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EXHIBIT 5.1
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EXECUTION COPY
SECURITIES PURCHASE AGREEMENT
Among
INTERNATIONAL ISOTOPES INC.
and
THE PURCHASERS LISTED ON SCHEDULE I
Dated as of June 1, 2000
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is dated as of
June 1, 2000 among International Isotopes Inc., a Texas corporation (the
"Company"), and the various purchasers identified and listed on Schedule I
hereto (each referred to herein as a "Purchaser" and, collectively, the
"Purchasers.")
WHEREAS, the Company and the Purchasers are executing and delivering
this Agreement in reliance upon the exemption from securities registration
afforded by Rule 506 under Regulation D as promulgated by the United States
Securities and Exchange Commission (the "Commission") under Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act");
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to issue and sell to the Purchasers, and the
Purchasers desire to acquire from the Company, 10,000 shares of the Company's
Series B 7% Convertible Redeemable Preferred Stock, par value $.01 per share,
liquidation value $1,000 per share (the "Preferred Stock"), at an aggregate
purchase price of $10,000,000 issued pursuant to a Certificate of Designation of
Preferences and Rights ("Certificate of Designation") in the form of Exhibit A
annexed hereto, and a stock purchase warrant or warrants (each, a "Warrant"), in
the form of Exhibit B annexed hereto, to purchase an aggregate amount of
2,500,000 shares of the Company's common stock, par value $0.01 per share (the
"Common Stock");
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company is willing to sell on December 1, 2000 to those
Purchasers who elect to purchase additional shares, up to 4,300 additional
shares of Preferred Stock and the number of Warrants equal to 4,300,000 divided
by $4.00;
NOW THEREFORE, in consideration of the promises and mutual covenants
and agreements hereinafter, the Company and the Purchasers hereby agree as
follows:
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PURCHASE AND SALE
PURCHASE AND SALE.
a. On the First Closing Date (as defined below), subject to the terms and
conditions set forth herein, the Company shall issue and sell to each Purchaser
and each Purchaser, severally and not jointly, shall purchase from the Company
the number of shares of Preferred Stock as set forth on Schedule I and a Warrant
or Warrants exercisable for the amount of Common Stock, par value $0.01 per
share ("Common Stock"), as set forth on Schedule I for such Purchaser. The
aggregate purchase price of the shares of Preferred Stock purchased by the
Purchasers shall be $10,000,000, the aggregate number of shares Preferred Stock
purchased by the Purchasers shall be 10,000, and the aggregate number of shares
of Common Stock for which the Warrant or Warrants will be exercisable shall be
2,500,000.
b. On the Second Closing Date (as defined below), subject to the terms and
conditions set forth herein, the Company shall issue and sell to the Purchasers
(1) up to an additional 4,300 shares of Preferred Stock at an aggregate purchase
price of $4,300,000 and (2) additional Warrants exercisable for an aggregate
number of shares of Common Stock equal to 4,300,000 divided by $4.00.
CLOSINGS.
a. The First Closing. The closing of the purchase and sale of the initial 10,000
Shares of Preferred Stock at an aggregate purchase price of $10,000,000 and
Warrants for an aggregate of 2,500,000 shares of Common Stock (the "First
Closing") shall take place at the offices of the Company, or by transmission by
facsimile and overnight courier, immediately following the execution hereof or
such later date or different location as the parties shall agree, but not prior
to the date that the conditions set forth in Section 4.1 have been satisfied or
waived by the appropriate party (the "First Closing Date"). At the First
Closing:
(a) Each Purchaser shall deliver, as directed by the Company, its
portion of the purchase price as set forth next to its name on
Schedule I in United States dollars in immediately available
funds to an account or accounts designated in writing by the
Company;
(b) The Company shall deliver a Preferred Stock certificate(s)
representing the number of shares of Preferred Stock purchased by
each Purchaser as set forth next to such Purchaser's name on
Schedule I, registered in the name of such Purchaser, each in
form satisfactory to the Purchaser and issued pursuant to the
Certificate of Designation with an initial Conversion Price (as
defined therein) equal to $4.00;
(c) The Company shall deliver a Warrant(s), in the form of Exhibit B
hereto and with the Exercise Price (as defined therein) equal to
$4.00, representing the number of shares of Common Stock as set
forth next to such Purchaser's name on the Schedule I, registered
in the name of such Purchaser; and
(d) The parties shall execute and deliver each of the documents
referred to in Section 4.1.
