Date of Grant:
Name of Optionee:
Number of Shares:         _______________ shares of Common Stock
Price Per Share:          $ ______ per share

International Isotopes Inc., a Texas corporation (the "Company"), hereby grants to the above-named optionee (the "Optionee") an option (the "Option") to purchase from the Company, for the price per share set forth above, the number of shares of Common Stock (the "Stock"), of the Company set forth above. This Option is granted pursuant to, and is subject to, the provisions of the International Isotopes Inc. 2002 Long-Term Incentive Plan, as amended from time to time. This Option is intended by the parties hereto to be an "incentive stock option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").

The terms and conditions of the Option granted hereby are as follows:

1. The price at which each share of Stock subject to this Option may be purchased shall be the price set forth above, subject to any adjustments that may be made pursuant to Section 10 hereof.

2. This Option may be exercised only to the extent that such Option is vested, subject to the provisions of Sections 8 and 9 hereof. This Option shall vest upon the Optionee's completion of a continuous period of satisfactory service as an Employee of the Company or one of its subsidiary corporations, in accordance with the following vesting table:

VESTING DATES                           NO. OF SHARES VESTED
-------------------                     --------------------

[at time of grant]                      25%
[after one year]                        50%
[after two years]                       75%
[after three years]                     100%

3. Except as provided in Section 8 hereof, this Option may not be exercised unless the Optionee is in the employ of the Company or one of its subsidiary corporations (within the meaning of Section 424(f) of the Code, and each individually referred to herein as a "Subsidiary") at the time of such exercise. Unless earlier terminated in accordance with its terms, this Option shall terminate in all events on date that is 10 years after date of grant (the "Expiration Date").

4. The Optionee (or his representative, guardian, devisee, or heir, as applicable) may exercise any portion of this Option that has become exercisable in accordance with the terms hereof as to all or any of the shares of Stock then available for purchase by delivering to the Company written notice specifying:

(i) the number of whole shares of Stock to be purchased together with payment in full of the aggregate option price of such shares, provided that this Option may not be exercised for less than fifty (50) shares of Stock or the number of shares of Stock remaining subject to this Option, whichever is smaller;

(ii) the address to which dividends, notices, reports, etc. are to be sent; and

(iii) the Optionee's social security number.

Payment shall be in cash, or by certified or cashier's check payable to the order of the Company, free from all collection charges, by delivery of shares of Common Stock already owned by the Optionee and having a fair market value equal to the aggregate Option Price, or by a combination of cash and shares of Common Stock. The Optionee shall not be entitled to any rights and privileges as a shareholder of the Company in respect of any shares of Stock covered by this Option until such shares of Stock shall have been paid for in full and issued to the Optionee.

5. As soon as practicable after the Company receives payment for shares of Stock covered by this Option, it shall deliver a certificate or certificates representing the shares of Stock so purchased to the Optionee. Such certificate shall be registered in the name of the Optionee. Optionee understands and agrees that the Company shall cause the legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by state or federal securities laws at the time of the issuance of the Shares:

THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR THE ISSUER OF THE SHARES (THE "ISSUER") HAS RECEIVED AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT.

Optionee agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate "stop transfer" instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

6. This Option is personal to the Optionee and during the Optionee's lifetime may be exercised only by the Optionee or his guardian or representative. This Option shall not be transferable other than by will or the laws of descent and distribution, or pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder.

7. If the Optionee's employment with the Company or any Subsidiary shall terminate by reason of his death or disability, then the Optionee or his personal representative shall have the right to exercise any vested portion of this Option for a period of one (1) year following the date of termination, or if earlier, until the Expiration Date of the Option. If the Optionee's employment with the Company or any Subsidiary shall terminate for any other reason, then the Optionee shall have the right to exercise any vested portion of this Option for a period of ninety (90) days following the date of termination, or if earlier, until the Expiration Date of the Option.

8. This Option does not confer on the Optionee any right to continue in the employ of the Company or any Subsidiary or interfere in any way with the right of the Company or any Subsidiary to determine the terms of the Optionee's employment.

9. All interpretations or determinations of the Board of Directors with respect to this Option shall be binding and conclusive upon the Optionee and his legal representatives with respect to any question arising hereunder. Any powers, rights, or responsibilities of the Company's Board of Directors set forth herein may be delegated to and exercised by the Compensation Committee thereof.

10. In the event of any change in the outstanding shares of stock of the Company by reason of any stock dividend, stock split, spinoff, recapitalization, merger, consolidation, combination, exchange of shares or other similar change, the aggregate number of shares of stock covered by the Option and/the purchase price under the Option, shall be equitably adjusted by the Board in its sole discretion.

11. If, while the Option is outstanding, there shall occur (a) a merger or consolidation of the Company with or into another corporation in which the Company shall not be the surviving corporation, (b) a dissolution of the Company, or (c) a transfer of all or substantially all of the assets of the Company in one transaction or a series of related transactions to one or more other persons or entities, then, if provision is not otherwise made in writing in connection with such transaction for the substitution of securities of another corporation, and without the necessity of any action by the Board of Directors, the Option shall terminate, but the Optionee shall be entitled, immediately prior to the effective date of such transaction, to purchase the number of shares that are then vested and exercisable. The unexercised portion of the Option shall be terminated as of the effective date of such transaction.

12. All notices hereunder to the parties to this Incentive Stock Option Agreement shall be delivered or mailed to the following addresses:

If to the Company:       International Isotopes Inc.
                         4137 Commerce Circle
                         Idaho Falls, ID 83401

If to the Optionee:      ___________________________
                         ___________________________
                         ___________________________

Such addresses for the service of notices may be changed at any time provided notice of such change is furnished in advance to the other party.

13. This Incentive Stock Option Agreement shall be governed by and construed in accordance with the laws of the State of Texas without application of the conflict of laws principles thereof, except to the extent preempted by federal law, which shall govern to such extent.

IN WITNESS WHEREOF, the undersigned have caused this Incentive Stock Option Agreement to be duly executed as of the date first above written.

INTERNATIONAL ISOTOPES INC.

By: ________________________

Name: ______________________

Title: _____________________

OPTIONEE:

EXHIBIT 10.4

SUMMARY OF

INTERNATIONAL ISOTOPES INC.
EMPLOYEE STOCK PURCHASE PLAN

This Summary relates to an aggregate of up to 2,000,000 shares of common stock of International Isotopes Inc. offered pursuant to the International Isotopes Inc. Employee Stock Purchase Plan ("Plan"). This Summary sets forth certain information relating to the Plan. If there are any inconsistencies between this Summary and the Plan, the Plan will control.

No person is authorized to give any information or to make any representation not contained in this Summary, and, if given or made, such information or representation should not be relied upon as having been authorized by the Company. This Summary does not constitute an offer to sell, or a solicitation of an offer to purchase the securities offered by this Summary in any jurisdiction in which, or to or from any person to or from whom, it is unlawful to make such an offer, or solicitation of an offer. Neither the delivery of this Summary nor any distribution of the securities offered pursuant to this Summary shall, under any circumstances, create any implication that there has been no change in the information set forth herein or in the affairs of the Company since the date of this Summary or that the information herein is correct as of any time subsequent to its date.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS SUMMARY. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THIS DOCUMENT CONSTITUTES PART OF A
PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

The date of this Summary is December 15, 2004

TABLE OF CONTENTS

Page

THE COMPANY..........................................................1

DESCRIPTION OF THE PLAN..............................................1

   Eligibility and Enrollment........................................2

   Payroll Contributions.............................................2

   Stock Purchases and Sales.........................................4

   Taxes.............................................................6

   Stockholder Rights...............................................10

   Plan Administration and General Plan Provisions..................11

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.....................12

THE COMPANY

International Isotopes Inc., a Texas corporation, is the issuer of the securities under the International Isotopes Inc. Employee Stock Purchase Plan described below. The term "Company" used in this Summary includes International Isotopes Inc. as well as any subsidiary of the Company designated by the Committee described below to participate in the Plan. The Company's executive offices are located at 4137 Commerce Circle, Idaho Falls, Idaho 83401, and the telephone number is (208) 524-5300.

DESCRIPTION OF THE PLAN

The Company established the Plan to provide eligible employees of the Company with an opportunity to purchase shares of common stock of International Isotopes Inc. ("Shares") through payroll contributions. These contributions are used at the end of an offering period to purchase Shares at a discount from the current market price.

The Plan was authorized by the Company's Board of Directors on September 30, 2004, subject to stockholder approval. The stockholders will be asked to approve the Plan at the stockholder annual meeting in 2005. If stockholder approval is not obtained, any payroll contributions deducted for the Plan will be returned.

The Plan is intended to qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code of 1986, as amended ("Code"), and the provisions of the Plan will be construed accordingly. The Plan is not intended to be a qualified plan under Section 401(a) of the Code and is not subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended.

The Plan is administered by the Compensation Committee or any other committee appointed by the Board to administer the Plan ("Committee"). You may contact the Committee at: Compensation Committee, 4137 Commerce Circle, Idaho Falls, Idaho 83401.

Additional information concerning the Plan and its administrators will be furnished upon request directed to the Chief Executive Officer of the Company at 4137 Commerce Circle, Idaho Falls, Idaho 83401, and the telephone number is
(208) 524-5300.

A summary of the major features of the Plan is set forth below in question and answer format:

Eligibility and Enrollment

Am I eligible to participate in the Plan?

You are eligible to participate in the Plan if you are an employee whose customary employment is more than 20 hours per week and more than 5 months per calendar year.

When may I enroll?

If you are an eligible employee before the first day of an offering period, you may begin participating on the first day of such offering period if you enroll in the Plan during the enrollment period for that offering period. The Committee determines the enrollment period. An enrollment period generally will end approximately two weeks before the first day of the offering period. You may not begin participating in an offering period if the enrollment period for that offering period has passed and you had not enrolled.

Does my enrollment carry over for future offering periods?

Yes. Once you have enrolled for one offering period, you will be re-enrolled automatically for future Plan offering periods at the same percentage unless:

o you actually elect not to contribute or elect a different contribution percentage during the enrollment period for such future offering period, or

o you suspended your contributions or withdrew during an offering period. (See discussion under "Can I change or stop my contributions during an offering period?" on page 3.)

Payroll Contributions

How much of my paycheck can I contribute?

You may authorize after-tax payroll contributions to the Plan of from 1 percent to 15 percent of your eligible pay (unless otherwise specified by the Committee). Your eligible pay

o includes your base salary, commissions, overtime pay and bonuses paid to you by the Company; and

o excludes reimbursements, allowances, disability pay not paid by the Company, severance payments, equity compensation and gain from stock option exercises.

Your percentage of eligible pay is determined before deductions such as 401(k) or other benefit contributions.

Under IRS rules, you generally may not purchase during any one calendar year more than $25,000 worth of Shares based on their fair market value on the first trading day of the offering period.

When do my payroll contributions begin?

Payroll contributions begin with the first paycheck following the first day of the offering period for which you are enrolling and continue at the same rate for future offering periods until you stop participating in the Plan. Contributions will not be prorated when the beginning or end of an offering period falls within a pay cycle. Payroll contributions from a paycheck will be for the offering period during which the paycheck was issued.

Can I change or stop my contributions during an offering period?

You may choose to change the percentage of your contributions or suspend contributions (elect 0 percent contribution) only once during any offering period. You may also withdraw from the Plan and have your contributions refunded to you.

o Change or Suspend - You may change or suspend your contributions in accordance with procedures determined by the Committee. If you suspend contributions, your contributions will be used to purchase Shares at the end of the offering period. Once you suspend contributions to the Plan, you will not be eligible to make further contributions until the next offering period. Once you change the percentage of your contributions, you will not be eligible to make further changes to your contributions percentage until the next offering period.

o Withdraw - Your accumulated contributions may also be withdrawn and refunded to you any time prior to 30 days before the end of an offering period (or such other period determined by the Committee). If you choose to withdraw from the Plan, you will not be eligible to make contributions to the Plan until the next offering period. No interest is paid on your contributions in the Plan. Refunds will be made through payroll as soon as practicable following your election to withdraw.

Of course, you will still own the Shares you have previously purchased under the Plan. Even if you stop contributing, you may re-enroll for any future offering period in which you are eligible to participate by enrolling during the applicable enrollment period for such future offering period.

How do I start making contributions again to the Plan?

Enroll during the enrollment period for a future offering period.

Do my payroll contributions earn interest?

No. Your contributions do not earn interest.

What happens to my payroll contributions?

Although a record is made of all your Plan payroll contributions, no separate account will actually be established to hold them. Instead, all payroll contributions received by the Company will be held without interest and may be integrated into the Company's general assets and used by the Company for any corporate purpose.

Can I make additional non-payroll contributions?

No. Contributions can only be made through payroll deductions.

Stock Purchases and Sales

What is an "offering period"?

o An offering period is a 3-month period or such other period determined by the Committee.

What is a "purchase date"?

A "purchase date" is the last trading day of the offering period, when Shares are purchased with your accumulated payroll contributions. On the purchase date, the total amount of payroll contributions credited to you during the offering period will be used to purchase whole Shares at the discount price.

When are my Shares purchased?

The Plan will purchase Shares for you on the last trading day of the offering period. The number of Shares purchased for you will be determined by how much money you have contributed by the purchase date and by the purchase price. Your contributions will be used to purchase as many whole Shares as possible. Any cash remaining will be added to your contributions for the next offering period. If you do not participate in the next offering period, excess cash will be refunded to you.

What is the purchase price of Shares?

At the end of each offering period, the fair market value of Shares on the purchase date is compared with the fair market value of Shares on the first day of the offering period. The price you pay for the Shares - called the "purchase price" - is 15% less than the lower of these two prices. You will always pay less than the current market price.

Example: When the share price goes up

Price on first trading day of offering period: $.20

Price on purchase date: $.25

What you pay: $.20 - 15% ($.03) = $.17

Example: When the share price goes down

Price on first trading day of offering period: $.20

Price on purchase date: $.15

What you pay: $.15 - 15% ($.0225) = $.1275

How is the fair market value of Shares determined?

"Fair market value" is the closing sales price per Share on the date in question as quoted on the OTC Bulletin Board.

Are there any limitations on the number of Shares I may purchase?

Yes. The following limitations apply:

o The total number of Shares available for purchase by all Plan participants is 2,000,000 Shares (subject to adjustment as discussed in "What happens if there is a change in the Company's capital structure?" on page 11).

o During any one calendar year, you generally may not purchase more than $25,000 worth of Shares based on the fair market value on the first trading day of an offering period. (Special rules apply to the calculation of this limit when the offering period spans two calendar years.)

o You may not purchase Shares in the Plan if you own 5% or more of the total voting power or value of all classes of stock of the Company or any parent or subsidiary corporation. (For purposes of determining 5% ownership, certain attribution rules apply and Shares which you may purchase under outstanding options are treated as owned by you.)

Any payroll contributions collected from you that cannot be applied to the purchase of Shares because of one or more of these limitations will be refunded.

Where do my Shares of stock go after they are purchased?

As soon as practicable after each three-month purchase date, your account at a designated broker will be credited with the Shares purchased on your behalf. No stock certificates will be issued.

Will I receive a statement indicating the amount and status of my account?

Yes. After each purchase date, you will receive a statement indicating the number of Shares purchased for you on the purchase date. After the end of each calendar year, you will also receive a statement regarding the contributions you made during the year and the number of Shares purchased for you during the year:

When can I sell my purchased Shares?

After the close of an offering period, Shares you purchased are deposited into a designated brokerage account as soon as administratively practicable. Subject to the Company's insider trading policies, you may sell your Shares as soon as this deposit is complete.

If Shares are disposed of in a disposition that does not satisfy the holding period requirements of Section 423 of the Code (generally, as discussed below, two years from the beginning of the applicable offering period), the Company must be notified. If you transfer your Shares from the designated brokerage account and then sell your Shares, you must notify the Company.

Federal income tax treatment of the sale proceeds will be more favorable if you hold your Shares for a certain period of time before selling them. Because of possible tax consequences, we suggest that you consult a tax advisor before you sell your Shares. (See "Taxes" on pages 6-10 for some general tax information.)

What happens if I leave the Company?

If you leave the Company, your contributions end automatically upon your termination of employment with the Company and your accumulated contributions for that offering period shall be returned. No interest is paid on your contributions to the Plan. The Shares you have already purchased through the Plan will remain yours after termination of your employment.

What happens if I take a leave of absence?

Depending on the length of the leave of absence, your participation may be terminated.

Taxes

The United States federal tax laws are technical and complex whereas the discussion herein is in general terms and relates solely to the regular United States income tax and not to the alternative minimum income tax, state, foreign or other income taxes or gift, estate or inheritance taxes unless specifically noted to the contrary. The following discussion is not a tax opinion and is not tax advice, but is merely a guide to assist employees and their advisers. Furthermore, the tax laws are subject to change (even retroactively) by legislation, administrative rulings and regulations, and judicial decisions. EMPLOYEES SHOULD CONSULT THEIR OWN TAX ADVISERS AS TO THE TAX CONSEQUENCES TO THEM OF THE PLAN.

The Plan is intended to qualify for favorable tax treatment under the Code. The favorable tax benefit is the deferral of taxable income related to the 15% discount. This amount will be deferred until the time you sell the Shares purchased through the Plan. Since the Plan provides you the opportunity to buy Shares at a discount, that discount is usually considered compensation income. If the Plan had not been designed to qualify for favorable tax treatment, that discount would be taxable to you at the time you purchase the Shares. Again, due to the favorable tax treatment, you generally will not have any income related to the discount until you sell the Shares.

The Plan allows you to purchase Shares with after-tax dollars at a 15% discount. The character of the income resulting from a sale of Shares is very important in determining your ultimate tax liability. The tax laws generally provide more favorable tax treatment when you hold the Shares for at least 21 months after the purchase date.

Will I have taxable income because I become a Plan participant or when Shares of Company common stock are purchased in my name?

Payroll contributions deducted from your pay for the Plan will be subject to federal income and employment taxes just as though such amounts were paid to you in cash.

The Plan is intended to be an "employee stock purchase plan" within the meaning of Code Section 423. Under such an employee stock purchase plan, no additional income will be recognized by you either at the time purchase rights are granted pursuant to the Plan or at the time you purchase Shares pursuant to the Plan.

When will I be subject to federal income tax on the purchased Shares?

You will have taxable income in the year in which there is a "disposition" of the purchased Shares. "Disposition" generally includes any transfer of legal title, including a transfer by sale, exchange or gift, but does not include a transfer to your spouse or a transfer into a joint ownership with right of survivorship if you remain one of the joint owners.

How is the federal income tax liability determined?

Your federal income tax liability will depend on whether you held the Shares for at least two years after the first day of the offering period for the Shares and at least one year after the Shares were acquired under the Plan ("Holding Period"). With 3-month offering periods under the Plan, you will meet the Holding Period if you do not dispose of the Shares for at least 21 months after the purchase date.

What if I sell or otherwise transfer my Shares before meeting the Holding Period requirement?

You will recognize ordinary income in the year of the disposition equal to the amount by which the market price of the Shares on the purchase date exceeded the purchase price. The amount of ordinary income will be added to your basis in the Shares, and any resulting gain or loss recognized upon the disposition will be a capital gain or loss. The capital gain or loss will be long term if the Shares are held for more than one year.

The Company will report the amount of ordinary income you recognize on your W-2 form for the year of the disposition.

Example: In September, 2005, you purchased Shares at $.17/Share when the market prices were $.25/share. In June, 2006, when the market price was $.17/Share, you sold the Shares within the two-year Holding Period.

Even though you had no gain on this sale, the income tax treatment would be:

Ordinary Income Per Share:

Market price on the purchase date in September, 2005 ($.25/Share) - Purchase price ($.17/Share) = $.08/Share

Short-Term Capital Loss Per Share:

Selling price ($.17/Share) - Your adjusted basis ($.17/Share purchase price + $.08/Share ordinary income = $.25/Share) = $.08/Share

In contrast, if you had held the Shares for the Holding Period, you would recognize no income.

What if I sell or otherwise transfer my Shares after meeting the Holding Period requirement?

You will realize ordinary income in the year of the sale or transfer equal to the lesser of (1) the amount by which the market price of the Shares on the first trading day of the offering period during which such Shares were purchased exceeds the purchase price, or (2) the amount by which the Shares' market price on the disposition date exceeds the purchase price. This amount of ordinary income will be added to your basis in the Shares, and any additional gain recognized upon the disposition will be a long-term capital gain. If the Shares' market price on the disposition date is less than the purchase price you paid for the Shares, there will be no ordinary income, and any loss recognized will be a long-term capital loss.

Example: On the first trading day of the offering period (July 1, 2005), the market price of a Share was $.20/Share. On the September 30, 2005 exercise date, you purchased Shares at $.17/Share when the market price was $.25/Share. In December of 2007, you sell the Shares for $.30/Share in a disposition meeting the Holding Period.

The income tax treatment of your $.13 gain/Share will be:

Ordinary Income Per Share is the Lower of:

o Shares' market price on the first day of the offering period ($.20) over the purchase price ($.17) = $.03/per Share.

o the excess of the Shares' market price on the date of the disposition ($.30/Share) over the purchase price ($.17/Share) = $.13/Share.

Therefore, Ordinary Income per Share is $.03.

Long-Term Capital Gain Per Share:

Selling price - (Your purchase price + ordinary income) [$.30 - ($.17 + $.03)] = $.10/Share.

In contrast, if you had disposed of the Shares before meeting the Holding Period, you would have ordinary income per Share of $.08 ($.25 - $.17) and long-term capital gain per Share of $.05 [$.30 - ($.17 + $.08)].

Are there special rules if I purchase Shares on a purchase date ending more than three months after my termination of employment?

Yes. To get the special tax treatment described above for employee stock purchase plans, you must be employed by the Company within three months of the purchase date. Generally, your participation in the Plan ends upon your termination of employment and contributions for the period are returned to you and no Shares are purchased for the period. However, if your employment terminates (other than because of death) more than three months before the end of an offering period and Shares are purchased at the next purchase date with payroll contributions prior to your termination of employment, the discount from the Shares' market value on the purchase date will be treated as ordinary income to you and subject to income tax withholding.

What if I die before disposing of my Shares?

Your estate must report as ordinary income in the year you die the lesser of (1) the amount by which the Shares' market price on the date of your death exceeds the purchase price paid for such Shares or (2) the amount by which the market price of the Shares on the first trading day of the offering period during which those Shares were purchased exceeds the purchase price paid for such Shares.

Is there income tax withholding if I dispose of my Shares before the Holding Period is met?

No. The IRS does not require the Company to withhold income taxes on the sale of any Shares acquired pursuant to the Plan (except as set forth in "Are there special rules if I purchase Shares on a purchase date ending more than three months after my termination of employment?" above). Because no income taxes will be withheld, you are responsible for paying any tax due and should evaluate whether you need to adjust your regular payroll withholding or make an estimated federal or state income tax payment. Failure to do this could result in the imposition of penalties and interest upon the filing of your tax returns.

Are there FICA and FUTA taxes applicable to the discount from market value on Share purchases pursuant to the Plan?

No. The IRS does not assess FICA and FUTA taxes on the discount from market value when Shares are purchased pursuant to the Plan.

What if the Company is required to withhold taxes?

If the Company is required to withhold taxes with respect to purchases or sales of Shares under the Plan, the Company may require you to pay such taxes to the Company or the Company may deduct such amounts from your wages.

What are the federal tax consequences to the Company?

The Company can take a federal income tax deduction only if the purchased Shares are sold before the Holding Period is met. The Company generally can take a deduction equal to the amount of ordinary income you recognize upon such disposition prior to the end of the Holding Period.

EACH EMPLOYEE SHOULD CONSULT HIS OR HER OWN TAX ADVISER AS TO FEDERAL AND OTHER TAX CONSEQUENCES WHICH MAY ARISE WITH RESPECT TO PARTICIPATION IN THE PLAN AND SHARES RECEIVED PURSUANT TO THE PLAN.

Stockholder Rights

When do I receive rights as a stockholder?

Once Shares are purchased for you, you will have the rights of a stockholder with respect to those Shares, including voting rights. This means that as long as you hold Shares you will receive the same information that all other shareholders receive. You will also be entitled to vote on matters submitted to the company's stockholders.

What happens to any dividends?

If dividends on Shares are ever paid, such dividends would be deposited into your brokerage account holding such Shares.

Can I assign or transfer my rights to purchase Shares under the Plan?

No. Your Plan purchase rights cannot be assigned or transferred to anyone else, except by will or the laws of inheritance following your death.

Are there any restrictions on my ability to sell Shares?

All employees are subject to the Company's insider trading policy. The Committee may impose additional restrictions or limitations on the sale of Shares purchased under the Plan.

What additional restrictions apply if I become an "affiliate" or "Section 16 insider"?

Only a few members of top management are "affiliates" or "Section 16 insiders." In general, Rule 144 of the Securities Act of 1933 and Section 16 of the Securities Exchange Act of 1934 restrict the transfer of stock by "affiliates" of the Company and "Section 16 insiders," as defined in those sections. If you become an affiliate or Section 16 insider, you may become subject to, among other rules, special notice requirements, limits on the number of Shares you can sell and the short-swing profit rules of Section 16.

Does participating in the Plan affect the terms of my employment?

Participating in the Plan does not provide you with any right to continued employment at the Company, and your employment may be terminated at any time for any reason.

Plan Administration and General Plan Provisions

Who administers the Plan?

The Plan is administered by the Committee. The Board determines the Committee.

The Committee has the full and exclusive discretionary authority to construe and interpret the Plan and the rights granted under it, to designate from time to time which subsidiaries of the Company shall participate in the Plan, to establish rules and regulations for the administration of the Plan and to amend the Plan to satisfy applicable laws, to obtain any exemption under such laws or to reduce or eliminate any unfavorable accounting consequences.

You should address any inquiries you may have to the Committee at the Company's executive offices in Idaho Falls.

Who pays for the brokerage commissions and record keeping costs associated with the Plan?

The Company pays for the administrative costs as well as any fees associated with the purchase of Shares under the Plan. You will pay brokerage fees and any costs associated with the sale of your Shares when you decide to sell the Shares.

What is the total number of Shares that may be issued under the Plan?

No more than 2,000,000 Shares may be issued as part of the Plan (subject to adjustment as discussed in "What happens if there's a change in the Company's capital structure?" below).

What happens if there is a change in the Company's capital structure?

If there is any increase or decrease in the number of Shares resulting from a stock split, reverse stock split, stock dividend, extraordinary cash dividend, combination or reclassification of Shares or recapitalization, reorganization, consolidation, split-up, spin-off or any other increase or decrease in the number of Shares affected without receipt of consideration by the Company, the Plan provides for adjustment of the number of Shares which may be granted under the Plan as well as the purchase price per Share and the number of Shares covered by each purchase right.

What happens if there is a sale of the Company or other significant corporate event?

In the event of a proposed sale of the Company, outstanding rights to purchase Shares will be assumed or an equivalent right to purchase shares substituted by the successor corporation or a parent or affiliate of the successor corporation. If the successor corporation refuses to assume or substitute the right to purchase shares, any offering period then in progress will be shortened by setting a new purchase date and any offering period then in progress will end on the new purchase date.

In the event of any corporate transaction, the Committee may make such adjustment it deems appropriate to prevent dilution or enlargement of rights in the Plan, in the number, class of or price of Shares available for purchase under the Plan and in the number of Shares which an employee is entitled to purchase and any other adjustments it deems appropriate. In the event of any transaction, the Committee may elect to have the purchase rights under the Plan assumed or such purchase rights substituted by a successor entity, to terminate all outstanding purchase rights either prior to their expiration or upon completion of the purchase of Shares on the next purchase date, or to take such other action deemed appropriate by the Committee.

What if there are not enough Shares available to cover all the exercised purchase rights on a particular exercise date?

If the total number of Shares to be issued on any particular exercise date is greater than the maximum number of Shares that may be issued under the Plan, the Committee will:

o allocate the available Shares pro rata to participants; and

o promptly refund to participants any remaining payroll contributions not applied to the purchase of Shares.

Can the Plan be amended?

The Board may amend the Plan at any time, provided such amendment does not cause rights issued under the Plan to fail to meet the requirements of
Section 423 of the Code. Any amendment for which shareholder approval is required under Section 423 of the Code or such securities exchange must be submitted to the shareholders for approval.

What is the maximum life of the Plan?

The Plan will terminate when all Shares available for issuance under it have been sold, unless the Board terminates the Plan earlier.

When can the Company terminate the Plan?

The Board may terminate the Plan at any time. If it does, no additional purchases of Shares will occur and no additional rights to purchase Shares will be granted and no further payroll contributions will be collected.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Company has registered the Shares reserved for issuance under the Plan on a Form S-8 Registration Statement (the "Registration Statement"), filed with the Securities and Exchange Commission under the 1933 Act. The documents incorporated by reference in Item 3 of Part II of the Registration Statement are also incorporated herein by reference and made a part hereof.

All reports and other documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act subsequent to the date of this Summary and prior to the filing of a post-effective amendment to the Registration Statement which indicates that all of the Shares have been sold or which deregisters all Shares then remaining unsold, shall be deemed to be incorporated by reference into and made a part of the Registration Statement and this Summary from the date of filing of such documents.

The Company is subject to the informational requirements of the 1934 Act, and will file reports, proxy statements and other information with the Securities and Exchange Commission. Employees may read and copy the Registration Statement, the documents that the Company incorporates by reference into this prospectus and the other reports, proxy statements and other information that the Company files with the Securities and Exchange Commission at the Securities and Exchange Commission's Public Reference Room at 450 Fifth Street N.W., Washington, D.C. 20549. Employees may also obtain copies of these documents at prescribed rates from the Securities and Exchange Commission's Public Reference Room at 450 Fifth Street N.W., Washington, D.C. 20549. Employees may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Requests for such documents can also be directed to International Isotopes Inc., Attn: Chief Executive Officer, 4137 Commerce Circle, Idaho Falls, Idaho 83401, and the telephone number is (208) 524-5300.

In addition, the Company is required to file electronic versions of these documents with the Securities and Exchange Commission through the Securities and Exchange Commission's EDGAR system. The Securities and Exchange Commission maintains a web site at http://www.sec.gov that contains the information incorporated by reference in this prospectus. The Company's website also contains electronic versions of these documents. The Company's internet address is http://www.intisoid.com.

EXHIBIT 10.5

INTERNATIONAL ISOTOPES INC EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (as it may be amended or supplemented, this "Agreement") is entered into as of February 1, 2001, by and between International Isotopes Inc., a Texas corporation ("Company"), and Stephen Laflin.

RECITALS

A. Company desires to employ Employee as its President and CEO because of his experience and expertise and to secure his services upon the terms and subject to the conditions set forth in this Agreement.

B. Employee desires and is willing to accept such employment upon such terms and subject to the conditions.

THEREFORE, for and in consideration of the foregoing and the mutual covenants and agreements contained in this Agreement, Company and Employee agree as follows:

1. Employment. Upon the terms and subject to the conditions contained in this Agreement, Company hereby employs Employee; and Employee hereby accepts such employment, upon such terms and subject to such conditions.

2. Duties and Authority.

2.1 Duties of Employee. During the term of this Agreement, Employee will serve as Company's Chief Executive Officer of International Isotopes and will faithfully and to the best of his ability perform such duties consistent with the position of president and CEO as 1 are determined and directed by the Board of Directors, or as are necessary in the reasonable judgement of the Employee, to carry out his duties under this Agreement. In his capacity as President and Chief Executive Officer, Employee will be generally responsible for the implementation of directives of, and policies and procedures adopted by the Board of Directors and for the overall day-to-day management of duties. In performing his duties under this Agreement, Employee will fully support and cooperate with Company's efforts to develop its markets, expand its business, and operate profitably and in conformity with business and strategic plans approved from time to time by Company's Board of Directors.

