LEASE AGREEMENT

 

 

 

                                                                    EXHIBIT 10.6

 

     

                                 LEASE AGREEMENT

 

 

 

         THIS LEASE   AGREEMENT,   is made and entered   into as of this 2nd day of

May, 2003, by and between ADRIAN RAND ROBISON and DOROTHY   ROBISON,   husband and

wife, referred to herein as "Lessor", and INTERNATIONAL ISOTOPES,   INC., a Texas

corporation, referred to herein as "Lessee".

 

                                    RECITALS:

 

         A.      Lessee   previously   entered into a Lease   Agreement   (the "Prior

Lease Agreement")   dated March 2,2003,   with Allen Ball, acting not individually

but as Trustee of the Allen Ball and Connie   Ball   Living   Trust   created   under

Trust   Agreement   dated January 6, 1990,   and any   amendments   thereto   ("Ball")

pertaining to the Leased Premises hereinafter described.   Ball subsequently sold

the Leased Premises to Lessor and as a result   thereof,   Lessor has been leasing

the Leased   Premises to Lessee pursuant to the terms and provisions of the Prior

Lease Agreement. Lessor is now remodeling the improvements located on the Leased

Premises   and as a result   thereof   Lessor and Lessee   have agreed to enter into

this Lease Agreement in substitution for the Prior Lease Agreement.

 

          B.      Lessee and Lessor   have   agreed that the term of the Prior Lease

Agreement shall terminate   effective as of midnight on July 3 1,2003,   and shall

at such time be replaced by this Lease Agreement.

 

 

                                   AGREEMENTS:

 

         In   consideration   of the mutual covenants,   conditions   and agreements

contained   herein and the   payment of rents   herein   specified,   it is agreed as

follows:

 

         1.      DEMISED PREMISES. Lessor does hereby lease, demise and rent unto

Lessee the following   described   premises and all   improvements   located thereon

situated   in the   County of   Bonneville,   State of Idaho,   to-wit   (the   "Leased

Premises"):

 

                Lot 4 Block   4,   St.   Leon   Industrial   Park,   Division   No.   2,

                according to the recorded plat thereof.

 

         2.      TERM. The term of this Lease Agreement shall be as follows:

 

                2.1    Initial Term. The term of the Prior Lease   Agreement shall

terminate as of midnight on July 31, 2003,   and thereafter   the Leased   Premises

shall be leased to Lessee   pursuant   to the terms and   provisions   of this Lease

Agreement. The initial term of this Lease   Agreement shall be for a term of five

(5) years commencing on August 1, 2003 (the   "Commencement   Date") and extending

to   midnight   on   July   31,   2008,   subject   however   to   prior   termination   as

hereinafter   set forth.   For purposes of this Lease   Agreement,   the term "Lease

Year" shall refer to the period of time each year   commencing   on the 1st day of

August and ending at midnight on the 31st day of July.

 

 

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                2.2    Option to Renew.   The term of this Lease   Agreement may be

extended, at the option of the Lessee, for one (1) successive period of five (5)

years, being herein sometimes referred to as the extended term, as follows:

 

                      Extended Term    --     Commencing five (5) years from the

                                            Commencement Date and continuing for

                                             five (5) years thereafter.

                                                  

                      At the expiration of the Initial Term, if this Lease shall

be in full force and effect and the Lessee shall have fully performed all of its

terms and   conditions,   the Lessee   shall have the option to extend   this Lease,

upon the same terms and conditions, with rent to be paid as set forth in Article

3 herein,   for an extended term of five (5) years to commence   immediately   upon

the termination of the Initial Term of this Lease.   The option for such extended

term shall be   exercised   by the Lessee   giving   written   notice   thereof to the

Lessor not less than one hundred   eighty (1 80) days prior to the   expiration of

the then current term.

 

                       The extended term shall be upon the same terms,   covenants

and    conditions   as the original   term of this   Lease.   In the event this Lease

is extended as aforesaid, a new Lease   Agreement for the term of such   extension

shall be unnecessary on such extension, this Lease constituting a present demise

for both the original   and the   extended   term.   Any   termination   of this Lease

during the Initial Term shall terminate all rights of extension hereunder.