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b. Second Closing. At the sole option of each Purchaser, and subject to the
terms and conditions set forth in Section 4.2 the closing and sale of up to (as
shall be specified by such Purchaser prior to the Second Closing Date) an
additional 4,300 shares of Preferred Stock for an aggregate purchase price of
$4,300,000 and Warrants for an aggregate of up to such number of shares of
Common Stock equal to 4,300,000 divided by $4.00 shall take place on the later
of December 1, 2000 or 30 days after the effectiveness of the Registration
Statement registering for resale the shares of Common Stock underlying the
Preferred Stock from the First Closing, in the same manner as the First Closing
(the "Second Closing Date"); provided that in no case shall the Second Closing
take place unless and until the conditions listed in Section 4.2 have been
satisfied or waived by the appropriate party. At the Second Closing:
(e) (i) Each Purchaser electing to purchase additional shares of
Preferred Stock shall deliver, as directed by the Company, its
portion of the purchase price as set forth next to its name on a
schedule similar to Schedule I (the "Second Closing Schedule"),
to be delivered to the Company by the Purchasers two days before
the Second Closing Date, in United States dollars in immediately
available funds to an account or accounts designated in writing
by the Company;
(f) (ii) The Company shall deliver a Preferred Stock certificate(s)
representing the number of shares of Preferred Stock purchased by
each Purchaser as set forth next to such Purchaser's name on the
Second Closing Schedule, registered in the name of such
Purchaser, each in form satisfactory to the Purchaser and issued
pursuant to the Certificate of Designation with a Conversion
Price equal to $4.00;
(g) (iii) The Company shall deliver a Warrant(s), in the form of
Exhibit B hereto and with the Exercise Price equal to $4.00,
representing the number of shares of Common Stock as set forth
next to such Purchaser's name on the Second Closing Schedule,
registered in the name of such Purchaser; and
(h) (iv) The parties shall execute and deliver each of the documents
referred to in Section 4.2(b).
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. THE COMPANY HEREBY
MAKES THE FOLLOWING REPRESENTATIONS AND WARRANTIES TO EACH OF THE PURCHASERS:
a. Organization and Qualification. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Texas, with the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted. Each
of the Subsidiaries (which for purposes of this Agreement means any entity in
which the Company, directly or indirectly, owns the majority of such entity's
capital stock or holds an equivalent equity or similar interest) is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or
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organization (as applicable), with the full corporate power and authority to own
and use its properties and assets and to carry on its business as currently
conducted. Each of the Company and the Subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, would not,
individually or in the aggregate, (x) adversely affect the legality, validity or
enforceability of any of this Agreement or the Transaction Documents (as defined
in Section 2.1(b)) or any of the transactions contemplated hereby or thereby,
(y) have or result in a material adverse effect on the results of operations,
assets, prospects, or financial condition of the Company and its Subsidiaries,
taken as a whole or (z) impair the Company's ability to perform fully on a
timely basis its obligations under any Transaction Document (any of (x), (y) or
(z), being a "Material Adverse Effect").
b. Authorization; Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement, the Certificate of Designation, the Warrants and the Registration
Rights Agreement (collectively, the "Transaction Documents"), and otherwise to
carry out its obligations hereunder and thereunder. The execution and delivery
of each of this Agreement and the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action and no further action is
required by the Company, its Board of Directors or its stockholders. Each of
this Agreement and the Transaction Documents has been duly executed by the
Company and when delivered in accordance with the terms hereof will constitute
the valid and binding obligation of the Company enforceable against the Company
in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application and
except that rights to indemnification and contribution may be limited by Federal
or state securities laws or public policy relating thereto. Neither the Company
nor any Subsidiary is in any material violation of any of the provisions of its
respective certificate of incorporation, bylaws or other charter documents such
that any right of a holder of shares of Preferred Stock would be affected.
c. Capitalization. As of the date hereof, the authorized capital stock of the
Company is as set forth in Schedule 2.1(c). All of such outstanding shares of
capital stock have been, or upon issuance will be, validly authorized and
issued, fully paid and nonassessable and were issued in accordance with the
registration or qualification provisions of the Securities Act, or pursuant to
valid exemptions therefrom.
d. Authorization and Validity; Issuance of Shares. The shares of Common Stock
issuable upon conversion of the Preferred Stock (collectively, "Conversion
Shares") and exercise of the Warrants (collectively, the "Warrant Shares," and
together with the Conversion Shares, the "Underlying Shares") are and will at
all times hereafter continue to be duly authorized and reserved for issuance to
the Purchasers entitled thereto and the Underlying Shares and the Shares of
Preferred Stock when issued and delivered and will be validly issued, fully paid
and non-assessable, free and clear of all liens, encumbrances and Company rights
of first refusal, other than liens and encumbrances created by the Purchasers
(collectively, "Liens") and will not be subject to any preemptive or similar
rights.
