EXHIBIT 10.7
OPTION TO PURCHASE AND
RIGHT OF FIRST REFUSAL
THIS OPTION TO PURCHASE AND RIGHT OF FIRST REFUSAL is made and entered
into as of the 2nd day of May, 2003, by and between XXXXXX XXXX XXXXXXX and
XXXXXXX XXXXX 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") and an Option to Purchase and Right of First Refusal (the
"Prior Option to Purchase and Right of First Refusal) dated March 2: 2000, with
Xxxxx Xxxx, acting not individually but as Trustee of the Xxxxx Xxxx and Xxxxxx
Xxxx Living Trust created under Trust Agreement dated January 6, 1990, and any
amendments thereto ("Ball").
B. The interest of Ball in the Prior Lease Agreement and the Prior
Option to Purchase and Right of First Refusal was transferred by Ball to Lessor
in connection with the sale by Ball to Lessor of the following described
premises and all improvements located thereon situate in the County of
Bonneville, State of Idaho, to-wit (the "Leased Premises"):
Xxx 0, Xxxxx 0, Xx. Xxxx Xxxxxxxxxx Xxxx, Division No. 2,
according to the recorded plat thereof.
C. Lessee and Lessor are now entering into a New Lease Agreement
pertaining to the Leased Premises which shall have a term which commences on
August 1, 2003 (the "New lease Agreement"). In connection with the execution of
the New Lease Agreement, Lessor and Lessee have agreed to execute this Option to
Purchase and Right of First Refusal in substitution for the Prior Option to
Purchase and Right of First Refusal.
AGREEMENTS:
NOW, THEREFORE, in consideration of the lease of the Leased Premises by
Lessee, the mutual covenants set forth herein and for other good and valuable
consideration, the parties agree as follows:
1. This Option to Purchase and Right of First Refusal shall
substitute for the Prior Option to Purchase and Right of First Refusal and the
Prior to Option to Purchase and Right of First Refusal shall have no further
force and effect. The right of first refusal and option to purchase granted to
Lessee herein shall be in effect only until the expiration of the term of the
New Lease Agreement. The right of first refusal and option to purchase set forth
herein may not be exercised by Lessee if:
(a) Lessee or a sublessee of Lessee authorized by Lessor is
not in possession of the Leased Premises under the New Lease Agreement.
(b) Lessee is in default of any of the terms of the New Lease
Agreement.
2. Except as otherwise provided for herein, in the event Lessor
desires to sell, transfer or convey Lessor's interest in the Leased Premises, or
any portion thereof, Lessor shall have the right to sell, transfer or convey
Lessor's interest in the Leased Premises, or any portion thereof, only after
complying with the following requirements:
(a) Lessor shall forward to Lessee by certified mail, return
receipt requested, at 0000 Xxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxx 00000,
or to such other address as Lessee shall have provided to Lessor in
writing, written notice containing all of the terms and conditions on
which Lessor desires to give, sell, transfer or convey the Leased
Premises, or any portion thereof (the "Lessor's Notice of Transfer").
Said notice shall be deemed effective upon the date of its mailing.
(b) Upon mailing of Lessor's Notice of Transfer, Lessee shall
then have the option to purchase the interest of Lessor in the Leased
Premises, or such portion thereof, as is referred to in Lessor's Notice
of Transfer upon the same terms as set forth in such notice.
(c) Lessee may exercise its option to purchase by mailing its
written notice of exercise of option to Lessor within fifteen (15)
days from the date of mailing of the notice to Lessee. Such notice of
exercise of option shall be forwarded to Lessor by certified mail,
return receipt requested, at Xxxx Xxxxxx Xxx 00, Xxxxxxx, Xxxxx 00000,
or to such other address as may be designated in writing to Lessee by
Lessor. In the event Lessee exercises such option, then Lessee and
Lessor must, within fifteen (15) days after the exercise of such
option, enter into a binding written agreement for the transfer and/or
the purchase of the Leased Premises upon the same terms and conditions
set forth in Lessor's Notice of Transfer. Notwithstanding anything
contained in the New Lease Agreement to the contrary, if Lessee
exercises such option to purchase, then the term of the New Lease
Agreement shall expire on the day of closing of the sales transaction.