2.2 Direction from the Board of Directors and Chairman of the Board. Employee will look primarily to the Board of Directors for direction and guidance as to the performance of Employee's duties under this Agreement; however, to facilitate communication between Employee and the Board of Directors, Employee will report on the status of Employee's activities and the performance of Employee's duties to the Chairman of the Board of Company at such times as he may be requested. Employee will receive and participate in a performance review with the Chairman of the Compensation Committee every six months or other times if required.

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2.3 Employee's Authority. In performing his duties under this Agreement, Employee will have such authority as is necessary for him to implement the directives of, and policies and procedures adopted by the Board of Directors of the Company and to oversee the management of the Company's day to day affairs; but, from time to time as thought appropriate by Employee or Company's Chairman of the Board, Employee will discharge his duties in consultation with and under the direction of the Chairman of the Board of Company. Without limiting the generality of the foregoing, in exercising his authority as Chief Executive Officer of Company, Employee will have the authority for employing, dismissing, and assigning job duties and responsibilities to Company's employees.

2.4 Time and Attention to Services. Employee will devote all of his time and attention to the performance of his duties to Company during the term of this Agreement. Company, however, recognizes that Employee may be engaged in other non-conflicting passive business investments and in community activities unrelated to his duties under this Agreement that will require some portion of his time, and Company hereby consents to Employee's attention to such other activities so long as such activities (a) do not hinder Employee's ability to perform his duties under this Agreement and (b) do not represent a conflict of interest in contravention of the agreements contained in paragraph 11 or a competitive activity in contravention of the agreements contained in paragraph 13 of this Agreement.

2.5 Election as an Officer. Company will cause Employee to be elected to the office of Chief Executive Officer and Board of Directors (as to such other offices, if any, as Company's Board of Directors determines to be appropriate).

3. Term and Termination.

3.1 Term. This Agreement is effective as of the Effective Date and will continue in effect until February 28, 2007, unless it is (a) terminated in accordance with I paragraph 3.2 or (b) extended in accordance with paragraph 3.3.

3.2 Termination. This Agreement may be terminated prior to February 28 2007, as follows:

(a) Termination by Mutual Consent. This Agreement may be terminated at any time by the written mutual consent of Company and Employee.

(b) Termination By Company for Cause. This Agreement may be terminated by Company at any time for Cause by the delivery to Employee of a written notice of termination stating the effective date of termination and the basis upon which this Agreement is being terminated. As used in this Agreement, the term "Cause" means (a) a material default in the performance of Employee's duties under this Agreement, or (b) Employee's dishonesty, willful misconduct, breach of fiduciary duty involving personal profit, willful violation of any law, rule, or regulation, action (or omission) involving moral turpitude and reflecting unfavorably upon the public image of Company or its Affiliates, or action (or omission) abiding or abetting a competitor, supplier or customer of Company or its Affiliates to the material disadvantage of Company or its Affiliates; and the term "Affiliate" means any other person or entity who directly controls, is controlled by, or is under common control with Company or any Affiliate of Company (and "control" means possession, directly or indirectly, of power to direct or cause the direction of management or policies, whether through ownership of voting securities or otherwise). In the event of termination for Cause, Employee will be entitled to such salary and benefits as have accrued under this Agreement through the effective date of termination, but will not be entitled to any other salary, benefits, or other compensation after such date.

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(c) Termination By Company Without Cause. This Agreement may be terminated by Company at any time without Cause by (a) the delivery to Employee of a written notice of termination not less than 60 days prior to the effective date of termination, or (b) a vote by the Board of Directors and Shareholders to effect the sale or dissolution of Company. Upon such termination, Employee will be paid salary and benefits as provided in this Agreement through the effective date of termination and for the period of 24 months after such date. The Company will not be obligated to pay any bonus after the effective date of termination except for bonus payments approved by the Board of Directors and Compensation Committee prior to the effective date of termination.

(d) Termination of Employee. This Agreement may be terminated by Employee at any time, with or without Cause, by the delivery to Company of a written notice of termination not less than 90 days prior to the effective date of termination. In the event of termination by Employee, Employee will be entitled to such salary and benefits as have accrued under this Agreement through the effective date of termination, but will not be entitled to any other salary, benefits, or other compensation after such date.

(e) Termination Upon Death or Disability of Employee. This Agreement will be terminated immediately upon the death or permanent disability (which shall be determined in accordance with Company's disability plan as then in effect, or if no such plan is then in effect, as determined in good faith by Company's Board of Directors at such time as Employee becomes physically or mentally incapable or properly performing his duties under this Agreement and such incapacity will exist or can reasonably be expected to exist for a period of ninety days or more) of Employee. In either such event, Employee or his beneficiary as designated in writing to Company (or his estate, if no such beneficiary has been designated) will be entitled to such benefits (i) as are consistent with Company policy then if effect or (ii) as are determined by Company's Board of Directors in its sole discretion.

3.3 Extension of Term. At the time period thirty-six (36) months after the effective date of this agreement, Employee and Company will reset the terms of this agreement, and at that time decide by mutual agreement to extend the term of the agreement. Each such extension, unless expressly agreed otherwise by Employee and Company, will be for five years commencing on January 1 of the year preceding the expiration of the original or any renewal term. Mutual agreement to extend the term of this Agreement shall be evidenced by either (a) a written agreement executed by Company and Employee or (b) the continuation of Employee's performance of services under this Agreement with the approval of Company and without notice of termination given by Company or Employee. Any extended term of this Agreement may be terminated as set forth in paragraph 3.2 above, unless otherwise agreed in writing by Company and Employee. In the event the term of this agreement is not reset by mutual agreement by Employee and Company, the original terms of the agreement will continue in force and the termination date will remain February 25, 2007.

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4. Compensation.

4.1 Base Annual Salary. In consideration for the performance of his duties under this Agreement, Employee will be paid a base annual salary of $120,000, which shall be payable (less applicable withholding for federal taxes) in semi-monthly installments or otherwise in such manner as the salaries of other executive officers of Company are paid in accordance with Company policy.

4.2 Annual Salary Review. Company's Board of Directors and Compensation Committee will review Employee's salary level on an annual basis and may elect, on the basis of such review, to increase Employee's base annual salary; but any such increase in Employee's Salary will be made solely at the discretion of Company's Board of Directors.

Bonus. In addition to the annual salary to be paid to Employee pursuant to this Agreement, Employee will be considered for an annual bonus at the end of each calendar or fiscal year of Company. The Board of Directors, at its discretion, will determine the amount of the bonus, if any, to be paid to Employee after considering such factors related to the performance of Employee and of Company during the preceding fiscal year as the Board of Directors determines to be appropriate.

4.4 Independent Consideration. Concurrently with the execution of this Agreement, Company is making a payment of $100 to Employee as independent and additional consideration ("Independent Consideration") for Employee's agreement to comply with the provisions of paragraph 11 of this Agreement.

5. Expenses and Reimbursements. Employee will be entitled to reimbursement for reasonable out-of-pocket expenses incurred by Employee that are directly attributable to the performance of Employee's duties under this Agreement. Employee will adhere to Company's customary practices and procedures with respect to incurring out-of-pocket expenses and will present such expense statements, receipts, vouchers, or other evidence supporting expenses incurred by Employee as Company may from time to time request.

6. Benefits. During the term of this Agreement, Employee will be entitled to the benefits generally provided or made available to other executive officers of Company, including, but without limitation, such group medical (including dental) insurance and life insurance benefits as are made available to employees of Company generally and participation in any "cafeteria" plan or retirement plan that may be available to employees of Company (subject, however, to (i) eligibility and (ii) modification or elimination in accordance with Company's standard policies as in effect from time to time) and to the following specific benefits:

(a) Vacation. Employee will be entitled to such vacation time as is allotted to other executive officers of Company (but in no event less than fifteen working days in any calendar year).

(b) Sick Leave. Employee will be entitled to the benefits, and subject to all provisions of, Company's standard policies and procedures regarding sick leave and time off.

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The Company will provide the employee with an equity position in the company in the month following the 2002 annual stockholders meeting. The amount and terms of that position will be seperatly described in an employee options agreement.

Confidentiality and Non-Disclosure. Employee acknowledges that in the performance of his duties to Company under this Agreement he will gain a close, personal, and special influence with Company's customers and suppliers and will obtain and/or develop certain trade secrets and valuable, confidential information of or pertaining to Company or its Affiliates, including, but without limitation, information concerning the following: operations; business opportunities; price and cost information; finances; customer names; customer prospects, and customer lists; the terms of contracts with customers, suppliers, and agents; business plans; marketing and sales plans; sales techniques; manuals; letters; notebooks; procedures; reports; products; processes; specifications; services; inventions; research and development; and other concepts or ideas involving or relating to the business or prospective business of Company (collectively, "Confidential Information"), which Confidential Information has been or will be uniquely developed by or for Company or its Affiliates and cannot be readily obtained by third parties from outside sources. Employee accordingly agrees as follows:

(c) Detrimental Statements. For so long as this Agreement remains in effect and for a period of 24 months after the date of termination or expiration of this Agreement (the "Applicable Period), Employee will not, directly or indirectly, in any individual or representative capacity whatsoever, make any statement, oral or written, or perform any act or omission which is or could be detrimental in any material respect to the goodwill of Company, provided that any truthful statement made by Employee in good faith shall not violate this subparagraph.

(d) Covenant of Confidentiality. All Confidential Information and other information communicated to Employee by, or otherwise belonging to, Company, its Affiliates, or their customers, whether before or after the Effective Date, shall at all times be held in strict confidence, shall be used only for the purpose of this Agreement, and shall not be disclosed by Employee without the prior written consent of Company, except as may be necessary by reason of legal, accounting, or regulatory requirements beyond the reasonable control of Employee.

(e) Return of Lists. Books. Records. and Property. Upon the expiration of the term or termination of this Agreement, Employee will surrender to Company all tangible Confidential Information in the possession of Employee, including, but without limitation, the originals and all copies of all lists, books, and records of or pertaining to any Confidential Information, and all other property in the possession of Employee belonging to Company or any of its Affiliates.

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(f) Right to Injunctive Relief. Employee acknowledges that a violation or attempted violation on his part of any agreement in this paragraph 9 will cause irreparable damage to Company and to its Affiliates, and accordingly Employee agrees that Company shall be entitled as a matter of right to an injunction, out of any court of competent jurisdiction, restraining any violation or further violation of such agreements by Employee; and such right to an injunction shall be cumulative and in addition to whatever other remedies Company may have.

(g) Survival of Terms. The terms and agreements set forth in this paragraph 9 shall survive the expiration of the term or termination of this Agreement regardless of the reason. The existence of any claim of Employee, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Company of the agreements contained in this paragraph 9.

(h) Separate Non-Disclosure Agreement. If after the Effective Date Company so requests, Employee will enter into a separate non-disclosure agreement the provisions of which are substantially the same as those contained in this paragraph 9.

7. Proprietary Information. Employee agrees to promptly and freely disclose to Company in writing any and all ideas, conceptions, inventions, improvements, suggestions for improvements, discoveries, formulae, processes, designs, software, hardware, circuitry, diagrams, copyrights, trade secrets, and any other proprietary information (collectively, "Proprietary Information"), whether patentable or not, which are conceived, developed, and made or acquired by Employee, alone or jointly with others, during the period of his employment by Company or using Company's time, data, facilities, and/or materials, and which are related to the products, business, or activities of Company or which Employee conceives, develops, makes, or acquires as a result of his employment by Company, and Employee agrees to assign and hereby does assign all of his right, title, and interest therein to Company. Whenever requested to do so by Company, Employee will execute applications, assignments, or other instruments, which Company deems necessary to apply for and obtain letters patent or copyrights of the United States or any foreign country, to otherwise protect Company's interest in any Proprietary Information, or to vest title to any Proprietary Information in Company. These obligations shall continue beyond the expiration or termination of Employee's employment, regardless of the reason for such termination, with respect to any Proprietary Information conceived, developed, made, or acquired by Employee during the period of his employment and shall be binding upon Employee's assigns, executors, administrators, and other legal representatives.

8. Conflict of Interest. In keeping with Employee's fiduciary duties to Company, Employee agrees that while employed by Company he will not, acting along or in conjunction with others, directly or indirectly, become involved in a conflict of interest or, upon discovery thereof, allow a conflict of interest to continue. Moreover, Employee agrees that he will immediately disclose to the Board of Directors any facts, which might involve any reasonable possibility of a conflict of interest. It is agreed that any direct or indirect interest in, connection with, or benefit from any outside activities, where such interest might in any way adversely affect Company, involves a possible conflict of interest. Circumstances in which a conflict of interest on the part of Employee might arise, and which must be reported immediately by Employee to the Board of Directors, include, but are not limited to, the following: (a) ownership of a material interest in any supplier, contractor, subcontractor, customer, or other entity with which Company does business;

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(b) acting in any capacity, including director, officer, partner, consultant, employee, distributor, agent, or the like, for a supplier, contractor, subcontractor, customer, or other entity with which Company does business; (c) accepting, directly or indirectly, payment, service, or loans from a supplier, contractor, subcontractor, customer, or other entity with which Company does business, including, but not limited to, gifts, trips, entertainment, or other favors of more than a nominal value; (d) misuse of Company's information or facilities to which Employee has access in a manner which will be detrimental to Company's interest, such as utilization for Employee's own benefit of know-how, inventions, or information developed through Company's business activities; (e) disclosure or other misuse of Confidential Information of any kind obtained through Employee's connection with Company; (0the ownership, directly or indirectly, of a material interest in an enterprise in competition with Company, or acting as an owner, director, principal, officer, partner, consultant, employee, agent, servant, or otherwise of any enterprise which is in competition with Company; and (g) appropriation of a Corporate Opportunity, as defined in paragraph 11 of this Agreement.

9. Corporate Opportunities. Employee acknowledges that during the course of his employment by Company he may be offered or become aware of business or investment opportunities in which Company may or might have an interest (a "Corporate Opportunity") and that he has a duty to advise Company of any such Corporate Opportunities before acting upon them. Accordingly, Employee agrees (a) that he will disclose to Company's Board of Directors any Corporate Opportunity offered to Employee or of which Employee becomes aware, and (b) that he will not act upon any Corporate Opportunity for his own benefit or for the benefit of any person or entity other than Company without first obtaining the consent or approval of Company's Board of Directors (whose consent or approval may be granted or denied solely at the discretion of Company's Board of Directors).

10. Non-Competition.

10.1 Covenant Not to Compete. As an ancillary covenant to the terms and conditions set forth elsewhere in this Agreement, and in particular the covenants set forth in paragraph 9, paragraph 10, and paragraph 11 above, and in consideration of the mutual promises set forth in this Agreement and other good and valuable consideration received and to be received, including, but without limitation, the Independent Consideration, which has been paid to Employee in consideration of Employee's agreement to comply with the terms and conditions of this paragraph 12, Employee agrees that, during the term of this Agreement, and throughout the Applicable Period, Employee will not, directly or indirectly, own or become employed by or otherwise provide consulting services to, any business competitive with Company prior to the date of termination of this Agreement in any country in which Company commences business while this Agreement remains in effect. Employee understands that the current business activities of Company and its Affiliates include the production of high quality radioisotopes, pharmaceutical grade radiochemicals, finished radiopharmaceuticals and diagnostic ant therapeutic medical products and that Company and its Affiliates have plans to expand the scope of such activities and the geographic area of operations of Company and its Affiliates in the near future with the direct involvement of Employee, therefore, Employee agrees that the limitations as to time, geographical area, and scope of activity contained in this covenant do not impose a greater restraint than is necessary to protect the goodwill and other business interests of Company. If any provision of this covenant is found to be invalid in part or in whole, Company may elect, but shall not be required, to have such provision reformed, whether as to time, area covered, or otherwise, as and to the extent required for its validity under applicable law and, as so reformed, such provision shall be enforceable.

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10.2 Right to Injunctive Relief. Employee acknowledges that a violation or attempted violation on his part of any agreement in this paragraph 13 will cause irreparable damage to Company and its Affiliates, and accordingly Employee agrees that Company shall be entitled as a manner of right to an injunction, out of any court of competent jurisdiction, restraining any violation or further violation of such agreements by Employee; such right to an injunction, however, shall be cumulative and in addition to whatever other remedies Company may have. Furthermore, Employee shall be entitled to seek a declaratory judgment regarding any conduct or enterprise to determine whether or not such conduct or violation is violative of the terms of this Agreement; provided however, that no suit shall be filed until Employee has given Company at least 15 days to respond to Employee's written request for permission to undertake certain requested acts. The terms and agreements set forth in this paragraph 13 shall survive the expiration of the term or termination of this Agreement for any reason. The existence of any claim of Employee, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Company of the agreements contained in this paragraph 12.

10.3 Separate Non-Competition Agreement. If after the Effective Date Company so requests, Employee will enter into a separate non-competition agreement the provisions of which are substantially the same as those contained in this paragraph 12.

11. Indemnification. Company, shall, and does hereby, indemnify and agree to hold Employee harmless to the fullest extent provided to officers and directors of Company under Article VII of Company's First Amended and Restated Bylaws, as amended from time to time (the "Bylaws Indemnification"); provided that (a) Employee shall be entitled to all benefits provided to directors of Company under the Bylaws Indemnification, whether or not Employee is, or at any time is elected, a director of Company; (b) any determination of indemnification made under the Bylaws Indemnification with respect to Employee shall be made by special legal counsel selected by the mutual agreement of Company's Board of Directors and Employee (or, if Company's Board of Directors and Employee cannot agree, then by Company, but in such case, such legal counsel must be a partner or shareholder in a law firm headquartered in the State of Idaho or Texas and having no fewer than 100 lawyers); and (c) if for any reason the Bylaws Indemnification has been terminated or is otherwise inapplicable to Employee, Employee shall be entitled to indemnification to the fullest extent that a corporation may grant indemnification to a director, officer, and employee under the Texas Business Corporation Act, as the same exists or as it may hereafter be amended ("TBCA"), if Employee was, or is threatened to be made a named defendant or respondent in a preceding (as hereinafter defined) because Employee (i) is or was an employee of Company or an Affiliate of Company as a director, officer, partner, venturer, proprietor, trustee, employee, agent, or in a similar position in a partnership, joint venture, sole proprietorship, trust, employee benefit plan, or other enterprise in which Employee serves on behalf of Company or at Company's request. In the event of Employee's death such right shall inure to the benefit of Employee's heirs, successors, and assigns. The indemnification granted to Employee hereunder is a contract right and shall survive the expiration of the term or termination of this Agreement and Company shall be obligated to indemnify Employee pursuant to and in accordance with this paragraph 13 regardless of whether this Agreement shall have expired or shall have been terminated. The rights conferred above shall not be exclusive of any other right which Employee may have or hereafter acquire under any statute, bylaw, resolution of shareholders or directors, agreement or otherwise. As used in this paragraph, the term "proceeding" means any threatened, pending, or completed action, suit, or proceeding, whether a civil, criminal, or administrative proceeding or an arbitration or investigation, any appeal in any such action, suit, or proceeding, and any inquiry or investigation that could lead to such an action, suit, or proceeding.

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12. Company's Right of Offset. Should Employee at any time be indebted to Company, or otherwise obligated to pay money to Company for any reason, Company, at its election, may offset amounts otherwise payable to Employee under this Agreement, including, but without limitation, salary and bonus payments, against any such indebtedness or amounts due from Employee to Company.

13. Miscellaneous.

13.1 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF IDAHO.

13.2 Entirety and Amendments. This Agreement embodies the entire agreement between the parties and supersedes all prior agreements and understandings relating to the subject matter hereof This Agreement may be amended or modified only in writing executed by Employee and the Chairman of the Board or another officer of the Company expressly authorized by Company's Board of Directors.

13.3 Notices. Any notice or other communication hereunder must be in writing to be effective and shall be deemed to have been given when personally delivered to Employee or Company or, if mailed, on the third day after it is enclosed in an envelope and sent certified mail/return receipt requested in the United States mail. Either party may from time to time change its address for notification purposes by giving the other party written notice of the new address and the date upon which it will become effective. The address for each party for notices hereunder is as follows:

Employee: Stephen Laflin

Company: International Isotopes Inc.

13.4 Attorney's Fees. In the event that either party is required to obtain the services of an attorney in order to enforce any right or obligation hereunder, the prevailing party shall be entitled to recover reasonable attorney's fees and court costs from the other party.

13.5 Assignability; Binding Nature. Neither this Agreement nor any right, duty, obligation, or interest hereunder may be assigned or delegated by one party hereto without the prior written consent of the other party hereto. This Agreement is binding upon Company and Employee and their respective successors, heirs and assigns

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13.6 Headings. The headings of paragraphs contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement.

13.7 Severability. If, but only to the extent that, any provision of this Agreement is declared or found to be illegal, unenforceable, or void, then both Company and Employee shall be relieved of all obligations arising under such provision, it being the intent and agreement of Company and Employee that this Agreement shall be deemed amended by modifying such provision to the extent necessary to make it legal and enforceable while preserving its intent. If such amendment is not possible, another provision that is legal and enforceable and achieves the same objective shall be substituted therefor. If the remainder of this Agreement is not affected by such declaration or finding and is capable of substantial performance by both Company and Employee, then the remainder shall be enforced to the extent permitted by law.

13.8 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be part of the same instrument.

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Executed as of the Effective Date set forth above by:

INTERNATIONAL ISOTOPES INC.

By:  /S/                                          /S/
     -------------------------                    -------------------------
     Name                                         Employee's Name

Title:  Chairman of the Board                     Title:  President & CEO
        ----------------------                            -----------------

Date:   23   Feb    2002                          Date:   Feb  23,  2002
        ----------------------                            -----------------

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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.

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.

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.

3.7 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.

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.

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 Lessee shall maintain and pay for adequate fire and extended coverage insurance upon the improvements located on the Leased Premises.

13.2 Lessee shall also obtain, at Lessee's sole cost and expense, general public liability insurance protecting and indemnifying Lessor and Lessee against all claims for damages to person or property or for loss of life or of property occurring upon, in, or about the Leased Premises, with liability limits of $50,000.00 property damage and $500,000.00 with respect to injuries to any one person, and $1,000,000.00 in respect to any one accident or disaster or incident of negligence.

13.3 Lessee shall obtain all such insurance policies before Lessee takes possession of the Leased Premises. In the event of any loss or destruction of the Leased Premises by any insured cause, the insurance proceeds paid or payable as a result of said insured loss shall be paid to Lessor and Lessor shall use such insurance proceeds to repair the Leased Premises unless as a result of such loss or destruction this Lease Agreement is terminated in accordance with the provisions of paragraph 20 herein. In the event of such termination, Lessor, at Lessor's option, shall determine whether or not to retain the insurance proceeds for other purposes or use the insurance proceeds to repair or restore the Leased Premises. Lessor shall remain as co-insured on all such policies. Such insurance policies shall provide that all notices issued by the insurance company pertaining to any changes in insurance coverage under the insurance policy, delinquent premium notices, or other matters pertaining to the coverage provided by such insurance policies shall be sent to both Lessor and Lessee. Evidence of such insurance policies shall be delivered to Lessor. Lessor shall have the right at any time to require Lessee to provide to Lessor copy of such insurance policies, together with any amendments or additions to such insurance policies and evidence that all payments required to be made in order to maintain such insurance in full course and effect have been paid in full by Lessee.

14. TAXES AND ASSESSMENTS. Lessee shall pay all real estate taxes, real property assessments and Owner's Association dues or assessments levied against the Leased Premises pertaining to the term of this Lease Agreement. Lessee shall pay all other taxes, licenses, and assessments of every kind, nature and description, including all taxes and assessments on any equipment, machinery, or assets of any kind or nature placed in or upon the Leased Premises by Lessee.

15. FIRE RISK. Lessee shall not do anything in the Leased Premises or bring or keep anything therein which in any way increase or tend to increase the risk of fire or damage by explosion, or which will conflict with the regulations of the fire department or fire laws, or with any fire insurance policy on the building or any part thereof, or with any rules or ordinances established by the Health Department or with any municipal, state, county or federal laws, ordinances or regulations.

16. ACCEPTANCE OF PREMISES. Lessee has examined the Leased Premises and the buildings and improvements situate thereon, and accepts the same in the condition and state of repair they are now in.

17. QUIET ENJOYMENT. Lessor covenants and warrants that if Lessee shall faithfully and fully discharge the obligations herein set forth, Lessee shall have and enjoy during the term of this Lease Agreement, a quiet and undisturbed possession of the Leased Premises, together with all of its appurtenances.

18. LESSEE INDEMNIFICATION. Lessee covenants and agrees not to do or suffer anything to be done by which persons or property in or about or adjacent to the Leased Premises may be injured, damaged, or endangered. Lessee hereby agrees to indemnify Lessor against and to hold Lessor harmless from any and all claims or demands for loss of or damage to property or for injury or death to any person from any cause whatsoever while in, upon, or about the Leased Premises during the term of this Lease Agreement or any extension thereof. Lessee shall, at Lessee's own expense, maintain any workman's compensation insurance or any other form of insurance required by law upon the employees or agents employed by Lessee and Lessor shall have no responsibility with respect thereto.

19. CONDEMNATION. If the Leased Premises, or any substantial portion thereof, is condemned or taken by right of eminent domain, or by purchase in lieu thereof, then and in any such event, this Lease Agreement shall terminate and cease as of the time when possession is taken by the public authority and rental shall be accounted for between Lessor and Lessee as of the date of the surrender of possession. Such termination shall be without prejudice to the rights of either Lessor or Lessee to recover compensation from the condemning authority for any loss or damage caused by such condemnation. Neither Lessor nor Lessee shall have any rights in or to any award or payment made to the other by the condemning authority.

20. DESTRUCTION. It is understood and agreed that if the building upon the Leased Premises shall be destroyed by fire, the elements, riots, insurrections, explosions or any other cause, or be so damaged thereby that it becomes untenantable and cannot be rendered tenantable within ninety (90) days from the date of such damage, this Lease Agreement may be terminated by either Lessor or Lessee; provided, however, that in the event the building is so damaged, Lessee shall not be required to pay the rental herein provided during the term the Leased Premises are wholly unfit for occupancy. In the event that only a portion of the Leased Premises be damaged or become untenantable, then the rental during the period that said premises remain partially untenantable shall be reduced in the proportion that the untenantable portion of the Leased Premises bear to the total thereof. . Lessor shall make all reasonable effort to repair the Leased Premises within ninety (90)days or upon such extended period as both parties shall agree, provided that if said partially tenantable premises cannot be rendered fully tenantable within said ninety (90) days or extended period agreed upon by both Lessor or Lessee, from the date of said damage, this Lease Agreement can be terminated by either Lessor or Lessee.

21. DEFAULT.

A. Time and prompt performance of each and every term, covenant and condition of this Lease Agreement is material and of the essence of this Lease Agreement. Every term, covenant and condition is a material term, covenant and condition of this Lease Agreement. Performance means compliance that is full and to the letter of this Lease Agreement. Substantial compliance will not be sufficient. Performance by Lessee is a condition precedent to performance by Lessor.

B. The following or any of them constitute an event of default of the terms of this Lease Agreement:

(1) Failure by Lessee to pay when due any installment of rent or any other sum herein specified to be paid by Lessee if the failure continues for three (3) days after written notice has been given to Lessee;

(2) Abandonment of the Leased Premises by Lessee without cause (for the purposes hereof the failure to occupy and operate the Leased Premises for ten (10) consecutive days shall be conclusively deemed an abandonment of the Leased Premises by Lessee);

(3) Failure by Lessee to perform any other provision of this Lease Agreement required of Lessee, if the failure to perform the same is not cured within thirty (30) days after written notice has been given to Lessee;

(4) If Lessee shall file or have filed against Lessee in any court pursuant to any statute, either in the United States or of any other state, a Petition in Bankruptcy or Insolvency, or for reorganizations, or for appointment of a receiver or trustee of all or a substantial portion of the property owned by Lessee, or if Lessee makes an assignment for the benefit of creditors, or an execution or attachment shall be issued against Lessee on all or a substantial portion of Lessee's property, whereby all or any portion of the Leased Premises covered by this Lease Agreement or any improvements thereon shall be taken or occupied, or attempted to be taken or occupied by someone other than Lessee, except as may herein be otherwise expressly permitted, and such adjudication, appointment, assignment, petition, execution or attachment shall not be set aside, vacated, discharged or bonded within thirty (30) days after the termination, issuance, or filing of the same; and

(5) The taking by any person, except by Lessor or its agents or affiliates, of the leasehold created hereby or any part thereof upon execution, or other process of law or equity other than by assignment or sublease.

C. Upon the occurrence of any event of default, and the failure, neglect or refusal of Lessee to cure the same during any notice period required for such default specified above, without further notice to Lessee, Lessor shall be entitled to effectuate such rights and remedies against Lessee as are available to Lessor under the terms of this Lease Agreement and the laws of the State of Idaho, including, without limitation, the following remedies:

(1) Lessor shall have the immediate right, but not the obligation, to terminate this Lease Agreement, and all rights of Lessee hereunder by giving Lessee written notice of Lessor's election to terminate. No act by Lessor other than giving notice to Lessee shall terminate this Lease Agreement.

In the event of such termination, Lessee agrees to immediately surrender possession of the Leased Premises. Should Lessor terminate this Lease Agreement, it may recover from Lessee all damages Lessor may incur by reason of Lessee's breach, including the cost of recovering the Leased Premises, reasonable attorney fees, and the worth at the time of such termination of the excess, if any, of the amount of rent and charges equivalent to rent reserved in this Lease Agreement for the remainder of the stated term over the then reasonable rental value of the Leased Premises for the remainder of the stated term, all of which amount shall be immediately due and payable from Lessee to Lessor.

(2) Lessor shall also have the right, without process of law, to enter the Leased Premises and remove all persons and property from the Leased Premises without being deemed guilty of or liable in trespass. No such re-entry or taking possession of the Leased Premises by Lessor shall be construed as an election on its part to terminate this Lease Agreement unless a written notice of such intention is given by Lessor to Lessee. No such action by Lessor shall be considered or construed to be a forcible entry.

(3) Lessor may, at any time, and from time to time, without terminating this Lease Agreement, enforce all of its rights and remedies under this Lease Agreement, or allowed by law or equity, including the right to recover all rent as it becomes due.

(4) In addition to the other rights of Lessor herein provided, Lessor shall have the right, without terminating this Lease Agreement, at its option, with or without process of law, to reenter and retake possession of the Leased Premises, and all improvements thereon, and collect rents from any Sublessee and/or sublet the whole or any part of the Leased Premises for the account of Lessee, upon any terms or conditions determined by Lessor. Lessee shall be liable immediately to Lessor for all costs Lessor incurs in reletting the Leased Premises, including without limitation, brokers' commissions, expenses of remodeling the Leased Premises required by the reletting, and like costs. Re-letting can be for a period shorter or longer than the remaining term of this Lease Agreement. In the event of such re-letting, Lessor shall have the right to collect any rent which may become payable under any sublease and apply the same first to the payment of expenses incurred by Lessor in dispossessing Lessee, and in re-letting the Leased Premises, and, thereafter, to the payment of the rent herein required to be paid by Lessee, in fulfillment of Lessee's covenants hereunder; and Lessee shall be liable to Lessor for the rent herein required to be paid, less any amounts actually received by Lessor from a sublease, and after payment of expenses incurred, applied on account of the rent due hereunder. In the event of such election, Lessor shall not be deemed to have terminated this Lease Agreement by taking possession of the Leased Premises unless notice of termination, in writing, has been given by Lessor to Lessee.

D. The remedies provided in this Lease Agreement are cumulative in addition to any remedies now or later allowed by law or equity. The exercise of any remedy by Lessor shall not be exclusive of the right to effect any other remedy, allowed Lessor under the terms of this Lease Agreement, or now or later allowed by law or equity.

E. Any delay by Lessor in enforcing the terms of this Lease Agreement or any considerations or departures therefrom shall not operate to waive or be deemed to be a waiver of any right to require compliance that is fill and to the letter of this Lease Agreement or to thereafter require performance by Lessee in strict accordance with the terms of this Lease Agreement.