e. No Conflicts. The execution, delivery and performance of this Agreement and
each of the Transaction Documents by the Company and the consummation by the
Company of the
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transactions contemplated hereby and thereby (including the issuance of the
Underlying Shares) do not and will not (i) conflict with or violate any
provision of the Certificate of Incorporation, Bylaws or other organizational
documents of the Company or any of the Subsidiaries, (ii) subject to obtaining
the consents referred to in Section 2.1(f), conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture, patent, patent
license or instrument (evidencing a Company or Subsidiary debt or otherwise) to
which the Company or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company or
any Subsidiary is subject applicable to the Company or any of its Subsidiaries,
or by which any material property or asset of the Company or any Subsidiary is
bound or affected.
f. Consents and Approvals. Except as specifically set forth on Schedule 2.1(f),
neither the Company nor any Subsidiary is required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority, regulatory or self regulatory agency, or other Person in
connection with the execution, delivery and performance by the Company of this
Agreement or the Transaction Documents, other than (i) the filing of one or more
registration statements with the Securities and Exchange Commission (the
"Commission"), which shall be filed in accordance with and in the time periods
set forth in the Registration Rights Agreement, (ii) the application(s) or any
letter(s) acceptable to the Nasdaq SmallCap Market ("Nasdaq") and the Boston
Stock Exchange ("BSE") for the listing of the Underlying Shares with Nasdaq and
the BSE (and with any other national securities exchange or market on which the
Common Stock is then listed), and (iii) any filings, notices or registrations
under applicable state securities laws (together with the consents, waivers,
authorizations, orders, notices and filings referred to on Schedule 2.1(f), the
"Required Approvals").
g. SEC Documents; Financial Statements. The Common Stock of the Company is
registered pursuant to Section 12(b) of the Exchange Act. The Company has filed
all reports, schedules, forms, statements and other documents required to be
filed by it with the Commission pursuant to the reporting requirements of the
Exchange Act, including pursuant to Section 13, 14 or 15(d) thereof (the
foregoing materials and all exhibits included therein and financial statements
and schedules thereto and documents (other than exhibits to such documents)
incorporated by reference therein being collectively referred to herein as the
"SEC Documents"), on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Documents prior to the expiration of
any such extension. The Company has delivered to each of the Purchasers or its
representatives true, complete and accurate copies of the SEC Documents. As of
their respective dates, the SEC Documents complied in all material respects with
the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Documents, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the SEC Documents comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with generally accepted
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accounting principles applied on a consistent basis during the periods involved
("GAAP"), except as may be otherwise specified in such financial statements or
the notes thereto, and fairly present in all material respects the financial
position of the Company and its consolidated subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended. Since December 31, 1999, except as specifically disclosed in the SEC
Documents or in the schedules to this Agreement, (a) there has been no event,
occurrence or development that has had or that would reasonably be expected to
result in a Material Adverse Effect, (b) the Company has not incurred any
liabilities (contingent or otherwise) other than (x) liabilities incurred in the
ordinary course of business consistent with past practice and (y) liabilities
not required to be reflected in the Company's financial statements pursuant to
GAAP or required to be disclosed in filings made with the Commission, (c) the
Company has not altered its method of accounting or the identify of its auditors
and (d) the Company has not declared or made any payment or distribution of cash
or other property to its stockholders or officers or directors (other than in
compliance with existing Company stock option plans) with respect to its capital
stock, or purchased, redeemed (or made any agreements to purchase or redeem) any
shares of its capital stock.
h. Investment Company. The Company is not, and is not controlled by or under
common control with an affiliate (an "Affiliate") of an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
i. Broker's Fees. No fees or commissions or similar payments with respect to the
transactions contemplated by this Agreement or the Transaction Documents have
been paid or will be payable by the Company to any broker, financial advisor,
finder, investment banker, or bank, other than as set forth in Schedule 2.1(i).
The Purchasers shall have no obligation with respect to any fees or with respect
to any claims made by or on behalf of other Persons for fees of a type
contemplated in this Section 2.1(i) that may be due in connection with the
transactions contemplated by this Agreement and the Transaction Documents. The
Company shall indemnify and hold harmless the Purchasers, their employees,
officers, directors, agents, and partners, and their respective Affiliates, from
and against all claims, losses, damages, costs (including the costs of
preparation and attorney's fees) and expenses suffered in respect of any such
claimed or existing fees, as such fees and expenses are incurred.
j. Form S-3 Eligibility. The Company is, and at the Closing Date will be,
eligible to register securities (including the Underlying Shares) for resale
with the Commission under Form S-3 (or any successor form) promulgated under the
Securities Act.
