateral wherever
                  it may
                  be found, using all necessary force so to do, or require Borrower
                  to
                  assemble the Collateral and make it available to Bank at a place
                  designated by Bank which is reasonably convenient to Borrower and
                  Bank,
                  and Borrower waives all claims for damages due to or arising from
                  or
                  connected with any such taking; (c) Proceed in the foreclosure
                  of
                  Bank’s
                  security interest and sale of the Collateral in any manner permitted
                  by
                  law, or provided for herein; (d) Sell, lease, or otherwise dispose
                  of the
                  Collateral at public or private sale, with or without having the
                  Collateral at the place of sale, and upon terms and in such manner
                  as Bank
                  may determine, and Bank may purchase same at any such sale; (e)
                  Retain the
                  Collateral in full satisfaction of the obligations secured thereby;
                  (f)
                  Exercise any remedies of a secured party under the Uniform Commercial
                  Code. Prior to any such disposition, Bank may, at its option, cause
                  any of
                  the Collateral to be repaired or reconditioned in such manner and
                  to such
                  extent as to Bank may seem advisable, and any sums expended therefor
                  by
                  Bank shall be repaid by Borrower and secured hereby. Bank shall
                  have the
                  right to enforce one or more remedies hereunder successively or
                  concurrently, and any such action shall not stop or prevent Bank
                  from
                  pursuing any further remedy which it may have hereunder or by law.
                  If a
                  sufficient sum is not realized from any such disposition of Collateral
                  to
                  pay all obligations secured hereby, Borrower hereby promises and
                  agrees to
                  pay Bank any deficiency. 

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                8.

              	
                If
                  Bank takes possession of the Collateral and it contains any property
                  other
                  than Collateral, Bank is authorized, at Borrower’s
                  sole option, to either (a) send such other property by ordinary
                  mail,
                  parcel post, freight, or other means to Borrower at the address
                  show
                  above, unless Borrower has notified Bank of a different address
                  in
                  writing; or (b) store such other property with a public warehouse
                  for the
                  account of Borrower and send to Borrower at such address by ordinary
                  mail
                  the warehouse receipt issued therefore. Such sending or store shall
                  be at
                  Borrower’s
                  expense and risk and shall relieve Bank from all liability in connection
                  with such property.

              

      

      

      
        	
                9.

              	
                The
                  right to plead the statute of limitations as a defense to any and
                  all
                  obligations contained herein or secured hereby is waived, to the
                  full
                  extent permissible by law. Any Borrower who is a married person
                  hereby
                  expressly agrees that recourse may be had against his or her separate
                  property for any deficiency after sale of the Collateral. Time
                  and
                  exactitude of each of the terms, obligations, covenants and conditions
                  are
                  hereby declared to be the essence hereof. No waiver by Bank of
                  any breach
                  or default shall be deemed a waiver of any breach or default thereafter
                  occurring and the taking of any action by Bank shall not be deemed
                  to be
                  an election of that action, but rather the rights and privileges
                  and
                  options granted to Bank under the terms of this security agreement
                  shall
                  be deemed cumulative, the one with the other and not
                  alternative.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      SECURITY
        AGREEMENT

      ACCOUNTS
        RECEIVABLE AND/OR INVENTORY

      

      

      THIS
        AGREEMENT
        is
        entered into between
        IsoRay Medical, Inc.
        (“Borrower”)
        and
Benton-Franklin
        Economic 

      Development
        District (“Bank”).
        

      

      1. As
        used
        in this Agreement, the following terms shall have the following
        meanings:

      

      A. “Accounts”
        means
        any right to payment for goods sold or leased, or to be sold or to be leased,
        or
        for services rendered or to be rendered no matter how evidenced, including
        accounts receivable, chattel paper, contract rights, purchase orders, notes,
        instruments, drafts, acceptances and other forms of obligations and
        receivables.

      

      B. “Inventory”
        means
        all of Borrower’s
        goods,
        merchandise and other personal property which are held for sale or lease
        including those held for display or demonstration or out on lease or consignment
        or to be furnished under a contract of service or are raw materials, work
        in
        process or materials used or consumed, or to be used or consumed, in
Borrower’s
        business, and shall include all general intangibles, proprietary rights,
        patents, trademarks, copyrights, plans, drawings, diagrams, schematics, assembly
        and display materials relating thereto.

