EQUIPMENT LEASE AGREEMENT
between the
UNIVERSITY OF NORTH TEXAS (UNT)
and
INTERNATIONAL ISOTOPES INC. (I3)
THIS AGREEMENT is entered into and by and between the University of North
Texas, P. O. Xxx 00000, Xxxxxx, Xxxxx, 0000-0000 (Lessor), and International
Isotopes Inc. (I(3)), 000 Xxxxx Xxx Xxxxxx, Xxxxxx, Xxxxx, 00000.
WITNESSETH:
WHEREAS, Lessor owns and has control over certain scientific and testing
equipment, all as described herein; and
WHEREAS, Lessee desires to use such equipment for its own purposes and to
provide commercial services to others;
NOW THEREFORE, for and in consideration of the premises hereof, and other
good and valuable consideration, the parties do hereby mutually agree as
follows:
LEASE OF EQUIPMENT
------------------
Lessor hereby leases, and Lessee hereby leases from Lessor, the equipment
item(s) and/or system(s) set forth in Schedule A, attached hereto and made a
part hereof (the "Leased Equipment"), upon the terms and conditions herein set
forth. Lessor and Lessee acknowledge that the Leased Equipment shall be used to
conduct chemical and analytical analyses and research on oil, gas, core samples,
oil field and refinery piping and production components and other materials for
which Lessee will contract with third parties.
Lessor and Lessee acknowledge and agree that Lessor may use the Leased
Equipment for non-commercial purposes at times when such equipment is not in
active use by Lessee or Lessee's Associates as stipulated below in the section
on LEASE PAYMENTS.
TERM OF LEASE
-------------
The lease term shall commence as of June 1, 1997, and continue in full
force and effect for a period of five (5) years unless otherwise terminated in
accordance with the provisions herein. Lessee may terminate this lease for
convenience at the end of any rental year provided that Lessee has given Lessor
sixty (60) days prior written notice of the intent to terminate and provided
further that all payments required by the section on LEASE PAYMENTS below are
current and paid. The Lessor may terminate the lease at the end of any rental
year, provided the Lessor has given the Lessee sixty (60) days prior written
notice of the intent to terminate.
LEASE PAYMENTS
--------------
A. Lessee hereby agrees to pay Lessor five (5) yearly rental payments of
Fifty Thousand Dollars ($50,000.00), totaling Two Hundred Fifty Thousand Dollars
($250,000.00) for the five years, beginning on June 1, 1997 and continuing for
the remainder of the lease term. Failure to make the first payment by June 2,
1997 or subsequent payments by June 2 of the applicable year shall be deemed a
material breach of this Lease and will allow Lessor to terminate this Lease at
its option. In case of a scheduling conflict where equipment cannot be obtained
by the University until after June 1, 1997, the first rental payment shall
provide Lessee with a right of first refusal to the use of the Leased Equipment
upon delivery to the University.
B. In addition to the lease payment above, Lessee further agrees to provide
support and operations personnel, analytical and research space, utilities
costs, maintenance and service costs and insurance. The Lessee further agrees to
pay Lessor two percent (2%) of the gross revenues or twenty percent (20%) of the
net margin, whichever is greater, from the commercial services
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of the Leased Equipment. Commercial services are defined as analytical
measurements done for a third party or for the company itself in its production
of radioisotopes.
C. The University of North Texas will receive lease payments from
International Isotopes Inc. (I(3)) of $50,000/year. In addition to the lease
payments, during the first two years of the lease, the Lessee will provide a
grant of $10,000 per year in in-kind services for access to the equipment by UNT
faculty, staff, post-doctoral research associates, and pre-doctoral students for
their research projects. This grant resolves past issues involving the use of
university facilities in the effort to establish an isotope production facility
in or near Denton, Texas and the University of North Texas. Should the $20,000
in in-kind services not be completely utilized during the first two years, it
shall carry forward until completely utilized. After two years, the university
will be responsible for any access charges for the equipment's use by UNT
faculty, staff, post-doctoral research associates, and pre-doctoral students in
their research projects. Charges for the use of the equipment will not exceed
normal and customary charges for using said equipment at other similar
facilities with the discount noted below.
D. Fees for equipment use will be based upon the particular party
ultimately receiving the information or analysis from the use of the equipment.