k. Solicitation Materials. The Company has not (i) distributed any offering
materials in connection with the offering and sale of the Preferred Stock or the
Warrants, other than the SEC Documents, the Schedules to this Agreement, any
amendments and supplements thereto and the materials listed on Schedule 2.1(k),
or (ii) solicited any offer to buy or sell the Preferred Stock or the Warrants
by means of any form of general solicitation or advertising. Neither the
Company, nor any of its Affiliates, nor any Person acting on its or their
behalf, has engaged or will engage in any form of general solicitation or
general advertising (within the meaning of Regulation D under the Securities
Act) in connection with the offer or sale of the Preferred Stock or Warrants.
l. Seniority; Exclusivity. No class of equity securities of the Company will be
senior to the Preferred Stock in right of payment, whether upon liquidation,
dissolution or otherwise, without the consent of a majority in ownership
interest of the Series B Stock. So long as any Preferred Stock issued hereunder
remains outstanding, the Company shall not exchange, redeem or covert any of the
Company's capital stock for indebtedness, including convertible debt, of the
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Company. The Company shall not issue and sell any shares of Preferred Stock,
other than to the Purchasers signatory to this Agreement on or prior to the
First Closing Date pursuant to this Agreement, without the prior written consent
of each of the Purchasers.
m. Litigation; Proceedings. Except as specifically set forth on Schedule 2.1(m),
there is no action, suit, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries or any of their respective properties before
or by any court, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) which (i) adversely affects or
challenges the legality, validity or enforceability of any of this Agreement or
the Transaction Documents or (ii) could reasonably be expected to, individually
or in the aggregate, have a Material Adverse Effect.
n. Shareholders' Approval. The Company will use its best efforts to obtain
shareholder approval for an increase in the number of authorized shares of
Common Stock and, in accordance with NASDAQ rules, for the issuance of Common
Stock upon conversion of the Preferred Stock.
o. Series A Preferred. The holders of the Company's Series A Preferred Stock do
not have the right, nor will the Company grant such holders the right, to
convert their Series A Preferred Stock to Series B Preferred Stock.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. EACH OF THE PURCHASERS,
SEVERALLY AND NOT JOINTLY, HEREBY REPRESENTS AND WARRANTS TO THE COMPANY AS
FOLLOWS:
a. Organization; Authority. Such Purchaser is a corporation or a limited
duration company or a limited liability company or limited partnership duly
formed, validly existing and in good standing under the laws of the jurisdiction
of its incorporation or formation with the requisite power and authority,
corporate or otherwise, to enter into and to consummate the transactions
contemplated hereby and by the Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder. The purchase by such Purchaser of the
shares of Preferred Stock and the Warrants hereunder has been duly authorized by
all necessary action on the part of such Purchaser. Each of this Agreement and
the Registration Rights Agreement has been duly executed and delivered by such
Purchaser and constitutes the valid and legally binding obligation of such
Purchaser, enforceable against such Purchaser in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights generally and to general principles of equity.
(b) Investment Intent. Such Purchaser is acquiring the shares of Preferred Stock
and the Warrants for its own account and not with a present view to or for
distributing or reselling the shares of Preferred Stock, the Warrants, the
Conversion Shares or the Warrant Shares or any part thereof or interest therein
in violation of the Securities Act; provided, however, that by making the
representations herein, such Purchaser does not agree to hold any of the shares
of Preferred Stock, the Warrants, the Conversion Shares or the Warrant Shares
for any minimum or other specific term and reserves the right to dispose of the
securities acquired hereunder at any time in accordance with or pursuant to a
registration statement or an exemption under the Securities Act.
(c) Purchaser Status. At the time such Purchaser was offered the Preferred Stock
and the Warrants, and at the Closing Date, (i) it was and will be an "accredited
investor" as defined in Rule 501 under the Securities Act and (ii) such
Purchaser, either alone or together with its representatives, had and will have
such knowledge, sophistication and experience in business and
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financial matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Preferred Stock and the Warrants.
(d) Reliance. Such Purchaser understands and acknowledges that (i) the Preferred
Stock, the Warrants and the Underlying Shares are being offered and sold to such
Purchaser without registration under the Securities Act in a private placement
that is exempt from the registration provisions of the Securities Act under
Section 4(2) of the Securities Act or Regulation D promulgated thereunder and
(ii) the availability of such exemption depends in part on, and the Company will
rely upon the accuracy and truthfulness of, the representations set forth in
this Section 2.2 and such Purchaser hereby consents to such reliance.