      

      C. “Collateral”
        means
        the property subject to Bank’s
        security
        interest.

      

      D. “Obligations”
        means
        all loans, advances, debts, liabilities, obligations, lease payments,
        guarantees, covenants, and duties owing by the Borrower
        to
Bank
        of any
        kind and description (whether or not evidenced by this Agreement, any note
        or
        other instrument or any other agreement between Bank
        and
Borrower
        and
        whether or not for the payment of money), direct or indirect, absolute or
        contingent, due or to become due, now existing or hereafter arising, including,
        without limitation , any debt, liability or obligation owing from Borrower
        to
        others which Bank
        may have
        obtained by assignment or otherwise, and further including, without limitation,
        all interest and Bank
        costs
        and fees which
        Borrower
        is
        required to pay or reimburse by this Agreement.

      

      E. Any
        words
        or phrases appearing in this Agreement and not defined in “A”
        through
“D”
        above
        shall be defined where applicable in accordance with the various definitions
        set
        forth in the Uniform Commercial Code.

      

      2. As
        security for any and all obligations of Borrower
        to
Bank,
        whether
        now owing or hereafter incurred and whether direct, indirect, absolute, or
        contingent, Borrower
        hereby
        grants to Bank
        a
        security interest in the following property: (a) all present and future
        Accounts, chattel paper, security agreements and debts secured thereby,
        documents, notes, drafts, instruments, contract rights, general intangibles,
        all
        guarantees and security therefor and all returned goods; (b) all present
        and
        hereafter acquired Inventory wherever located, including, but not limited
        to,
        raw materials, work in process and finished goods, goods held for sale or
        lease,
        goods under lease or consignment held by others, and materials used or consumed
        in
        Borrower’s
        business; (c) all proceeds and products of the foregoing, including but not
        limited to money, the Collateral account, goods, insurance proceeds, and
        other
        tangible or intangible property received upon the sale or disposition of
        the
        foregoing; (d) all
        present and future patents, trade name and trademarks;
        (e) all
        present and future books and records pertaining to the foregoing and the
        equipment containing said books and records. So long as Borrower
        is
        indebted to Bank,
        Borrower
        will
        execute and deliver to Bank
        such
        assignments, including Bank’s
        standard
        forms of specific or general assignment covering individual accounts, notices,
        financing statements, or other documents and papers as
        Bank may
        require or give any third party, including the account debtors obligated
        on the
        Accounts, notice of Bank’s
        interest
        in the Collateral. All future loans or advances shall be secured by the
        Collateral, whether or not such future loans or advances are (a) related
        to the
        original obligations being secured, by class or kind, (b) now contemplated
        by
Borrower
        and
Bank,
        or (c)
        identified as being secured by the Collateral. Nothing contained in this
        Agreement shall be construed as obligating Bank
        to make
        any future loan or advance.

      

      3. Until
        Bank
        exercises its rights to collect the Accounts and Inventory proceeds pursuant
        to
        this Agreement: 

      

       

      ࿶ Borrower
        will
        collect with diligence all Borrower’s
        Accounts
        and Inventory proceeds; provided, that no legal action shall be maintained
        thereon or in connection therewith, without
        Bank’s
        prior
        written consent.

      

      ࿶ Borrower
        will
        collect with diligence all Borrower’s
        Accounts
        and Inventory proceeds; provided, that no legal action shall be maintained
        thereon or in connection therewith, without Bank’s
        prior
        written consent. Any collection of accounts by Borrower
        under
        which Bank
        has
        specifically made loans against, whether in the form of cash, checks, notes,
        or
        other instruments for the payment of money (properly endorsed or assigned
        where
        required to enable Bank
        to
        collect same) shall be in trust for Bank
        and
Borrower
        shall
        keep all collections separate and apart from all other funds and property
        so as
        to be capable of identification as the property of Bank
        and
        deliver said collections daily to Bank
        in the
        identical form received. The proceeds of such collections when received by
        the
Bank
        may be
        applied by Bank
        directly
        to payment of any obligation secured hereby, or at Bank’s
        option
        may be deposited in the Collateral Account. Bank
        shall
        have the right at all times and from time to time, in its sole discretion,
        to
        apply all or any part of the moneys in payment of any of the obligations
        secured
        hereby. In the event collections are deposited in the Collateral Account,
        Borrower
        acknowledges that payment on its obligations secured thereby shall not be
        made
        until such time as Bank
        applies
        the balance of the Collateral Account in payment of its obligations.
Bank,
        in its
        sole discretion, may apply collections directly to any note(s) evidencing
        such
        obligations. Borrower
        shall
        pay Bank
        interest
        at the rate specified in Borrower’s
        note(s)
        evidencing such obligations on the amount of all such payments for a period
        of
        three business days subsequent to the date of credit to Borrower’s
        obligations.
        Any credit given by Bank upon receipt of said proceeds shall be conditional
        credit subject to collection. Returned items, at Bank’s
        option,
        may be charged to Borrower’s
        general
        account. Collections for such accounts shall be set forth on an itemized
        schedule, showing the name of the account debtor, the amount of each payment,
        and such other information as Bank
        may
        request.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      4. Until
        Bank
        exercises its rights to collect the Accounts or Inventory proceeds pursuant
        to
        this Agreement, Borrower
        may
        continue its present policies with respect to returned merchandise and
        adjustments. However, Borrower
        shall
        immediately notify Bank
        of all
        cases involving returns, rejection, repossessions, and loss or damage of
        or to
        merchandise represented by the Accounts or constituting Inventory and of
        any
        credits, adjustments or disputes arising in connection with the goods or
        services represented by the Accounts or constituting Inventory.