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(d) In the event that Lessee does not desire to exercise
Lessee's option to purchase, Lessee shall, within fifteen (15) days of
the mailing of Lessor's Notice of Transfer, mail by certified mail,
return receipt requested, to Xxxx Xxxxxx Xxx 00, Xxxxxxx, Xxxxx 00000,
or such other address as Lessor shall have provided to Lessee in
writing, Lessee's notice to Lessor that Lessee will not exercise said
option. If Lessee fails to provide such notice that Lessee will not
exercise such option, and Lessee does not exercise the option as
provided in paragraph 2(c), then Lessor is hereby empowered to record
Lessor's affidavit to the effect that Lessee did not timely exercise
said option, which affidavit shall be conclusive as against Lessee of
Lessee's failure to exercise such option. If Lessee fails to exercise
such option in the manner provided in paragraph 2(c) above, then Lessor
shall have the right to forthwith transfer or convey the Leased
Premises or any portion thereof free and clear of this right of first
refusal to whomsoever Lessor desires, provided that: (i) such sale,
transfer or conveyance is consummated within one hundred eighty (180)
days after the expiration of the time for Lessee to accept the offer,
(ii) such sale, transfer or conveyance is made in accordance with the
terms and conditions set out in Lessor's Notice of Transfer, and (iii)
the purchaser shall receive the Leased Premises subject to any
remaining rights and obligations Lessor and Lessee may have under the
New Lease Agreement. If Lessee fails to exercise such option in the
manner provided in paragraph 2(c) above, then in such event Lessor
shall have the right to forthwith transfer or convey the Leased
Premises or any portion thereof free and clear of the option to
purchase hereinafter set forth.
(e) Notwithstanding anything to the contrary herein, it is
specifically understood and agreed that this right of first refusal
shall not apply to any transfer, either with or without consideration,
or whether by will, agreement, operation of law or otherwise, by Lessor
to Immediate Family. "Immediate Family" means for purposes of this
paragraph, Xxxxxx Xxxx Xxxxxxx and Xxxxxxx Xxxxxxx, husband and wife,
the lineal descendants of Xxxxxx Xxxx Xxxxxxx and Xxxxxxx Xxxxxxx, the
spouses of any such lineal descendants and the trustees of any trusts
in which the beneficiaries of such trusts are any of the foregoing
mentioned parties. Any such transfer to Immediate Family shall be
subject, however, to the right of first refusal granted by this
Agreement, and the Immediate Family shall be bound to comply with this
right of first refusal and any subsequent transfer of the Leased
Premises or any portion thereof.
4. Subject to the termination of the option granted herein under
the conditions set forth in paragraph 2(d) above, Lessor grants unto Lessee the
exclusive right and option, if Lessee shall not be in default of any of the
terms of the New Lease Agreement, to purchase the Leased Premises and any
additions and improvements thereon, together with any improvements that may
have been made during the term of the New Lease Agreement, upon and subject to
the following terms and conditions:
(a) Said option shall be exercisable only prior to the
expiration of the term of the New Lease Agreement.
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(b) To exercise this option, Lessee shall deliver to Lessor
written notification of the date upon which Lessor is prepared to
purchase and close the transaction upon the terms provided herein;
provided, however, that Lessor shall be given at least thirty (30) days
notice of the date of such closing.
(c) Within sixty (60) days after giving written notice of
Lessee's intent to exercise the option to purchase, Lessee shall
purchase the Leased Premises and the closing to complete such purchase
shall be completed within said sixty (60) day period.
(d) If Lessee properly exercises the option to purchase set
forth herein, the Leased Premises shall be sold to Lessee by Lessor and
Lessee shall purchase the Leased Premises pursuant to the following
terms and provisions:
(i) For purposes of this subparagraph the term "CPI"
shall refer to 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. If Lessee properly exercises the option to purchase prior
to the expiration of the initial five (5) year term of the New
Lease Agreement, the purchase price shall be computed as
follows: a fraction shall be created, the denominator of which
is the CPI for March, 2003, and the numerator of which shall be
the CPI on the last day of the month prior to the date of
closing. This fraction then shall be multiplied by $709,587.00.