F. In the event that any remedy granted to Lessor under the terms of this Lease Agreement is held void or unenforceable, Lessor shall nevertheless have all of the other remedies provided in this Lease Agreement that are not contrary to law.

G. Lessee hereby expressly waives any and all rights of redemption granted by or under any present or future laws in the event of Lessee being evicted or dispossessed for any cause, or in the event of Lessor obtaining possession of the -Leased Premises by reason of the violation by Lessee of any of the covenants and conditions of this Lease Agreement or otherwise.

22. ENFORCEMENT. Should either party default in the performance of any covenants or agreements contained herein, such defaulting party shall pay to the other party all costs and expenses, including but not limited to, reasonable attorney fees, including such fees on appeal, which the prevailing party may incur in enforcing this Lease Agreement or in pursuing any remedy allowed by law for breach hereof.

23. LESSOR'S RIGHT TO CURE LESSEE'S DEFAULTS. If Lessee shall default in the performance of any covenant or condition in this Lease Agreement required to be performed by Lessee, Lessor may, after thirty (30) days notice to Lessee, or without notice if in Lessor's opinion an emergency exists, perform such covenant or condition for the account and at the expense of Lessee, in which event Lessee shall reimburse Lessor for all sums paid to effect such cure, together with interest from the date of the expenditure at the rate of eighteen percent (18%) per annum and reasonable attorney fees. All amounts owed by Lessee to Lessor under this paragraph shall be additional rent. In order to collect such additional rent Lessor shall have all the remedies available under this Lease Agreement for a default in the payment of rent and the provisions of this paragraph shall survive the

27. LESSEE AS INDEPENDENT CONTRACTOR. Lessee's use of the Leased Premises shall be as an independent contractor and nothing herein shall be deemed to create a partnership, joint venture, employment, or master-servant relationship between the parties.

28. IDAHO LAW GOVERNS. This Lease Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Idaho.

29. MODIFICATION. This Lease Agreement contains the entire agreement between the parties, and may not be modified or changed orally, but only by an agreement in writing and signed by the party against whom enforcement of any waiver, change, modification, or discharge is sought.

30. SEVERANCE AND VALIDITY. In the event any provision of this Lease Agreement or any part thereof shall be determined by any court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions hereunder or parts thereof, shall remain in full force and effect, and shall in no way be affected, impaired or invalidated thereby, it being agreed that such remaining provisions shall be construed in a manner most closely approximating the intention of the parties with respect to the invalid, void or unenforceable provision or part thereof.

31. BINDING ON SUCCESSORS. It is further expressly agreed, that the provisions, stipulations, terms, covenants, conditions and undertakings in this Lease Agreement and any renewals thereof shall inure to the benefit of and bind the heirs, -executors, administrators and assigns or successors in interest of both the Lessor and Lessee.

32. MUTUAL RELEASE OF LIABILITY TO THE EXTENT OF INSURANCE COVERAGE. Neither Lessor nor Lessee shall be liable to the other for any business interruption or any loss or damage to property or injury to or death of persons occurring on the Leased Premises or the adjoining property, or in any manner growing out of or connected with Lessee's use and occupation of the Leased Premises, or the condition thereof, or the adjoining property, whether or not caused by the negligence or other fault of Lessor or Lessee or their respective agents, employees, subtenants, licensees, or assignees. This release shall apply only to the extent that such business interruption loss or damage to property, or injury to or death of persons is covered by insurance, regardless of whether such insurance is payable to or protects Lessor or Lessee or both. Nothing in this paragraph shall be construed to impose any other or greater liability upon either Lessor or Lessee than would have existed in the absence of the paragraph. This release shall be in effect only so long as the applicable insurance policies contain a clause to the effect that this release shall not affect the right of the insured to recover under such policies.

33. ASSIGNMENT BY LESSOR. It is understood that Lessor intends to sell the Leased Premises to a third party and assign Lessor's rights and obligations under this Lease Agreement to a third party. Any such sale of the Leased Premises by Lessor to a third party shall be subject to the terms and provisions of this Lease Agreement. Upon any such sale, Lessor may assign Lessor's rights and obligations under this Lease Agreement to the purchaser of the Leased Premises and upon such assignment Lessor shall be released from any further liability or obligation under this Lease Agreement.

34. LESSEE'S REPRESENTATIONS AND WARRANTIES. Lessee represents and warrants as follows: Lessee is a corporation duly organized, validly existing and in good standing under the laws of the State of Texas and Lessee has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted. Lessee has full corporate power and authority to execute and deliver this Lease Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Lease Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized and approved by the Board of Directors of Lessee and no other corporate proceedings on the part of Lessee are necessary to authorize this Lease Agreement or the consummation of the transactions contemplated hereby. This Lease Agreement has been duly and validly executed and delivered by Lessee and constitutes a valid and binding agreement of Lessee, enforceable against it in accordance with its terms.

IN WITNESS WHEREOF, the parties have hereunto subscribed their names the day and year first above written.

LESSOR:

/S/ Adrian Rand Robison
-----------------------
Adrian Rand Robison


/S/ Dorothy Robison
-----------------------
Dorothy Robison

LESSEE:

INTERNATIONAL ISOTOPES, INC.

By:   /S/ Steve T. Laflin
      -------------------

Its:  President & CEO
      -------------------

APPENDIX 1
HAZARDOUS WASTE AND MATERIAL - INDEMNITY

Lessee shall not cause or permit any Hazardous Waste or Material (hereafter defined) to be brought upon, kept or used in or about the Leased Premises by Lessee, or agents, employees, contractors or invitees of Lessee, expect in strict compliance with all applicable federal. state and local laws. statutes. ordinances and regulations. Lessee agrees to indemnify, save and hold Lessor harmless from and against any claim, liability, damage, judgment, penalty, fine, cost, loss or expenses, including, without limitation, diminution in value of the Leased Premises, damages for loss or restriction on use of rentable or usable space or of any amenity of the Leased Premises, damages arising from any adverse impact on marketing of space, and sums paid in settlement of claims, reasonable attorney's fees, reasonable consultant fees, engineer's fees and other expert fees, which arise from or relate to the breach by Lessee of the prohibition herein contained and which arise during or after the lease term as a result of said breach. This indemnification and hold harmless of the Lessor by the Lessee for the breach of the prohibition herein contained includes, without limitation, reasonable costs incurred in connection with an investigation of site conditions or any clean up, remedial, removal or restoration work required by any federal, state or local governmental agency or political subdivision because of Hazardous Waste or Material present in the soil or ground water on or under the Leased Premises caused by or resulting from the breach by Lessee of the prohibition herein contained. Without limiting the foregoing, if the presence of any Hazardous Waste or Material on the Leased Premises is caused or permitted by Lessee and results in any contamination of the Leased Premises, Lessee shall promptly take all actions at Lessee's sole cost and expense as are necessary to return the Leased Premises to the condition necessary to meet the requirements of any competent governmental authorities with jurisdiction over the Leased Premises.

As used herein, the term "Hazardous Waste or Material" means any hazardous or toxic substance, material or waste which is or becomes regulated by any local, state or governmental authority charged with interpreting and enforcing the various statutes identified in this paragraph or similar statutes, or their state or local counterparts. The term "Hazardous Waste or Material" includes, without limitation, any material, waste or substance that is (i) petroleum, (ii) asbestos, (iii) designated as a "pollutant" pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C. ss 1321), (iv) defined as a "Hazardous Waste" pursuant to ss 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. ss 6901, et. seq. (42 U.S.C. ss 6903), or the Idaho Hazardous Waste Management Act of 1983, Title 39, Chapter 44, Idaho Code, (v) defined as a "hazardous substance" pursuant to ss 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. ss 9501, et seq., (vi) or otherwise regulated under the Toxic Substances Control Act, 15 U.S.C. ss 2601, et seq.; the Clean Air Act, 42 U.S.C. ss 7401, et seq.; the Clean Water Act, 33 U.S.C. ss 1251, et seq.; or (vii) defined as a "regulated substance" pursuant to subchapter IX, Solid Waste Disposal Act (regulation of underground storage tanks), 42 U.S.C. ss 6991, et seq.

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 ADRIAN RAND ROBISON and DOROTHY ROBIS 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 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").

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"):

Lot 4, Block 4, St. Leon Industrial Park, 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 4137 Commerce Circle, Idaho Falls, Idaho 83401, 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 Post Office Box 95, Rexburg, Idaho 83440, 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.

(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 Post Office Box 95, Rexburg, Idaho 83440, 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, Adrian Rand Robison and Dorothy Robison, husband and wife, the lineal descendants of Adrian Rand Robison and Dorothy Robison, 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.

(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.

(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.

IN WITNESS WHEREOF, the parties have hereunto set their hands the day and year first above written.

LESSOR:

/S/ Adrian Rand Robison
-----------------------
Adrian Rand Robison

LESSEE:

INTERNATIONAL ISOTOPES, INC.

By:   /S/ Steve T. Laflin
      -------------------

Its:  President & CEO
      -------------------

EXHIBIT 10.8

LEASE AGREEMENT

THIS LEASE AGREEMENT, is made and entered into as of this /flay of January, 2004, 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".

WITNESSETH:

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 3 Block 2, St. Leon Industrial Park, Division No. 1, according to the recorded plat thereof.

SUBJECT TO THE FOLLOWING:

1 Declaration of Covenants, Conditions and Restrictions for St. Leon Industrial Park, recorded in the records of Bonneville County, Idaho, on October 22, 1996, as Instrument No. 930434.

2 All existing easements or claims of easements, patent reservations, rights-of-way, protective covenants, zoning ordinances, 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 premises.

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

2.1 Initial Term. The initial term of this Lease Agreement shall be for a term of five (5) years commencing on February 1, 2004 (the "Commencement Date") and extending to midnight on January 31, 2009, 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 February and ending at midnight on the 3 1st day of January.

2.2 Early Termination of Lease. Lessee has a patent purchase pending and Lessee is entering into this Lease Agreement under the assumption that such patent will be acquired prior to February 29, 2004. Notwithstanding anything contained herein to the contrary, the parties agree that Lessee, at Lessee's option, may terminate this Lease Agreement by giving written notice to Lessor of such termination prior to 5:00 p.m. Mountain Standard Time on February 29, 2004, if Lessee determines prior to such time that such patent will not be acquired. Such notice of termination must be sent by facsimile to Lessor in care of Charles A. Homer at 208-523-95 18 prior to 5.00 p.m. Mountain Standard Time on February 29, 2004. If Lessee properly terminates this Lease Agreement in such manner, Lessee shall vacate the Leased Premises within thirty (30) days of the date such notice is given and this Lease shall be terminated as of such time. Lessor shall in the event of such early termination retain the $3,000.00 deposit referred to in paragraph 3.6 herein, be entitled to receive and retain rent for the entire month of February, 2004, and for any time thereafter that Lessee retains possession of the Leased Premises. Lessee's right to terminate this Lease Agreement in the above described manner shall expire if Lessee does not send the notice of termination to Lessor in the above manner prior to 5:00 p.m. Mountain Standard Time on February 29, 2004.

2.3 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 $4,309.50 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 the 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 February, 2004. 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 $4,309.50 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 $4,309.50 per month.

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 February 1,2004 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 on this date deposited with Lessor the sum of $3,000.00. Such deposit amount of $3,000.00 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.

3.7 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 (1 8%) 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.

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 witho.ut 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.

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 Lessee shall maintain and pay for adequate fire and extended coverage insurance upon the improvements located on the Leased Premises.

13.2 Lessee shall also obtain, at Lessee's sole cost and expense, general public liability insurance protecting and indemnifying Lessor and Lessee against all claims for damages to person or property or for loss of life or of property occurring upon, in, or about the Leased Premises, with liability limits of $50,000.00 property damage and $500,000.00 with respect to injuries to any one person, and $1,000,000.00 in respect to any one accident or disaster or incident of negligence.

13.3 Lessee shall obtain all such insurance policies before Lessee takes possession of the Leased Premises. In the event of any loss or destruction of the Leased Premises by any insured cause, the insurance proceeds paid or payable as a result of said insured loss shall be paid to Lessor and Lessor shall use such insurance proceeds to repair the Leased Premises unless as a result of such loss or destruction this Lease Agreement is terminated in accordance with the provisions of paragraph 20 herein. In the event of such termination, Lessor, at Lessor's option, shall determine whether or not to retain the insurance proceeds for other purposes or use the insurance proceeds to repair or restore the Leased Premises. Lessor shall remain as co-insured on all such policies. Such insurance policies shall provide that all notices issued by the insurance company pertaining to any changes in insurance coverage under the insurance policy, delinquent premium notices, or other matters pertaining to the coverage provided by such insurance policies shall be sent to both Lessor and Lessee. Evidence of such insurance policies shall be delivered to Lessor. Lessor shall have the right at any time to require Lessee to provide to Lessor copy of such insurance policies, together with any amendments or additions to such insurance policies and evidence that all payments required to be made in order to maintain such insurance in full course and effect have been paid in full by Lessee.

14. TAXES AND ASSESSMENTS. Lessee shall pay all real estate taxes, real property assessments and Owner's Association dues or assessments levied against the Leased Premises pertaining to the term of this Lease Agreement. Lessee shall pay all other taxes, licenses, and assessments of every kind, nature and description, including all taxes and assessments on any equipment, machinery, or assets of any kind or nature placed in or upon the Leased Premises by Lessee.

15. FIRE RISK. Lessee shall not do anything in the Leased Premises or bring or keep anything therein which in any way increase or tend to increase the risk of fire or damage by explosion, or which will conflict with the regulations of the fire department or fire laws, or with any fire insurance policy on the building or any part thereof, or with any rules or ordinances established by the Health Department or with any municipal, state, county or federal laws, ordinances or regulations.

16. ACCEPTANCE OF PREMISES. Lessee has examined the Leased Premises and the buildings and improvements situate thereon, and accepts the same in the condition and state of repair they are now in.

17. QUIET ENJOYMENT. Lessor covenants and warrants that if Lessee shall faithfully and fully discharge the obligations herein set forth, Lessee shall have and enjoy during the term of this Lease Agreement, a quiet and undisturbed possession of the Leased Premises, together with all of its appurtenances.

18. LESSEE INDEMNIFICATION. Lessee covenants and agrees not to do or suffer anything to be done by which persons or property in or about or adjacent to the Leased Premises may be injured, damaged, or endangered. Lessee hereby agrees to indemnify Lessor against and to hold Lessor harmless from any and all claims or demands for loss of or damage to property or for injury or death to any person from any cause whatsoever while in, upon, or about the Leased Premises during the term of this Lease Agreement or any extension thereof. Lessee shall, at Lessee's own expense, maintain any workman's compensation insurance or any other form of insurance required by law upon the employees or agents employed by Lessee and Lessor shall have no responsibility with respect thereto.

19. CONDEMNATION. If the Leased Premises, or any substantial portion thereof, is condemned or taken by right of eminent domain, or by purchase in lieu thereof, then and in any such event, this Lease Agreement shall terminate and cease as of the time when possession is taken by the public authority and rental shall be accounted for between Lessor and Lessee as of the date of the surrender of possession. Such termination shall be without prejudice to the rights of either Lessor or Lessee to recover compensation from the condemning authority for any loss or damage caused by such condemnation. Neither Lessor nor Lessee shall have any rights in or to any award or payment made to the other by the condemning authority.

20. DESTRUCTION. It is understood and agreed that if the building upon the Leased Premises shall be destroyed by fire, the elements, riots, insurrections, explosions or any other cause, or be so damaged thereby that it becomes untenantable and cannot be rendered tenantable within ninety (90) days from the date of such damage, this Lease Agreement may be terminated by either Lessor or Lessee; provided, however, that in the event the building is so damaged, Lessee shall not be required to pay the rental herein provided during the term the Leased Premises are wholly unfit for occupancy. In the event that only a portion of the Leased Premises be damaged or become untenantable, then the rental during the period that said premises remain partially untenantable shall be reduced in the proportion that the untenantable portion of the Leased Premises bear to the total thereof. Lessor shall make all reasonable effort to repair the Leased Premises within ninety (90) days or upon such extended period as both parties shall agree, provided that if said partially tenantable premises cannot be rendered fully tenantable within said ninety (90) days or extended period agreed upon by both Lessor or Lessee, from the date of said damage, this Lease Agreement can be terminated by either Lessor or Lessee.

21. DEFAULT

A. Time and prompt performance of each and every term, covenant and condition of this Lease Agreement is material and of the essence of this Lease Agreement. Every term, covenant and condition is a material term, covenant and condition of this Lease Agreement. Performance means compliance that is full and to the letter of this Lease Agreement. Substantial compliance will not be sufficient. Performance by Lessee is a condition precedent to performance by Lessor.

B. The following or any of them constitute an event of default of the terms of this Lease Agreement:

(1) Failure by Lessee to pay when due any installment of rent or any other sum herein specified to be paid by Lessee if the failure continues for three (3) days after written notice has been given to Lessee;

(2) Abandonment of the Leased Premises by Lessee without cause (for the purposes hereof the failure to occupy and operate the Leased Premises for ten (10) consecutive days shall be conclusively deemed an abandonment of the Leased Premises by Lessee);

(3) Failure by Lessee to perform any other provision of this Lease Agreement required of Lessee, if the failure to perform the same is not cured within thirty (30) days after written notice has been given to Lessee;

(4) If Lessee shall file or have filed against Lessee in any court pursuant to any statute, either in the United States or of any other state, a Petition in Bankruptcy or Insolvency, or for reorganizations, or for appointment of a receiver or trustee of all or a substantial portion of the property owned by Lessee, or if Lessee makes an assignment for the benefit of creditors, or an execution or attachment shall be issued against Lessee on all or a substantial portion of Lessee's property, whereby all or any portion of the Leased Premises covered by this Lease Agreement or any improvements thereon shall be taken or occupied, or attempted to be taken or occupied by someone other than Lessee, except as may herein be otherwise expressly permitted, and such adjudication, appointment, assignment, petition, execution or attachment shall not be set aside, vacated, discharged or bonded within thirty (30) days after the termination, issuance, or filing of the same; and

(5) The taking by any person, except by Lessor or its agents or affiliates, of the leasehold created hereby or any part thereof upon execution, or other process of law or equity other than by assignment or sublease.

C. Upon the occurrence of any event of default, and the failure, neglect or refusal of Lessee to cure the same during any notice period required for such default specified above, without further notice to Lessee, Lessor shall be entitled to effectuate such rights and remedies against Lessee as are available to Lessor under the terms of this Lease Agreement and the laws of the State of Idaho, including, without limitation, the following remedies:

(1) Lessor shall have the immediate right, but not the obligation, to terminate this Lease Agreement, and all rights of Lessee hereunder by giving Lessee written notice of Lessor's election to terminate. No act by Lessor other than giving notice to Lessee shall terminate this Lease Agreement. In the event of such termination, Lessee agrees to immediately surrender possession of the Leased Premises. Should Lessor terminate this Lease Agreement, it may recover from Lessee all damages Lessor may incur by reason of Lessee's breach, including the cost of recovering the Leased Premises, reasonable attorney fees, and the worth at the time of such termination of the excess, if any, of the amount of rent and charges equivalent to rent reserved in this Lease Agreement for the remainder of the stated term over the then reasonable rental value of the Leased Premises for the remainder of the stated term, all of which amount shall be immediately due and payable from Lessee to Lessor.

(2) Lessor shall also have the right, without process of law, to enter the Leased Premises and remove all persons and property from the Leased Premises without being deemed guilty of or liable in trespass. No such re-entry or taking possession of the Leased Premises by Lessor shall be construed as an election on its part to terminate this Lease Agreement unless a written notice of such intention is given by Lessor to Lessee. No such action by Lessor shall be considered or construed to be a forcible entry.

(3) Lessor may, at any time, and from time to time, without terminating this Lease Agreement, enforce all of its rights and remedies under this Lease Agreement, or allowed by law or equity, including the right to recover all rent as it becomes due.

(4) In addition to the other rights of Lessor herein provided, Lessor shall have the right, without terminating this Lease Agreement, at its option, with or without process of law, to reenter and retake possession of the Leased Premises, and all improvements thereon, and collect rents from any Sublessee and/or sublet the whole or any part of the Leased Premises for the account of Lessee, upon any terms or conditions determined by Lessor. Lessee shall be liable immediately to Lessor for all costs Lessor incurs in reletting the Leased Premises, including without limitation, brokers' commissions, expenses of remodeling the Leased Premises required by the reletting, and like costs. Re-letting can be for a period shorter or longer than the remaining term of this Lease Agreement. In the event of such re-letting, Lessor shall have the right to collect any rent which may become payable under any sublease and apply the same first to the payment of expenses incurred by Lessor in dispossessing Lessee, and in re-letting the Leased Premises, and, thereafter, to the payment of the rent herein required to be paid by Lessee, in fulfillment of Lessee's covenants hereunder; and Lessee shall be liable to Lessor for the rent herein required to be paid, less any amounts actually received by Lessor from a sublease, and after payment of expenses incurred, applied on account of the rent due hereunder. In the event of such election, Lessor shall not be deemed to have terminated this Lease Agreement by taking possession of the Leased Premises unless notice of termination, in writing, has been given by Lessor to Lessee.

D. The remedies provided in this Lease Agreement are cumulative in addition to any remedies now or later allowed by law or equity. The exercise of any remedy by Lessor shall not be exclusive of the right to effect any other remedy, allowed Lessor under the terms of this Lease Agreement, or now or later allowed by law or equity.

E. Any delay by Lessor in enforcing the terms of this Lease Agreement or any considerations or departures therefrom shall not operate to waive or be deemed to be a waiver of any right to require compliance that is full and to the letter of this Lease Agreement or to thereafter require performance by Lessee in strict accordance with the terms of this Lease Agreement.

F. In the event that any remedy granted to Lessor under the terms of this Lease Agreement is held void or unenforceable, Lessor shall nevertheless have all of the other remedies provided in this Lease Agreement that are not contrary to law.

G. Lessee hereby expressly waives any and all rights of redemption granted by or under any present or future laws in the event of Lessee being evicted or dispossessed for any cause, or in the event of Lessor obtaining possession of the Leased Premises by reason of the violation by Lessee of any of the covenants and conditions of this Lease Agreement or otherwise.

22. ENFORCEMENT. Should either party default in the performance of any covenants or agreements contained herein, such defaulting party shall pay to the other party all costs and expenses, including but not limited to, reasonable attorney fees, including such fees on appeal, which the prevailing party may incur in enforcing this Lease Agreement or in pursuing any remedy allowed by law for breach hereof.

23. LESSOR'S RIGHT TO CURE LESSEE'S DEFAULTS. If Lessee shall default in the performance of any covenant or condition in this Lease Agreement required to be performed by Lessee, Lessor may, after thirty (30) days notice to Lessee, or without notice if in Lessor's opinion an emergency exists, perform such covenant or condition for the account and at the expense of Lessee, in which event Lessee shall reimburse Lessor for all sums paid to effect such cure, together with interest from the date of the expenditure at the rate of eighteen percent (18%) per annum and reasonable attorney fees. All amounts owed by Lessee to Lessor under this paragraph shall be additional rent. In order to collect such additional rent Lessor shall have all the remedies available under this Lease Agreement for a default in the payment of rent and the provisions of this paragraph shall survive the termination of this Lease Agreement. Nothing in this paragraph provided shall in any way require Lessor to perform or correct any such defaults on the part of Lessee.

24. NOTICES. Service of any notice permitted or required under the terms of this Lease Agreement shall be deemed complete upon the deposit of the same in the United States

27. LESSEE AS INDEPENDENT CONTRACTOR. Lessee's use of the Leased Premises shall be as an independent contractor and nothing herein shall be deemed to create a partnership, joint venture, employment, or master-servant relationship between the parties.

28. IDAHO LAW GOVERNS. This Lease Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Idaho.

29. MODIFICATION. This Lease Agreement contains the entire agreement between the parties, and may not be modified or changed orally, but only by an agreement in writing and signed by the party against whom enforcement of any waiver, change, modification, or discharge is sought.

30. SEVERANCE AND VALIDITY. In the event any provision of this Lease Agreement or any part thereof shall be determined by any court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions hereunder or parts thereof, shall remain in full force and effect, and shall in no way be affected, impaired or invalidated thereby, it being agreed that such remaining provisions shall be construed in a manner most closely approximating the intention of the parties with respect to the invalid, void or unenforceable provision or part thereof.

31. BINDING ON SUCCESSORS. It is further expressly agreed, that the provisions, stipulations, terms, covenants, conditions and undertakings in this Lease Agreement and any renewals thereof shall inure to the benefit of and bind the heirs, executors, administrators and assigns or successors in interest of both the Lessor and Lessee.

32. MUTUAL RELEASE OF LIABILITY TO THE EXTENT OF INSURANCE COVERAGE. Neither Lessor nor Lessee shall be liable to the other for any business interruption or any loss or damage to property or injury to or death of persons occurring on the Leased Premises or the adjoining property, or in any manner growing out of or connected with Lessee's use and occupation of the Leased Premises, or the condition thereof, or the adjoining property, whether or not caused by the negligence or other fault of Lessor or Lessee or their respective agents, employees, subtenants, licensees, or assignees. This release shall apply only to the extent that such business interruption loss or damage to property, or injury to or death of persons is covered by insurance, regardless of whether such insurance is payable to or protects Lessor or Lessee or both. Nothing in this paragraph shall be construed to impose any other or greater liability upon either Lessor or Lessee than would have existed in the absence of the paragraph. This release shall be in effect only so long as the applicable insurance policies contain a clause to the effect that this release shall not affect the right of the insured to recover under such policies.

APPENDIX 1
HAZAKDOUS WASTE AND MATERIAL - INDEMNITY

Lessee shall not cause or permit any Hazardous Waste or Material (hereafter defined) to be brought upon, kept or used in or about the Leased Premises by Lessee, or agents, employees, contractors or invitees of Lessee, expect in strict compliance with all applicable federal. state and local laws. statutes. ordinances and regulations. Lessee agrees to indemnify, save and hold Lessor harmless from and against any claim, liability, damage, judgment, penalty, fine, cost, loss or expenses, including, without limitation, diminution in value of the Leased Premises, damages for loss or restriction on use of rentable or usable space or of any amenity of the Leased Premises, damages arising from any adverse impact on marketing of space, and sums paid in settlement of claims, reasonable attorney's fees, reasonable consultant fees, engineer's fees and other expert fees, which arise from or relate to the breach by Lessee of the prohibition herein contained and which arise during or after the lease term as a result of said breach. This indemnification and hold harmless of the Lessor by the Lessee for the breach of the prohibition herein contained includes, without limitation, reasonable costs incurred in connection with an investigation of site conditions or any clean up, remedial, removal or restoration work required by any federal, state or local governmental agency or political subdivision because of Hazardous Waste or Material present in the soil or ground water on or under the Leased Premises caused by or resulting from the breach by Lessee of the prohibition herein contained. Without limiting the foregoing, if the presence of any Hazardous Waste or Material on the Leased Premises is caused or permitted by Lessee and results in any contamination of the Leased Premises, Lessee shall promptly take all actions at Lessee's sole cost and expense as are necessary to return the Leased Premises to the condition necessary to meet the requirements of any competent governmental authorities with jurisdiction over the Leased Premises.

As used herein, the term "Hazardous Waste or Material" means any hazardous or toxic substance, material or waste which is or becomes regulated by any local, state or governmental authority charged with interpreting and enforcing the various statutes identified in this paragraph or similar statutes, or their state or local counterparts. The term "Hazardous Waste or Material" includes, without limitation, any material, waste or substance that is (i) petroleum, (ii) asbestos, (iii) designated as a "pollutant" pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C. ss.1321), (iv) defined as a "Hazardous Waste" pursuant to ss 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. ss.6901, et. seq. (42 U.S.C. ss.6903), or the Idaho Hazardous Waste Management Act of 1983, Title 39, Chapter 44, Idaho Code, (v) defined as a "hazardous substance" pursuant to ss.101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. ss.9501, et seq., (vi) or otherwise regulated under the Toxic Substances Control Act, 15 U.S.C. ss.2601, et seq.; the Clean Air Act, 42 U.S.C. ss.7401, et seq.; the Clean Water Act, 33 U.S.C. ss.1251, et seq.; or (vii) defined as a "regulated substance" pursuant to subchapter IX, Solid Waste Disposal Act (regulation of underground storage tanks), 42 U.S.C. ss.6991, et seq.

EXHIBIT 10.9

OPTION T0 PURCHASE AND
RIGHT OF FIRST REFUSAL

THIS OPTION TO PURCHASE AND RIGHT OF FIRST REFUSAL is made and entered into as of the 14th day of January, 2004. 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. Lessor and Lessee are simultaneous with the execution of this Agreement entering into a Lease Agreement (the "Lease Agreement") wherein Lessor is leasing to Lessee the following described premises and all improvements located thereon situate in the County of Bonneville, State of Idaho, to-wit (the "Leased Premises"):

Lot 3, Block 2, St. Leon Industrial Park, Division No. 1, according to the recorded plat thereof.

SUBJECT TO THE FOLLOWING:

1. Declaration of Covenants, Conditions and Restrictions for St. Leon Industrial Park, recorded in the records of Bonneville County, Idaho, on October 22,1996, as Instrument No. 930434.

2. All existing easements or claims of easements, patent reservations, rights-of-way, protective covenants, zoning ordinances, 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 premises.

B. Lessor has agreed to grant to Lessee the right of first refusal and option to purchase set forth herein.

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. 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 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 Lease Agreement.

(b) Lessee is in default of any of the terms of the 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 4137 Commerce Circle, Idaho Falls, Idaho 83401, 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 Post Office Box 95, Rexburg, Idaho 83440, 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. Not withstanding anything contained in the Lease Agreement to the contrary, if Lessee exercises such option to purchase, then the term of the Lease Agreement shall expire on the day of closing of the sales transaction.

(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 Post Office Box 95, Rexburg, Idaho 83440, 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 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, Adrian Rand Robison and Dorothy Robison, husband and wife, the lineal descendants of Adrian Rand Robison and Dorothy Robison, 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 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 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 Lease Agreement.

(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 Lease Agreement, the purchase price shall be computed as follows: a fraction shall be created, the denominator of which is the CPI for December, 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 $480,000.00. The purchase price shall be the higher of:
(i) $480,000.00 or (ii) the amount which is arrived at my multiplying $480,000.00 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 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 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.

IN WITNESS WHEREOF, the parties have hereunto set their hands the day and year first above written.

LESSOR:

/S/ Adrian Rand Robison
-----------------------
Adrian Rand Robison



/S/ Dorothy Robison
-----------------------
Dorothy Robison

LESSEE:

INTERNATIONAL ISOTOPES, INC.

By:   /S/ Steve T. Laflin
      -------------------

Its:  President & CEO
      -------------------

_____________________________________________________________________________________________
LOAN NUMBER             LOAN NAME               ACCT. NUMBER      NOTE DATE      INITIALS
   48107        International Isotopes, Inc.       243059          07/01/04         MDH
NOTE AMOUNT          INDEX (w/Margin)               RATE        MATURITY DATE   LOAN PURPOSE
$250,000.00     Texas State Bank Base Rate          7.5%           07/01/05      Commercial
                       plus 1.OOO%

                                     Creditor Use Only
_____________________________________________________________________________________________

PROMISSORY NOTE
(Commercial - Revolving Draw - Variable Rate)

DATE AND PARTIES. The date of this Promissory Note (Note) is July 1, 2004. The parties and their addresses are:

LENDER:
TEXAS STATE BANK
3900 North 10th Street
McAllen, Texas 78501-1719
Telephone: (956) 631-5401

BORROWER:
INTERNATIONAL ISOTOPES, INC.
a Texas Corporation
4137 Commerce Circle
Idaho Falls, Idaho 83401

1. DEFINITIONS. As used in this Note, the terms have the following meanings:

A. Pronouns. The pronouns "I," "me," and "my" refer to each Borrower signing this Note, Individually and together with their heirs, successors and assigns, and each other person or legal entity (including guarantors, endorsers, and sureties) who agrees to pay this Note. "You" and "Your" refer to the Lender, with its participants or syndicators, successors and assigns, or any person or company that acquires an interest in the loan.