 

         3.      RENT AND SECURITY   DEPOSIT.   Lessee   covenants,   stipulates   and

agrees to pay to Lessor as rent for the Leased Premises the following:

 

                3.1    Lessee shall pay to Lessor monthly rental   payments in the

         amount of $7,252.00 each.

 

                3.2    At the   conclusion   of each Lease Year   during the term of

         this Lease   Agreement   (the   "Adjustment   Date"),   the monthly   rent as

         specified   herein shall be adjusted   according to the following   terms.

         The   adjusted   rent   shall be based on the   percent   change   in the CPI

         published   by the   Bureau   of Labor   Statistics   of the   United   States

         Department of Labor for All Urban   Consumers,   U.S.   City   Average (All

         Cities)   for All Items with the index base being the   current   official

         base of 1982 - 1984 = 100 (hereafter   the "CPI").   The monthly rent due

         following   each   Adjustment   Date shall be increased by a percentage of

         tile initial rent determined by comparison of the CPI on the Adjustment

         Date to the CPI of the Base Month.   The "Base   Month",   for purposes of

         the rent adjustment provided herein shall be August, 2003. The adjusted

         rent shall be computed by creating a fraction, the denominator of which

         is the CPI for the Base Month.   The numerator of which shall be the CPI

         on the   Adjustment   Date.   This   fraction   shall be   multiplied   by the

         initial rent of $7,252.00 to determine the amount of the adjusted rent.

          The adjusted   monthly rent shall be the rent due   hereunder   during the

         next ensuing   Lease Year until the next   Adjustment   Date. In no event,

         however,   shall the amount of   adjusted   rent due be reduced   below the

         rent of $7,252.00 per month.

 

 

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                3.3    In the event that the CPI for the   Adjustment   Date is not

         published   or   not   available   on the   Adjustment   Date,   Lessee   shall

         continue   paying rent at the last   effective rate until the CPI for the

         Adjustment   Date   becomes   available.   At that   time the rent   shall be

         adjusted   as   provided   herein   and   Lessee   shall   pay to   Lessor   the

         difference   between the rent due under the proper   adjustment   from the

         Adjustment   Date to the date the adjusted   rent is   calculated   and the

         amount of rent actually paid during that period.

 

                3.4    In the event the   publication of the CPI identified   above

         is discontinued,   the parties hereto shall thereafter accept comparable

         statistics   on the   cost   of   living   as they   shall   be   computed   and

         published by an official   agency or   department of the United States of

          America or by a responsible   financial   entity of recognized   authority

         then to be selected by the parties hereto, making such revisions as the

         circumstances may require to carry out the intent of this paragraph.

 

                3.5    All monthly rental   payments shall be paid in advance with

         the first months lease   payments to be paid on or before August 1, 2003

         and all   subsequent   lease   payments   to be paid on the 1st day of each

         month during the term of this Lease Agreement.

 

                3.6    Lessee   has   pursuant   to the   terms   of the   Prior   Lease

         Agreement previously deposited with Lessor the sum of $3,000.00.   On or

         before August 1, 2003,   Lessee shall deposit with Lessor the additional

         amount of   $4,252.00   for a total   amount   on   deposit   with   Lessor of

         $7,252.00.   Such deposit   amount of $7,252.00   shall be deposited   with

         Lessor as security for the faithful performance by Lessee of all terms,

          provisions,   conditions and covenants   hereof upon the Lessee's part to

         be kept,   observed   and   performed,   and said sum shall be   returned to

         Lessee after the time fixed as the expiration of this Lease   Agreement;