The purchase price shall be the higher of: (i) $709,587.00 or
(ii) the amount which is arrived at my multiplying $709,587.00
by the above referred to fraction.
(ii) If Lessee exercises the option to purchase set forth
herein after the expiration of the initial five (5) year term of
the New Lease Agreement, the purchase price of the Leased
Premises shall be the fair market value of the Leased Premises
at the time Lessee exercises the option to purchase. If Lessee
and Lessor cannot agree upon the fair market value of the Leased
Premises, the Leased Premises shall be appraised. If Lessee and
Lessor cannot agree on an appraiser, they shall each appoint an
appraiser. If the two (2) appraisers cannot agree upon the fair
market value of the Leased Premises, they shall appoint a third
appraiser, and the decision of a majority of the three (3)
appraisers shall be binding on all parties. The cost of the
appraisal shall be shared equally by the Lessor and the Lessee.
(iii) At closing, Lessor shall execute a Grant Deed and
deliver such Grant Deed to Lessee for recording which such Grant
Deed shall transfer title to the Leased Premises to Lessee. The
Leased Premises shall be transferred to Lessee subject to all
existing easements or claims of easements, patent reservations,
rights-of-way, protective covenants, zoning ordinance, and
applicable building codes, laws and regulations, encroachments,
overlaps, boundary line disputes and other matters which would
be disclosed by an accurate survey or inspection of the Leased
Premises.
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(iv) Lessee is responsible for payment of all taxes and
assessments accruing on the Leased Premises during the term of
the New Lease Agreement between Lessee and Lessor. In addition,
Lessee shall pay all taxes and assessments levied upon the
Leased Premises from and after the date of closing before the
same become delinquent.
(v) Lessor shall provide to Lessee at the time of
closing at Lessee's cost a standard form owners title insurance
policy in the amount of the purchase price insuring title to the
Leased Premises in Lessee, free and clear of any lien or
encumbrance, excepting any lien or encumbrance that may have
attached by reason of any act, deed or omission of Lessee and
excepting the usual printed exceptions contained in such
policies of title insurance, and taxes and assessments for the
current year.
(vi) The Leased Premises shall be transferred to Lessee
"as is" and Lessee understands that Lessor makes no warranties
in regard to the Leased Premises, express or implied, except any
warranties of title that may be otherwise contained in the Grant
Deed from Lessor to Lessee.
(vii) Notwithstanding anything contained in the New Lease
Agreement to the contrary, if Lessee exercises the option to
purchase set forth herein, the term of the New Lease Agreement
shall expire on the day of closing of the sales transaction. The
closing on the sale of the transaction shall be handled by
Bonneville Land & Title Company, and Lessor and Lessee shall
each pay one-half (1/2) of the closing costs charged by
Bonneville Land & Title Company. Lessee shall be responsible to
pay any and all costs incurred in connection with any loan which
may be obtained by Lessee in connection with the purchase of the
Leased Premises, including, but not limited to, loan document
preparation fees, tax service fees, appraisal fees and loan
origination fees.
5. This Agreement shall inure to the benefit of and be binding upon
the heirs, successors and assigns of the parties hereto.
6. Should either party default in the performance of any of the
covenants or agreements contained herein, such defaulting party shall pay to the
other party all costs and expenses, including, but not limited to, a reasonable
attorney fee, including such fees on appeal, which the offended party may incur
in enforcing this Agreement or in pursuing any remedy allowed by law for breach
hereof, whether such is incurred by the filing of suit or otherwise.
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IN WITNESS WHEREOF, the parties have hereunto set their hands the day
and year first above written.
LESSOR:
/S/ Xxxxxx Xxxx Xxxxxxx
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Xxxxxx Xxxx Xxxxxxx
LESSEE:
INTERNATIONAL ISOTOPES, INC.
By: /S/ Xxxxx X. Xxxxxx
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Its: President & CEO
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