B. Note. Note refers to this document, and any extensions, renewals, modifications and substitutions of this Note.

C. Loan. Loan refers to this transaction generally, including obligations and duties arising from the terms of all documents prepared or submitted for this transaction such as applications, security agreements, disclosures or notes, and this Note.

D. Property. Property is any property, real, personal or intangible, that secures my performance of the obligations of this Loan.

E. Percent. Rates and rate change limitations are expressed as annualized percentages.

2. PROMISE TO PAY. For value received, I promise to pay you or your order, at your address, or at such other location as you may designate, amounts advanced from time to time under the terms of this Note up to the maximum outstanding principal balance of $250,000.00 (Principal), plus interest from the date of disbursement, on the unpaid outstanding Principal balance until this Note matures or this obligation is accelerated.

I may borrow up to the Principal amount more than one time.

3. ADVANCES. Advances under this Note are made according to the following terms and conditions.

A. Requests for Advances. My requests are a warranty that I am in compliance with all the Loan documents. When required by you for a particular method of advance, my requests for an advance must specify the requested amount and the date and be accompanied with any agreements, documents, and instruments that you require for the Loan. Any payment by you of any check, share draft or other charge may, at your option, constitute an advance on the Loan to me. All advances will be made in United States dollars. I will indemnify you and hold you harmless for your reliance on any request for advances that you reasonably believe to be genuine. To the extent permitted by law, I will indemnify you and hold you harmless when the person making any request represents that I authorized this person to request an advance even when this person is unauthorized or this person's signature is not genuine.

I or anyone I authorize to act on my behalf may request advances by the following methods.

(1) I make a request in person.
(2) I make a request by phone.
(3) I make a request by fax.

B. Advance Limitations. In addition to any other Loan conditions, requests for, and access to, advances are subject to the following limitations.

(1) Obligatory Advances. You will make all Loan advances subject to this Agreement's terms and conditions.

(2) Advance Amount. Subject to the terms and conditions contained in this Note, advances will me made in exactly the amount I request.

(3) Cut-Off Time. Requests for an advance received before 04:00 PM will be made on any day that you are open for business, on the day for which the advance is requested.

(4) Disbursement of Advances. On my fulfillment of this Note's terms and conditions, you will disburse the advance in any manner as you and I agree.

(5) Credit Limit. I understand that you will not ordinarily grant a request for an advance that would cause the unpaid principal of my Loan to be greater than the Principal limit. You may, at your option, grant such a request without obligating yourselves to do so in the future.

(6) Records. Your records will be conclusive evidence as to the amount of advances, the Loan's unpaid principal balances and the accrued interest.

4. INTEREST. Interest will accrue on the unpaid balance of this Note at the rate of 7.5 percent (Interest Rate) until July 2, 2004, after which time it may change as described in the Variable Rate subsection.

A. Post-Maturity Interest. After maturity or acceleration, interest will accrue at the highest rate permitted by law.

B. Maximum Interest Amount. Any amount assessed or collected as interest under the terms of this Note or obligation will be limited to the Maximum Lawful Amount of interest allowed by state or federal law. Amounts collected in excess of the Maximum Lawful Amount will be applied first to the unpaid Principal balance. Any remainder will be refunded to me. The maximum interest rate producing the Maximum Lawful Amount will be the quarterly ceiling rate announced by the Credit Commissioner from time to time hereafter.

C. Statutory Authority. The amount assessed or collected on this Note is authorized by the Texas usury laws under Tex. Fin. Code, Ch. 303. The provisions of Tex. Fin. Code, Ch. 346 do not apply to this Note.

D. Accrual. During the scheduled term of this Loan interest accrues using an Actual/360 days counting method.

E. Variable Rate. The Interest Rate may change during the term of this transaction.

(1) Index. Beginning with the first Change Date, the Interest Rate will be based on the following Index: the base commercial lending rate announced by Texas State Bank.

The Current Index is the most recent index figure available on each Change Date. You do not guaranty by selecting this Index, or the margin, that the Interest Rate on this Note will be the same rate you charge on any other loans or class of loans you make to me or other borrowers. If this Index is no longer available, you will substitute a similar Index. You will give me notice of your choice.

(2) Change Date. Each date on which the Interest Rate may change is called a Change Date. The Interest Rate may change July 2, 2004 and daily thereafter.

(3) Calculation Of Change. On each Change Date, you will calculate the Interest Rate, which will be the Current Index plus 1.000 percent. The result of this calculation will be rounded to the nearest .001 percent. Subject to any limitations, this will be the Interest Rate until the next Change Date. The new Interest Rate will become effective on each Change Date. The Interest Rate and other charges on this Note will never exceed the highest rate or charge allowed by law for this Note.

(4) Limitations. The Interest Rate changes are subject to the following limitations.

(a) Lifetime. The Interest Rate will never be less than 7.500 percent.

(5) Effect Of Variable Rate. A change in the Interest Rate will have the following effect on the payments: The amount of scheduled payments and the amount of the final payment will change.

(5) REMEDIAL CHARGES. In addition to interest or other finance charges, I agree that I will pay these additional fees based on my method and pattern of payment. Additional remedial charges may be described elsewhere in this Note.

A. Late Charge. If a payment is more than 10 days late, I will be charged 5.000 percent of the Amount of Payment. I will pay this late charge promptly but only once for each late payment.

B. Returned Check Charge. I agree to pay a fee not to exceed $30.00 for each check, negotiable order of withdrawal or draft I issue in connection with this Loan that is returned because it has been dishonored.

C. Stop Payment. A(n) Stop Payment equal to $25.00.

6. PAYMENT. I agree to pay all accrued interest on the balance outstanding from time to time in regular payments beginning October 1, 2004, then on the same day in each 3rd month thereafter. Any payment scheduled for a date falling beyond the last day of the month, will be due on the last day. A final payment of the entire unpaid outstanding balance of Principal and interest will be due July 1, 2005.

Payments will be rounded to the nearest $.01. With the final payment I also agree to pay any additional fees or charges owing and the amount of any advances you have made to others on my behalf. Payments scheduled to be paid on the 29th. 30th or 31st day of a month that contains no such day will, instead, be made on the last day of such month.

Interest payments will be applied first to any charges I owe other than late charges, then to accrued, but unpaid interest, then to late charges. Principal payments will be applied first to the outstanding Principal balance, then to any late charges. If you and I agree to a different application of payments, we will describe our agreement on this Note. The actual amount of my final payment will depend on my payment record.

7. PREPAYMENT. I may prepay this Loan in full or in part at any time. Any partial prepayment will not excuse any later scheduled payments until I pay in full.

8. LOAN PURPOSE. The purpose of this Loan is for renewal O/P working capital.

9. SECURITY. This Loan is secured by separate security instruments prepared together with this Note as follows:

Document Name Parties to Document Security Agreement -International Isotopes, Inc. International Isotopes, Inc.

10. DEFAULT. I will be in default if any of the following occur:

A. Payments. I fail to make a payment in full when due.

B. Insolvency or Bankruptcy. I make an assignment for the benefit of creditors or become insolvent, either because my liabilities exceed my assets or I am unable to pay my debts as they become due; or I petition for protection under federal, state or local bankruptcy, insolvency or debtor relief laws, or am the subject of a petition or action under such laws and fail to have the petition or action dismissed within a reasonable period of time not to exceed 60 days.

C. Business Termination. I merge, dissolve, reorganize, end my business or existence, or a partner or majority owner dies is declared legally incompetent.

D. Failure to Perform. I fail to perform any condition or to keep any promise or covenant of this Note.

E. Other Documents. A default occurs under the terms of any other transaction document.

F. Other Agreements. I am in default on any other debt or agreement I have with you.

G. Misrepresentation. I make any verbal or written statement or provide any financial information that is untrue, inaccurate, or conceals a material fact at the time it is made or provided.

H. Judgment. I fail to satisfy or appeal any judgment against me.

I. Forfeiture. The Property is used in a manner or for a purpose that threatens confiscation by a legal authority.

J. Name Change. I change my name or assume an additional name without notifying you before making such a change.

K. Property Transfer. I transfer all or a substantial part of my money or property.

L. Property Value. The value of the Property declines or is impaired.

M. Material Change. Without first notifying you, there is a material change in my business, including ownership, management, and financial conditions.

N. Insecurity. You reasonably believe that you are insecure.

11. ASSUMPTIONS. Someone buying the Property cannot assume the obligation. You may declare the entire balance of the Note to be immediately due and payable upon the creation of, or contract for the creation of, any lien, encumbrance, or transfer of the Property. However, I may sell or similarly dispose of any Property that is inventory.

12. WAIVERS AND CONSENT. To the extent not prohibited by law, I waive protest, presentment for payment, demand, notice of acceleration, notice of intent to accelerate and notice of dishonor.

A. Additional Waivers By Borrower. In addition, I, and any party to this Note and Loan, to the extent permitted by law, consent to certain actions you may take, and generally waive defenses that may be available based on these actions or based on the status of a party to this Note.

(1)You may renew or extend payments on this Note, regardless of the number of such renewals or extensions.

(2)You may release any Borrower, endorser, guarantor, surety, accommodation maker or any other co-signer.

(3) You may release, substitute or impair any Property securing this Note.

(4)You, or any institution participating in this Note, may invoke your right of set-off.

(5) You may enter into any sales, repurchases or participations of this Note to any person in any amounts and I waive notice of such sales, repurchases or participations.

(6) 1 agree that any of us signing this Note as a Borrower is authorized to modify the terms of this Note or any instrument securing, guarantying or relating to this Note.

B. No Waiver By Lender. Your course of dealing, or your forbearance from, or delay in, the exercise of any of your rights, remedies, privileges or right to insist upon my strict performance of any provisions contained in this Note, or other Loan documents, shall not be construed as a waiver by you, unless any such waiver is in writing and is signed by you.

13. REMEDIES. After I default, and after you give any legally required notice and opportunity to cure the default, you may at your option do any one 01 more of the following.

A. Acceleration. You may make all or any part of the amount owing by the terms of this Note immediately due.

B. Sources. You may use any and all remedies you have under state or federal law or in any instrument securing this Note.

C. Insurance Benefits. You may make a claim for any and all insurance benefits or refunds that may be available on my default.

D. Payments Made On My Behalf. Amounts advanced on my behalf will be immediately due and may be added to the balance owing under the terms of this Note, and accrue interest at the highest post-maturity interest rate.

E. Termination. You may terminate my right to obtain advances and may refuse to make any further extensions of credit.

F. Set-Off. You may use the right of set-off. This means you may set-off any amount due and payable under the terms of this Note against any right I have to receive money from you. My right to receive money from you includes any deposit or share account balance I have with you; any money owed to me on an item presented to you or in your possession for collection or exchange; and any repurchase agreement or other non-deposit obligation. "Any amount due and payable under the terms of this Note" means the total amount to which you are entitled to demand payment under the terms of this Note at the time you set-off. Subject to any other written contract, if my right to receive money from you is also owned by someone who has not agreed to pay this Note, you1 right of set-off will apply to my interest in the obligation and to any other amounts I could withdraw on my sole request or endorsement. Your right of set-off does not apply to an account or other obligation where my rights arise only in a representative capacity. It also does not apply to any Individual Retirement Account or other tax-deferred retirement account. You will not be liable for the dishonor of any check when the dishonor occurs because you set-off against any of my accounts. I agree to hold you harmless from any such claims arising as a result of your exercise of your right of set-off.

G. Waiver. Except as otherwise required by law, by choosing any one or more of these remedies you do not give up your right to use any other remedy. You do not waive a default if you choose not to use a remedy. By electing not to use any remedy, you do not waive your right to later consider the event a default and to use any remedies if the default continues or occurs again.

14. COLLECTION EXPENSES AND ATTORNEYS' FEES. On or after Default, to the extent permitted by law, I agree to pay all expenses of collection, enforcement or protection of your rights and remedies under this Note. Expenses include, but are not limited to, reasonable attorneys' fees, court costs, and other legal expenses. These expenses are due and payable immediately. If not paid immediately, these expenses will bear interest from the date of payment until paid in full at the highest interest rate in effect as provided for in the terms of this Note. All fees and expenses will be secured by the Property I have granted to you, if any. To the extent permitted by the United States Bankruptcy Code, I agree to pay the reasonable attorneys' fees you incur to collect this Debt as awarded by any court exercising jurisdiction under the Bankruptcy Code.

15. WARRANTIES AND REPRESENTATIONS. I make to you the following warranties and representations which will continue as long as this Note is in effect:

A. Power. I am duly organized, and validly existing and in good standing in all jurisdictions in which I operate. I have the power and authority to enter into this transaction and to carry on my business or activity as it is now being conducted and, as applicable, am qualified to do so in each jurisdiction in which I operate.

B. Authority. The execution, delivery and performance of this Note and the obligation evidenced by this Note are within my powers, have been duly authorized, have received all necessary governmental approval, will not violate any provision of law, or order of court or governmental agency, and will not violate any agreement to which I am a party or to which I am or any of my Property is subject.

C. Name and Place of Business. Other than previously disclosed in writing to you I have not changed my name or principal place of business within the last 10 years and have not used any other trade or fictitious name. Without your prior written consent, I do not and will not use any other name and will preserve my existing name, trade names and franchises.

16. INSURANCE. I agree to obtain the insurance described in this Loan Agreement.

A. Property Insurance. I will insure or retain insurance coverage on the Property and abide by the insurance requirements of any security instrument securing this Loan.

B. Insurance Warranties. I agree to purchase any insurance coverages that are required, in the amounts you require, as described in this or any other documents I sign for this Loan. I will provide you with continuing proof of coverage. I will buy or provide insurance from a firm licensed to do business in the State where the Property is located. I will have the insurance company name you as loss payee on any insurance policy. You will apply the insurance proceeds toward what I owe you on the outstanding balance. I agree that if the insurance proceeds do not cover the amounts I still owe you, I will pay the difference. I will keep the insurance until all debts secured by this agreement are paid. If I want to buy the insurance from you, I have signed a separate statement agreeing to this purchase.

17. APPLICABLE LAW. This Note is governed by the laws of Texas, the United States of America and to the extent required, by the laws of the jurisdiction where the Property is located. In the event of a dispute, the exclusive forum, venue and place of jurisdiction will be in Texas, unless otherwise required by law.

18. JOINT AND INDIVIDUAL LIABILITY AND SUCCESSORS. My obligation to pay this Loan is independent of the obligation of any other person who has also agreed to pay it. You may sue me alone, or anyone else who is obligated on this Loan, or any number of us together, to collect this Loan. Extending this Loan or new obligations under this Loan, will not affect my duty under this Loan and I will still be obligated to pay this Loan. The duties and benefits of this Loan will bind and benefit the successors and assigns of you and me.

19. AMENDMENT, INTEGRATION AND SEVERABILITY. This Note may not be amended or modified by oral agreement. No amendment or modification of this Note is effective unless made in writing and executed by you and me. This Note is the complete and final expression of the agreement. If any provision of this Note is unenforceable, then the unenforceable provision will be severed and the remaining provisions will still be enforceable.

20. INTERPRETATION. Whenever used, the singular includes the plural and the plural includes the singular. The section headings are for convenience only and are not to be used to interpret or define the terms of this Note.

21. NOTICE, FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise required by law, any notice will be given by delivering it or mailing it by first class mail to the appropriate party's address listed in the DATE AND PARTIES section, or to any other address designated in writing. Notice to one party will be deemed to be notice to all parties. I will inform you in writing of any change in my name, address or other application information. I will provide you any financial statement or information you request. All financial statements and information I give you will be correct and complete. I agree to sign, deliver, and file any additional documents or certifications that you may consider necessary to perfect, continue, and preserve my obligations under this Loan and to confirm your lien status on any Property. Time is of the essence.

22. CREDIT INFORMATION. I agree to supply you with whatever information you reasonably feel you need to decide whether to continue this Loan. You will make requests for this information without undue frequency, and will give me reasonable time in which to supply the information.

23. ERRORS AND OMISSIONS. I agree, if requested by you, to fully cooperate in the correction, if necessary, in the reasonable discretion of you of any and all loan closing documents so that all documents accurately describe the loan between you and me. I agree to assume all costs including by way of illustration and not limitation, actual expenses, legal fees and marketing losses for failing to reasonably comply with your requests within thirty (301 days.

THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

24. SIGNATURES. By signing, I agree to the terms contained in this Note. I also acknowledge receipt of a copy of this Note.

BORROWER:

International Isotopes, Inc.

By:  /S/  Steve Laflin 7-9-04
     -----------------------------
     Steve Laflin, President & CEO

LENDER:

Texas State Bank

SECURITY AGREEMENT

DATE AND PARTIES. The date of this Security Agreement (Agreement) is July 1, 2004. The parties and their addresses are:

SECURED PARTY:

TEXAS STATE BANK
3900 North 10th Street
McAllen, Texas 78501-1719

DEBTOR:

INTERNATIONAL ISOTOPES, INC.

a Texas Corporation
4137 Commerce Circle
Idaho Falls, Idaho 83401

The pronouns "you" and "your" refer to the Secured Party. The pronouns "I," "me" and "my" refer to each person or entity signing this Agreement as Debtor and agreeing to give the Property described in this Agreement as security for the Secured Debts.

1. SECURED DEBTS. This Agreement will secure the following Secured Debts:

A. Specific Debts. The following debts and all extensions, renewals, refinancings, modifications and replacements. A promissory note or other agreement, No. 48107, dated July 1, 21004, from me to you, in the amount of $250,000.00.

B. Sums Advanced. All sums advanced and expenses incurred by you under the terms of this Agreement.

2. SECURITY INTEREST. To secure the payment and performance of the Secured Debts, I give you a security interest in all of the Property described in this Agreement that I own or have sufficient rights in which to transfer an interest, now or in the future, wherever the Property is or will be located, and all proceeds and products from the Property (including, but not limited to, all parts, accessories, repairs, replacements, improvements, and accessions to the Property). Property is is11 the collateral given as security for the Secured Debts and described in this Agreement, and includes all obligations that support the payment or performance of the Property. "Proceeds" includes anything acquired upon the sale, lease, license, exchange, or other disposition of the Property; any rights and claims arising from the Property; and any collections and distributions on account of the Property.

This Agreement remains in effect until terminated in writing, even if the Secured Debts are paid and you are no longer obligated to advance funds to me under any loan or credit agreement.

3. PROPERTY DESCRIPTION. The Property is described as follows:

A. Inventory. All inventory which I hold for ultimate sale or lease, or which has been or will be supplied under contracts of service, or which are raw materials, work in process, or materials used or consumed in my business.

B. Accounts and Other Rights to Payment. All rights I have now or in the future to payments including, but not limited to, payment for property or services sold, leased, rented, licensed, or assigned, whether or not I have earned such payment by performance. This includes any rights and interests (including all liens and security interests) which I may have by law or agreement against any Account Debtor or obligor of mine.

C. Instruments, Documents and Chattel Paper. All instruments and rights I have now or in the future to payments including, but not limited to, rights to payment arising out of all present and future documents, instruments, tangible and electronic chattel paper, and loans and obligations receivable. This includes any rights and interests (including all liens and security interests) which I may have by law or agreement against any Account Debtor or obligor of mine.

D. General Intangibles. All general intangibles including, but not limited to, tax refunds, applications for patents, patents, copyrights, trademarks, trade secrets, good will, trade names, customer lists, permits and franchises, payment intangibles, computer programs and all supporting information provided in connection with a transaction relating to computer programs, and the right to use my name.

E. Equipment. All equipment including, but not limited to, all machinery. vehicles, furniture, fixtures, manufacturing equipment, farm machinery and equipment, shop equipment, office and recordkeeping equipment, and parts and tools. All equipment described in a list or schedule which I give to you will also be included in the Property, but such a list is not necessary for a valid security interest in my equipment.

F. Specific Property.

4. WARRANTIES AND REPRESENTATIONS. I make to you the following warranties and representations which will continue as long as this Agreement is in effect:

A. Power. I am duly organized, and validly existing and in good standing in all jurisdictions in which I operate. I have the power and authority to enter into this transaction and to carry on my business or activity as it is now being conducted and, as applicable, am qualified to do so in each jurisdiction in which I operate.

B. Authority. The execution, delivery and performance of this Agreement and the obligation evidenced by this Agreement are within my powers, have been duly authorized, have received all necessary governmental approval, will not violate any provision of law, or order of court or governmental agency, and will not violate any agreement to which I am a party or to which I am or any of my property is subject.

C. Name and Location. My name indicated in the DATE AND PARTIES section is my exact legal name. I am an entity organized and registered under the laws of Texas. I will provide verification of registration and location upon your request. I will provide you with at least 30 days notice prior to any change in my name, address, or state of organization or registration.

D. Business Name. Other than previously disclosed in writing to you I have not changed my name or principal place of business within the last 10 years and have not used any other trade or fictitious name. Without your prior written consent, I do not and will not use any other name and will preserve my existing name, trade-names and franchises.

E. Ownership of Property. I represent: that I own all of the Property. Your claim to the Property is ahead of the claims of any other creditor, except as disclosed in writing to you prior to any advance on the Secured Debts. The collateral that is the subject of the chattel paper is perfected and preserved. I represent that I am the original owner of the Property and, if I am not, that I have provided you with a list of prior owners of the Property.

5. DUTIES TOWARD PROPERTY.

A. Protection of Secured Party's Interest. I will defend the Property against any other claim. I agree to do whatever you require to protect your security interest and to keep your claim in the Property ahead of the claims of other creditors. I will not do anything to harm your position. I will keep books, records and accounts about the Property and my business in general. I will let you examine these and make copies at any reasonable time. I will prepare any report or accounting you request which deals with the Property.

B. Use, Location, and Protection of the Property. I will keep the Property in my possession and in good repair. I will use it only for commercial purposes. I will not change this specified use without your prior written consent. You have the right of reasonable access to inspect the Property and I will immediately inform you of any loss or damage to the Property. I will not cause or permit waste to the Property.

I will keep the Property at my address listed in the DATE AND PARTIES section unless we agree I may keep it at another location. If the Property is to be used in other states, I will give you a list of those states. The location of the Property is given to aid in the identification of the Property. It does not in any way limit the scope of the security interest granted to you. I will notify you in writing and obtain your prior written consent to any change in location of any of the Property. I will not use the Property in violation of any law. I will notify you in writing prior to any change in my address, name or, if an organization, any change in my identity or structure.

Until the Secured Debts are fully paid and this Agreement is terminated, I will not grant a security interest in any of the Property without your prior written consent. I will pay all taxes and assessments levied or assessed against me or the Property and provide timely proof of payment of these taxes and assessments upon request.

C. Selling, Leasing or Encumbering the Property. I will not sell, offer to sell, lease, or otherwise transfer or encumber the Property without your prior written permission, except for Inventory sold in the ordinary course of business at fair market value, or at a minimum price established between you and me. If I am in default under this Agreement, I may not sell the Inventory portion of the Property even in the ordinary course of business, Any disposition of the Property contrary to this Agreement will violate your rights. Your permission to sell the Property may be reasonably withheld without regard to the creditworthiness of any buyer or transferee. I will not permit the Property to be the subject of any court order affecting my rights to the Property in any action by anyone other than you. If the Property includes chattel paper or instruments, either as original collateral or as proceeds of the Property, I will note your security interest on the face of the chattel paper or instruments.

D. Additional Duties Specific to Accounts. I will not settle any Account for less than its full value without your written permission. Until you tell me otherwise, I will collect all Accounts in the ordinary course of business. I will not dispose of the Accounts by assignment without your prior written consent. I will keep the proceeds from all the Accounts and any goods which are returned to me or which I take back. I will not commingle them with any of my other property. I will deliver the Accounts to you at your request. If you ask me to pay you the full price on any returned items or items retaken by me, I will do so. I will make no material change in the terms of any Account, and I will give you any statements, reports, certificates, lists of Account Debtors (showing names, addresses and amounts owing), invoices applicable to each Account, and other data in any way pertaining to the Accounts as you may request.

6. INSURANCE. I agree to keep the Property insured against the risks reasonably associated with the Property. I will maintain this insurance in the amounts you require. This insurance will last until the Property is released from this Agreement. I may choose the insurance company, subject to your approval, which will not be unreasonably withheld.

I will have the insurance company name you as loss payee on any insurance policy. I will give you and the insurance company immediate notice of any loss. You may apply the insurance proceeds toward what is owed on the Secured Debts. Yo11 may require added security as a condition of permitting any insurance proceeds to be used to repair or replace the Property.

If you acquire the Property in damaged condition, my right to any insurance policies and proceeds will pass to you to the extent of the Secured Debts.

I will immediately notify you of cancellation or termination of insurance. If I fail to keep the Property insured, you may obtain insurance to protect your interest in the Property. This insurance may include coverages not originally required of me, may be written by a company other than one I would choose, and may be written at a higher rate than I could obtain if I purchased the insurance.

7. COLLATERAL PROTECTION INSURANCE. As part of this Agreement, I am giving you a security interest in the Property described in the Property Description Section. I am required to maintain insurance on the Property in the amount you specify, subject to applicable law. I agree to purchase the collateral insurance from an insurer authorized to do business in Texas or an eligible surplus lines insurer to the extent permitted by law. I will name you as loss payee under the policy. I may be required to deliver to you a copy of the collateral protection insurance policy and proof of payment of premiums. If I fail to meet any of these requirements, you may retain collateral protection insurance on my behalf. You are not required to purchase any type or amount of insurance. You may obtain replacement cost insurance if authorized under applicable law, subject to policy limits. If you purchase insurance for the Property, I will be responsible for the cost of that insurance, including interest and any other charges incurred by you in connection with the placement of collateral protection insurance to the extent permitted by law. I understand that insurance you obtain may cost significantly greater than the cost of insurance I could have obtained. Amounts that I owe are due and payable upon demand or on such other terms as you require to the extent permitted by law.

8. COLLECTION RIGHTS OF THE SECURED PARTY. Account Debtor means the person who is obligated on an account, chattel paper, or general intangible. I authorize you to notify my Account Debtors of your security interest and to deal with the Account Debtors' obligations at your discretion. You may enforce the obligations of an Account Debtor, exercising any of my rights with respect to the Account Debtors' obligations to make payment or otherwise render performance to me, including the enforcement of any security interest that secures such obligations. You may apply proceeds received from the Account Debtors to the Secured Debts or you may release such proceeds to me.

I specifically and irrevocably authorize you to exercise any of the following powers at my expense, without limitation, until the Secured Debts are paid in full:

A. demand payment and enforce collection from any Account Debtor or Obligor by suit or otherwise

B. enforce any security interest. lien or encumbrance given to secure the payment or performance of any Account Debtor or any obligation constituting Property.

C. file proofs of claim or similar documents in the event of bankruptcy, insolvency or death of any person obligated as an Account Debtor.

D. compromise, release, extend, or exchange any indebtedness of an Account Debtor.

E. take control of any proceeds of the Account Debtors' obligations and any returned or repossessed goods.

F. endorse all payments by any Account Debtor which may come into your possession as payable to me.

G. deal in all respects as the holder and owner of the Account Debtors' obligations.

9. AUTHORITY TO PERFORM. I authorize you to do anything you deem reasonably necessary to protect the Property, and perfect and continue your security interest in the Property. If I fail to perform any of my duties under this Agreement or any other security interest, you are authorized, without notice to me, to perform the duties or cause them to be performed. These authorizations include, but are not limited to, permission to:

A. pay and discharge taxes, liens, security interests or other encumbrances at any time levied or placed on the Property.

B. pay any rents or other charges under any lease affecting the Property.

C. order and pay for the repair, maintenance and preservation of the Property.

D. sign, when permitted by law, and file any financing statements on my behalf and pay for filing and recording fees pertaining to the Property.

E. place a note on any chattel paper indicating your interest in the Property.

F. take any action you feel necessary to realize on the Property, including performing any part of a contract or endorsing it in my name.

G. handle any suits or other proceedings involving the Property in my name.

H. prepare, file, and sign my name to any necessary reports or accountings.

I. make an entry on my books and records showing the existence of this Agreement.

J. notify any Account Debtor of your interest in the Property and tell the Account Debtor to make payments to you or someone else you name.

If you perform for me, you will use reasonable care. Reasonable care will not include: any steps necessary to preserve rights against prior parties; the duty to send notices, perform services or take any other action in connection with the management of the Property; or the duty to protect, preserve or maintain any security interest given to others by me or other parties. Your authorization to perform for me will not create an obligation to perform and your failure to perform will not preclude you from exercising any other rights under the law or this Agreement.

If you come into actual or constructive possession of the Property, you will preserve and protect the Property. For purposes of this paragraph, you will be in actual possession of the Property only when you have physical, immediate and exclusive control over the Property and you have affirmatively accepted that control. You will be in constructive possession of the Property only when you have both the power and the intent to exercise control over the Property.

10. DEFAULT. I will be in default if any of the following occur:

A. Payments. I fail to make a payment in full when due.

B. Insolvency or Bankruptcy. I make an assignment for the benefit of creditors or become insolvent, either because my liabilities exceed my assets or I am unable to pay my debts as they become due; or I petition for protection under federal, state or local bankruptcy, insolvency or debtor relief laws, or am the subject of a petition or action under such laws and fail to have the petition or action dismissed within a reasonable period of time not to exceed 60 days.

C. Business Termination. I merge, dissolve, reorganize, end my business or existence, or a partner or majority owner dies or is declared legally incompetent.

D. Failure to Perform. I fail to perform any condition or to keep any promise or covenant of this Agreement.

E. Other Documents. A default occurs under the terms of any other transaction document.

F. Other Agreements. I am in default on any other debt or agreement I have with you.

G. Misrepresentation. I make any verbal or written statement or provide any financial information that is untrue, inaccurate, or conceals a material fact at the time it is made or provided.

H. Judgment. I fail to satisfy or appeal any judgment against me.

I. Forfeiture. The Property is used in a manner or for a purpose that threatens confiscation by a legal authority.

J. Name Change. I change my name or assume an additional name without notifying you before making such a change

K. Property Transfer. I transfer all or a substantial part of my money or property.

L. Property Value. The value of the Property declines or is impaired.

M. Material Change. Without first notifying you, there is a material change in my business, including ownership, management, and financial conditions.

N. Insecurity. You reasonably believe that you are insecure.

11. REMEDIES. After I default, and after you give any legally required notice and opportunity to cure the default, you may at your option do any one or more of the following.

A. Acceleration. You may make all or any part of the amount owing by the terms of the Secured Debts immediately due.

B. Sources. You may use any and all remedies you have under state or federal law or in any instrument evidencing or pertaining to the Secured Debts.

C. Insurance Benefits. You may make a claim for any and all insurance benefits or refunds that may be available on my default.

D. Payments Made On My Behalf. Amounts advanced on my behalf will be immediately due and may be added to the Secured Debts.

E. Assembly of Property. You may require me to gather the Property and make it available to you in a reasonable fashion.

F. Repossession. You may repossess the Property so long as the repossession does not involve a breach of the peace. You may sell the Property as provided by law. You may apply what you receive from the sale of the Property to your expenses, your attorneys' fees and legal expenses (where not prohibited by law), and any debt I owe you. If what you receive from the sale of the Property does not satisfy the debt, I will be liable for the deficiency (where permitted by law). In some cases, you may keep the Property to satisfy the debt.

Where a notice is required. I agree that ten days prior written notice sent by first class mail to my address listed in this Agreement will be reasonable notice to me under the Texas Uniform Commercial Code. If the Property is perishable or threatens to decline speedily in value, you may, without notice to me, dispose of any or all of the Property in a commercially reasonable manner at my expense following any commercially reasonable preparation or processing.

If any items not otherwise subject to this Agreement are contained in the Property when you take possession, you may hold these items for me at my risk and you will not be liable for taking possession of them.

G. Use and Operation. You may enter upon my premises and take possession of all or any part of my property for the purpose of preserving the Property or its value, so long as you do not breach the peace. You may use and operate my property for the length of time you feel is necessary to protect your interest, all without payment or compensation to me.