         provided,   however,   Lessee shall have   faithfully   kept,   observed and

         performed   all the   terms,   provisions,   conditions   and   covenants   on

         Lessee's part to be kept and performed;   that in case of default on the

         part of Lessee to comply with the provisions hereof, said deposit shall

         be used first for the payment of   delinquent   rental,   secondly for the

         payment of costs and expenses incurred by Lessor in repairing damage to

         the Leased   Premises   occasioned by the tenancy,   and thirdly,   for the

         repair and renovation of the grounds,   occasioned by the default on the

         part of Lessee to comply with the terms   hereof.   Any surplus   over the

         amount deposited   hereof, in excess of the costs and expenses of Lessor

         in   repairing   damages   due to the fault or neglect of Lessee   shall be

         returned   to   Lessee.   In the   event   the   deposit   herein   made is not

         sufficient   to cover costs of such repair,   Lessee   agrees to forthwith

         pay to Lessor, or Lessor's agents,   the amount necessary over and above

         such deposit, to repair the Leased premises.

 

 

                                       3

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                3.7    In the event   Lessee is   delinquent   in paying   the rental

         payments or any other payments   required of Lessee herein all such past

         due payments   shall bear   interest at eighteen   percent (18%) per annum

         from the date of default until paid.

 

         4.      ASSIGNMENT OR SUBLEASING.   Lessee shall not assign, mortgage, or

encumber this Lease   Agreement,   nor sublet or permit the Leased Premises or any

part   thereof to be used by others for any   purpose,   without the prior   written

consent of Lessor being first obtained in each instance; provided, however, that

regardless   of any such   assignment or sublease,   Lessee shall remain   primarily

liable for the payment of the rent herein   reserved and for the   performance   of

all the other terms of this Lease Agreement   required to be performed by Lessee.

Lessor does hereby specifically   consent to the sublease of this Lease Agreement

by   Lessee to its   subsidiary,   International   Isotopes   Idaho,   Inc.   Provided,

however,   regardless of such sublease,   Lessee shall remain primarily liable for

the payment of the rent herein reserved and for the performance of all the other

terms of this Lease Agreement required to be performed by Lessee.

 

         5.      USAGE OF PREMISES AND COMPLIANCE WITH LAWS AND INSURANCE. Lessee

shall not use, nor permit the use of the Leased Premises,   for any other purpose

or purposes or under any other trade name without the prior   written   consent of

Lessor.   The Leased   Premises shall not be used for any unlawful   purpose during

the   term of this   Lease   Agreement,   and   Lessee   agrees   to   comply   with   all

restrictive   covenants   (including any further   covenants   which may be recorded

pertaining to the Premises) and all federal,   state, county and city ordinances,

laws and   regulations,   present or future,   affecting   the use of or the type of

business   to be   carried   on in the Leased   Premises.   Lessee   shall not use the

Leased   Premises in a manner   which shall   increase the rate of fire or extended

coverage   insurance on the building   situate on the Leased Premises over that in

effect prior to this Lease Agreement.   It is understood   that,   before Lessee or

any sublessee of Lessee can conduct   certain   operations on the Leased   Premises

contemplated   by Lessee,   a license to conduct such   operations   will need to be

obtained from the nuclear regulatory commission and other governmental agencies.

It is anticipated that in connection with the issuance of such licenses,   Lessee

will be required to obtain a surety bond insuring   against any damages caused to

the Leased Premises by hazardous   waste and materials.   Lessor shall be named as

an insured   party and   beneficiary   of any such   surety bond or   insurance.   THE

PROVISIONS   CONCERNING   HAZARDOUS   WASTE AND   MATERIAL   SET FORTH IN   APPENDIX 1

ATTACHED HERETO ARE INCORPORATED HEREIN BY REFERENCE AND ARE SPECIFICALLY MADE A

PART OF THIS LEASE AGREEMENT.

 

 

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<PAGE>

 

         6.      UTILITIES.   Lessee   shall   furnish   and timely pay for all heat,

gas,   electricity,   power, water, hot water,   lights,   telephone,   and all other

utilities   of every   type and   nature   whatsoever   used in or about   the   Leased

Premises at Lessee's own cost and   expense,   and shall indemnify   Lessor against

any liability on such account. Lessor shall be under no obligation to furnish or

pay for any of such utilities.