      

      5. Borrower
        represents and warrants to Bank:
        (a) if
Borrower
        is a
        corporation, that Borrower
        is duly
        organized and existing in the State of its incorporation and the execution,
        delivery and performance hereof are within Borrower’s
        corporate powers, have been duly authorized and are not in conflict with
        law or
        the terms of any charger, by-law or other incorporation papers, or of any
        indenture, agreement or undertaking to which Borrower
        is a
        party or by which Borrower
        is bound
        or affected; (b) Borrower
        is the
        true and lawful owner of the Collateral, becomes subject to which is free
        and
        clear of all liens and encumbrances other than Bank’s
        security
        interest, therein; (c) each Account is, or at the time the Account comes
        into
        existence will be, a true and collect statement of a bona fide indebtedness
        incurred by the account debtor named therein in the amount of the Account
        for
        either merchandise sold and delivered (or being held subject to delivery
        instructions of the account debtor) to, or services rendered, performed and
        accepted by, the account debtor; (d) that there are or will be no defenses,
        counterclaims, or setoffs which may be asserted against the Accounts; (e)
        any
        and all financial information, including information relating to the Collateral,
        submitted by Borrower
        to
Bank,
        whether
        previously or in the future, is or will be true and correct; (f) so long
        as
Borrower
        is
        indebted to Bank,
        the
        representations and warranties contained herein shall have a continuing
        effect.

      

      6. Borrower
        will:
        (a) furnish Bank
        from
        time to time such financial statements and information as Bank
        may
        reasonably request and inform Bank
        immediately upon the occurrence of a material adverse change therein; (b)
        furnish Bank
        periodically, in such form and detail and at such times as
        Bank
        may
        require, statements showing aging and reconciliation of the Accounts and
        collections thereof, and reports as to the Inventory and sales thereof; (c)
        furnish Bank
        periodically, in such form and detail and at such times as Bank
        may
        require, statements showing aging and reconciliation of Borrower’s
        accounts
        payable; (d) maintain a system of accounting in accordance with generally
        accepted accounting principals consistently applied, which system shall not
        be
        modified without the prior written consent of the
        Bank;
        (e) not
        enter into, modify or terminate any agreement with an accounting firm or
        service
        bureau for the preparation or storage of Borrower’s
        accounting records without the prior written consent of Bank
        which
        consent shall be conditioned upon the agreement of said accounting firm or
        service bureau to provide information requested by Bank;
        (f)
        permit Bank
        and any
        of its employees, officers or agents, upon demand, during Borrower’s
        usual
        business hours, or the usual business hours of third persons having control
        thereof, to have access to and examine all Borrower’s
        books
        relating to the Accounts and Inventory, Borrower’s
        obligations to Bank,
        Borrower’s
        financial
        condition and the results of Borrower’s
        operations and, in connection therewith, permit Bank
        or any
        of its agents, employees or officers to copy and make extracts therefrom;
        (g)
        maintain Inventory only at the following location(s); all
        locations
        and
        notify Bank
        in
        writing of each new or changed location at which Inventory is or will be
        kept,
        other than for temporary processing, storage or similar purposes, and any
        removal thereof to a new location of Borrower’s
        chief
        executive office and of each office at which books and records relating to
        the
        Accounts are kept; (h) promptly notify Bank
        of any
        attachment or other legal process levied against any of the Collateral and
        any
        information received by Borrower
        relative
        to the Collateral, including the Accounts, the Account debtors or other persons
        obligated in connection therewith, which may in any way affect the value
        of the
        Collateral or the rights and remedies of Bank
        in
        respect thereof; (I) reimburse Bank
        upon
        demand for any and all legal costs, including reasonable attorneys’
        fees and
        other expenses incurred in collecting any sums payable by Borrower
        under
Borrower’s
        loan or
        any other obligation secured hereby, enforcing any term or provisions of
        this
        Agreement or otherwise, or in the checking, handling, and collection of the
        Collateral and the preparation and enforcement of any agreement relating
        thereof; (j) provide, maintain and deliver to Bank
        policies
        insuring the Collateral against loss or damage by such risks and in such
        amounts, forms, and companies as Bank may require and with loss payable solely
        to Bank,
        and, in
        the event Bank
        takes
        possession of the Collateral, the insurance policy or policies and any unearned
        or returned premium thereof shall be at the option of Bank
        become
        the sole property of Bank,
        such
        policies and the proceeds of any other insurance covering or in any way relating
        to the Collateral, whether now in existence or hereafter obtained being hereby
        assigned to Bank;
        (k) do
        all acts necessary to maintain preserve and protect all inventory, keep all
        Inventory in good condition and repair and not to cause any waste or unusual
        or
        unreasonable depreciation thereof, (l) pay before delinquency all taxes,
        assessments, and liens now or hereafter imposed upon the Collateral or any
        portion thereof.