H. Waiver. By choosing any one or more of these remedies you do not give up your right to use any other remedy. You do not waive a default if you choose not to use a remedy. By electing not to use any remedy, you do not waive your right to later consider the event a default and to use any remedies if the default continues or occurs again.

12. WAIVER OF CLAIMS. I waive all claims for loss or damage caused by your acts or omissions where you acted reasonably and in good faith.

13. PERFECTION OF SECURITY INTEREST. I authorize you to file a financing statement covering the Property. I will comply with, facilitate, and otherwise assist you in connection with obtaining perfection or control over the Property for purposes of perfecting your security interest under the Uniform Commercial Code.

14. APPLICABLE LAW. This Agreement is governed by the laws of Texas, the United States of America and to the extent required, by the laws of the jurisdiction where the Property is located. In the event of a dispute, the exclusive forum, venue and place of jurisdiction will be in Texas, unless otherwise required by law.

15. JOINT AND INDIVIDUAL LIABILITY AND SUCCESSORS. Each Debtor's obligations under this Agreement are independent of the obligations of any other Debtor. You may sue each Debtor individually or together with any other Debtor. You may release any part of the Property and I will still be obligated under this Agreement for the remaining Property. The duties and benefits of this Agreement will bind and benefit the successors and assigns of you and me.

16. AMENDMENT, INTEGRATION AND SEVERABILITY. This Agreement may not be amended or modified by oral agreement. No amendment or modification of this Agreement is effective unless made in writing and executed by you and me. This Agreement is the complete and final expression of the understanding between you and me. If any provision of this Agreement IS unenforceable, then the unenforceable provision will be severed and the remaining provisions will still be enforceable.

17. INTERPRETATION. Whenever used, the singular includes the plural and the plural includes the singular. The section headings are for convenience only and are not to be used to interpret or define the terms of this Agreement.

18. NOTICE, FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise required by law, any notice will be given by delivering it or mailing it by first class mail to the appropriate party's address listed in the DATE AND PARTIES section, or to any other address designated in writing. Notice to one party will be deemed to be notice to all parties. I will inform you in writing of any change in my name, address or other application information. I will provide you any financial statement or information you request. All financial statements and information I give you will be correct and complete. I agree to sign, deliver, and file any additional documents or certifications that you may consider necessary to perfect, continue, and preserve my obligations under this Agreement and to confirm your lien status on any Property. Time is of the essence.

THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

SIGNATURES. By signing, I agree to the terms contained in this Agreement. I also acknowledge receipt of a copy of this Agreement.

DEBTOR:

International Isotopes, Inc.

By: /S/ Steve Laflin 7-9-04
    -----------------------------
    Steve Laflin, President & CEO

SECURED PARTY:

Texas State Bank

DISBURSEMENT AUTHORIZATION

DATE AND PARTIES. The date of this Disbursement Authorization is July 1, 2004. The parties and their addresses are:

LENDER:
TEXAS STATE BANK
3900 North 10th Street
McAllen, Texas 78501-1719

Telephone: (956) 631-5401

BORROWER:
INTERNATIONAL ISOTOPES, Inc.

a Texas Corporation
4137 Commerce Circle
Idaho Falls, Idaho 83401

1. DEFINITIONS. As used in this Disbursement Authorization, the terms have the following meanings:

A. Pronouns. The pronouns "I", "me" and "my" refer to all Borrowers signing this Disbursement Authorization, individually and together with their heirs, executors, administrators, successors and assigns. "You" and "Your" refer to the Lender, with its participants, successors and assigns, or any person or company that acquires an interest in the Loan.

B. Loan. "Loan" refers to this transaction generally, including obligations and duties arising from the terms of all documents prepared or submitted for this transaction such as applications, security agreements, disclosures or notes, and this Disbursement Authorization.

2. DISBURSEMENT SUMMARY. The following summarizes the disbursements from the Loan.

Initial Advance                                                         $0.00
   Cash Paid In                                              $0.00
   Amount Contributed by Borrower                            $0.00
Total Cash Received (see Cash Payment Summary)                          $0.00
   Disbursed to Borrowers                                    $0.00
   Disbursed to Lender                                       $0.00
   Disbursed to Other Payees                                 $0.00
Total Amounts Disbursed                                                 $0.00
Amount Remaining To Be Disbursed                                        $0.00
Undisbursed Fees/charges                                                $0.00

3. DISBURSEMENT AUTHORIZATION. I authorize you to disburse the following amounts from my Loan.

DISBURSED TO:                      DATE:                     AMOUNT DISBURSED:
Disbursements to Borrower:                                              $0.00
Disbursements to Lender:                                                $0.00
Disbursements to third parties:                                         $0.00
TOTAL DISBURSED:                                                        $0.00

Remaining Credit Line: $250,000.00

I acknowledge receipt of a copy of this Disbursement Authorization on July 1, 2004.

BORROWER:

International Isotopes, Inc.

By: /S/ Steve Laflin 7-9-04
    -----------------------------
    Steve Laflin, President & CEO

 Loan Number           48107

 Loan Officer          M. Douglas Harris

 Loan Summary          This is a(n) Commercial, New, Secured, Revolving,
                       Variable loan.


 Lender Information    001 Comm
                       Texas State Bank
                       3900 North 10th Street, McAllen, TX 78501-1719
                       (956) 631 -5401


 BORROWERS

 Host ID:              243059

 Name:                 International Isotopes, Inc.

 DBA:

 Address:              4137 Commerce Circle, Idaho Falls, ID 83401

 EIN:                  74-2763837

 Phone:

 NAlC -Primary:

 NAlC -Secondary:


 GENERAL INFORMATION
 Specific Loan Purpose:    for renewal O/P working capital


User Defined Fields:

Class Code                                         05
Branch                                             01
Purpose Code                                       530
Opened By Responsibility Code                      039
Product Code                                       10405
Collateral Code                                    0052
Rate Index (if variable rate)                      01
Payment Code                                       2
Loan Rating Code                                   02
Census Tract Number                                0.00

CALCULATION TERMS


PAYMENT INFORMATION

 Repayment Method                   Accrued Interest Only
 Credit Limit                       $250,000.00
 Payment Frequency                  Quarterly
 Funding Date                       July 1, 2004
 Note Date                          July 1, 2004
 First Payment Date                 October 1, 2004
 Accrual Method                     Actual/360
 Term of the Loan                   1 years
 Maturity Date                      July 1, 2005


 VARIABLE RATE

 Index                              Texas State Bank Base Rate
 Market as Percent of Index         0.000 %
 Margin as Percentage Points        1,000 %
 Rounded to the Nearest             .001 %
 Market Rate                        7.500 %
 Lock Margin for (Days)
 Margin Expiration Date
 Initial Rate Definition            Specific Value
 Initial Rate                       7.500 %
 Discount                           0.000 %
 Periodic Cap                       0.000 %
 Initial Rate Subject to Floor      Yes
 Initial Rate Subject to Ceiling    No
 Floor Definition                   Specific Value
 Floor                              7.500 %

Floor Margin                       0.000%
Ceiling Definition                 None
Ceiling                            0.000%
Ceiling Margin                     0.000%
Rate Change Affects                Payment Amount and Amount Due at Maturity
Initial Rate Hold Date             July 2, 2004
Initial Rate Hold Term             1 Days
Rate Change Frequency              1 Days
Initial Payment Hold (Payments)    1 payments
Payment Change Frequency;          1 payments

ADVANCE INFORMATION

Initial Advance                    50.00
Minimum Advance                    SO.00
Advance Type                       Obligatory
Advances are equal to or a         No
multiple of the minimum
Number Authorized Persons
Deposit Account Number

LATE CHARGES

If a payment is more than 10 days late, I will be charged 5.000 percent of the Amount of Payment. I will pay this late charge promptly but only once for each late payment.

Collateral Type                    Accounts & Contract Rights (Generally)
Specific Collateral Description
Additional Comments
Location Address                   4137 Commerce Circle, Idaho Falls, ID 83401




Collateral Type                    General Intangibles (Generally)
Specific Collateral Description
Additional Comments
Location Address                   4137 Commerce Circle, Idaho Falls, ID 83401




Collateral Type                    Inventory
Specific Collateral Description
Additional Comments
Location Address                   4137 Commerce Circle, Idaho Falls, ID 83401




Collateral Type                    Equipment (Generally)
Specific Collateral Description
Additional Comments
Location Address                   4137 Commerce Circle, Idaho Falls, ID 83401



Collateral Type                    Chattel Paper
Specific Collateral Description
Additional Comments
Location Address                   4137 Commerce Circle, Idaho Falls, ID 83401

_____________________________________________________________________________________________
LOAN NUMBER             LOAN NAME               ACCT. NUMBER      NOTE DATE      INITIALS
   48108        International Isotopes, Inc.       243059          07/01/04         MDH
NOTE AMOUNT          INDEX (w/Margin)               RATE        MATURITY DATE   LOAN PURPOSE
$733,595.00     Texas State Bank Base Rate          7.5%           02/01/06      Commercial
                       plus 1.OOO%

                                     Creditor Use Only
_____________________________________________________________________________________________

PROMISSORY NOTE
(Commercial - Single Advance - Variable Rate)

DATE AND PARTIES. The date of this Promissory Note (Note) is July 1, 2004. The parties and their addresses are:

LENDER:
TEXAS STATE BANK
3900 North 10th Street
McAllen, Texas 78501- 1719

Telephone: (956) 631-5401

BORROWER:
INTERNATIONAL ISOTOPES, Inc.

a Texas Corporation
4137 Commerce Circle
Idaho Falls, Idaho 83401

1. DEFINITIONS. As used in this Note, the terms have the following meanings:

A. Pronouns. The pronouns "I," "me," and "my" refer to each Borrower signing this Note. individually and together with their heirs, successors and assigns, and each other person or legal entity (including guarantors, endorsers, and sureties) who agrees to pay this Note. "You" and "Your" refer to the Lender, with its participants or syndicators, successors and assigns, or any person or company that acquires an interest in the Loan.

B. Note. Note refers to this document, and any extensions, renewals, modifications and substitutions of this Note,

C. Loan. Loan refers to this transaction generally, including obligations and duties arising from the terms of all documents prepared or submitted for this transaction such as applications. security agreements, disclosures or notes, and this Note.

D. Property. Property is any property, real, personal or intangible, that secures my performance of the obligations of this Loan.

E. Percent. Rates and rate change limitations are expressed as annualized percentages.

2. PROMISE TO PAY. For value received, I promise to pay you or your order, at your address, or at such other location as you may designate, the principal sum of $733,595.00 (Principal) plus interest from July 1, 2004 on the unpaid Principal balance until this Note matures or this obligation is accelerated.

3. INTEREST. Interest will accrue on the unpaid Principal balance of this Note at the rate of 7.5 percent (Interest Rate) until July 2, 2004, after which time it may change as described in the Variable Rate subsection.

A. Post-Maturity Interest. After maturity or acceleration, interest will accrue at highest rate permitted by law.

B. Maximum Interest Amount. Any amount assessed or collected as interest under the terms of this Note or obligation will be limited to the Maximum Lawful Amount of interest allowed by state or federal law. Amounts collected in excess of the Maximum Lawful Amount will be applied first to the unpaid Principal balance. Any remainder will be refunded to me. The maximum interest rate producing the Maximum Lawful Amount will be the quarterly ceiling rate announced by the Credit Commissioner from time to time hereafter.

C. Statutory Authority. The amount: assessed or collected on this Note is authorized by the Texas usury laws under Tex. Fin. Code. Ch. 303.

D. Accrual. During the scheduled term of this Loan interest accrues using an Actual1360 days counting method.

E. Variable Rate. The Interest Rate may change during the term of this transaction.

(1) Index. Beginning with the first Change Date, the Interest Rate will be based on the following index: the base commercial lending rate announced by Texas State Bank.

The Current index is the most recent index figure available on each Change Date. You do not guaranty by selecting this Index, or the margin, that the Interest Rate on this Note will be the same rate you charge on any other loans or class of loans you make to me or other borrowers. If this Index is no longer available, you will substitute a similar index. You will give me notice of your choice.

(2) Change Date. Each date on which the Interest Rate may change is called a Change Date. The Interest Rate may change July 2, 2005 and daily thereafter.

(3) Calculation Of Change. On each Change Date, you will calculate the Interest Rate, which will be the Current Index plus 1.000 percent. The result of this calculation will be rounded to the nearest .001 percent. Subject to any limitations, this will be the Interest Rate until the next Change Date. The new Interest Rate will become effective on each Change Date. The Interest Rate and other charges on this Note will never exceed the highest rate or charge allowed by law for this Note.

(4) Limitations. The Interest Rate changes are subject to the following limitations:

(a) Lifetime. The Interest Rate will never be less than 7.500 percent.

(5) Effect Of Variable Rate. A change in the Interest Rate will have the following effect on the payments: The amount of scheduled payments will change.

4. REMEDIAL CHARGES. In addition to interest or other finance charges, I agree that I will pay these additional fees based on my method and pattern of payment. Additional remedial charges may be described elsewhere in this Note.

A. Late Charge. If a payment is more than 10 days late, I will be charged 5.000 percent of the Amount of Payment. I will pay this late charge promptly but only once for each late payment.

B. Returned Check Charge. I agree to pay a fee not to exceed $30.00 for each check, negotiable order of withdrawal or draft I issue in connection with this Loan that is returned because it has been dishonored.

C. Stop Payment. A(n) Stop Payment equal to $25.00.

5. PAYMENT. I agree to pay this Note as follows: 6 monthly payments of accrued interest beginning on August 01, 2004, then 12 monthly payments of accrued interest plus $1,500.00 to principal beginning February 01, 2005, and a final payment of the entire unpaid outstanding balance of Principal and Interest will be due on February 01, 2006.

Payments will be rounded to the nearest $.01. With the final payment I also agree to pay any additional fees or charges owing and the amount of any advances you have made to others on my behalf. Payments scheduled to be paid on the 29th. 30th or 31st day of a month that contains no such day will, instead, be made on the last day of such month.

Each payment I make on this Note will be applied first to interest that is due then to principal that is due, and finally to any charges that I owe other than principal and interest. If you and I agree to a different application of payments, we will describe our agreement on this Note. The actual amount of my final payment will depend on my payment record.

6. PREPAYMENT. I may prepay this Loan in full or in part at any time. Any partial prepayment will not excuse any later scheduled payments until I pay in full.

7. LOAN PURPOSE. The purpose of this Loan is a renewal O/P payoff note #31083169

8. SECURITY. This Loan is secured by separate security instruments prepared together with this Note as follows:

Document Name Parties to Document Security Agreement - International Isotopes, Inc. International Isotopes, Inc.

9. DEFAULT. I will be in default if any of the following occur:

A. Payments. I fail to make a payment in full when due.

B. Insolvency. I make an assignment for the benefit of creditors or become insolvent, either because my liabilities exceed my assets or I am unable to pay my debts as they become due.

C. Business Termination. I merge, dissolve, reorganize, end my business or existence, or a partner or majority owner dies or is declared legally incompetent.

D. Failure to Perform. I fail to perform any condition or to keep any promise or covenant of this Note.

E. Other Documents. A default occurs under the terms of any other transaction document.

F. Other Agreements. I am in default on any other debt or agreement I have with you.

G. Misrepresentation. I make any verbal or written statement or provide any financial information that is untrue, inaccurate, or conceals a material fact at the time it is made or provided.

H. Judgment. I fail to satisfy or appeal any judgment against me.

I. Forfeiture. The Property is used in a manner or for a purpose that threatens confiscation by a legal authority.

J. Name Change. I change my name or assume an additional name without notifying you before making such a change.

K. Property Transfer. I transfer all or a substantial part of my money or property.

L. Property Value. The value of the Property declines or is impaired.

M. Material Change. Without first notifying you, there is a material change in my business, including ownership, management, and financial conditions.

N. Insecurity. You reasonably believe that you are insecure.

10. ASSUMPTIONS. Someone buying the Property cannot assume the obligation. You may declare the entire balance of the Note to be immediately due and payable upon the creation of, or contract for the creation of, any lien, encumbrance, or transfer of the Property. However, I may sell or similarly dispose of any Property that is inventory.

11. WAIVERS AND CONSENT. To the extent not prohibited by law, I waive protest, presentment for payment, demand, notice of acceleration. notice of intent to accelerate and notice of dishonor.

A. Additional Waivers By Borrower. In addition, I, and any party to this Note and Loan, to the extent permitted by law, consent to certain actions you may take, and generally waive defenses that may be available based on these actions or based on the status of a party to this Note.

(1) You may renew or extend payments on this Note, regardless of the number of such renewals or extensions.

(2) You may release any Borrower, endorser, guarantor, surety, accommodation maker or any other co-signer.

(3) You may release, substitute or impair any Property securing this Note.

(4) You, or any institution participating in this Note, may invoke your right of set-off.

(5) You may enter into any sales, repurchases or participations of this Note to any person in any amounts and I waive notice of such sales, repurchases or participations.

(6) I agree that any of us signing this Note as a Borrower is authorized to modify the terms of this Note or any instrument securing, guarantying or relating to this Note.

B. No Waiver By Lender. Your course of dealing, or your forbearance from, or delay in, the exercise of any of your rights, remedies, privileges or right to insist upon my strict performance of any provisions contained in this Note, or other Loan documents. shall not be construed as a waiver by you, unless any such waiver is in writing and is signed by you.

12. REMEDIES. After I default, and after you give any legally required notice and opportunity to cure the default, you may at your option do any one more of the following.

A. Acceleration. You may make all or any part of the amount owing by the terms of this Note immediately due.

B. Sources. You may use any and all remedies you have under state or federal law or in any instrument securing this Note.

C. Insurance Benefits. You may make a claim for any and all insurance benefits or refunds that may be available on my default.

D. Payments Made On My Behalf. Amounts advanced on my behalf will be immediately due and may be added to the balance owing under the terms of this Note, and accrue interest at the highest post-maturity interest rate.

E. Set-Off. You may use the right of set-off. This means you may set-off any amount due and payable under the terms of this Note against any right I have to receive money from you. My right to receive money from you includes any deposit or share account balance I have with you; any money owed to me on an item presented to you or in your possession for collection or exchange; and any repurchase agreement or other non-deposit obligation. "Any amount due and payable under the terms of this Note" means the total amount to which you are entitled to demand payment under the terms of this Note at the time you set-off. Subject to any other written contract, if my right to receive money from you is also owned by someone who has not agreed to pay this Note, your right of set-off will apply to my interest in the obligation and to any other amounts I could withdraw on my sole request or endorsement. Your right of set-off does not apply to an account or other obligation where my rights arise only in a representative capacity. It also does not apply to any Individual Retirement Account or other tax-deferred retirement account. You will not be liable for the dishonor of any check when the dishonor occurs because you set-off against any of my accounts. I agree to hold you harmless from any such claims arising as a result of your exercise of your right of set-off.

F. Waiver. Except as otherwise required by law, by choosing any one or more of these remedies you do not give up your right to use any other remedy. You do not waive a default if you choose not to use a remedy. By electing not to use any remedy, you do not waive your right to later consider the event a default and to use any remedies if the default continues or occurs again.

13. COLLECTION EXPENSES AND ATTORNEYS' FEES. On or after Default, to the extent permitted by law, I agree to pay all expenses of collection, enforcement or protection of your rights and remedies under this Note. Expenses include, but are not limited to, reasonable attorneys' fees, court costs, and other legal expenses. These expenses are due and payable immediately. If not paid immediately, these expenses will bear interest from the date of payment until paid in full at the highest interest rate in effect as provided for in the terms of this Note. All fees and expenses will be secured by the Property I have granted to you, if any. To the extent permitted by the United States Bankruptcy Code, I agree to pay the reasonable attorneys' fees you incur to collect this Debt as awarded by any court exercising jurisdiction under the Bankruptcy Code.

14. WARRANTIES AND REPRESENTATIONS. I make to you the following warranties and representations which will continue as long as this Note is in effect:

A. Power. I am duly organized, and validly existing and in good standing in all jurisdictions in which I operate. I have the power and authority to enter into this transaction and to carry on my business or activity as it is now being conducted and, as applicable, am qualified to do so in each jurisdiction in which I operate.

B. Authority. The execution, delivery and performance of this Note and the obligation evidenced by this Note are within my powers, have been duly authorized, have received all necessary governmental approval, will not violate any provision of law, or order of court or governmental agency, and will not violate any agreement to which I am a party or to which I am or any of my Property is subject.

C. Name and place of Business. Other than previously disclosed in writing to you I have not changed my name or principal place of business within the last 10 years and have not used any other trade or fictitious name. Without your prior written consent, I do not and will not use any other name and will preserve my existing name, trade names and franchises.

15. INSURANCE. I agree to obtain the insurance described in this Loan Agreement.

A. Property Insurance. I will insure or retain insurance coverage on the Property and abide by the insurance requirements of any security instrument securing this Loan.

B. Insurance Warranties. I agree to purchase any insurance coverages that are required, in the amounts you require, as described in this or any other documents I sign for this Loan. I will provide you with continuing proof of coverage. I will buy or provide insurance from a firm licensed to do business in the State where the Property is located. I will have the insurance company name you as loss payee on any insurance policy. You will apply the insurance proceeds toward what I owe you on the outstanding balance. I agree that if the insurance proceeds do not cover the amounts I still owe you, I will pay the difference. I will keep the insurance until all debts secured by this agreement are paid. If I want to buy the insurance from you, I have signed a separate statement agreeing to this purchase.

16. APPLICABLE LAW. This Note is governed by the laws of Texas, the United States of America and to the extent required, by the laws of the jurisdiction where the Property is located. In the event of a dispute, the exclusive forum, venue and place of jurisdiction will be in Texas, unless otherwise required by law.

17. JOINT AND INDIVIDUAL LIABILITY AND SUCCESSORS. My obligation to pay this Loan is independent of the obligation of any other person who has also agreed to pay it. You may sue me alone, or anyone else who is obligated on this Loan, or any number of us together, to collect this Loan. Extending this Loan or new obligations under this Loan, will not affect my duty under this Loan and I will still be obligated to pay this Loan. The duties and benefits of this Loan will bind and benefit the successors and assigns of you and me.

18. AMENDMENT, INTEGRATION AND SEVERABILITY. This Note may not be amended or modified by oral agreement. No amendment or modification of this Note is effective unless made in writing and executed by you and me. This Note is the complete and final expression of the agreement. If any provision of this Note is unenforceable, then the unenforceable provision will be severed and the remaining provisions will still be enforceable.

19. INTERPRETATION. Whenever used, the singular includes the plural and the plural includes the singular. The section headings are for convenience only and are not to be used to interpret or define the terms of this Note.

20. NOTICE, FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise required by law, any notice will be given by delivering it or mailing it by first class mail to the appropriate party's address listed in the DATE AND PARTIES section, or to any other address designated in writing. Notice to one party will be deemed to be notice to all parties. I will inform you in writing of any change in my name, address or other application information. I will provide you any financial statement or information you request. All financial statements and information I give you will be correct and complete. I agree to sign, deliver, and file any additional documents or certifications that you may consider necessary to perfect, continue, and preserve my obligations under this Loan and to confirm your lien status on any Property. Time is of the essence.

21. CREDIT INFORMATION. I agree to supply you with whatever information you reasonably request. You will make requests for this information without undue frequency, and will give me reasonable time in which to supply the information.

22. ERRORS AND OMISSIONS. I agree, if requested by you, to fully cooperate in the correction, if necessary, in the reasonable discretion of you of any and all loan closing documents so that all documents accurately describe the loan between you and me. I agree to assume all costs including by way of illustration and not limitation, actual expenses, legal fees and marketing losses for failing to reasonably comply with your requests within thirty (30)days.

THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

23. SIGNATURES. By signing, I agree to the terms contained in this Note. I also acknowledge receipt of a copy of this Note.

BORROWER:

International Isotopes, Inc.

By: /S/ Steve Laflin 7-9-04
    ----------------------------
    Steve Laflin, President, CEO

LENDER:

Texas State Bank

SECURITY AGREEMENT

DATE AND PARTIES. The date of this Security Agreement (Agreement) is July 01, 2004. The parties and their addresses are:

SECURED PARTY:
TEXAS STATE BANK
3900 North 10th Street
McAllen, Texas 78501-1719

DEBTOR:
INTERNATIONAL ISOTOPES, INC.

a Texas Corporation
4137 Commerce Circle
Idaho Falls, Idaho 83401

The pronouns "you" and "your" refer to the Secured Party. The pronouns "I," "me" and "my" refer to each person or entity signing this Agreement as Debtor and agreeing to give the Property described in this Agreement as security for the Secured Debts.

1. SECURED DEBTS. This Agreement will secure the following Secured Debts:

A. Specific Debts. The following debts and all extensions, renewals, refinancings, modifications and replacements. A promissory note or other agreement, No. 48108, dated July 1, 2004, from me to you, in the amount of $733,595.00.

B. Sums Advanced. All sums advanced and expenses incurred by you under the terms of this Agreement.

2. SECURITY INTEREST. To secure the payment and performance of the Secured Debts, I give you a security interest in ail of the Property described in this Agreement that I own or have sufficient rights in which to transfer an interest, now or in the future, wherever the Property is or will be located, and all proceeds and products from the Property (including, but not limited to, all parts, accessories, repairs, replacements, improvements, and accessions to the Property). Property is all the collateral given as security for the Secured Debts and described in this Agreement, and includes all obligations that support the payment or performance of the Property. "Proceeds" includes anything acquired upon the sale, lease, license, exchange, or other disposition of the Property; any rights and claims arising from the Property; and any collections and distributions on account of the Property.

This Agreement remains in effect until terminated in writing, even if the Secured Debts are paid and you are no longer obligated to advance funds to me under any loan or credit agreement.

3. PROPERTY DESCRIPTION. The Property is described as follows:

A. Inventory. All inventory which I hold for ultimate sale or lease, or which has been or will be supplied under contracts of service, or which are raw materials, work in process, or materials used or consumed in my business.

B. Accounts and Other Rights to Payment. All rights I have now or in the future to payments including, but not limited to, payment for property or services sold, leased, rented, licensed, or assigned, whether or not I have earned such payment by performance. This includes any rights and interests (including all liens and security interests) which I may have by law or agreement against any Account Debtor or obligor of mine.

C. Instruments, Documents and Chattel Paper. All instruments and rights I have now or in the future to payments including, but not limited to, rights to payment arising out of all present and future documents, instruments, tangible and electronic chattel paper, and loans and obligations receivable. This includes any rights and interests [including all liens and security interests) which I may have by law or agreement against any Account Debtor or obligor of mine.

D. General Intangibles. All general intangibles including, but not limited to, tax refunds, applications for patents, patents, copyrights, trademarks, trade secrets, good will, trade names, customer lists, permits and franchises, payment intangibles, computer programs and all supporting information provided in connection with a transaction relating to computer programs, and the right to use my name.

E. Equipment. All equipment including, but not limited to, all machinery, vehicles, furniture, fixtures, manufacturing equipment, farm machinery and equipment, shop equipment, office and recordkeeping equipment, and parts and tools. All equipment described in a list or schedule which I give to you will also be included in the Property, but such a list is not necessary for a valid security interest in my equipment.

F. Specific Property. Any and All deposit accounts, payment intangibles, investment property and software together with all supporting obligation and proceeds of same property and all after-acquired collateral of the same classification.

4. WARRANTIES AND REPRESENTATIONS. I make to you the following warranties and representations which will continue as long as this Agreement is in effect:

A. Power. I am duly organized, and validly existing and in good standing in all jurisdictions in which 1 operate. I have the power and authority to enter into this transaction and to carry on my business or activity as it is now being conducted and, as applicable, am qualified to do so in each jurisdiction in which I operate.

B. Authority. The execution, delivery and performance of this Agreement and the obligation evidenced by this Agreement are within my powers, have been duly authorized, have received all necessary governmental approval, will not violate any provision of law, or order of court or governmental agency, and will not violate any agreement to which I am a party or to which I am or any of my property is subject.

C. Name and Location. My name indicated in the DATE AND PARTIES section is my exact legal name. I am an entity organized and registered under the laws of Texas. I will provide verification of registration and location upon your request. I will provide you with at least 30 days notice prior to any change in my name, address, or state of organization or registration.

D. Business Name. Other than previously disclosed in writing to you I have not changed my name or principal place of business within the last 10 years and have not used any other trade or fictitious name. Without your prior written consent, I do not and will not use any other name and will preserve my existing name, trade names and franchises.

E. Ownership of Property. I represent that I own all of the Property. Your claim to the Property is ahead of the claims of any other creditor, except as disclosed in writing to you prior to any advance on the Secured Debts. The collateral that is the subject of the chattel paper is perfected and preserved. I represent that I am the original owner of the Property and, if I am not, that I have provided you with a list of prior owners of the Property.

5. DUTIES TOWARD PROPERTY.

A. Protection of Secured Party's Interest. I will defend the Property against any other claim. I agree to do whatever you require to protect your security interest and to keep your claim in the Property ahead of the claims of other creditors. I will not do anything to harm your position. I will keep books. records and accounts about the Property and my business in general. I will let you examine these and make copies at any reasonable time. I will prepare any report or accounting you request which deals with the Property.

B. Use, Location, and Protection of the Property. I will keep the Property in my possession and in good repair. I will use it only for commercial purposes. I will not change this specified use without your prior written consent. You have the right of reasonable access to inspect the Property and I will immediately inform you of any loss or damage to the Property. I will not cause or permit waste to the Property.

I will keep the Property at my address listed in the DATE AND PARTIES section unless we agree I may keep it at another location. If the Property is to be used in other states, I will give you a list of those states. The location of the Property is given to aid in the identification of the Property. It does not in any way limit the scope of the security interest granted to you. I will notify you in writing and obtain your prior written consent to any change in location of any of the Property. I will not use the Property in violation of any law. I will notify you in writing prior to any change in my address, name or, if an organization, any change in my identity or structure.

Until the Secured Debts are fully paid and this Agreement is terminated, I will not grant a security interest in any of the Property without your prior written consent. I will pay all taxes and assessments levied or assessed against me or the Property and provide timely proof of payment of these taxes and assessments upon request.

C. Selling, Leasing or Encumbering the Property. I will not sell, offer to sell, lease, or otherwise transfer or encumber the Property without your prior written permission, except for inventory sold in the ordinary course of business at fair market value, or at a minimum price established between you and me. If I am in default under this Agreement, I may not sell the inventory portion of the Property even in the ordinary course of business. Any disposition of the Property contrary to this Agreement will violate your rights. Your permission to sell the Property may be reasonably withheld without regard to the creditworthiness of any buyer or transferee. I will not permit the Property to be the subject of any court order affecting my rights to the Property in any action by anyone other than you. If the Property includes chattel paper or instruments, either as original collateral or as proceeds of the Property, I will note your security interest on the face of the chattel paper or instruments.

D. Additional Duties Specific to Accounts. I will not settle any Account for less than its full value without your written permission. Until you tell me otherwise, I will collect all Accounts in the ordinary course of business. I will not dispose of the Accounts by assignment without your prior written consent. I will keep the proceeds from all the Accounts and any goods which are returned to me or which I take back. I will not commingle them with any of my other property. I will deliver the Accounts to you at your request. If you ask me to pay you the full price on any returned items or items retaken by me, I will do so. I will make no material change in the terms of any Account, and I will give you any statements, reports, certificates, lists of Account Debtors (showing names, addresses and amounts owing), invoices applicable to each Account, and other data in any way pertaining to the Accounts as you may request.

6. INSURANCE. I agree to keep the Property insured against the risks reasonably associated with the Property. I will maintain this insurance in the amounts you require. This insurance will last until the Property is released from this Agreement. I may choose the insurance company, subject to your approval, which will not be unreasonably withheld.

I will have the insurance company name you as loss payee on any insurance policy. I will give you and the insurance company immediate notice of any loss. You may apply the insurance proceeds toward what is owed on the Secured Debts. You may require added security as a condition of permitting any insurance proceeds to be used to repair or replace the Property.