 

         7.      LESSOR'S   RIGHT OF ENTRY.   Lessor or their agents shall have the

right to enter the Leased   Premises at any reasonable time upon notice to Lessee

to examine the same and determine the state of repair or alteration   which shall

or may be necessary for the safety or preservation of the Leased Premises.

 

         8.      ALTERATIONS.   No   alteration,   addition,   or   improvement to the

Leased   Premises shall be made by Lessee without the written   consent of Lessor.

Any alteration,   addition or improvement made by Lessee after such consent shall

have been given, and any fixtures   installed as part thereof,   shall at Lessor's

option   become   the   property   of   Lessor   upon the   termination   of this   Lease

Agreement and be surrendered with the Leased Premises;   provided,   however, that

Lessor   shall   have the   right to   require   Lessee to remove   such   fixtures   at

Lessee's cost upon the termination of this Lease Agreement.   Upon the removal of

any -such   fixtures,   Lessee shall be required to promptly   repair any damage or

injury   done to the Leased   Premises   by such   removal   and   restore   the Leased

Premises to as good   condition   as the same are in at the time Lessee shall take

possession,   reasonable wear and tear excepted.   Lessee shall   indemnify   Lessor

against any   mechanic's or   materialman's   lien or other lien arising out of the

making of any alteration,   repair, addition, or improvement by Lessee, and shall

hold Lessor harmless of any such liens or claims,   including reasonable attorney

fees and costs that may be incurred in removing any such liens.

 

         9.      SIGNS.   Lessee shall not affix or maintain   upon the glass panes

or supports of the windows,   doors or the exterior walls of the Leased Premises,

any   signs,   advertising   placards,   names,   insignia,   trademarks,   descriptive

material or any other such like items   except as shall have first   received   the

written approval of Lessor as to the size, type, color,   location,   copy, nature

and display   qualities.   Lessee may,   upon   approval of Lessor,   have windows or

doors of the Leased Premises   painted,   or place decals thereon with the name of

Lessee,   Lessee's   address and business hours,   provided said painting or decals

are removed   upon   termination   or   vacation of the Leased   Premises at Lessee's

expense.

 

         10.     WASTE. Lessee shall not commit any waste or damage to the Leased

Premises hereby leased, nor permit any waste or damage to be done thereto.

 

 

 

                                       5

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         11.     PROTECTION   OF   PROPERTY.   Lessee   agrees to maintain the Leased

Premises in as good   condition   as the same is in at the time Lessee   shall take

possession of the Leased   Premises,   reasonable   wear and tear excepted.   At the

termination   of this Lease   Agreement in any manner   Lessee will   surrender   the

Leased   Premises to Lessor in the condition   above   described.   Damage to walls,

doors,   windows,   ceiling tiles and other parts of the Leased   Premises shall be

repaired and painted by Lessee at Lessee's sole cost and expense and returned in

good condition at the termination of this Lease Agreement and at the termination

of this Lease   Agreement   carpets   shall be   repaired   and   cleaned by Lessee at

Lessee's cost and expense. Upon the termination of this Lease Agreement,   Lessee

may   remove   any   signs   owned by   Lessee   from the   Leased   Premises,   promptly

repairing   any damage or injury done to the Leased   Premises by such removal and

restoring the Leased Premises to the condition above described.  

 

         12.     MAINTENANCE.   All maintenance   and repair   necessary to keep the

Leased Premises in good condition and repair shall be made at Lessee's sole cost

and expense,   including,   but not limited to, normal   maintenance and repairs to

the   furnace or any other   heating   or air   conditioning   equipment,   electrical

fixtures, all interior and exterior painting and decorating,   glass replacement,

plumbing   and sewer   repair,   and all other   repairs of every   kind,   nature and

description.   Lessee further agrees that all damage or injury done to the Leased

Premises by Lessee or by any person who may be in or upon the Leased Premises at

Lessee's   invitation or with Lessee's   permission shall be repaired by Lessee at

their sole cost and expense.

 

         13.     INSURANCE.

 

                13.1   Less