(e) Information. Such Purchaser and its advisors, if any, have been furnished
with all materials relating to the business, finances and operations of the
Company and materials relating to the offer and sale of the Preferred Stock and
Warrants which have been requested by such Purchaser or its advisors. Such
Purchaser and its advisors, if any, have been afforded the opportunity to ask
questions of the Company. Neither such inquiries nor any other due diligence
investigation conducted by any Purchaser or any of its advisors or
representatives shall modify, amend or affect a Purchaser's right to rely on the
Company's representations and warranties contained in this Agreement or any
other Transaction Document. Such Purchaser understands that its investment in
the Preferred Stock and Warrants involves a significant degree of risk.
(f) Governmental Review. Such Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Preferred Stock or
Warrants.
(g) Residency. Such Purchaser is a resident of the jurisdiction set forth
immediately below such Purchaser's name on Schedule II hereto.
The Company acknowledges and agrees that the Purchasers make no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.2.
OTHER AGREEMENTS
TRANSFER RESTRICTIONS.
(a) If any Purchaser should decide to dispose of shares of the Preferred Stock,
the Warrants, the Conversion Shares or the Warrant Shares held by it, such
Purchaser understands and agrees that it may do so only pursuant to an effective
registration statement under the Securities Act, to the Company or pursuant to
an available exemption from the registration requirements of the Securities Act
or Rule 144 promulgated under the Securities Act ("Rule 144"). The Company shall
announce any material non-public information that it legally is required to
announce on or prior to the Effectiveness Date (as defined in the Registration
Rights Agreement) and shall not enter into any subsequent non-disclosure
agreements that would prevent it from announcing any such information that
otherwise legally could have been announced on or prior to the Effectiveness
Date, unless confidential treatment for such information is granted by the
Commission. In connection with any transfer of any shares of the Preferred
Stock, Warrants, Conversion Shares or Warrant Shares other than pursuant to an
effective registration statement, Rule 144(k) or to the Company, the Company may
require the transferor thereof to provide to the Company a written opinion of
counsel experienced in the area of United States securities laws selected by the
transferor, the form and substance of which opinion shall be customary for
opinions of counsel in comparable transactions, to the effect that such transfer
does not require registration of such transferred securities under the
Securities Act. Notwithstanding the
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foregoing, the Company hereby consents to and agrees to register any transfer by
any Purchaser to an Affiliate of such Purchaser or an investment fund or account
under common management with such Purchaser, provided that the transferee
certifies to the Company that it is an "accredited investor" as defined in Rule
501(a) under the Securities Act. Any such transferee shall agree in writing to
be bound by the terms of this Agreement and shall have the rights of a Purchaser
under this Agreement and the Transaction Documents. If a Purchaser provides the
Company with an opinion of counsel, the form and substance of which opinion
shall be customary for opinions of counsel in comparable transactions, to the
effect that a public sale, assignment or transfer of the Preferred Stock, the
Conversion Shares, the Warrants and the Warrant Shares may be made without
registration under the Securities Act or the Purchaser provides the Company with
reasonable assurances that the Preferred Stock, the Warrants, the Conversion
Shares and the Warrant Shares can be sold pursuant to Rule 144 without any
restriction as to the number of securities acquired as of a particular date that
can then be immediately sold, the Company shall permit the transfer, and, in the
case of the Conversion Shares and the Warrant Shares, promptly instruct its
transfer agent to issue one or more certificates in such name and in such
denominations as specified by such Purchaser and without any restrictive legend.
Notwithstanding the foregoing or anything else contained herein to the contrary,
the Preferred Stock, the Warrants, the Conversion Shares and the Warrant Shares
may be pledged as collateral in connection with a bona fide margin account or
other lending arrangement.
b. Each Purchaser agrees to the imprinting, so long as is required by this
Section 3.1(b), of the following legend (or a legend substantially similar) on
the Preferred Stock certificates, the Warrants, the Conversion Shares and the
Warrant Shares:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
The Underlying Shares shall not contain the legend set forth above (or
any other legend) (i) at any time while a registration statement is effective
under the Securities Act covering the resale of such security, (ii) if in the
written opinion of counsel to the Company experienced in the area of United
States securities laws such legend is not required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the Commission) or (iii) if such shares may be sold
pursuant to Rule 144(k). The Company agrees that it will provide each Purchaser,
upon request, with a certificate or certificates representing Conversion Shares
or Warrant Shares, free from all legends at such time as such legend is no
longer required under this Section 3.1(b). If such certificate or certificates
had previously been issued with such a legend or any other legend, the Company
shall, upon request, receive such certificate or certificates free of any
legend.
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STOP TRANSFER INSTRUCTION. THE COMPANY MAY NOT MAKE ANY NOTATION ON ITS RECORDS
OR GIVE INSTRUCTIONS TO ANY TRANSFER AGENT OF THE COMPANY WHICH ENLARGE THE
RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 3.1.