If you acquire the Property in damaged condition, my right to any insurance policies and proceeds will pass to you to the extent of the Secured Debts.

I will immediately notify you of cancellation or termination of insurance. If I fail to keep the Property insured, you may obtain insurance to protect your interest in the Property. This insurance may include coverages not originally required of me, may be written by a company other than one I would choose, and may be written at a higher rate than I could obtain if I purchased the insurance.

7. COLLATERAL PROTECTION INSURANCE. As part of this Agreement, I am giving you a security interest in the Property described in the Property Description Section. I am required to maintain insurance on the Property in the amount you specify, subject to applicable law. I agree to purchase the collateral insurance from an insurer authorized to do business in Texas or an eligible surplus lines insurer to the extent permitted by law. I will name you as loss payee under the policy. I may be required to deliver to you a copy of the collateral protection insurance policy and proof of payment of premiums. If I fail to meet any of these requirements, you may obtain collateral protection insurance on my behalf. You are not required to purchase any type or amount of insurance. You may obtain replacement cost insurance if authorized under applicable law, subject to policy limits. If you purchase insurance for the Property, I will be responsible for the cost of that insurance, including interest and any other charges incurred by you in connection with the placement of collateral protection insurance to the extent permitted by law. I understand that insurance you obtain may cost significantly greater than the cost of insurance I could have obtained. Amounts that I owe are due and payable upon demand or on such other terms as you require to the extent permitted by law.

8. COLLECTION RIGHTS OF THE SECURED PARTY. Account Debtor means the person who is obligated on an account, chattel paper, or general intangible. I authorize you to notify my Account Debtors of your security interest and to deal with the Account Debtors' obligations at your discretion. You may enforce the obligations of an Account Debtor, exercising any of my rights with respect to the Account Debtors' obligations to make payment or otherwise render performance to me, including the enforcement of any security interest that secures such obligations. You may apply proceeds received from the Account Debtors to the Secured Debts or you may release such proceeds to me. I specifically and irrevocably authorize you to exercise any of the following powers at my expense, without limitation, until the Secured Debts are paid in full:

A. demand payment and enforce collection from any Account Debtor or Obligor by suit or otherwise.

B. enforce any security interest, lien or encumbrance given to secure the payment or performance of any Account Debtor or any obligation constituting Property.

C. file proofs of claim or similar documents in the event of bankruptcy, insolvency or death of any person obligated as an Account Debtor.

D. compromise, release, extend, or exchange any indebtedness of an Account Debtor.

E. take control of any proceeds of the Account Debtors' obligations and any returned or repossessed goods.

F. endorse all payments by any Account Debtor which may come into your possession as payable to me.

G. deal in all respects as the holder and owner of the Account Debtors' obligations.

9. AUTHORITY TO PERFORM. I authorize you to do anything you deem reasonably necessary to protect the Property, and perfect and continue your security interest in the Property. If I fail to perform any of my duties under this Agreement or any other security interest, you are authorized, without notice to me, to perform the duties or cause them to be performed. These authorizations include, but are not limited to, permission to:

A. pay and discharge taxes, liens, security interests or other encumbrances at any time levied or placed on the Property.

B. pay any rents or other charges under any lease affecting the Property.

C. order and pay for the repair, maintenance and preservation of the Property.

D. sign, when permitted by law, and file any financing statements on my behalf and pay for filing and recording fees pertaining to the Property.

E. place a note on any chattel paper indicating your interest in the Property.

F. take any action you feel necessary to realize on the Property, including performing any part of a contract or endorsing it in my name.

G. handle any suits or other proceedings involving the Property in my name.

H. prepare, file, and sign my name to any necessary reports or accountings.

I. make an entry on my books and records showing the existence of this Agreement.

J. notify any Account Debtor of your interest in the Property and tell the Account Debtor to make payments to you or someone else you name.

If you perform for me, you will use reasonable care. Reasonable care will not include: any steps necessary to preserve rights against prior parties; the duty to send notices, perform services or take any other action in connection with the management of the Property; or the duty to protect, preserve or maintain any security interest given to others by me or other parties. Your authorization to perform for me will not create an obligation to perform and your failure to perform will not preclude you from exercising any other rights under the law or this Agreement.

If you come into actual or constructive possession of the Property, you will preserve and protect the Property. For purposes of this paragraph, you will be in actual possession of the Property only when you have physical, immediate and exclusive control over the Property and you have affirmatively accepted that control. You will be in constructive possession of the Property only when you have both the power and the intent to exercise control over the Property.

10. DEFAULT. I will be in default if any of the following occur:

A. Payments. I fail to make a payment in full when due.

B. Insolvency. I make an assignment for the benefit of creditors or become insolvent, either because my liabilities exceed my assets or I am unable to pay my debts as they become due.

C. Business Termination. I merge, dissolve, reorganize, end my business or existence, or a partner or majority owner dies or is declared legally incompetent.

D. Failure to Perform. I fail to perform any condition or to keep any promise or covenant of this Agreement.

E. Other Documents. A default occurs under the terms of any other transaction document.

F. Other Agreements. I am in default on any other debt or agreement I have with you.

G. Misrepresentation. I make any verbal or written statement or provide any financial information that is untrue, inaccurate, or conceals a material fact at the time it is made or provided.

H. Judgment. I fail to satisfy or appeal any judgment against me.

I. Forfeiture. The Property is used in a manner or for a purpose that threatens confiscation by a legal authority.

J. Name Change. I change my name or assume an additional name without notifying you before making such a change.

K. Property Transfer. I transfer all or a substantial part of my money or property.

L. Property Value. The value of the Property declines or is impaired.

M. Material Change. Without first notifying you, there is a material change in my business, including ownership, management, and financial conditions.

N. Insecurity. You reasonably believe that you are insecure.

11. REMEDIES. After I default, and after you give any legally required notice and opportunity to cure the default, you may at your option do any one or more of the following.

A. Acceleration. You may make all or any part of the amount owing by the terms of the Secured Debts immediately due.

B. Sources. You may use any and all remedies you have under state or federal law or in any instrument evidencing or pertaining to the Secured Debts.

C. Insurance Benefits. You may make a claim for any and all insurance benefits or refunds that may be available on my default.

D. Payments Made On My Behalf. Amounts advanced on my behalf will be immediately due and may be added to the Secured Debts.

E. Assembly of Property. You may require me to gather the Property and make it available to you in a reasonable fashion.

F. Repossession. You may repossess the Property so long as the repossession does not involve a breach of the peace. You may sell the Property as provided by law. You may apply what you receive from the sale of the Property to your expenses, your attorneys' fees and legal expenses (where not prohibited by law), and any debt I owe you. If what you receive from the sale of the Property does not satisfy the debt, I will be liable for the deficiency (where permitted by law). In some cases, you may keep the Property to satisfy the debt.

Where a notice is required, I agree that ten days prior written notice sent by first class mail to my address listed in this Agreement will be reasonable notice to me under the Texas Uniform Commercial Code. If the Property is perishable or threatens to decline speedily in value, you may, without notice to me, dispose of any or all of the Property in a commercially reasonable manner at my expense following any commercially reasonable preparation or processing.

If any items not otherwise subject to this Agreement are contained in the Property when you take possession, you may hold these items for me at my risk and you will not be liable for taking possession of them.

G. Use and Operation. You may enter upon my premises and take possession of all or any part of my property for the purpose of preserving the Property or its value, so long as you do not breach the peace. You may use and operate my property for the length of time you feel is necessary to protect your interest, all without payment or compensation to me.

H. Waiver. By choosing any one or more of these remedies you do not give up your right to use any other remedy. You do not waive a default if you choose not to use a remedy. By electing not to use any remedy, you do not waive your right to later consider the event a default and to use any remedies if the default continues or occurs again.

12. WAIVER OF CLAIMS. I waive all claims for loss or damage caused by your acts or omissions where you acted reasonably and in good faith.

13. PERFECTION OF SECURITY INTEREST. I authorize you to file a financing statement covering the Property. I will comply with, facilitate, and otherwise assist you in connection with obtaining perfection or control over the Property for purposes of perfecting your security interest under the Uniform Commercial Code.

14. APPLICABLE LAW. This Agreement is governed by the laws of Texas, the United States of America and to the extent required, by the laws of the jurisdiction where the Property is located. In the event of a dispute, the exclusive forum, venue and place of jurisdiction will be in Texas, unless otherwise required by law.

15. JOINT AND INDIVIDUAL LIABILITY AND SUCCESSORS. Each Debtor's obligations under this Agreement are independent of the obligations of any other Debtor. You may sue each Debtor individually or together with any other Debtor. You may release any part of the Property and I will still be obligated under this Agreement for the remaining Property. The duties and benefits of this Agreement will bind and benefit the successors and assigns of you and me.

16. AMENDMENT, INTEGRATION AND SEVERABILITY. This Agreement may not be amended or modified by oral agreement. No amendment or modification of this Agreement is effective unless made in writing and executed by you and me. This Agreement is the complete and final expression of the understanding between you and me. If any provision of this Agreement is unenforceable, then the unenforceable provision will be severed and the remaining provisions will still be enforceable.

17. INTERPRETATION. Whenever used, the singular includes the plural and the plural includes the singular. The section headings are for convenience only and are not to be used to interpret or define the terms of this Agreement.

18. NOTICE, FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise required by law, any notice will be given by delivering it or mailing it by first class mail to the appropriate party's address listed in the DATE AND PARTIES section, or to any other address designated in writing. Notice to one party will be deemed to be notice to all parties. I will inform you in writing of any change in my name, address or other application information. I will provide you any financial statement or information you request. All financial statements and information I give you will be correct and complete. I agree to sign, deliver, and file any additional documents or certifications that you may consider necessary to perfect, continue, and preserve my obligations under this Agreement and to confirm your lien status on any Property. Time is of the essence.

REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

SIGNATURES. By signing, I agree to the terms contained in this Agreement. I also acknowledge receipt of a copy of this Agreement.

DEBTOR:

International Isotopes, Inc.

By: /S/ Steve Laflin 7-9-04
    -----------------------------
    Steve Laflin, President & CEO

SECURED PARTY:

Texas State Bank

Loan Number                              48108
Loan Officer                             M. Douglas Harris
Loan Summary                             This is a(n) Commercial, New, Secured,
                                         Term, Variable loan.


Lender Information                       001 Comm
                                         Texas State Bank
                                         3900 North 10th Street
                                         McAllen, TX 78501-1719
                                         (956) 631-5401

Host ID:                                 243059
Name:                                    International Isotopes, Inc.
DBA:
Address:                                 4137 Commerce Circle
                                         Idaho Falls, ID 83401
EIN:                                     74-2763837
Phone:
NAlC -Primary:

Specific Loan Purpose:                   a renewal O/P payoff note #3 1083 169


User Defined Fields:

Class Code                               05
Branch                                   01
Purpose Code                             540
Opened By Responsibility Code            039
Product Code                             10405
Collateral Code                          0052
Rate Index (if variable rate)            01
Payment Code                             2
Loan Rating Code                         02
Census Tract Number                      0.00

    Repayment Method                                                 Custom
    Amount Requested                                            $733,595.00
    Outstanding Balance                                               $0.00
    Payment Frequency                                               Monthly
    Number of Amortized Payments                                          0
    Funding Date                                               July 1, 2004
    Note Date                                                  July 1, 2004
        Funding Date is used to calculate the beginning
        of interest accrual
    First Payment Date                                       August 1, 2004
    Days to First Payment                                                31
    Accrual Method                                               Actual/360
    First Period Accrual Method                                  Actual/360
    Prepay Odd Days Interest                                             No
         Collect Odd Days As                                            N/A

____________________________________________________________________________

    INTEREST RATE DEFINITION
    Variable Interest Rate

Index                                         Texas State Bank Base Rate
Index Rate                                                        6.500%
Market as Percent of Index                                        0.000%
Margin as Percentage Points                                       1.OOO%
Market Rate                                                       7.500%
Round to the Nearest                                               .001%
Lock Margin For (number of days)
Lock Expiration Date
Initial Rate Definition                                   Specific Value
Initial Rate Subject to Floor                                         No
Initial Rate Subject to Ceiling                                       No
Initial Rate                                                      7.500%
Discount/Premium
Calculated Initial Rate                                           7.500%
Periodic Cap                                                      0.000%
Floor Definition                                          Specific Value
Floor                                                             7.500%
Floor Margin                                                      0.000%
Calculated Floor                                                  7.500%
Ceiling Definition                                                  None
Ceiling                                                           0.000%
Ceiling Margin                                                    0.000%
Calculated Ceiling                                                0.000%
Rate Change Affects                                       Payment Amount
Initial Rate Hold Date                                      July 2, 2004
Initial Rate Hold Term and Units                                  1 Days
Rate Change Frequency and Units                                   1 Days
Two Step                                                              No
Initial Payment Hold                                          1 payments
Payment Change Frequency                                      1 payments

Loan Amount                                                        $0.00
Charges Not Affecting APR                                          $0.00
Charges Affecting APR                                              $0.00
Odd Days Prepaid/Credit                                            $0.00
    0 Days
Pro Rata Charge                                                    $0.00
Prepaid Insurance                                                  $0.00
Escrow                                                             $0.00
Insurance Renewal                                                  $0.00
Single Premium PMI
Interest                                                           $0.00
Interest Reserve (Calculated)
Interest Reserve (Lender)
Minimum Interest Applies                                              No
Finance Charge                                                     $0.00
Amount Financed                                                    $0.00
Proceeds                                                           $0.00

__________________   ___________________   _____________________________________
               N/A                   N/A   6 monthly payments of accrued
                                           interest beginning on August 01,
                                           2004, then 12 monthly payments of
                                           accrued interest plus $1,500.00 to
                                           principal beginning February 01,
                                           2005, and a final payment of the
                                           entire unpaid outstanding balance of
                                           Principal and Interest will be due on
                                           February 01, 2006
________________________________________________________________________________
Total of Payments                                                          $0.00

Maturity Date
                                APR 0.000%

Credit Disability Plan Selected                           N/A
Total Premium                                           $0.00
Cost Per Day                                            $0.00


Amount of Decreasing Insurance                          $0.00
Amount of Level Insurance                               $0.00
Amount of Disability Insurance                          $0.00
Monthly Disability Benefit                              $0.00


Decreasing Term               0.000 Months             0 Days
Level Term                    0.000 Months             0 Days
Disability Term               0.000 Months             0 Days

Post Maturity interest will accrue at highest rate permitted by law

Loan Amount              $0.00
Maturity Date            February 1, 2006
Repayment Description    6 monthly payments of accrued interest beginning on
                         August 01, 2004, then 12 monthly payments of accrued
                         interest plus $1.500.00 to principal beginning February
                         01, 2005, and a final payment of the entire unpaid
                         outstanding balance of Principal and Interest will be
                         due on February 01, 2006

Fees and Charges
Description

Collateral Type                      Accounts & Contract Rights (Generally)
Specific Collateral Description
Additional Comments
Location Address                     4137 Commerce Circle, Idaho Falls, ID 83401




Collateral Type                      Equipment (Generally)
Specific Collateral Description
Additional Comments
Location Address                     4137 Commerce Circle, Idaho Falls, ID 83401



Collateral Type                      General Intangibles (Generally)
Specific Collateral Description
Additional Comments
Location Address                     4137 Commerce Circle, Idaho Falls, ID 83401




Collateral Type                      Inventory
Specific Collateral Description
Additional Comments
Location Address                     4137 Commerce Circle, Idaho Falls, ID 83401




Collateral Type                      Chattel Paper
Specific Collateral Description      Any and All deposit accounts, payment
                                     intangibles, investment property and
                                     software together with all supporting
                                     obligation and proceeds of same property
                                     and all after-acquired collateral of the
                                     same classification.
Additional Comments
Location Address                     4137 Commerce Circle, Idaho Falls, ID 83401

___________________________________________________________________________________________________

                LOAN NUMBER      ACCT. NUMBER       NOTE DATE       NOTE AMOUNT       MATURITY DATE
PRIOR
OBLIGATION         48108            243059           07101104       $733,595.00         02/01/06
INFORMATION


                LOAN NUMBER           ACCT. NUMBER         MODIFICATION DATE            NOTE AMOUNT
AMENDED
OBLIGATION         48108                 243059                07/01/04                 $733,595.00
INFORMATION
                MATURITY DATE       INDEX (w/margin)         INTEREST RATE               INITIALS

                  02/01/06           Not Applicable              7.5%                      MDH


                                Creditor Use Only
___________________________________________________________________________________________________

DATE AND PARTIES. The date of this Debt Modification Agreement iModification1 is July 1, 2004. The parties and their addresses are:

LENDER:
TEXAS STATE BANK
3900 North 10th Street
McAllen, Texas 78501-1719

Telephone: (956) 63l-5401

BORROWER:
INTERNATIONAL ISOTOPES, INC.

a Texas Corporation
4137 Commerce Circle
Idaho Falls, Idaho 83401

1. DEFINITIONS. In this Modification, these terms have the following meanings:

A. Pronouns. The pronouns "I,' "me," and "my" refer to each Borrower signing this Modification, individually and together with their heirs, executors, administrators, successors, and assigns. "You" and "your" refer to the Lender, with its participants or syndicators, successors and assigns, or any person or entity that acquires an interest in the Modification or Prior Obligation.

B. Amended Obligation. Amended Obligation is the resulting agreement that is created when the Modification amends the Prior Obligation. It is described above in the AMENDED OBLIGATION INFORMATION section.

C. Loan. Loan refers to this transaction generally. It includes the obligations and duties arising from the terms of all documents prepared or submitted in association with the Prior Obligation and this modification, such as applications, security agreements, disclosures, notes, agreements, and this Modification.

D. Modification. Modification refers to this Debt Modification Agreement.

E. Prior Obligation. Prior Obligation refers to my existing agreement described above in the PRIOR OBLIGATION INFORMATION section, and any previous extensions, renewals, modifications or substitutions of it.

2. BACKGROUND. You and I have previously entered into a Prior Obligation. As of the date of this Modification, the outstanding, unpaid balance of the Prior Obligation is $733,595.00. Conditions have changed since the execution of the Prior 0bligation instruments. In response, and for value received, you and I agree to modify the terms of the Prior Obligation, as provided for in this Modification.

3. TERMS. The Prior Obligation is modified as follows:

A. Interest. Our agreement for the payment of interest is modified to read:

(1) INTEREST. Interest will accrue on the unpaid Principal balance of this loan at the rate of 7.5 percent (Interest Rate).

(a) Maximum Interest Amount. Any amount assessed or collected as interest under the terms of this loan or obligation will be limited to the Maximum Lawful Amount of interest allowed by state or federal law. Amounts collected in excess of the Maximum Lawful Amount will be applied first to the unpaid Principal balance. Any remainder will be refunded to me.

(b) Statutory Authority. The amount assessed or collected on this loan is authorized by the Texas usury law, under Tex. Fin. Code. Ch. 303.

(c) Accrual. During the scheduled term of this Loan Interest accrues using an Actual/360 days counting method.

B. Payments. The payment provision 1s modified to lead:

(1) PAYMENT. I agree to pay this loan as follows: 6 monthly payments of accrued interest beginning on August 01, 2004, then 12 monthly payments of accrued interest plus $1,500.00 principal payment beginning February 01, 2005, and a final payment of the entire unpaid outstanding balance of Principal and Interest will be due on February 01, 2008.

Payments will be refunded to the nearest $.01. With the final payment I also agree to pay any additional fees or charges owing and the amount of any advances you have made to others on my behalf. Payments scheduled to be paid on the 29th, 30th or 31st day of a month that contains no such day will, instead, be made on the last day of such month.

C. Fees and Charges. As additiona1 consideration for your consent to enter into this Modification Agreement, I agree to pay, or have paid these additional fees and charges:

(1) Stop Payment. A(n) Stop Payment equal to $25.00.

(2) Late Charge. If a payment is more than 10 days late, I will be charged 5.000 percent of the Amount of Payment. I will pay this late charge promptly but only once for each late payment.

(3) Returned Check Charge, I agree to pay a fee not to exceed $30.00 for each check, negotiable order of withdrawal or draft I issue in connection with this Loan that is returned because it has been dishonored.

4. CONTINUATION OF TERMS. Except as specifically amended by this Modification, all of the terms of the Prior Obligation shall remain in full force and effect

5. WAIVER. I waive all claims, defenses, setoffs, or counterclaims relating to the Prior Obligation, or any document securing the Prior Obligation, that I may have. Any party to the Prior Obligation that does not sign this Modification, shall remain liable under the terms of the Prior Obligation unless released in writing by you.

6. ADDITIONAL TERMS. Interest will accrue at the fixed rate of 7.50% as indicated on 3A for 12 months. Fix rate will be adjusted to change on July 1, 2005 to a variable rate of Texas State Bank Base Rate plus 1%. Interest rate will change on a daily basis and will effect the amount of scheduled payment.

Interest rate will never be less than 7.50 percent for entire term of the loan,

THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

7. SIGNATURES. By signing, I agree to the terms contained in this Modification. I also acknowledge receipt of a copy of this Modification.

BORROWER:

International Isotopes, Inc.

By:   /S/ Steve Laflin
      -----------------------------
      Steve Laflin, President & CEO

LENDER:

Texas State Bank

By:  /S/ M. Douglas Harris
     ---------------------------------
     M. Douglas Harris, Vice President

EXHIBIT 10.12

UNSECURED NOTE

Date: April 1, 2002

MAKER: International Isotopes Inc., a Texas corporation

MAKER'S Mailing Address:

4137 Commerce Circle
Idaho Falls, Idaho 83401

PAYEE: William Nicholson

PAYEE'S Mailing Address and Place for Payment:

121 Post Oak Lane, Suite 2105
Houston, TX 77024

Principal Amount: Nine Hundred Nine Thousand Seven Hundred Thirty Seven and 00/100 Dollars ($909,737)

Annual Interest Rate on Unpaid Principal from Date: Seven percent (7%)

Annual Interest Rate on Matured, Unpaid Amounts: Ten percent (10%)

Terms of Payment (principal and interest):

Annual Payments: On April 1 of each year during the term of this Note,

                  MAKER shall  make a payment of interest and principal
                  in accordance with the following terms:

Interest:         All interest accrued for the prior year is to be paid
                  to the extent Net Profits  from the prior fiscal year
                  of MAKER are  available.  For  purposes of this Note,
                  "Net Profits" shall mean revenues less expenses,  but
                  excluding  any  taxes to be paid and prior to (i) the
                  payment   of  any  bonus   compensation   to  MAKER'S
                  management  or  employees  or (ii) the payment of any
                  dividends   or   other   distributions   to   MAKER'S
                  shareholders.  If Net Profits  from the prior  fiscal
                  year  are not  adequate  to make an  annual  interest
                  payment  when due,  then MAKER  shall be  required to

make quarterly payments (on each July 1, October 1, and January 1) of Net Profits until all interest payments that were due on the previous April 1 have been paid in full, at which time interest payments shall revert back to annual payments on April 1 of each year.

Principal:       An annual principal payment equal to:

                 30% x (Net Profit for the prior  fiscal year less any
                 interest paid pursuant to the previous paragraph)

Date of First Annual Payment: April 1, 2003

Maturity Date: April 1, 2012

MAKER promises to pay PAYEE installments of principal and interest due and payable in annual installments on the dates and as described above, continuing regularly until the Maturity Date, when the entire balance, principal and accrued interest, shall be due and payable; interest being calculated on the unpaid principal to the date of each installment paid.

The MAKER of the Note reserves the right to prepay, prior to maturity, all or any part of the principal of the Note without penalty, and interest immediately shall cease on any amount so prepaid.

SECURITY FOR PAYMENT: This Note is unsecured. Without the prior written consent of MAKER, which consent shall not unreasonably be withheld, PAYEE shall not pledge any assets as security for repayment of any obligation, except to Texas State Bank or any other financial institution that becomes MAKER'S primary bank lender.

MAKER promises to pay to the order of PAYEE at the place for payment and according to the terms of payment the principal amount plus interest at the rates stated above. All unpaid amounts shall be due by the final scheduled payment date.

On default in the payment of this Note or in the performance of any obligation hereunder, the unpaid principal balance and earned interest on this Note shall become immediately due at the election of PAYEE. MAKER and each surety, endorser, and guarantor waive all demands for payment, presentations for payment, notices of intention to accelerate maturity, notices of acceleration of maturity, protests, and notices of protest.

If this Note is given to an attorney for collection or enforcement, or if suit is brought for collection or enforcement, or if it is collected or enforced through probate, bankruptcy, or other judicial proceeding, then MAKER shall pay PAYEE all costs of collection and enforcement, including reasonable attorney's fees and court costs, in addition to other amounts due. Reasonable attorney's fees shall be 5% of all amounts due unless either party pleads otherwise.

Interest on the debt evidenced by this Note shall not exceed the maximum amount of nonusurious interest that may be contracted for, taken, reserved, charged, or received under law; any interest in excess of that maximum amount shall be credited on the principal of the debt or, if that has been paid, refunded. On any acceleration or required or permitted repayment, any such excess hall be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the debt, or, if the principal of the debt has been paid, refunded. The provision overrides other provisions in this and all other instruments concerning the debt.

This Note shall be construed in accordance with the laws of the State of Texas.

When the context requires, singular nouns and pronouns include the plural.

This Note supercodes and is in lieu of all agreements and notes, whether written or oral, between MAKER and PAYEE preceeding the date of this Note, and all such prior notes and/or agreements are hereby declared null and void.

INTERNATIONAL ISOTOPES INC.

By:     /S/ Steve Laflin  3-29-02
        -------------------------
Name:   Steve Laflin
Title:  President & CEO

Acknowledged by PAYEE;

/S/ William Nicholson
---------------------
William Nicholson

EXHIBIT 10.13

NOTE PURCHASE AGREEMENT

THIS NOTE PURCHASE AGREEMENT (this "Agreement"), is made and entered into as of January 21, 2004, by and between the undersigned lender ("Lender") and International Isotopes Inc., a Texas corporation ("Borrower'7).

WITNESSETH:

WHEREAS, Borrower desires to borrow from Lender, and Lender is willing to loan to Borrower, the principal amount of $ 156,000.00 , to be evidenced by an unsecured convertible promissory note in the form set forth on Exhibit A attached hereto (the "Convertible Note" or the "Note'7).

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby specifically acknowledged, the parties hereto agree as follows:

1. Closing; Delivery. Upon the terms and subject to the conditions herein, Borrower agrees to issue to the Lender the Convertible Note and Lender agrees to lend to Borrower pursuant to the terms of the Convertible Note and this Agreement, a maximum principal amount of $ 156,000.00 (the "Loan"). The execution and delivery of the Convertible Note and the delivery of the proceeds of the Loan shall take place at closing (the "Closing") to be held on January 23, 2004 at 9:00 a.m., Mountain time, or on such other date and at such other time as may be mutually agreed upon (the "Closing Date"). The Closing shall be held at the offices of the Borrower or at such other place as may be mutually agreed upon.

2. Representations and Warranties of Lender. Lender hereby represents and warrants that as of the Closing Date:

a. Purchase Entirely for Own Account. Lender is acquiring the Note and any securities issuable upon conversion of the Note to be received by Lender (the "Securities") for investment for Lender's owl account and not with a view to or for resale in connection with, any distribution thereof. Lender understands that the Securities have not been registered under the Securities Act of 1933, as amended (the "Act"), by reason of a specific exemption from the registration provisions of the Act that depends upon, among other things, the bona fide nature of the investment intent as expressed herein.

b. Investment Experience. Lender is an accredited investor within the meaning of Regulation D prescribed by the Securities and Exchange Commission pursuant to the Act and by virtue or Lender's experience in evaluating and investing in private placement transactions of securities in companies similar to Borrower, such Lender is capable of evaluating the merits and risks of Lender's investment in Borrower and has the capacity to protect Lender's own interests.

c. Restricted Securities. Lender acknowledges that the Securities must be held indefinitely unless subsequently registered under the Act, or unless an exemption from such registration is available. Lender is aware of the provisions of Rule 144 and 144A promulgated under the Act that permit limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions.

3. Representations and Warranties of Borrower. Borrower hereby represents and warrants that, as of the Closing Date:

a. Authority. Borrower has all requisite legal and corporate power and authority and has obtained all approvals and consents necessary to enter into this Agreement and the Note and to carry out and perform its obligations under the terms of this Agreement and the Note.

4. Covenant Concerning Confidential Information. Lender understands that in connection with the negotiation of this Agreement and the Note it may become privy to material non-public information concerning Borrower and its business operations including proposed new business opportunities. Lender agrees that it will keep such information confidential and will not disclose any material non-public information concerning Borrower to any third person and will not purchase or sell or enter into any agreement to purchase or sell securities of Borrower so long as Lender is in possession of any material information concerning Borrower which has not yet been announced publicly, either through a Borrower press release or in a disclosure filing with the Securities and Exchange Commission.

5. Conditions of Lender's Obligations at Closing. The obligations of the Lender under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions, the waiver of which shall not be effective against the Lender without its written consent:

a. Note. Borrower shall have executed and delivered to Lender an original copy of this Agreement and the Note in the form attached as Exhibit A for the Loan.

b. Patent Acquisition. All conditions precedent to the closing of that certain Asset Acquisition Agreement entered into as of November 24, 2003 between the Borrower and International Machine Design, LLC shall have been satisfied.

c. Minimum Loan Amount. The Company shall have received a minimum of $650,000 pursuant to the Note and other similar unsecured convertible promissory notes from existing Borrower shareholders.

6. Registration Rights. Borrower hereby covenants to include in its next registration of its securities under the Securities Act of 1933 the registration, on behalf of the Lender, as a selling shareholder, of that number of shares of its common stock that would be issuable upon a full conversion of the principal amount of Lender's Note. Such "piggy back" registration rights shall be subject to limitation due to underwriter's discretion based on an assessment of market conditions in the event that the Company's next registered offering of securities involves a traditional underwriting, provided that any such limitation shall affect Lender and other similarly situated holders of Borrower notes on an equal percentage basis according to the number of conversion shares held by Lender and such other noteholders. All expenses of such registration, including the expenses of a single law firm representing the interests of Lender and all other similarly situated selling shareholders, shall be borne by Borrower.

7. SEC Filings. Borrower hereby covenants, at its expense, to make any filings with the Securities and Exchange Commission required of Lender in connection with the issuance of the Note or any underlying shares of stock issuable upon conversion of the Note, including any Form 3s or 4s and any filings required under Section 13(d) of the Securities and Exchange Act of 1934. Lender agrees to cooperate with Borrower's legal counsel in providing the necessary information for such filings.

8. Miscellaneous.

a. Severabilitv. If any of the provisions of this Agreement shall be held to be invalid or unenforceable, this Agreement shall be construed as if not containing those provisions and the rights and obligations of the parties hereto shall be construed and enforced accordingly.

b. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A facsimile, telecopy of other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

c. Governing Law: Jurisdiction. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas without regard to the conflicts of law principles thereof.

d. Integration. This Agreement and each Note (together with the exhibits and documents referenced herein and therein) contain the entire agreement of the parties relating to the subject matter hereof and supersedes all prior offers, letters, agreements and understandings of the parties.

e. Waiver and Amendment. Any term of this Agreement may be amended only with the written consent of Borrower and Lender. The observance of any term of this Agreement may be waived only if such waiver is in writing signed by the party waiving such term.

f. Headings. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

g. Transfer and Assignment. The rights and obligations of Lender and Borrower hereunder and pursuant to the Note may not be transferred or assigned by either party without the prior written consent of the other, except that Lender may transfer or assign its rights and obligations under this Agreement or the Note to an affiliate, partner or limited partner of Lender. Except as otherwise provided in this Agreement and the Note, the provisions of this Agreement and the Note shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

BORROWER:

INTERNATIONAL ISOTOPES INC.
a Texas corporation

By:    /S/ Steve T. Laflin
       -------------------
Name:  Steve T. Laflin
Title: President

LENDER:

By:    /S/ Ralph Richart
       -----------------
Name:  Ralph Richart

SIGNATURE PAGE TO INTERNATIONAL ISOTOPES INC.
NOTE PURCHASE AGREEMENT

                                                              Idaho Falls, Idaho

$156,000.00                                                   January 21,2004


         1.     Principal and Interest.

(a) International Isotopes Inc., a Texas corporation (the "Company"), for value received, hereby promises to pay to the order of Ralph Richart (the "Holder") in lawful money of the United States at the address of the Holder set forth below, the principal amount of Hundred and Fifty Six Thousand Dollars ($156,000.00) (the "Principal"), together with simple interest at the rate of six percent (6%) per annum. Interest shall be computed on a 365-day year for the actual number of days elapsed.