      

      7. Bank
        may at
        any time without prior notice to Borrower,
        collect
        the Accounts and Inventory proceeds and may give notice of Bank’s
        security
        interest to any and all account debtors, and Borrower
        does
        hereby make, constitute and appoint
        Bank
        its
        irrevocable, true and lawful attorney with power to receive, open and dispose
        of
        all mail addressed to Borrower,
        to
        endorse the name of Borrower
        upon any
        checks or other evidences of payment that may come into the possession of
        Bank
        upon the
        Accounts or as proceeds of Inventory; to endorse the name of the undersigned
        upon any document or instrument relating to the Collateral; in its name or
        otherwise to demand, sue for, collect and give acquittances for; any and
        all
        moneys due or to become due upon the Accounts, to compromise, prosecute or
        defend any action, claim or proceeding with respect thereto; and to do any
        and
        all things necessary and proper to carry out the purpose herein contemplated.
        

      

      8. Until
        the
        obligations secured hereby shall have been repaid in full, Borrower
        shall
        not, except in the ordinary course of business, sell, dispose of or grant
        a
        security interest in any of the Collateral other than to Bank.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      9. Should
        (I) default be made in the payment of any obligation secured hereby, or breach
        be made of any warranty, statement, promise, term or condition contained
        herein;
        (ii) any statement or representation made for the purpose of obtaining credit
        hereunder is determined by Bank
        to be
        false; (iii) Bank
        deem the
        Collateral inadequate or unsafe or in danger of misuse; (iv) Borrower
        become
        insolvent, commit an act of Bankruptcy,
        or make an assignment for the benefit of creditors; (v) any proceeding be
        commenced by or against Borrower
        under
        any Bankruptcy,
        reorganization, arrangement, readjustment or debt or moratorium, law or statute;
        (iv) any writ of attachment, garnishment, execution or other legal process
        be
        issued against any property of Borrower
        or if
        any assessment for taxes against Borrower,
        other
        than real property, is made by the Federal or state government or any department
        thereof; (vii) any guarantor or endorser of any obligations secured hereby
        shall
        revoke or terminate a guarantee, make an assignment for the benefit of
        creditors, permit the appointment of a receiver over any part of such
        guarantor’s
        or
        endorser’s
        property; then in any such event, Bank may, at its option and without demand
        first made and without notice to Borrower,
        do any
        one or more of the following: (a) declare all Obligations secured hereby
        immediately due and payable; (b) immediately take possession of the Collateral
        wherever it may be found, using all necessary force so to do, or require
        Borrower
        to
        assemble the Collateral and make it available to Bank
        at
        a
        place designated by Bank
        which is
        reasonably convenient to Borrower
        and
Bank,
        and
Borrower
        waives
        all claims for damages due or arising from or connected with any such taking
        and
        to maintain possession of and dispose of the Collateral on any premises of
        the
        Borrower or
        under
Borrower’s
        control;
        (c) proceed in the foreclosure of Bank’s
        security
        interest and sale of the Collateral in any manner permitted by law, or provided
        for herein; (d) sell, lease or otherwise dispose of the Collateral at public
        or
        private sale, with or without having the Collateral at the place of sale,
        and
        upon terms and in such manner as Bank
        may
        determine, and Bank
        may
        purchase same at any such sale; (e) retain the Collateral in full satisfaction
        of the Obligations secured hereby; (f) exercise any remedies of a secured
        party
        under the Uniform Commercial Code; (g) exercise the right of set off against
        any
        deposit account maintained with Bank
        by
Borrower.
        Prior
        to any disposition of Collateral, Bank
        may, at
        its option, cause the Collateral to be repaired or reconditioned in such
        manner
        and to such extent as to Bank
        may seem
        advisable, any sums expended therefore by Bank
        shall be
        repaid by Borrower
        and
        secured hereby. Bank
        shall
        have the right to endorse one or more remedies hereunder successively or
        concurrently, and any such action shall not stop or prevent Bank
        from
        pursuing any further remedy which it may pursue hereunder or by
        law.