FURNISHING OF INFORMATION. AS LONG AS ANY PURCHASER OWNS SHARES OF THE PREFERRED
STOCK, THE WARRANTS, THE CONVERSION SHARES OR THE WARRANT SHARES, THE COMPANY
WILL CAUSE THE COMMON STOCK TO CONTINUE AT ALL TIMES TO BE REGISTERED UNDER
SECTION 12(g) OF THE EXCHANGE ACT, WILL TIMELY FILE (OR OBTAIN EXTENSIONS IN
RESPECT THEREOF AND FILE WITHIN THE APPLICABLE GRACE PERIOD) ALL REPORTS
REQUIRED TO BE FILED BY THE COMPANY AFTER THE DATE HEREOF PURSUANT TO SECTION
13, 14 OR 15(d) OF THE EXCHANGE. THE COMPANY FURTHER COVENANTS THAT IT WILL TAKE
SUCH FURTHER ACTION AS ANY HOLDER OF THE SHARES OF PREFERRED STOCK, THE
WARRANTS, THE CONVERSION SHARES OR THE WARRANT SHARES MAY REASONABLY REQUEST,
ALL TO THE EXTENT REQUIRED FROM TIME TO TIME TO ENABLE SUCH PERSON TO SELL THE
SHARES OF PREFERRED STOCK, THE WARRANTS, THE CONVERSION SHARES, OR THE WARRANT
SHARES WITHOUT REGISTRATION UNDER THE SECURITIES ACT WITHIN THE LIMITATION OF
THE EXEMPTIONS PROVIDED BY RULE 144 PROMULGATED UNDER THE SECURITIES ACT,
INCLUDING THE LEGAL OPINION REFERENCED ABOVE IN SECTION 3.1(b).
LISTING AND RESERVATION OF CONVERSION SHARES AND WARRANT SHARES.
a. The Company shall (i) not later than ten (10) business days after the Closing
Date prepare and file with Nasdaq and the BSE (as well as any other national
securities exchange or market on which the Common Stock is then listed)
additional shares listing applications or letters acceptable to Nasdaq and the
BSE covering and listing a number of shares of Common Stock which is at least
equal to 120% the maximum number of Underlying Shares then issuable, assuming
that the payment of all future dividends on such shares then outstanding were
made in shares of Common Stock and, for Conversion Shares, a conversion price
equal to 100% of the original conversion price, (ii) take all steps necessary to
cause the Underlying Shares to be approved for listing on Nasdaq and the BSE (as
well as on any other national securities exchange or market on which the Common
Stock is then listed) as soon as possible thereafter, (iii) maintain, so long as
any other shares of Common Stock shall be so listed, such listing of all such
Underlying Shares, and (iv) provide to the Purchasers evidence of such listing.
Neither the Company nor any of its Subsidiaries shall take any action that may
result in the delisting or suspension of the Common Stock on Nasdaq or the BSE.
The Company shall promptly provide to each Purchaser copies of any notices it
receives from Nasdaq or BSE regarding the continued eligibility of the Common
Stock for listing on such automated quotation system, so long as such notice
does not include material, nonpublic information. The Company shall pay all fees
and expenses in connection with satisfying its obligations under this Section
3.4(a).
b. The Company at all times shall reserve a sufficient number of shares of its
authorized but unissued Common Stock to provide for the full conversion of the
outstanding shares of Preferred Stock (including the payment of all dividends
thereon) assuming a conversion price equal to 100% of the initial conversion
price and exercise of the outstanding Warrants. Shares of Common Stock reserved
for issuance upon conversion of the shares of Preferred Stock and the exercise
of the Warrants shall be allocated pro rata to each of the Purchasers in
accordance with the number of shares of Preferred Stock and Warrants issued and
delivered to such Purchaser at the Closing. If at any time the number of shares
of Common Stock authorized and reserved for
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12
issuance is insufficient to cover 100% of the number of Conversion Shares and
Warrant Shares issued and issuable upon conversion of the shares of Preferred
Stock and exercise of the Warrants (based on the Conversion Price (as defined in
the Certificate of Designation) of the shares of Preferred Stock in effect from
time to time and the Exercise Price (as defined in the Warrants) of the Warrants
in effect from time to time) without regard to any limitation on conversions or
exercises, the Company will promptly take all corporate action necessary to
authorize and reserve 100% of such shares pursuant to Section 3(b) of the
Registration Rights Agreement, including, without limitation, calling a special
meeting of stockholders to authorize additional shares to meet the Company's
obligations under this Section 3.4(b), in the case of an insufficient number of
authorized shares, and using best efforts to obtain stockholder approval of an
increase in such authorized number of shares.