For corporate or outside parties, a competitive fee will be determined and
assessed for research and/or analysis using the equipment. For UNT faculty
research projects with outside parties or corporations, a reduced fee will be
assessed. For UNT faculty research projects that are internal research, a
minimum fee will be assessed based upon replacement of materials and supplies
and baseline operational expenses. To help insure that the priorities for use of
the equipment are set to reflect faculty availability, the equipment and
operators will be managed by the UNT Vice Xxxxxxx for Research.
International Isotopes Inc. personnel, other industrial users, and
University of North Texas
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personnel (faculty, staff, post-doctoral research associates, and pre-doctoral
student users of the equipment) will be required to exhibit operational
expertise with the equipment before use of the equipment will be permitted. This
expertise will be determined by the I(3) laboratory director for industrial
users and the UNT Vice Xxxxxxx for Research for university users. This will
reduce the maintenance expense and possible damage to the equipment and will
provide the maximum operating time and lifetime for the equipment.
INSURANCE
---------
Lessee shall insure the Leased Equipment for fire, theft and general
liability coverage during the period of this Lease Agreement, naming the
University of North Texas as co-insured. The dollar value of the property
coverage shall not be less than eighty percent (80%) of the replacement cost of
the equipment. In the event of damage or loss, any proceeds of such insurance
shall, at the option of Lessee, (a) be used to repair or replace the Leased
Equipment in good working order or (b) be transferred to Lessor. Should Lessee
transfer the proceeds to Lessor, Lessor shall refund that prorata portion of the
annual lease rental that Lessee prepaid but the Lessor had not utilized to date.
The general liability coverage shall be in the amount of one million dollars and
naming the University of North Texas as co-insured. Lessee shall provide Lessor
with an insurance binder prior to delivery of the equipment and any subsequent
time at the request of Lessor. Failure to maintain insurance or provide proof
thereon is a material breach of the contract and allows the Lessor to terminate
the contract and receive the equipment back from Lessee at the expense of
Lessee.
ALTERATIONS
-----------
Lessee is hereby given the right to make alterations, additions, or
improvements to the Leased Equipment, so long as the value of the equipment is
not materially reduced thereby.
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Lessor retains title to improvements in the Leased Equipment; however, software
and intellectual property improvements shall remain the property of Lessee as
covered by any applicable software license agreement.
MAINTENANCE AND REPAIR
----------------------
Lessee shall maintain the Leased Equipment in good repair at all times. All
maintenance and repair costs shall be the sole responsibility of Lessee, subject
to the section on GENERAL DUTIES OF LESSEE.
LOCATION
--------
Lessee shall not, without the prior written consent of Lessor, permit the
Leased Equipment to be removed from the State of Texas.
DISCLAIMER OF WARRANTIES
------------------------
LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS
TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR FITNESS FOR USE OF THE LEASED EQUIPMENT OR ANY PORTION THEREOF, OR
ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE LEASED EQUIPMENT OR ANY
PORTION THEREOF. LESEE ACCEPTS THE EQUIPMENT IN AN "AS IS" CONDITION.
LESSEE HEREBY ACKNOWLEDGES AND DECLARES THAT LESSEE IS SOLELY RESPONSIBLE
FOR THE APPLICATION, OPERATION AND MAINTENANCE OF THE LEASED EQUIPMENT BY
LESSEE, AND THAT LESSOR HAS NO RESPONSIBILITY THEREFOR AND THAT LESSEE ACCEPTS
EQUIPMENT, "AS IS" WITH ALL DEFECTS, IF ANY. IN NO EVENT SHALL LESSOR BE LIABLE
FOR ANY DIRECT OR INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES IN
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CONNECTION WITH OR ARISING OUT OF THE APPLICATION OR USE OF THE LEASED EQUIPMENT
BY LESSEE OR OTHERS, PRIVATELY OR COMMERCIALLY, OR BY THIS LEASE AGREEMENT OR
THE EXISTENCE, FURNISHING, FUNCTIONING OR USE BY LESSEE OF ANY ITEM, PRODUCT OR
SERVICE PROVIDED FOR HEREIN.
INDEMNIFICATION
---------------
LESSEE AGREES TO DEFEND, ASSUME THE COST OF DEFENSE, HOLD HARMLESS AND
INDEMNIFY LESSOR, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AN AGAINST ALL
LIABILITY AND EXPENSES (INCLUDING DEATH) TO ANY PERSON AND FROM ANY DAMAGES TO
THE PROPERTY OF OTHERS ARISING OUT OF THE ACTS OR OMISSIONS OF LESSEE'S
OFFICERS, AGENTS OR EMPLOYEES IN CONNECTION WITH THE WORK CARRIED OUT INVOLVING
THE LEASED EQUIPMENT. LESSEE SHALL TAKE ALL REASONABLE PRECAUTIONS IN THE
PERFORMANCE OF THE WORK INVOLVING THE LEASED EQUIPMENT TO PROTECT THE HEALTH AND
SAFETY OF ALL PERSONS AND TO MINIMIZE ALL HAZARDS TO LIFE AND PROPERTY.