(b) The Principal of this Note shall be due and payable on December 30, 2005 (the "Maturity Date"). Accrued interest on this Note shall be payable in a5G-s 6ri June 30, 2004, December 30, 2004, June 30, 2005 and on the Maturity Date. This Note may be prepaid without penalty, in whole or in part, at any time.

(c) Upon payment in full of all principal and interest payable hereunder, this Note shall be surrendered to the Company for cancellation.

2. Conversion.

(a) Conversion. The outstanding principal balance of this Note and all interest accrued and unpaid thereon may be converted at the option of the Holder at any time into shares of the Company's common stock, par value $.01 per share at a conversion price equal to the average of the closing bid prices of the Company's common stock on the third through the eighth trading days following the Company's announcement of its acquisition of certain fluorine extraction process patents from International Machine Design, LLC, such announcement to be made by the Company within two (2) business days of the closing of the acquisition of the patents.

(b) Option Exercise. At least 10 days (but not more than 30 days) prior to the conversion date, Holder shall notify the Company of its desire to convert all or part of this Note to common stock. Holder's notice shall specify the conversion date and the amount of principal and accrued interest to be converted. Any notice required or that may be given under this Note shall be in writing and shall be deemed to have been duly given when delivered, transmitted by telecopier (with receipt confirmed) or mailed by registered or certified first class mail, postage prepaid, return receipt requested to the parties hereto at the address set forth below (as the same may be changed from time to time by notice similarly given) or the last known business or residence address of much other person as may be designated by either party hereto in writing.

(i) If to Company:

International Isotopes Inc. 4137 Commerce Circle Idaho Falls, Idaho 83401 Fax: (208) 524-141 1

(ii) If to Holder:

Ralph Richart
VC 14-212
630 West 168th St.

New York, NY 10032

(c) Mechanics of Conversion. Upon conversion of this entire Note as set forth above, the outstanding principal and accrued interest of the Note shall be converted as elected by Holder without any further action by the Holder and whether or not the Note is surrendered to the Company or its transfer agent. The Company shall not be obligated to issue certificates evidencing the shares of the securities issuable upon conversion unless such Note is either delivered to the Company or its transfer agent, or the Holder notifies the Company or its transfer agent that such Note has been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such Note. The Company shall, as soon as practicable after such delivery, or such agreement and indemnification, issue and deliver to such Holder, a certificate or certificates for the securities to which the Holder shall be entitled and a check payable to the Holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of common stock. Such conversion shall be deemed to have been made on the conversion date specified in Holder's notice of conversion. The person or persons entitled to receive securities issuable upon such conversion shall be treated for all purposes as the record holder or holders of such securities on such date. If the Holder elects to convert less than the entire principal amount of the Note, upon Lender's surrender of the original Note, Borrower shall deliver to Lender a new Note in an amount equal to the principal amount of the original Note that has not been converted to common stock.

3. Attorneys Fees. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal and interest payable hereunder, reasonable attorneys' fees and costs incurred by the Holder.

4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF TEXAS AS SUCH 1,AWS ARE APPLIED TO AGREEMENTS BETWEEN TEXAS RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN TEXAS.

HOLDER: INTERNATIONAL ISOTOPES INC.

By:      /S/ Ralph Richart           By:    /S/ Steve T. Laflin
         ------------------                 -------------------
Name:    Ralph Richart               Name:  Steve T. Laflin
Address: VC 14-212                   Title: President
         630 West 168th St.
         New York, NY 10032

NOTE PURCHASE AGREEMENT

THIS NOTE PURCHASE AGREEMENT (this "Agreement"), is made and entered into as of January 23, 2004, by and between the undersigned lender ("Lender") and International Isotopes Inc., a Texas corporation ("Borrower").

WITNESSETH:

WHEREAS, Borrower desires to borrow from Lender, and Lender is willing to loan to Borrower, the principal amount of $ 130,500.00 ,to be evidenced by an unsecured convertible promissory note in the form set forth on Exhibit A attached hereto (the "Convertible Note" or the "Note '7).

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby specifically acknowledged, the parties hereto agree as follows:

1. Closing; Delivery. Upon the terms and subject to the conditions herein, Borrower agrees to issue to the Lender the Convertible Note and Lender agrees to lend to Borrower pursuant to the terms of the Convertible Note and this Agreement, a maximum principal amount of $ 130,500.00 (the "Loan J'). The execution and delivery of the Convertible Note and the delivery of the proceeds of the Loan shall take place at closing (the "Closing") to be held on January 28, 2004 at 9:00 a.m., Mountain time, or on such other date and at such other time as may be mutually agreed upon (the "Closing Date"). The Closing shall be held at the offices of the Borrower or at such other place as may be mutually agreed upon.

2. Representations and Warranties of Lender. Lender hereby represents and warrants that as of the Closing Date:

a. Purchase Entirely for Own Account. Lender is acquiring the Note and any securities issuable upon conversion of the Note to be received by Lender (the "Securities") for investment for Lender's own account and not with a view to or for resale in connection with, any distribution thereof. Lender understands that the Securities have not been registered under the Securities Act of 1933, as amended (the "Act"), by reason of a specific exemption from the registration provisions of the Act that depends upon, among other things, the bona fide nature of the investment intent as expressed herein.

b. Investment Experience. Lender is an accredited investor within the meaning of Regulation D prescribed by the Securities and Exchange Commission pursuant to the Act and by virtue of Lender's experience in evaluating and investing in private placement transactions of securities in companies similar to Borrower, such Lender is capable of evaluating the merits and risks of Lender's investment in Borrower and has the capacity to protect Lender's own interests.

c. Restricted Securities. Lender acknowledges that the Securities must be held indefinitely unless subsequently registered under the Act, or unless an exemption from such registration is available. Lender is aware of the provisions of Rule 144 and 144A promulgated under the Act that permit limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions.

3. Representations and Warranties of Borrower. Borrower hereby represents and warrants that, as of the Closing Date:

a. Authority. Borrower has all requisite legal and corporate power and authority and has obtained all approvals and consents necessary to enter into this Agreement and the Note and to carry out and perform its obligations under the terms of this Agreement and the Note.

4. Covenant Concerning Confidential Information. Lender understands that in connection with the negotiation of this Agreement and the Note it may become privy to material non-public information concerning Borrower and its business operations including proposed new business opportunities. Lender agrees that it will keep such information confidential and will not disclose any material non-public information concerning Borrower to any third person and will not purchase or sell or enter into any agreement to purchase or sell securities of Borrower so long as Lender is in possession of any material information concerning Borrower which has not yet been announced publicly, either through a Borrower press release or in a disclosure filing with the Securities and Exchange Commission.

5. Conditions of Lender's Obligations at Closing. The obligations of the Lender under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions, the waiver of which shall not be effective against the Lender without its written consent:

a. Note. Borrower shall have executed and delivered to Lender an original copy of this Agreement and the Note in the form attached as Exhibit A for the Loan.

b. Patent Acquisition. All conditions precedent to the closing of that certain Asset Acquisition Agreement entered into as of November 24, 2003 between the Borrower and International Machine Design, LLC shall have been satisfied.

c. Minimum Loan Amount. The Company shall have received a minimum of $650,000 pursuant to the Note and other similar unsecured convertible promissory notes from existing Borrower shareholders.

6. Registration Rights. Borrower hereby covenants to include in its next registration of its securities under the Securities Act of 1933 the registration, on behalf of the Lender, as a selling shareholder, of that number of shares of its common stock that would be issuable upon a full conversion of the principal amount of Lender's Note. Such "piggy back" registration rights shall be subject to limitation due to underwriter's discretion based on an assessment of market conditions in the event that the Company's next registered offering of securities involves a traditional underwriting, provided that any such limitation shall affect Lender and other similarly situated holders of Borrower notes on an equal percentage basis according to the number of conversion shares held by Lender and such other noteholders. All expenses of such registration, including the expenses of a single law firm representing the interests of Lender and all other similarly situated selling shareholders, shall be borne by Borrower.

7. SEC Filings. Borrower hereby covenants, at its expense, to make any filings with the Securities and Exchange Commission required of Lender in connection with the issuance of the Note or any underlying shares of stock issuable upon conversion of the Note, including any Form 3s or 4s and any filings required under Section 13(d) of the Securities and Exchange Act of 1934. Lender agrees to cooperate with Borrower's legal counsel in providing the necessary information for such filings.

8. Miscellaneous.

a. Severability. If any of the provisions of this Agreement shall be held to be invalid or unenforceable, this Agreement shall be construed as if not containing those provisions and the rights and obligations of the parties hereto shall be construed and enforced accordingly.

b. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A facsimile, telecopy of other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

c. Governing Law: Jurisdiction. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas without regard to the conflicts of law principles thereof.

d. Integration. This Agreement and each Note (together with the exhibits and documents referenced herein and therein) contain the entire agreement of the parties relating to the subject matter hereof and supersedes all prior offers, letters, agreements and understandings of the parties.

e. Waiver and Amendment. Any term of this Agreement may be amended only with the written consent of Borrower and Lender. The observance of any term of this Agreement may be waived only if such waiver is in writing signed by the party waiving such term.

f. Headings. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

g. Transfer and Assignment. The rights and obligations of Lender and Borrower hereunder and pursuant to the Note may not be transferred or assigned by either party without the prior written consent of the other, except that Lender may transfer or assign its rights and obligations under this Agreement or the Note to an affiliate, partner or limited partner of Lender. Except as otherwise provided in this Agreement and the Note, the provisions of this Agreement and the Note shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

BORROWER:

INTERNATIONAL ISOTOPES INC.
a Texas corporation

By:    /S/ Steve T. Laflin
       -------------------
Name:  Steve T. Laflin
Title: President

LENDER:

By:    /S/ William Nicholson
       ---------------------
Name:  William Nicholson

SIGNATURE PAGE TO INTERNATIONAL ISOTOPES INC.
NOTE PURCHASE AGREEMENT

                                                              Idaho Falls, Idaho

$130,500.00                                                   January 23,2004


         1.     Principal and Interest.

(a) International Isotopes Inc., a Texas corporation (the "Company"), for value received, hereby promises to pay to the order of William Nicholson (the "Holder") in lawful money of the United States at the address of the Holder set forth below, the principal amount of One Hundred Thirty Thousand Five Hundred Dollars ($130,500.00) (the "Principal"), together with simple interest at the rate of six percent (6%) per annum. Interest shall be computed on a 365-day year for the actual number of days elapsed.

(b) The Principal of this Note shall be due and payable on December 30, 2005 (the "Maturity Date"). Accrued interest on this Note shall be payable in arrears on June 30, 2004, December 30, 2004, June 30, 2005 and on the Maturity Date. This Note may be prepaid without penalty, in whole or in part, at any time.

(c) Upon payment in full of all principal and interest payable hereunder, this Note shall be surrendered to the Company for cancellation.

2. Conversion.

(a) Conversion. The outstanding principal balance of this Note and all interest accrued and unpaid thereon may be converted at the option of the Holder at any time into shares of the Company's common stock, par value $.01 per share at a conversion price equal to the average of the closing bid prices of the Company's common stock on the third through the eighth trading days following the Company's announcement of its acquisition of certain fluorine extraction process patents from International Machine Design, LLC, such announcement to be made by the Company within two (2) business days of the closing of the acquisition of the patents.

(b) Option Exercise. At least 10 days (but not more than 30 days) prior to the conversion date, Holder shall notify the Company of its desire to convert all or part of this Note to common stock. Holder's notice shall specify the conversion date and the amount of principal and accrued interest to be converted. Any notice required or that may be given under this Note shall be in writing and shall be deemed to have been duly given when delivered, transmitted by

4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF TEXAS AS SUCH LAWS ARE APPLIED TO AGREEMENTS BETWEEN TEXAS RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN TEXAS.

HOLDER:                                  INTERNATIONAL ISOTOPES INC.



By:      /S/ William Nicholson           By:   /S/ Steve T. Laflin
         ---------------------                 -------------------
Name:    William Nicholson               Name: Steve T. Laflin

Address: 121 N. Post Oak Ln. Ste. 2105 Title: President Houston, TX 77024

NOTE PURCHASE AGREEMENT

THIS NOTE PURCHASE AGREEMENT (this "Agreement"), is made and entered into as of January 21, 2004, by and between the undersigned lender ("Lender") and International Isotopes Inc., a Texas corporation ("Borrower").

WITNESSETH:

WHEREAS, Borrower desires to borrow from Lender, and Lender is willing to loan to Borrower, the principal amount of $ 26,000.00 , to be evidenced by an unsecured convertible promissory note in the form set forth on Exhibit A attached hereto (the "Convertible Note" or the "Note ").

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby specifically acknowledged, the parties hereto agree as follows:

1. Closing; Delivery. Upon the terms and subject to the conditions herein, Borrower agrees to issue to the Lender the Convertible Note and Lender agrees to lend to Borrower pursuant to the terms of the Convertible Note and this Agreement, a maximum principal amount of $ 26,000.00 (the "Loan"). The execution and delivery of the Convertible Note and the delivery of the proceeds of the Loan shall take place at closing (the "Closing") to be held on January 23, 2004 at 9:00 a.m., Mountain time, or on such other date and at such other time as may be mutually agreed upon (the "Closing Date"). The Closing shall be held at the offices of the Borrower or at such other place as may be mutually agreed upon.

2. Representations and Warranties of Lender. Lender hereby represents and warrants that as of the Closing Date:

a. Purchase Entirely for Own Account. Lender is acquiring the Note and any securities issuable upon conversion of the Note to be received by Lender (the "Securities") for investment for Lender's own account and not with a view to or for resale in connection with, any distribution thereof. Lender understands that the Securities have not been registered under the Securities Act of 1933, as amended (the "Act"), by reason of a specific exemption from the registration provisions of the Act that depends upon, among other things, the bona fide nature of the investment intent as expressed herein.

b. Investment Experience. Lender is an accredited investor within the meaning of Regulation D prescribed by the Securities and Exchange Commission pursuant to the Act and by virtue of Lender's experience in evaluating and investing in private placement transactions of securities in companies similar to Borrower, such Lender is capable of evaluating the merits and risks of Lender's investment in Borrower and has the capacity to protect Lender's own interests.

c. Restricted Securities. Lender acknowledges that the Securities must be held indefinitely unless subsequently registered under the Act, or unless an exemption from such registration is available. Lender is aware of the provisions of Rule 144 and 144A promulgated under the Act that permit limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions.

3. Representations and Warranties of Borrower. Borrower hereby represents and warrants that, as of the Closing Date:

a. Authority. Borrower has all requisite legal and corporate power and authority and has obtained all approvals and consents necessary to enter into this Agreement and the Note and to carry out and perform its obligations under the terms of this Agreement and the Note.

4. Covenant Concerning Confidential Information. Lender understands that in connection with the negotiation of this Agreement and the Note it may become privy to material non-public information concerning Borrower and its business operations including proposed new business opportunities. Lender agrees that it will keep such information confidential and will not disclose any material non-public information concerning Borrower to any third person and will not purchase or sell or enter into any agreement to purchase or sell securities of Borrower so long as Lender is in possession of any material information concerning Borrower which has not yet been announced publicly, either through a Borrower press release or in a disclosure filing with the Securities and Exchange Commission.

5. Conditions of Lender's Obligations at Closing. The obligations of the Lender under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions, the waiver of which shall not be effective against the Lender without its written consent:

a. Note. Borrower shall have executed and delivered to Lender an original copy of this Agreement and the Note in the form attached as Exhibit A for the Loan.

b. Patent Acquisition. All conditions precedent to the closing of that certain Asset Acquisition Agreement entered into as of November 24, 2003 between the Borrower and International Machine Design, LLC shall have been satisfied.

c. Minimum Loan Amount. The Company shall have received a minimum of $650,000 pursuant to the Note and other similar unsecured convertible promissory notes from existing Borrower shareholders.

6. Registration Rights. Borrower hereby covenants to include in its next registration of its securities under the Securities Act of 1933 the registration, on behalf of the Lender, as a selling shareholder, of that number of shares of its common stock that would be issuable upon a full conversion of the principal amount of Lender's Note. Such "piggy back" registration rights shall be subject to limitation due to underwriter's discretion based on an assessment of market conditions in the event that the Company's next registered offering of securities involves a traditional underwriting, provided that any such limitation shall affect Lender and other similarly situated holders of Borrower notes on an equal percentage basis according to the number of conversion shares held by Lender and such other noteholders. All expenses of such registration, including the expenses of a single law firm representing the interests of Lender and all other similarly situated selling shareholders, shall be borne by Borrower.

7. SEC Filings. Borrower hereby covenants, at its expense, to make any filings with the Securities and Exchange Commission required of Lender in connection with the issuance of the Note or any underlying shares of stock issuable upon conversion of the Note, including any Form 3s or 4s and any filings required under Section 13(d) of the Securities and Exchange Act of 1934. Lender agrees to cooperate with Borrower's legal counsel in providing the necessary information for such filings.

8. Miscellaneous.

a. Severabilitv. If any of the provisions of this Agreement shall be held to be invalid or unenforceable, this Agreement shall be construed as if not containing those provisions and the rights and obligations of the parties hereto shall be construed and enforced accordingly.

b. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A facsimile, telecopy of other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

c. Governing Law: Jurisdiction. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas without regard to the conflicts of law principles thereof.

d. Integration. This Agreement and each Note (together with the exhibits and documents referenced herein and therein) contain the entire agreement of the parties relating to the subject matter hereof and supersedes all prior offers, letters, agreements and understandings of the parties.

e. Waiver and Amendment. Any term of this Agreement may be amended only with the written consent of Borrower and Lender. The observance of any term of this Agreement may be waived only if such waiver is in writing signed by the party waiving such term.

f. Headings. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

g. Transfer and Assignment. The rights and obligations of Lender and Borrower hereunder and pursuant to the Note may not be transferred or assigned by either party without the prior written consent of the other, except that Lender may transfer or assign its rights and obligations under this Agreement or the Note to an affiliate, partner or limited partner of Lender. Except as otherwise provided in this Agreement and the Note, the provisions of this Agreement and the Note shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

BORROWER:

INTERNATIONAL ISOTOPES INC.
a Texas corporation

By:     /S/ Steve T. Laflin
        -------------------
Name:   Steve T. Laflin
Title:  President

LENDER:

By:     /S/ Christopher Grosso
        ----------------------
Name:   Christopher Grosso

SIGNATURE PAGE TO INTERNATIONAL ISOTOPES INC.

NOTE PURCHASE AGREEMENT

                                                              Idaho Falls, Idaho

$26,000.00                                                    January 21,2004


         1.     Principal and Interest.

(a) International Isotopes Inc., a Texas corporation (the "Company"), for value received, hereby promises to pay to the order of Christopher Grosso (the "Holder") in lawful money of the United States at the address of the Holder set forth below, the principal amount of Twenty Six Thousand Dollars ($ 26,000.00 ) (the "Principal"), together with simple interest at the rate of six percent (6%) per annum. Interest shall be computed on a 365-day year for the actual number of days elapsed.

(b) The Principal of this Note shall be due and payable on December 30, 2005 (the "Maturity Date"). Accrued interest on this Note shall be payable in arrears on June 30, 2004, December 30, 2004, June 30, 2005 and on the Maturity Date. This Note may be prepaid without penalty, in whole or in part, at any time.

(c) Upon payment in full of all principal and interest payable hereunder, this Note shall be surrendered to the Company for cancellation.

2. Conversion.

(a) Conversion. The outstanding principal balance of this Note and all interest accrued and unpaid thereon may be converted at the option of the Holder at any time into shares of the Company's common stock, par value $.01 per share at a conversion price equal to the average of the closing bid prices of the Company's common stock on the third through the eighth trading days following the Company's announcement of its acquisition of certain fluorine extraction process patents from International Machine Design, LLC, such announcement to be made by the Company within two (2) business days of the closing of the acquisition of the patents.

(b) Option Exercise. At least 10 days (but not more than 30 days) prior to the conversion date, Holder shall notify the Company of its desire to convert all or part of this Note to common stock. Holder's notice shall specify the conversion date and the amount of principal and accrued interest to be converted. Any notice required or that may be given under this Note shall be in writing and shall be deemed to have been duly given when delivered, transmitted by telecopier (with receipt confirmed) or mailed by registered or certified first class mail, postage prepaid, return receipt requested to the parties hereto at the address set forth below (as the same may be changed from time to time by notice similarly given) or the last known business or residence address of much other person as may be designated by either party hereto in writing.

(i) If to Company:

International Isotopes Inc. 4137 Commerce Circle Idaho Falls, Idaho 83401 Fax: (208) 524-1411

(ii) If to Holder:

Christopher Grosso 480 Broadway, Suite 310 Saratoga Springs, NY 12866

(c) Mechanics of Conversion. Upon conversion of this entire Note as set forth above, the outstanding principal and accrued interest of the Note shall be converted as elected by Holder without any further action by the Holder and whether or not the Note is surrendered to the Company or its transfer agent. The Company shall not be obligated to issue certificates evidencing the shares of the securities issuable upon conversion unless such Note is either delivered to the Company or its transfer agent, or the Holder notifies the Company or its transfer agent that such Note has been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such Note. The Company shall, as soon as practicable after such delivery, or such agreement and indemnification, issue and deliver to such Holder, a certificate or certificates for the securities to which the Holder shall be entitled and a check payable to the Holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of common stock. Such conversion shall be deemed to have been made on the conversion date specified in Holder's notice of conversion. The person or persons entitled to receive securities issuable upon such conversion shall be treated for all purposes as the record holder or holders of such securities on such date. If the Holder elects to convert less than the entire principal amount of the Note, upon Lender's surrender of the original Note, Borrower shall deliver to Lender a new Note in an amount equal to the principal amount of the original Note that has not been converted to common stock.

3. Attorneys Fees. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal and interest payable hereunder, reasonable attorneys' fees and costs incurred by the Holder.

4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF TEXAS AS SUCH LAWS ARE APPLIED TO AGREEMENTS BETWEEN TEXAS RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN TEXAS.

HOLDER: INTERNATIONAL ISOTOPES INC.

By:      /S/ Chistopher Grosso           By:    /S/ Steve T. Laflin
         ---------------------                  -------------------
Name:    Chistopher Grosso               Name:  Steve T. Laflin

Address: 480 Broadway, Suite 310 Title: President Saratoga Springs, NY 12866

NOTE PURCHASE AGREEMENT

THIS NOTE PURCHASE AGREEMENT (this "Agreement"), is made and entered into as of January 21, 2004, by and between the undersigned lender ("Lender") and International Isotopes Inc., a Texas corporation ("Borrower").

WITNESSETH:

WHEREAS, Borrower desires to borrow from Lender, and 1,ender is willing to loan to Borrower, the principal amount of $ 29,000.00, to be evidenced by an unsecured convertible promissory note in the form set forth on Exhibit A attached hereto (the "Convertible Note" or the "Note").

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby specifically acknowledged, the parties hereto agree as follows:

1. Closing; Delivery. Upon the terms and subject to the conditions herein, Borrower agrees to issue to the Lender the Convertible Note and Lender agrees to lend to Borrower pursuant to the terms of the Convertible Note and this Agreement, a maximum principal amount of $ 29,000.00 (the "Loan"). The execution and delivery of the Convertible Note and the delivery of the proceeds of the Loan shall take place at closing (the "Closing") to be held on January 23, 2004 at 9:00 a.m., Mountain time, or on such other date and at such other time as may be mutually agreed upon (the "Closing Date '7). The Closing shall be held at the offices of the Borrower or at such other place as may be mutually agreed upon.

2 Representations and Warranties of Lender. Lender hereby represents and warrants that as of the Closing Date:

a. Purchase Entirely for Own Account. Lender is acquiring the Note and any securities issuable upon conversion of the Note to be received by Lender (the "Securities") for investment for Lender's own account and not with a view to or for resale in connection with, any distribution thereof. Lender understands that the Securities have not been registered under the Securities Act of 1933, as amended (the "Act"), by reason 01a specific exemption from the registration provisions of the Act that depends upon, among other things, the bona fide nature of the investment intent as expressed herein.

b. Investment Experience. Lender is an accredited investor within the meaning of Regulation D prescribed by the Securities and Exchange Commission pursuant to the Act and by virtue of Lender's experience in evaluating and investing in private placement transactions of securities in companies similar to Borrower, such Lender is capable of evaluating the merits and risks of Lender's investment in Borrower and has the capacity to protect Lender's own interests.

c. Restricted Securities. Lender acknowledges that the Securities must be held 'indefinitely unless subsequently registered under the Act, or unless an exemption from such registration is available. Lender is aware of the provisions of Rule 144 and 144A promulgated under the Act that permit limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions.

3. Representations and Warranties of Borrower. Borrower hereby represents and warrants that, as of the Closing Date:

a. Authority. Borrower has all requisite legal and corporate power and authority and has obtained all approvals and consents necessary to enter into this Agreement and the Note and to carry out and perform its obligations under the terms of this Agreement and the Note.

4. Covenant Concerning Confidential Information. Lender understands that in connection with the negotiation of this Agreement and the Note it may become privy to material non-public information concerning Borrower and its business operations including proposed new business opportunities. Lender agrees that it will keep such information confidential and will not disclose any material non-public information concerning Borrower to any third person and will not purchase or sell or enter into any agreement to purchase or sell securities of Borrower so long as Lender is in possession of any material information concerning Borrower which has not yet been announced publicly, either through a Borrower press release or in a disclosure filing with the Securities and Exchange Commission.

5. Conditions of Lender's Obligations at Closing. The obligations of the Lender under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions, the waiver of which shall not be effective against the Lender without its written consent:

a. Note. Borrower shall have executed and delivered to Lender an original copy of this Agreement and the Note in the form attached as Exhibit A for the Loan.

b. Patent Acquisition. All conditions precedent to the closing of that certain Asset Acquisition Agreement entered into as of November 24, 2003 between the Borrower and International Machine Design, LLC shall have been satisfied.

c. Minimum Loan Amount. The Company shall have received a minimum of $650,000 pursuant to the Note and other similar unsecured convertible promissory notes from existing Borrower shareholders.

6. Registration Rights. Borrower hereby covenants to include in its next registration of its securities under the Securities Act of 1933 the registration, on behalf of the Lender, as a selling shareholder, of that number of shares of its common stock that would be issuable upon a full conversion of the principal amount of Lender's Note. Such "piggy back" registration rights shall be subject to limitation due to underwriter's discretion based on an assessment of market conditions in the event that the Company's next registered offering of securities involves a traditional underwriting, provided that any such limitation shall affect Lender and other similarly situated holders of Borrower notes on an equal percentage basis according to the number of conversion shares held by Lender and such other noteholders. All expenses of such registration, including the expenses of a single law firm representing the interests of Lender and all other similarly situated selling shareholders, shall be borne by Borrower.

7. SEC Filings. Borrower hereby covenants, at its expense, to make any filings with the Securities and Exchange Commission required of Lender in connection with the issuance of the Note or any underlying shares of stock issuable upon conversion of the Note, including any Form 3s or 4s and any filings required under Section 13(d) of the Securities and Exchange Act of 1934. Lender agrees to cooperate with Borrower's legal counsel in providing the necessary information for such filings.

8. Miscellaneous.

a. Severability. If any of the provisions of this Agreement shall be held to be invalid or unenforceable, this Agreement shall be construed as if not containing those provisions and the rights and obligations of the parties hereto shall be construed and enforced accordingly.

b. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A facsimile, telecopy of other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

c. Governing Law: Jurisdiction. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas without regard to the conflicts of law principles thereof.

d. Integration. This Agreement and each Note (together with the exhibits and documents referenced herein and therein) contain the entire agreement of the parties relating to the subject matter hereof and supersedes all prior offers, letters, agreements and understandings of the parties.

e. Waiver and Amendment. Any term of this Agreement may be amended only with the written consent of Borrower and Lender. The observance of any term of this Agreement may be waived only if such waiver is in writing signed by the party waiving such term.

f. Headings. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

g. Transfer and Assignment. The rights and obligations of Lender and Borrower hereunder and pursuant to the Note may not be transferred or assigned by either party without the prior written consent of the other, except that Lender may transfer or assign its rights and obligations under this Agreement or the Note to an affiliate, partner or limited partner of Lender. Except as otherwise provided in this Agreement and the Note, the provisions of this Agreement and the Note shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

BORROWER:

INTERNATIONAL ISOTOPES INC.
a Texas corporation

By:    /S/ Steve T. Laflin
       -------------------
Name:  Steve T. Laflin
Title: President

LENDER:

By:    /S/ Thomas Kershner
       -------------------
Name:  Thomas Kershner

SIGNATURE PAGE TO INTERNATIONAL ISOTOPES INC.
NOTE PURCHASE AGREEMENT

                                                              Idaho Falls, Idaho

$29,000.00                                                    January 21,2004


         1.     Principal and Interest.

(a) International Isotopes Inc., a Texas corporation (the "Company"), for value received, hereby promises to pay to the order of Thomas Kershner (the "Holder") in lawful money of the United States at the address of the Holder set forth below, the principal amount of Twenty Nine Thousand Dollars ($29,000.00) (the "Principal"), together with simple interest at the rate of six percent (6%) per annum. Interest shall be computed on a 365-day year for the actual number of days elapsed.

(b) The Principal of this Note shall be due and payable on December 30, 2005 (the "Maturity Date"). Accrued interest on this Note shall be payable in arrears on June 30, 2004, December 30, 2004, June 30, 2005 and on the Maturity Date. This Note may be prepaid without penalty, in whole or in part, at any time.

(c) Upon payment in full of all principal and interest payable hereunder, this Note shall be surrendered to the Company for cancellation.

2. Conversion.

(a) Conversion. The outstanding principal balance of this Note and all interest accrued and unpaid thereon may be converted at the option of the Holder at any time into shares of the Company's common stock, par value $.01 per share at a conversion price equal to the average of the closing bid prices of the Company's common stock on the third through the eighth trading days following the Company's announcement of its acquisition of certain fluorine extraction process patents from International Machine Design, LLC, such announcement to be made by the Company within two (2) business days of the closing of the acquisition of the patents.

(b) Option Exercise. At least 10 days (but not more than 30 days) prior to the conversion date, Holder shall notify the Company of its desire to convert all or part of this Note to common stock. Holder's notice shall specify the conversion date and the amount of principal and accrued interest to be converted. Any notice required or that may be given under this Note shall be in writing and shall be deemed to have been duly given when delivered, transmitted by telecopier (with receipt confirmed) or mailed by registered or certified first class mail, postage prepaid, return receipt requested to the parties hereto at the address set forth below (as the same may be changed from time to time by notice similarly given) or the last known business or residence address of much other person as may be designated by either party hereto in writing.

(i) If to Company:

International Isotopes Inc. 4137 Commerce Circle Idaho Falls, Idaho 83401 Fax: (208) 524-1411

(ii) If to Holder:

Thomas Kershner 258E. Sanford St.