      

      10. Nothing
        herein shall in any way limit the effect of the terms and conditions of any
        other security or other agreement executed by Borrower, but each and every
        condition hereof shall be in addition thereto.

      

      

      EXECUTED
        this 15th
        day of
        September 2004.

      
        	 	 	
                IsoRay
                  Medical, Inc.

              
	 	
              	
                By:
                  /s/ Roger Girard

              
	 	
                 

              	Roger
                Girard,
                President, CEO
	 	 	 
	 	 	
                By:
                  /s/
                  Michael Dunlop

              
	 	 	
                 Michael
                  Dunlop,
                  Secretary/Treasurer/CFOUnassociated Document

     

    

      REGISTRY
        OF RADIOACTIVE SEALED SOURCES AND DEVICES

      SAFETY
        EVALUATION OF SEALED SOURCE

      
        
          	NO.:     WA-1220-S-101-S 	DATE:
                  17
                  September 2004 	 	
                   PAGE: 1
                    of 8

                
	 	 	 	 

        

          

        
 

      

      
        
          	
                  SOURCE
                    TYPE:

                	 	
                  Sealed
                    Brachytherapy Source

                
	 	 	 
	 	 	 
	
                  MODEL:

                	 	
                  CS-1

                
	 	 	
                  Lawrence
                    CSERION Cs-131 Brachytherapy Seed

                
	 	 	
                  (
                    also known as 131Cseed
                    )

                
	 	 	 
	 	 	 
	
                  DISTRIBUTOR:

                	 	
                  IsoRay

                
	 	 	
                  Suite
                    106

                
	 	 	
                  350
                    Hills Street

                
	 	 	
                  Richland,
                    WA 99352

                
	 	 	 
	 	 	 
	
                  MANUFACTURER:

                	 	
                  IsoRay

                
	 	 	
                  Suite
                    106

                
	 	 	
                  350
                    Hills Street

                
	 	 	
                  Richland,
                    WA 99352

                
	 	 	 
	 	 	 
	
                  ISOTOPE:

                	 	
                  MAXIMUM
                    ACTIVITY:

                
	 	 	 
	
                  Cesium-131

                	 	
                  65
                    mCi (2.41 Gbq) Internal Activity

                
	 	 	
                  2-5
                    mCi Average Air Kerma Strength/Assay Activity

                
	 	 	 
	
                  LEAK
                    TEST FREQUENCY:

                	 	
                  Not
                    Required

                
	 	 	 
	 	 	 
	
                  PRINCIPAL
                    USE:

                	 	
                  (AA)
                    Manual Brachytherapy

                
	 	 	 
	 	 	 
	
                  CUSTOM
                    SOURCE:

                	 	
                  ____YES
                    X
                    NO

                

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      REGISTRY
        OF RADIOACTIVE SEALED SOURCES AND DEVICES

      SAFETY
        EVALUATION OF SEALED SOURCE

      

      
        
          	NO.:     WA-1220-S-101-S 	DATE:
                  17
                  September 2004 	 	
                   PAGE: 2
                    of 8

                
	
                	 	 	 

        

                                

      

      SOURCE
        TYPE:   Sealed
        Brachytherapy Source

      

      DESCRIPTION:

      

      The
        IsoRay Model CS-1 brachytherapy seed is a small, cylindrical, sealed source
        that
        consists of a welded titanium capsule containing the low energy gamma (X-ray)
        emitting isotope, cesium-131 (T1/2
        = 9.7d),
        adsorbed onto an internal inorganic substrate. The nominal external seed
        dimensions (4.5 mm length and 0.8 mm diameter) and patient-contracting material
        (titanium) are identical to other commercially available brachytherapy sources
        for radiation oncology.

      

      The
        brachytherapy seed contains a cylindrical inorganic substrate onto which
        a thin
        coating of radioactive cesium-131 is applied. A 0.25 mm diameter gold wire
        is
        placed within in the central annulus of the core. The gold wire serves as
        an
        X-ray marker for radiographic visualization of individual brachytherapy source
        locations. The internal core materials are inserted into a tube of commercially
        pure, grade 2 titanium (4.3 mm long, 0.8 mm OD, 0.7 mm ID). Titanium end
        caps
        (0.8 mm diameter, 0.1 mm thick) are precision laser welded in
        place.