GENERAL DUTIES OF LESSEE
------------------------
The parties agree that Lessee shall have primary use of the Leased
Equipment for the purpose of conducting commercial research, development and
testing activities. Lessee, at its sole discretion, shall repair said equipment
to the degree Lessee deems necessary to conduct said commercial research,
development and testing activities. Lessee agrees to maintain the Leased
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Equipment in its as leased condition along with any repairs or improvements
in accordance with normal practices. All costs resulting from operations,
maintenance and other actions of Lessee involving the Leased Equipment shall be
borne by Lessee, and all benefits derived from Lessee's actions using the
Leased Equipment shall inure to Lessee during the term of this Agreement and
then to Lessor
11. COMPLIANCE WITH LAW
-------------------
Lessee shall be solely responsible for compliance with all applicable
statutes, rules, orders, regulations and requirements of all governmental
authorities, now existing or hereinafter enacted, pertaining to Lessee actions
involving the Leased Equipment.
12. ASSIGNMENT AND SUBLEASE
-----------------------
Lessor shall not encumber its interest in the use of the Leased Equipment
and shall not sell or encumber its ownership of this lease during the term
hereof without the consent of Lessee. Without the prior written consent of
Lessor, Lessee shall not (a) assign or transfer this Lease Agreement, the Leased
Equipment or any part thereof, or (b) permit the Leased Equipment or any part
thereof to be used by anyone other than Lessee, except as provided herein, or
(c) encumber the leased equipment in any way.
13. NOTICES
-------
Any notice called for or permitted under the terms hereof may be given in
writing and sent by ordinary mail to the last address of the party to whom the
notice is to be given as designated by such party in writing. All notices must
include copies to UNT. Lessor hereby designates its address as:
Xxxxxxx X. Xxxxxx
Vice President for Finance and Business Affairs
University of North Texas
P.O. Box 13763, NT Station
Xxxxxx, Xxxxx 00000
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Lessee hereby designates its address as:
Xxxx X. Xxxxxx
President and Chief Executive Officer
International Isotopes, Incorporated
000 Xxxxx Xxx
Xxxxxx, Xxxxx 00000
STATE LAW AND VENUE
-------------------
This Agreement shall be construed in accordance with the laws of the State
of Texas and venue for any proceeding related to this Agreement shall lie in
Xxxxxx, Xxxxxx County, Texas.
BINDING OF HEIRS AND ASSIGNS
----------------------------
Subject to the provisions of this Lease Agreement against assignment of the
Lessor's and the Lessee's interests hereunder, all provisions of this Lease
Agreement shall extend to and bind, or inure to the benefit not only of the
parties hereto but to each and every on of the heirs, executors,
representatives, successors, and assigns of Lessor and Lessee.
INVALID CLAUSES
---------------
It is expressly agreed and understood by the parties hereto that if any
provision of this Lease Agreement is held to be invalid under any applicable
statute or rule of law, it is deemed to that extent to be omitted. However, the
balance of the Agreement shall remain in full force and effect.
ENTIRETY CLAUSE
---------------
This instrument and Schedule A attached hereto contain the entire agreement
between the parties relating to the rights herein granted and the obligations
herein assumed. Any oral representations or modifications concerning this
instrument shall be of no force or effect excepting a subsequent modification in
writing, signed by both parties.
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LEASE SUBJECT TO RECEIVING THE EQUIPMENT
----------------------------------------
This lease is subject to the Lessor receiving as a gift from Mobil R & D
Corporation the equipment described herein. Should the equipment not be donated
to the University by June 1, 1997, this lease is null and void and any payments
made by Lessee under this Lease will be returned to Lessee.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date of the last signature following.
UNIVERSITY OF NORTH TEXAS
/s/ Xxxxxxx X. Xxxxxx 5/29/97
----------------------------------------------- -----------------------------
Xxxxxxx X. Xxxxxx Date
Vice President for Finance and Business Affairs
INTERNATIONAL ISOTOPES INC.
/s/ Xxxx X. Xxxxxx 5/29/97
----------------------------------------------- -----------------------------
Xxxx X. Xxxxxx Date
President and Chief Executive Officer