Glens Falls, NY 12801

(c) Mechanics of Conversion. Upon conversion of this entire Note as set forth above, the outstanding principal and accrued interest of the Note shall be converted as elected by Holder without any further action by the Holder and whether or not the Note is surrendered to the Company or its transfer agent. The Company shall not be obligated to issue certificates evidencing the shares of the securities issuable upon conversion unless such Note is either delivered to the Company or its transfer agent, or the Holder notifies the Company or its transfer agent that such Note has been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such Note. The Company shall, as soon as practicable after such delivery, or such agreement and indemnification, issue and deliver to such Holder, a certificate or certificates for the securities to which the Holder shall be entitled and a check payable to the Holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of common stock. Such conversion shall be deemed to have been made on the conversion date specified in Holder's notice of conversion. The person or persons entitled to receive securities issuable upon such conversion shall be treated for all purposes as the record holder or holders of such securities on such date. If the Holder elects to convert less than the entire principal amount of the Note, upon Lender's surrender of the original Note, Borrower shall deliver to Lender a new Note in an amount equal to the principal amount of the original Note that has not been converted to common stock.

3. Attorneys Fees. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal and interest payable hereunder, reasonable attorneys' fees and costs incurred by the Holder.

4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF TEXAS AS SUCH LAWS ARE APPLIED TO AGREEMENTS BETWEEN TEXAS RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN TEXAS.

HOLDER: INTERNATIONAL ISOTOPES INC.

By:   /S/ Thomas Kershner              By:    /S/ Steve T. Laflin
      -------------------                     -------------------
Name: Thomas Kershner                  Name:  Steve T. Laflin
Address: 258 E. Sanford St.           Title:  President
         Glens Falls, NY 12801

NOTE PURCHASE AGREEMENT

THIS NOTE PURCHASE AGREEMENT (this "Agreement"), is made and entered into as of January 23, 2004, by and between the undersigned lender ("Lender") and International Isotopes Inc., a Texas corporation ("Borrower").

WITNESSETH:

WHEREAS, Borrower desires to borrow from Lender, and Lender is willing to loan to Borrower, the principal amount of $ 162,500.00 ,to be evidenced by an unsecured convertible promissory note in the form set forth on Exhibit A attached hereto (the "Convertible Note" or the "Note'7).

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby specifically acknowledged, the parties hereto agree as follows:

1. Closing; Delivery. Upon the terms and subject to the conditions herein, Borrower agrees to issue to the Lender the Convertible Note and Lender agrees to lend to Borrower pursuant to the terms of the Convertible Note and this Agreement, a maximum principal amount of $ 162,500.00 (the "Loan"). The execution and delivery of the Convertible Note and the delivery of the proceeds of the Loan shall take place at closing (the "Closing") to be held on January 28, 2004 at 9:00 a.m., Mountain time, or on such other date and at such other time as may be mutually agreed upon (the "Closing Date"). The Closing shall be held at the offices of the Borrower or at such other place as may be mutually agreed upon.

2. Representations and Warranties of Lender. Lender hereby represents and warrants that as of the Closing Date:

a. Purchase Entirely for Own Account. Lender is acquiring the Note and any securities issuable upon conversion of the Note to be received by Lender (the "Securities") for investment for Lender's own account and not with a view to or for resale in connection with, any distribution thereof. Lender understands that the Securities have not been registered under the Securities Act of 1933, as amended (the "Act"), by reason of a specific exemption from the registration provisions of the Act that depends upon, among other things, the bona fide nature of the investment intent as expressed herein.

b. Investment Experience. Lender is an accredited investor within the meaning of Regulation D prescribed by the Securities and Exchange Commission pursuant to the Act and by virtue of Lender's experience in evaluating and investing in private placement transactions of securities in companies similar to Borrower, such Lender is capable of evaluating the merits and risks of Lender's investment in Borrower and has the capacity to protect Lender's own interests.

c. Restricted Securities. Lender acknowledges that the Securities must be held indefinitely unless subsequently registered under the Act, or unless an exemption from such registration is available. Lender is aware of the provisions of Rule 144 and 144A promulgated under the Act that permit limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions.

3. Representations and Warranties of Borrower. Borrower hereby represents and warrants that, as of the Closing Date:

a. Authority. Borrower has all requisite legal and corporate power and authority and has obtained all approvals and consents necessary to enter into this Agreement and the Note and to carry out and perform its obligations under the terms of this Agreement and the Note.

4. Covenant Concerning Confidential Information. Lender understands that in connection with the negotiation of this Agreement and the Note it may become privy to material non-public information concerning Borrower and its business operations including proposed new business opportunities. Lender agrees that it will keep such information confidential and will not disclose any material non-public information concerning Borrower to any third person and will not purchase or sell or enter into any agreement to purchase or sell securities of Borrower so long as Lender is in possession of any material information concerning Borrower which has not yet been announced publicly, either through a Borrower press release or in a disclosure filing with the Securities and Exchange Commission.

5. Conditions of Lender's Obligations at Closing. The obligations of the Lender under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions, the waiver of which shall not be effective against the Lender without its written consent:

a. Note. Borrower shall have executed and delivered to Lender an original copy of this Agreement and the Note in the form attached as Exhibit A for the Loan.

b. Patent Acquisition. All conditions precedent to the closing of that certain Asset Acquisition Agreement entered into as of November 24, 2003 between the Borrower and International Machine Design, LLC shall have been satisfied.

c. Minimum Loan Amount. The Company shall have received a minimum of $650,000 pursuant to the Note and other similar unsecured convertible promissory notes from existing Borrower shareholders.

6. Registration Rights. Borrower hereby covenants to include in its next registration of its securities under the Securities Act of 1933 the registration, on behalf of the Lender, as a selling shareholder, of that number of shares of its common stock that would be issuable upon a full conversion of the principal amount of Lender's Note. Such "piggy back" registration rights shall be subject to limitation due to underwriter's discretion based on an assessment of market conditions in the event that the Company's next registered offering of securities involves a traditional underwriting, provided that any such limitation shall affect Lender and other similarly situated holders of Borrower notes on an equal percentage basis according to the number of conversion shares held by Lender and such other noteholders. All expenses of such registration, including the expenses of a single law firm representing the interests of Lender and all other similarly situated selling shareholders, shall be borne by Borrower.

7. SEC Filings. Borrower hereby covenants, at its expense, to make any filings with the Securities and Exchange Commission required of Lender in connection with the issuance of the Note or any underlying shares of stock issuable upon conversion of the Note, including any Form 3s or 4s and any filings required under Section 13(d) of the Securities and Exchange Act of 1934. Lender agrees to cooperate with Borrower's legal counsel in providing the necessary information for such filings.

8. Miscellaneous.

a. Severability. If any of the provisions of this Agreement shall be held to be invalid or unenforceable, this Agreement shall be construed as if not containing those provisions and the rights and obligations of the parties hereto shall be construed and enforced accordingly.

b. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A facsimile, telecopy of other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

c. Governing Law: Jurisdiction. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas without regard to the conflicts of law principles thereof.

d. Integration. This Agreement and each Note (together with the exhibits and documents referenced herein and therein) contain the entire agreement of the parties relating to the subject matter hereof and supersedes all prior offers, letters, agreements and understandings of the parties.

e. Waiver and Amendment. Any term of this Agreement may be amended only with the written consent of Borrower and Lender. The observance of any term of this Agreement may be waived only if such waiver is in writing signed by the party waiving such term.

f. Headings. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

g. Transfer and Assignment. The rights and obligations of Lender and Borrower hereunder and pursuant to the Note may not be transferred or assigned by either party without the prior written consent of the other, except that Lender may transfer or assign its rights and obligations under this Agreement or the Note to an affiliate, partner or limited partner of Lender. Except as otherwise provided in this Agreement and the Note, the provisions of this Agreement and the Note shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

BORROWER:

INTERNATIONAL ISOTOPES INC.
a Texas corporation

By:    /S/ Steve T. Laflin
       ----------------------
Name:  Steve T. Laflin
Title: President

LENDER:

By:     /S/ John McCormack
        ---------------------
Name:   John McCormack

SIGNATURE PAGE TO INTERNATIONAL ISOTOPES INC.
NOTE PURCHASE AGREEMENT

                                                              Idaho Falls, Idaho

$162,500.00                                                   January 23,2004


         1.     Principal and Interest.

(a) International Isotopes Inc., a Texas corporation (the "Company"), for value received, hereby promises to pay to the order of John McCormack (the "Holder") in lawful money of the United States at the address of the Holder set forth below, the principal amount of One Hundred Sixty Two Thousand Five Hundred Dollars ($162,500.00) (the "Principal"), together with simple interest at the rate of six percent (6%) per annum. Interest shall be computed on a 365-day year for the actual number of days elapsed.

(b) The Principal of this Note shall be due and payable on December 30, 2005 (the "Maturity Date"). Accrued interest on this Note shall be payable in arrears on June 30, 2004, December 30, 2004, June 30, 2005 and on the Maturity Date. This Note may be prepaid without penalty, in whole or in part, at any time.

(c) Upon payment in full of all principal and interest payable hereunder, this Note shall be surrendered to the Company for cancellation.

2. Conversion.

(a) Conversion. The outstanding principal balance of this Note and all interest accrued and unpaid thereon may be converted at the option of the Holder at any time into shares of the Company's common stock, par value $.01 per share at a conversion price equal to the average of the closing bid prices of the Company's common stock on the third through the eighth trading days following the Company's announcement of its acquisition of certain fluorine extraction process patents from International Machine Design, LLC, such announcement to be made by the Company within two (2) business days of the closing of the acquisition of the patents.

(b) Option Exercise. At least 10 days (but not more than 30 days) prior to the conversion date, Holder shall notify the Company of its desire to convert all or part of this Note to common stock. Holder's notice shall specify the conversion date and the amount of principal and accrued interest to be converted. Any notice required or that may be given under this Note shall be in writing and shall be deemed to have been duly given when delivered, transmitted by telecopier (with receipt confirmed) or mailed by registered or certified first class mail, postage prepaid, return receipt requested to the parties hereto at the address set forth below (as the same may be changed from time to time by notice similarly given) or the last known business or residence address of much other person as may be designated by either party hereto in writing.

(i) If to Company:

International Isotopes Inc. 4137 Commerce Circle Idaho Falls, Idaho 83401 Fax: (208) 524-1411

(ii) If to Holder:

John McCormack
1303 Campbell
Houston, TX 77055

(c) Mechanics of Conversion. Upon conversion of this entire Note as set forth above, the outstanding principal and accrued interest of the Note shall be converted as elected by Holder without any further action by the Holder and whether or not the Note is surrendered to the Company or its transfer agent. The Company shall not be obligated to issue certificates evidencing the shares of the securities issuable upon conversion unless such Note is either delivered to the Company or its transfer agent, or the Holder notifies the Company or its transfer agent that such Note has been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such Note. The Company shall, as soon as practicable after such delivery, or such agreement and indemnification, issue and deliver to such Holder, a certificate or certificates for the securities to which the Holder shall be entitled and a check payable to the Holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of common stock. Such conversion shall be deemed to have been made on the conversion date specified in Holder's notice of conversion. The person or persons entitled to receive securities issuable upon such conversion shall be treated for all purposes as the record holder or holders of such securities on such date. If the Holder elects to convert less than the entire principal amount of the Note, upon Lender's surrender of the original Note, Borrower shall deliver to Lender a new Note in an amount equal to the principal amount of the original Note that has not been converted to common stock.

3. Attorneys Fees. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal and interest payable hereunder, reasonable attorneys' fees and costs incurred by the Holder.

4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF TEXAS AS SUCH LAWS ARE APPLIED TO AGREEMENTS BETWEEN TEXAS RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN TEXAS.

HOLDER: INTERNATIONAL ISOTOPES INC.

By:    /S/ John McCormack               By:    /S/ Steve T. Laflin
       ------------------                      -------------------
Name:  John McCormack                   Name:  Steve T. Laflin

Address: 1303 Campbell Rd. Title: President Houston, TX 77055

NOTE PURCHASE AGREEMENT

THIS NOTE PURCHASE AGREEMENT (this "Agreement"), is made and entered into as of January 21, 2004, by and between the undersigned lender ("Lender") and International Isotopes Inc., a Texas corporation ("Borrower").

WITNESSETH:

WHEREAS, Borrower desires to borrow from Lender, and Lender is willing to loan to Borrower, the principal amount of $ 73,000.00 ,to be evidenced by an unsecured convertible promissory note in the form set forth on Exhibit A attached hereto (the "Convertible Note" or the "Note'7).

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby specifically acknowledged, the parties hereto agree as follows:

1. Closing; Delivery. Upon the terms and subject to the conditions herein, Borrower agrees to issue to the Lender the Convertible Note and Lender agrees to lend to Borrower pursuant to the terms of the Convertible Note and this Agreement, a maximum principal amount of $ 73,000.00 (the "Loan"). The execution and delivery of the Convertible Note and the delivery of the proceeds of the Loan shall take place at closing (the "Closing") to be held on January 23, 2004 at 9:00 a.m., Mountain time, or on such other date and at such other time as may be mutually agreed upon (the "Closing Date"). The Closing shall be held at the offices of the Borrower or at such other place as may be mutually agreed upon.

2. Representations and Warranties of Lender. Lender hereby represents and warrants that as of the Closing Date:

a. Purchase Entirely for Own Account. Lender is acquiring the Note and any securities issuable upon conversion of the Note to be received by Lender (the "Securities") for investment for Lender's own account and not with a view to or for resale in connection with, any distribution thereof. Lender understands that the Securities have not been registered under the Securities Act of 1933, as amended (the "Act"), by reason of a specific exemption from the registration provisions of the Act that depends upon, among other things, the bona fide nature of the investment intent as expressed herein.

b. Investment Experience. Lender is an accredited investor within the meaning of Regulation D prescribed by the Securities and Exchange Commission pursuant to the Act and by virtue of Lender's experience in evaluating and investing in private placement transactions of securities in companies similar to Borrower, such Lender is capable of evaluating the merits and risks of Lender's investment in Borrower and has the capacity to protect Lender's own interests.

c. Restricted Securities. Lender acknowledges that the Securities must be held indefinitely unless subsequently registered under the Act, or unless an exemption from such registration is available. Lender is aware of the provisions of Rule 144 and 144A promulgated under the Act that permit limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions.

3. Representations and Warranties of Borrower. Borrower hereby represents and warrants that, as of the Closing Date:

a. Authority. Borrower has all requisite legal and corporate power and authority and has obtained all approvals and consents necessary to enter into this Agreement and the Note and to carry out and perform its obligations under the terms of this Agreement and the Note.

4. Covenant Concerning Confidential Information. Lender understands that in connection with the negotiation of this Agreement and the Note it may become privy to material non-public information concerning Borrower and its business operations including proposed new business opportunities. Lender agrees that it will keep such information confidential and will not disclose any material non-public information concerning Borrower to any third person and will not purchase or sell or enter into any agreement to purchase or sell securities of Borrower so long as Lender is in possession of any material information concerning Borrower which has not yet been announced publicly, either through a Borrower press release or in a disclosure filing with the Securities and Exchange Commission.

5. Conditions of Lender's Obligations at Closing. The obligations of the Lender under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions, the waiver of which shall not be effective against the Lender without its written consent:

a. Note. Borrower shall have executed and delivered to Lender an original copy of this Agreement and the Note in the form attached as Exhibit A for the Loan. b. Patent Acquisition. All conditions precedent to the closing of that certain Asset Acquisition Agreement entered into as of November 24, 2003 between the Borrower and International Machine Design, LLC shall have been satisfied.

c. Minimum Loan Amount. The Company shall have received a minimum of $650,000 pursuant to the Note and other similar unsecured convertible promissory notes from existing Borrower shareholders.

6. Registration Rights. Borrower hereby covenants to include in its next registration of its securities under the Securities Act of 1933 the registration, on behalf of the Lender, as a selling shareholder, of that number of shares of its common stock that would be issuable upon a full conversion of the principal amount of Lender's Note. Such "piggy back" registration rights shall be subject to limitation due to underwriter's discretion based on an assessment of market conditions in the event that the Company's next registered offering of securities involves a traditional underwriting, provided that any such limitation shall affect Lender and other similarly situated holders of Borrower notes on an equal percentage basis according to the number of conversion shares held by Lender and such other noteholders. All expenses of such registration, including the expenses of a single law firm representing the interests of Lender and all other similarly situated selling shareholders, shall be borne by Borrower.

7. SEC Filings. Borrower hereby covenants, at its expense, to make any filings with the Securities and Exchange Commission required of Lender in connection with the issuance of the Note or any underlying shares of stock issuable upon conversion of the Note, including any Form 3s or 4s and any filings required under Section 13(d) of the Securities and Exchange Act of 1934. Lender agrees to cooperate with Borrower's legal counsel in providing the necessary information for such filings.

8. Miscellaneous.

a. Severability. If any of the provisions of this Agreement shall be held to be invalid or unenforceable, this Agreement shall be construed as if not containing those provisions and the rights and obligations of the parties hereto shall be construed and enforced accordingly.

b. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A facsimile, telecopy of other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

c. Governing Law: Jurisdiction. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas without regard to the conflicts of law principles thereof.

d. Integration. This Agreement and each Note (together with the exhibits and documents referenced herein and therein) contain the entire agreement of the parties relating to the subject matter hereof and supersedes all prior offers, letters, agreements and understandings of the parties.

e. Waiver and Amendment. Any term of this Agreement may be amended only with the written consent of Borrower and Lender. The observance of any term of this Agreement may be waived only if such waiver is in writing signed by the party waiving such term.

f. Headings. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

g. Transfer and Assignment. The rights and obligations of Lender and Borrower hereunder and pursuant to the Note may not be transferred or assigned by either party without the prior written consent of the other, except that Lender may transfer or assign its rights and obligations under this Agreement or the Note to an affiliate, partner or limited partner of Lender. Except as otherwise provided in this Agreement and the Note, the provisions of this Agreement and the Note shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

BORROWER:

INTERNATIONAL ISOTOPES INC.
a Texas corporation

By:    /S/ Steve T. Laflin
       -------------------
Name:  Steve T. Laflin
Title: President

LENDER:

By:    /S/ James Keane
       ------------------
Name:  James Keane

SIGNATURE PAGE TO INTERNATIONAL ISOTOPES INC.

NOTE PURCHASE AGREEMENT

                                                              Idaho Falls, Idaho

$ 73,000.00                                                   January 21, 2004


         1.     Principal and Interest.

(a) International Isotopes Inc., a Texas corporation (the "Company"), for value received, hereby promises to pay to the order of James Keane (the "Holder") in lawful money of the United States at the address of the Holder set forth below, the principal amount of Seventy Three Thousand Dollars ($ 73,000.00) (the "Principal"), together with simple interest at the rate of six percent (6%) per annum. Interest shall be computed on a 365-day year for the actual number of days elapsed.

(b) The Principal of this Note shall be due and payable on December 30, 2005 (the "Maturity Date"). Accrued interest on this Note shall be payable in arrears on June 30, 2004, December 30, 2004, June 30, 2005 and on the Maturity Date. This Note may be prepaid without penalty, in whole or in part, at any time.

(c) Upon payment in full of all principal and interest payable hereunder, this Note shall be surrendered to the Company for cancellation.

2. Conversion.

(a) Conversion. The outstanding principal balance of this Note and all interest accrued and unpaid thereon may be converted at the option of the Holder at any time into shares of the Company's common stock, par value $.01 per share at a conversion price equal to the average of the closing bid prices of the Company's common stock on the third through the eighth trading days following the Company's announcement of its acquisition of certain fluorine extraction process patents from International Machine Design, LLC, such announcement to be made by the Company within two (2) business days of the closing of the acquisition of the patents.

(b) Option Exercise. At least 10 days (but not more than 30 days) prior to the conversion date, Holder shall notify the Company of its desire to convert all or part of this Note to common stock. Holder's notice shall specify the conversion date and the amount of principal and accrued interest to be converted. Any notice required or that may be given under this Note shall be in writing and shall be deemed to have been duly given when delivered, transmitted by telecopier (with receipt confirmed) or mailed by registered or certified first class mail, postage prepaid, return receipt requested to the parties hereto at the address set forth below (as the same may be changed from time to time by notice similarly given) or the last known business or residence address of much other person as may be designated by either party hereto in writing.

(i) If to company:

International Isotopes Inc. 4137 Commerce Circle Idaho Falls, Idaho 83401 Fax: (208) 524-1411

(ii) If to Holder:

James Keane
Fifty Broadway
New York, NY 10004

(c) Mechanics of Conversion. Upon conversion of this entire Note as set forth above, the outstanding principal and accrued interest of the Note shall be converted as elected by Holder without any further action by the Holder and whether or not the Note is surrendered to the Company or its transfer agent. The Company shall not be obligated to issue certificates evidencing the shares of the securities issuable upon conversion unless such Note is either delivered to the Company or its transfer agent, or the Holder notifies the Company or its transfer agent that such Note has been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such Note. The Company shall, as soon as practicable after such delivery, or such agreement and indemnification, issue and deliver to such Holder, a certificate or certificates for the securities to which the Holder shall be entitled and a check payable to the Holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of common stock. Such conversion shall be deemed to have been made on the conversion date specified in Holder's notice of conversion. The person or persons entitled to receive securities issuable upon such conversion shall be treated for all purposes as the record holder or holders of such securities on such date. If the Holder elects to convert less than the entire principal amount of the Note, upon Lender's surrender of the original Note, Borrower shall deliver to Lender a new Note in an amount equal to the principal amount of the original Note that has not been converted to common stock.

3. Attorneys Fees. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal and interest payable hereunder, reasonable attorneys' fees and costs incurred by the Holder.

4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF TEXAS AS SUCH LAWS ARE APPLIED TO AGREEMENTS BETWEEN TEXAS RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN TEXAS.

HOLDER: INTERNATIONAL ISOTOPES INC.

By:    /S/ James Keane               By:    /S/ Steve T. Laflin
       ---------------                      -------------------
Name:  James Keane                   Name:  Steve T. Laflin

Address: Fifty Broadway Title: President New York, NY 10004

NOTE PURCHASE AGREEMENT

THIS NOTE PURCHASE AGREEMENT (this "Agreement"), is made and entered into as of January 21, 2004, by and between the undersigned lender ("Lender") and International Isotopes Inc., a Texas corporation ("Borrower").

WITNESSETH:

WHEREAS, Borrower desires to borrow from Lender, and Lender is willing to loan to Borrower, the principal amount of $ 73,000.00 ,to be evidenced by an unsecured convertible promissory note in the form set forth on Exhibit A attached hereto (the "Convertible Note" or the "Note '7.

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby specifically acknowledged, the parties hereto agree as follows:

1. Closing; Delivery. Upon the terms and subject to the conditions herein, Borrower agrees to issue to the Lender the Convertible Note and Lender agrees to lend to Borrower pursuant to the terms of the Convertible Note and this Agreement, a maximum principal amount of $ 73,000.00 (the "Loan"). The execution and delivery of the Convertible Note and the delivery of the proceeds of the Loan shall take place at closing (the "Closing") to be held on January 23, 2004 at 9:00 a.m., Mountain time, or on such other date and at such other time as may be mutually agreed upon (the "Closing Date"). The Closing shall be held at the offices of the Borrower or at such other place as may be mutually agreed upon.

2. Representations and Warranties of Lender. Lender hereby represents and warrants that as of the Closing Date:

a. Purchase Entirely for Own Account. Lender is acquiring the Note and any securities issuable upon conversion of the Note to be received by Lender (the "Securities") for investment for Lender's own account and not with a view to or for resale in connection with, any distribution thereof. Lender understands that the Securities have not been registered under the Securities Act of 1933, as amended (the "Act"), by reason of a specific exemption from the registration provisions of the Act that depends upon, among other things, the bona fide nature of the investment intent as expressed herein.

b. Investment Experience. Lender is an accredited investor within the meaning of Regulation D prescribed by the Securities and Exchange Commission pursuant to the Act and by virtue of Lender's experience in evaluating and investing in private placement transactions of securities in companies similar to Borrower, such Lender is capable of evaluating the merits and risks of Lender's investment in Borrower and has the capacity to protect Lender's own interests.

c. Restricted Securities. Lender acknowledges that the Securities must be held indefinitely unless subsequently registered under the Act, or unless an exemption from such registration is available. Lender is aware of the provisions of Rule 144 and 144A promulgated under the Act that permit limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions.

3. Representations and Warranties of Borrower. Borrower hereby represents and warrants that, as of the Closing Date:

a. Authority. Borrower has all requisite legal and corporate power and authority and has obtained all approvals and consents necessary to enter into this Agreement and the Note and to carry out and perform its obligations under the terms of this Agreement and the Note.

4. Covenant Concerning Confidential Information. Lender understands that in connection with the negotiation of this Agreement and the Note it may become privy to material non-public information concerning Borrower and its business operations including proposed new business opportunities. Lender agrees that it will keep such information confidential and will not disclose any material non-public information concerning Borrower to any third person and will not purchase or sell or enter into any agreement to purchase or sell securities of Borrower so long as Lender is in possession of any material information concerning Borrower which has not yet been announced publicly, either through a Borrower press release or in a disclosure filing with the Securities and Exchange Commission.

5. Conditions of Lender's Obligations at Closing. The obligations of the Lender under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions, the waiver of which shall not be effective against the Lender without its written consent:

a. Note. Borrower shall have executed and delivered to Lender an original copy of this Agreement and the Note in the form attached as Exhibit A for the Loan.

b. Patent Acquisition. All conditions precedent to the closing of that certain Asset Acquisition Agreement entered into as of November 24, 2003 between the Borrower and International Machine Design, LLC shall have been satisfied.

c. Minimum Loan Amount. The Company shall have received a minimum of $650,000 pursuant to the Note and other similar unsecured convertible promissory notes from existing Borrower shareholders.

6. Registration Rights. Borrower hereby covenants to include in its next registration of its securities under the Securities Act of 1933 the registration, on behalf of the Lender, as a selling shareholder, of that number of shares of its common stock that would be issuable upon a full conversion of the principal amount of Lender's Note. Such "piggy back" registration rights shall be subject to limitation due to underwriter's discretion based on an assessment of market conditions in the event that the Company's next registered offering of securities involves a traditional underwriting, provided that any such limitation shall affect Lender and other similarly situated holders of Borrower notes on an equal percentage basis according to the number of conversion shares held by Lender and such other noteholders. All expenses of such registration, including the expenses of a single law firm representing the interests of Lender and all other similarly situated selling shareholders, shall be borne by Borrower.

7. SEC Filings. Borrower hereby covenants, at its expense, to make any filings with the Securities and Exchange Commission required of Lender in connection with the issuance of the Note or any underlying shares of stock issuable upon conversion of the Note, including any Form 3s or 4s and any filings required under Section 13(d) of the Securities and Exchange Act of 1934. Lender agrees to cooperate with Borrower's legal counsel in providing the necessary information for such filings.

8. Miscellaneous.

a. Severability. If any of the provisions of this Agreement shall be held to be invalid or unenforceable, this Agreement shall be construed as if not containing those provisions and the rights and obligations of the parties hereto shall be construed and enforced accordingly.

b. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A facsimile, telecopy of other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

c. Governing Law: Jurisdiction. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas without regard to the conflicts of law principles thereof.

d. Integration. This Agreement and each Note (together with the exhibits and documents referenced herein and therein) contain the entire agreement of the parties relating to the subject matter hereof and supersedes all prior offers, letters, agreements and understandings of the parties.

e. Waiver and Amendment. Any term of this Agreement may be amended only with the written consent of Borrower and Lender. The observance of any term of this Agreement may be waived only if such waiver is in writing signed by the party waiving such term.

f. Headings. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

g. Transfer and Assignment. The rights and obligations of Lender and Borrower hereunder and pursuant to the Note may not be transferred or assigned by either party without the prior written consent of the other, except that Lender may transfer or assign its rights and obligations under this Agreement or the Note to an affiliate, partner or limited partner of Lender. Except as otherwise provided in this Agreement and the Note, the provisions of this Agreement and the Note shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

BORROWER:

INTERNATIONAL ISOTOPES INC.
a Texas corporation

By:     /S/ Steve T. Laflin
        -------------------
Name:   Steve T. Laflin
Title:  President

LENDER:

By:    /S/ Walter O'Hearn
       ------------------
Name:  Walter O'Hearn

SIGNATURE PAGE TO INTERNATIONAL ISOTOPES INC.

NOTE PURCHASE AGREEMENT

                                                              Idaho Falls, Idaho

$73,000.00                                                    January 21, 2004


         1.     Principal and Interest.

(a) International Isotopes Inc., a Texas corporation (the "Company"), for value received, hereby promises to pay to the order of Walter O'Hearn (the "Holder") in lawful money of the United States at the address of the Holder set forth below, the principal amount of Seventy Three Thousand Dollars ($73,000.00) (the "Principal"), together with simple interest at the rate of six percent (6%) per annum. Interest shall be computed on a 365-day year for the actual number of days elapsed.

(b) The Principal of this Note shall be due and payable on December 30, 2005 (the "Maturity Date"). Accrued interest on this Note shall be payable in arrears on June 30, 2004, December 30, 2004, June 30, 2005 and on the Maturity Date. This Note may be prepaid without penalty, in whole or in part, at any time.

(c) Upon payment in full of all principal and interest payable hereunder, this Note shall be surrendered to the Company for cancellation.

2. Conversion.

(a) Conversion. The outstanding principal balance of this Note and all interest accrued and unpaid thereon may be converted at the option of the Holder at any time into shares of the Company's common stock, par value $.01 per share at a conversion price equal to the average of the closing bid prices of the Company's common stock on the third through the eighth trading days following the Company's announcement of its acquisition of certain fluorine extraction process patents from International Machine Design, LLC, such announcement to be made by the Company within two (2) business days of the closing of the acquisition of the patents.

(b) Option Exercise. At least 10 days (but not more than 30 days) prior to the conversion date, Holder shall notify the Company of its desire to convert all or part of this Note to common stock. Holder's notice shall specify the conversion date and the amount of principal and accrued interest to be converted. Any notice required or that may be given under this Note shall be in writing and shall be deemed to have been duly given when delivered, transmitted by telecopier (with receipt confirmed) or mailed by registered or certified first class mail, postage prepaid, return receipt requested to the parties hereto at the address set forth below (as the same may be changed from time to time by notice similarly given) or the last known business or residence address of much other person as may be designated by either party hereto in writing.

(i) If to Company:

International Isotopes Inc. 4137 Commerce Circle Idaho Falls, Idaho 83401 Fax: (208) 524- 14 11

(ii) If to Holder:

Walter O'Hearn 1115 5th Ave, Apt 4A New York, NY 10128

(c) Mechanics of Conversion. Upon conversion of this entire Note as set forth above, the outstanding principal and accrued interest of the Note shall be converted as elected by Holder without any further action by the Holder and whether or not the Note is surrendered to the Company or its transfer agent. The Company shall not be obligated to issue certificates evidencing the shares of the securities issuable upon conversion unless such Note is either delivered to the Company or its transfer agent, or the Holder notifies the Company or its transfer agent that such Note has been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such Note. The Company shall, as soon as practicable after such delivery, or such agreement and indemnification, issue and deliver to such Holder, a certificate or certificates for the securities to which the Holder shall be entitled and a check payable to the Holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of common stock. Such conversion shall be deemed to have been made on the conversion date specified in Holder's notice of conversion. The person or persons entitled to receive securities issuable upon such conversion shall be treated for all purposes as the record holder or holders of such securities on such date. If the Holder elects to convert less than the entire principal amount of the Note, upon Lender's surrender of the original Note, Borrower shall deliver to Lender a new Note in an amount equal to the principal amount of the original Note that has not been converted to common stock.

3. Attorneys Fees. If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal and interest payable hereunder, reasonable attorneys' fees and costs incurred by the Holder.

4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF TEXAS AS SUCH LAWS ARE APPLIED TO AGREEMENTS BETWEEN TEXAS RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN TEXAS.

HOLDER: INTERNATIONAL ISOTOPES INC.

By:    /S/ Walter O'Hearn                By:    /S/ Steve T. Laflin
       ------------------                       -------------------
Name:  Walter O'Hearn                    Name:  Steve T. Laflin

Address: 1115 5th Ave, Apt 4A Title: President New York, NY 10128