      

      

      LABELING:

      

      Because
        of their small size, individual brachytherapy sources do not directly exhibit
        identifying marking, labeling or warnings. Multiple sources will be supplied
        in
        a primary container such as a glass vial or preloaded cartridges. The primary
        container will be placed inside a shielded storage container. The shielded
        storage container will be placed inside a shipping container meeting DOT
        requirements for shipment of radioactive materials. Examples of labels for
        each
        of these containers appear in Figures 1 -
        3. The
        labels will be made of durable materials that remain legible during the expected
        conditions of transportation and use. 

      

      DIAGRAM:

      

      A
        diagram
        of the IsoRay Model CS-1 brachytherapy seed showing components, dimensions,
        and
        the method of sealing appears below:

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      REGISTRY
        OF RADIOACTIVE SEALED SOURCES AND DEVICES

      SAFETY
        EVALUATION OF SEALED SOURCE

      

      
        	NO.:     WA-1220-S-101-S 	DATE:
                17
                September 2004 	 	
                 PAGE:
                  3
                  of 8

              
	 	 	 	 
	SOURCE
                TYPE: 	 	 	 

      

                                                                                                   

      

         Sealed
        Brachytherapy Source

      

      

      CONDITIONS
        OF NORMAL USE:

      

      IsoRay
        Model CS-1 brachytherapy seeds are indicated for the treatment of malignant
        disease (e.g., head and neck, brain, breast, prostate, etc.) in a clinical
        setting and may be used in topical, interstitial, and intracavitary applications
        for tumors with known radiosensitivity. The seeds may be used as a primary
        treatment or in conjuction with other treatment modalities, such as external
        beam radiation therapy, chemotherapy or as treatment for residual disease
        after
        excision of primary tumors.

      

      Seeds
        are
        typically supplied non-sterile in radiation shielded packaging. The sources
        are
        capable of withstanding autoclave conditions. Sources may be implanted using
        any
        appropriate, FDA-approved device (e.g., 18-gauge brachytherapy needle, seed
        applicator, tubing, etc.). Radiological protection devices should be utilized
        during implantation procedures. When protective barriers are not practical,
        (e.g., certain surgical stages), the user must rely on time and distance
        to
        minimize radiation exposure.

      

      PROTOTYPE
        TESTING:

      

      IsoRay
        Model CS-1 Brachytherapy Seeds were classified and subjected to environmental
        test conditions and stresses as defined in ISO 2919-1999, “Radiation
        Protection -
        Sealed
        Radioactive Sources -
        General
        Requirements and Classification.”
        The
        seeds successfully passed all of the required test conditions and are classified
        as ISO 99C53211, where the last five digits define the test conditions and
        requirements as shown in the following table. The cesium-131 isotope is
        classified as Group 3: Moderate Toxicity.

      

      
        	
                Test

              	
                Classification

              	
                Test
                  Conditions

              
	
                Low
                  Temperature

                High
                  Temperature

              	
                5

              	
                -40°C
                  (20 min) w/ thermal shock to 20°C;

                +600°
                  (1
                  hr) w/ thermal shock to 20°C

              
	
                External
                  Low Pressure

                External
                  High Pressue

              	
                3

              	
                Two
                  5 min periods at 25 kPa absolute;

                Two
                  5 min periods at 2 Mpa absolute

              
	
                Impact

              	
                2

              	
                50
                  g steel weight dropped from 1 meter height

              
	
                Vibration

              	
                1

              	
                No
                  Test Required

              
	
                Puncture

              	
                1

              	
                No
                  Test Required

              
	
                Bending

              	
                1

              	
                No
                  Test Required

              
	
                Steam
                  Autoclave

              	
                Optional

              	
                121°C
                  at 29.8 psig for 20 min

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      REGISTRY
        OF RADIOACTIVE SEALED SOURCES AND DEVICES

      SAFETY
        EVALUATION OF SEALED SOURCE

                                                                                               PAGE:
        4 of
        8

      
        	WA-1220-S-101-S 	DATE:
                17
                September 2004 	 	
                 PAGE: 4
                  of 8

              
	
              	 	 	 

                  

      

      SOURCE
        TYPE:   Sealed
        Brachytherapy Source

      

      EXTERNAL
        RADIATION LEVELS:

      

      The
        radiation dose rates in air at various distances from the Model CS-1 source
        were
        calculated using a gamma dose rate constant of 0.637 cGy/hr-mCi (637 mR/hr)
        at 1
        cm. The dose rate constant is based on Air Kerma Rate measurements of actual
        seeds by the National Institute for Standards and Technology and has been
        confirmed using Monte Carlo calculations.