NOTICE OF BREACHES.
a. The Company and each Purchaser shall give prompt written notice to the other
of any breach by it of any representation, warranty or other agreement contained
in this Agreement or in the Transaction Documents, as well as any events or
occurrences arising after the date hereof and prior to the Closing Date, which
would reasonably be likely to cause any representation or warranty or other
agreement of such party, as the case may be, contained herein to be incorrect or
breached as of the Closing Date provided such notice will not constitute
material non-public information. However, no disclosure by either party pursuant
to this Section 3.5 shall be deemed to cure any breach of any representation,
warranty or other agreement contained herein or in the Transaction Documents.
b. The default by any Purchaser of any of its obligations, representations or
warranties under this Agreement or the Transaction Documents shall not be
imputed to, and shall have no effect upon, any other Purchaser or affect the
Company's obligations under this Agreement or any Transaction Document to any
non-defaulting Purchaser.
FORM D. THE COMPANY AGREES TO FILE A FORM D WITH RESPECT TO THE PREFERRED STOCK
AND WARRANTS AS REQUIRED BY RULE 506 UNDER REGULATION D.
USE OF PROCEEDS. THE COMPANY SHALL USE THE PROCEEDS FROM THE SALE OF THE
PREFERRED STOCK AND THE EXERCISE OF THE WARRANTS TO ACQUIRE ASSETS, REDUCE DEBT
AND FOR WORKING CAPITAL.
TRANSFER AGENT INSTRUCTIONS. AT EACH CLOSING THE COMPANY SHALL ISSUE IRREVOCABLE
INSTRUCTIONS TO ITS TRANSFER AGENT (AND SHALL ISSUE TO ANY SUBSEQUENT TRANSFER
AGENT AS REQUIRED), TO ISSUE CERTIFICATES, REGISTERED IN THE NAME OF EACH SUCH
PURCHASER OR ITS RESPECTIVE NOMINEE(S), FOR THE CONVERSION SHARES AND/OR THE
WARRANT SHARES IN SUCH AMOUNTS AS SPECIFIED FROM TIME TO TIME BY EACH PURCHASER
TO THE COMPANY IN A FORM ACCEPTABLE TO SUCH PURCHASERS (THE "IRREVOCABLE
TRANSFER AGENT INSTRUCTIONS"). SO LONG AS REQUIRED PURSUANT TO SECTION 3.1(b),
ALL SUCH CERTIFICATES SHALL BEAR THE RESTRICTIVE LEGEND SPECIFIED IN SECTION
3.1(b) OF THIS AGREEMENT. THE COMPANY WARRANTS THAT NO INSTRUCTION OTHER THAN
THE IRREVOCABLE TRANSFER AGENT INSTRUCTIONS REFERRED TO IN THIS SECTION 3.10,
AND STOP TRANSFER INSTRUCTIONS TO GIVE EFFECT TO SECTION 3.1 (IN THE CASE OF THE
CONVERSION SHARES AND THE WARRANT SHARES, PRIOR TO REGISTRATION OF THE
CONVERSION SHARES UNDER THE SECURITIES ACT) WILL BE GIVEN BY THE COMPANY TO ITS
TRANSFER AGENT AND THAT THE PREFERRED STOCK, THE WARRANTS, THE CONVERSION SHARES
AND THE WARRANT SHARES SHALL OTHERWISE BE
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FREELY TRANSFERABLE ON THE BOOKS AND RECORDS OF THE COMPANY AS AND TO THE EXTENT
PROVIDED IN THIS AGREEMENT AND THE TRANSACTION DOCUMENTS. IF A PURCHASER
PROVIDES THE COMPANY WITH AN OPINION OF COUNSEL, THE FORM AND SUBSTANCE OF WHICH
OPINION SHALL BE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS,
TO THE EFFECT THAT A PUBLIC SALE, ASSIGNMENT OR TRANSFER OF THE PREFERRED STOCK,
THE CONVERSION SHARES, THE WARRANTS AND THE WARRANT SHARES MAY BE MADE WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OR THE PURCHASER PROVIDES THE COMPANY WITH
REASONABLE ASSURANCES THAT THE WARRANTS, THE CONVERSION SHARES AND THE WARRANT
SHARES CAN BE SOLD PURSUANT TO RULE 144 WITHOUT ANY RESTRICTION AS TO THE NUMBER
OF SECURITIES ACQUIRED AS OF A PARTICULAR DATE THAT CAN THEN BE IMMEDIATELY
SOLD, THE COMPANY SHALL PERMIT THE TRANSFER, AND, IN THE CASE OF THE CONVERSION
SHARES AND THE WARRANT SHARES, PROMPTLY INSTRUCT ITS TRANSFER AGENT TO ISSUE ONE
OR MORE CERTIFICATES IN SUCH NAME AND IN SUCH DENOMINATIONS AS SPECIFIED BY SUCH
PURCHASER AND WITHOUT ANY RESTRICTIVE LEGEND.