      

      
        	
                Distance
                  from the source 

                (cm)

              	
                Dose
                  Rate (mR/hr)

                Maximum
                  activity (50 mCi)

              	
                Dose
                  Rate (mR/hr)

                Typical
                  activity (3.3 mCi)

              
	
                5

              	
                1300

              	
                84

              
	
                30

              	
                35

              	
                2.3

              
	
                100

              	
                3.2

              	
                0.21

              

      

      

      QUALITY
        ASSURANCE AND CONTROL:

      

      Prior
        to
        distribution, the following quality control tests will be
        completed:

      

       

      
        	
                Test

              	
                Method

              	
                Acceptance
                  Criteria

              
	
                Radionuclidic
                  Purity

              	
                Gamma
                  Analysis

              	
                >99.9%
                  Cs-131;

                <0.01%
                  Ba-131; <0.1% Cs-132;

                <0.05%
                  all other radioisotopes

              
	
                Weld
                  Inspection

              	
                Visual
                  -
                  w/
                  Magnification

              	
                Silver
                  in color; with no cracks or holes

              
	
                Leak
                  Test

              	
                ISO
                  9978

              	
                ≤
                  0.185 kBq (≤ .005 μCi)
                  per seed

              
	
                Radioassay

              	
                Dose
                  Calibrator

              	
                0.2
                  to 50.0 mCi ± 5% apparent activity

              
	
                External
                  Dimensions

              	
                Gauging

              	
                0.8mm
                  ± 10% OD; 4.5 mm ± 10% length

              
	
                Seed
                  Assembly

              	
                Visual

              	
                No
                  foreign material, dents, or scratches

              
	
                Labeling

              	
                Visual

              	
                Information
                  is legible, accurate and complete

              

      

      

      

      IsoRay
        maintains a quality assurance program that is based on ISO 9001 requirements
        and
        is designed to comply with US Food and Drug Administration Quality Systems
        Requirements for medical devices. Elements of the quality system that are
        directly applicable to this brachytherapy seed are included in the application
        for safety evaluation of this sealed source.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      REGISTRY
        OF RADIOACTIVE SEALED SOURCES AND DEVICES

      SAFETY
        EVALUATION OF SEALED SOURCE

                                                                                                                                                                

      
        	WA-1220-S-101-S 	DATE:
                17
                September 2004 	 	
                 PAGE: 5
                  of 8

              
	
              	 	 	 

                  

      

      SOURCE
        TYPE:   Sealed
        Brachytherapy Source

      

      LIMITATIONS
        AND OTHER CONSIDERATION OF USE:

      

      
        	
                ·

              	
                The
                  sealed sources shall be distributed only to specific licenses of
                  the
                  Washington State Department of Health, the U.S. Nuclear Regulatory
                  Commission, or an Agreement State.

              
	 	 
	
                ·

              	
                Handling,
                  Storage, Use, Transfer and Disposal: To be determined by the licensing
                  authority. Given that these sealed sources exhibit high surface
                  dose rates
                  when unshielded, these sources should be handled by experienced
                  licensed
                  personnel using adequate remote handling equipment and
                  procedures.

              
	 	 
	
                ·

              	
                Leak
                  testing beyond that performed by the manufacturer is not required
                  due to
                  the short half-life (9.7 days) of Cs-131.

              
	 	 
	
                ·

              	
                Since
                  the seeds are non-sterile when shipped, they must be sterilized
                  upon
                  receipt prior to use using either steam (autoclave) or ethylene
                  oxide
                  (EtO). Dry heat sterilization must not be used.

              
	 	 
	
                ·

              	
                Sources
                  shall not be exposed to conditions that exceed the ISO 2919 classification
                  of 99C53211. Despite excellent corrosion resistance of titanium,
                  seeds are
                  not to be exposed to concentrated acids or bases.

              
	 	 
	
                ·

              	
                Licenses
                  should observe the manufacturer’s
                  instructions for handling and using the Cs-131 sources which are
                  provided
                  with each shipment of seeds. When not in use, seeds should be stored
                  in
                  shielded containers in a controlled area.

              
	 	 
	
                ·

              	
                Any
                  excess seeds must be disposed in accordance with applicable rules
                  and
                  regulations. Unused sources may be returned to the distributor.
                  

              
	 	 
	
                ·

              	
                This
                  registration sheet and the information contained with the references
                  shall
                  not be changed without the written consent of the Washington State
                  Department of Health. 

              

      

      

      SAFETY
        ANALYSIS SUMMARY:

      

      Based
        on
        review of the IsoRay Model CS-1 brachytherapy sealed source, its ISO 2919/ANSI
        N43.6/ANSI N44.1 classification, and the information and test data cited
        below,
        we conclude that the IsoRay Model CS-1 sealed source is acceptable for licensing
        purposes.

      

      Furthermore,
        we conclude that this source should maintain its integrity under normal
        conditions of use and accidental conditions which might occur during uses
        specified in this certificate.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      REGISTRY
        OF RADIOACTIVE SEALED SOURCES AND DEVICES

      SAFETY
        EVALUATION OF SEALED SOURCE

       

      
        
          	WA-1220-S-101-S 	DATE:
                  17
                  September 2004 	 	
                   PAGE: 6
                    of 8

                
	
                	 	 	 

SOURCE
          TYPE:   Sealed
          Brachytherapy Source

      

      

      REFERENCES:

      

      This
        Certificate of Registration is based on information contained in the following
        supporting documents which are hereby incorporated by reference and made
        a part
        of this registry document:

      

      
        	
                ·

              	
                Application
                  for Safety Evaluation and Registration of IsoRay Model CS-1 Brachytherapy
                  Sealed Source, dated May 20, 2004.

              
	 	 
	
                ·

              	
                Letter
                  and attachment dated 24 August
                  2004.

              

      

       

      ISSUING
        AGENCY: Washington
        State Department of Health, Office of Radiation Protection     Box
        47827, Olympia, Washington 98504 360-236-3220.

      

      
        
          	Date: 17 Sept 04	REVIEWED BY: /s/ ACL
	 	
                  for
                    C. DeMaris

                
	 	 
	Date: 23 September 04	CONCURRENCE:
                  /s/
                  A. Grumbles
	 	
                  A
                    Grumbles

                

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      REGISTRY
        OF RADIOACTIVE SEALED SOURCES AND DEVICES

      SAFETY
        EVALUATION OF SEALED SOURCE

      

      
        
          	WA-1220-S-101-S 	DATE:
                  17
                  September 2004 	 	
                   PAGE: 7
                    of 8

                
	
                	 	 	 

          
 

        

      

      SOURCE
        TYPE:   Sealed
        Brachytherapy Source

      

      
        	
                Cs-131
                  Brachytherapy Seed Model CS-1

              
	
                IsoRay,
                  Richland, WA 99352 USA

              
	
                Lot
                  Number:

              	 
	
                Assay
                  Date:

              	 
	
                Number
                  of Sources:

              
	
                Total
                  Activity: mCi

              
	
                NON-STERILE

              
	
                Caution:
                  Cesium-131

                Radioactive
                  Material

              

      

      

      

      Figure
        1.
        Example of primary seed container labeling

      

      
        	
                Cs-131
                  Brachytherapy Seed Model CS-1

              
	
                Manufactured
                  By:

                IsoRay,
                  Inc.

                350
                  Hills Street, Suite 106

                Richland,
                  WA 99352 USA

                Phone:
                  509-375-1202

              	
                Certificate
                  Number:

              	 
	
                Lot
                  Number:

              	 
	
                Number
                  of Seeds:

                ________________

              	
                Reference
                  Date:

                ______________

              	
                Implant
                  Date:

                ___________

              
	
                Total
                  Apparent Activity (mCi):

              	 	 
	
                Total
                  Air Kerma 

                μGy
                  m2
                  h-1
                  (U):

              	 	 
	
                Midpoint
                  Apparent Activity (mCi):

              	 	 
	 	
                Caution:
                  Federal law restricts this device to sale by or on the order of
                  a
                  physician. 

              	
                Midpoint
                  Air Kerma μGy
                  m2
                  h-1
                  (U):

              	 	 
	 	
                Patient
                  Name or ID:

              	 
	
                Caution:
                  Radioactive Material Cesium -131

              	
                Physician
                  Name:

              	 
	 	
                SINGLE
                  USE ONLY

              	
                WARNING:
                  NON-STERILE

              

      

      

      Figure
        2.
        Example of shielded storage container labeling

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      REGISTRY
        OF RADIOACTIVE SEALED SOURCES AND DEVICES

      SAFETY
        EVALUATION OF SEALED SOURCE

      
         

        
          	WA-1220-S-101-S 	DATE:
                  17
                  September 2004 	 	
                   PAGE: 8
                    of 8

                
	
                	 	 	 

           

        

      

      SOURCE
        TYPE:   Sealed
        Brachytherapy Source

      

      

      

      
        	
                CAUTION:
                  RADIOACTIVE MATERIAL

              	
                CAUTION

                 

                 

                Radioactive

                Materials

              
	
                READ
                  THE WARNINGS
                  AND PRECAUTIONS
                  SECTION OF THE PACKAGE INSERT SHEET ENCLOSED WITH THIS PACKAGE
                  BEFORE
                  HANDLING THIS CONTAINER OR CONTENTS

              

      

      

      

      Figure
        3.
        Example of package insert warning label

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}]]