BEST EFFORTS. EACH OF THE PARTIES HERETO SHALL USE ITS BEST EFFORTS TO SATISFY
EACH OF THE CONDITIONS TO BE SATISFIED BY IT AS PROVIDED IN ARTICLE IV OF THIS
AGREEMENT.
CONDITIONS
FIRST CLOSING.
a. Conditions Precedent to the Obligation of the Company to Sell the Shares of
Preferred Stock and Warrants. The obligation of the Company to sell the shares
of Preferred Stock and Warrants is subject to the satisfaction or waiver (with
prior written notice to each Purchaser) by the Company, at or before the First
Closing Date of each of the following conditions:
(i) (i) Accuracy of the Purchasers' Representations and Warranties.
The representations and warranties of each Purchaser in this
Agreement shall be true and correct in all material respects as
of the date when made and as of the First Closing;
(j) (ii) Performance by the Purchasers. Each Purchaser shall have
performed, satisfied and complied in all material respects with
all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such
Purchaser at or before the First Closing; and
(k) (iii) No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this
Agreement or the Transaction Documents.
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14
b. Conditions Precedent to the Obligation of the Purchasers to Purchase the
Shares of Preferred Stock and Warrants at the First Closing. The obligation of
each Purchaser hereunder to acquire and pay for the shares of Preferred Stock
and Warrants at the First Closing is subject to the satisfaction or waiver by
such Purchaser, at or before the First Closing Date, of each of the following
conditions:
(l) (i) Accuracy of the Company's Representations and Warranties. The
representations and warranties of the Company set forth in this
Agreement and in the Registration Rights Agreement shall be true
and correct in all respects as of the date when made and as of
the First Closing Date;
(m) (ii) Performance by the Company. The Company shall have
performed, satisfied and complied in all respects with all
covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by the Company at or
before the First Closing Date;
(n) (iii) No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this
Agreement and the Transaction Documents;
(o) (iv) No Suspensions of Trading in Common Stock. The trading in
the Common Stock shall not have been suspended by the Commission,
on Nasdaq or on the BSE (except for any suspension of trading of
limited duration solely to permit dissemination of material
information regarding the Company);
(p) (v) Listing of Common Stock. The Common Stock shall have been at
all times since the date of this Agreement and on the Closing
Date listed for trading on the Nasdaq and the BSE;
(q) (vi) Required Approvals. All Required Approvals, other than those
relating solely to Closing Dates other than the First Closing
Date, shall have been obtained and copies thereof delivered to
the Purchasers other than those relating solely to Closing Dates
other than the First Closing Date;
(r) (vii) Shares of Common Stock. The Company shall have duly
reserved the number of Underlying Shares required by this
Agreement and the Transaction Documents to be reserved upon the
exercise of the Warrants or the conversion of the shares of
Preferred Stock acquired by the Purchaser on the First Closing
Date;
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15
c. Documents and Certificates. At the First Closing, the Company shall have
delivered to the Purchasers, the following in form and substance reasonably
satisfactory to the Purchasers:
(s) (i) Preferred Stock Certificate. A Preferred Stock certificate(s)
representing the number of shares of Preferred Stock purchased by
each Purchaser as set forth next to such Purchaser's name on
Schedule I, registered in the name of such Purchaser, each in
form satisfactory to the Purchaser and issued pursuant to the
Certificate of Designation with a Conversion Price equal to
$4.00.
(t) (ii) Warrant. A Warrant(s), in the form of Exhibit B hereto and
with the Exercise Price equal to $4.00 representing the
Warrant(s) being purchased by each Purchaser as set forth next to
such Purchaser's name on the Schedule I, registered in the name
of such Purchaser;
(u) (iii) Registration Rights. The Company shall have executed and
delivered the Registration Rights Agreement;
(v) (iv) Legal Opinion. Legal Counsel for the Company shall have
rendered a legal opinion to the effect that the Transaction
Documents are legally valid and enforceable and that the shares
of Preferred Stock have been duly and validly issued.
(w) (v) Certificate of Designation. A certified copy of the
Certificate of Designation with respect to the Series B Preferred
Stock, as filed with the Texas Secretary of State.
SECOND CLOSING.
a. Conditions Precedent to the Obligation of the Company to Sell the shares of
Preferred Stock and Warrants. The obligation of the Company to sell the shares
of Preferred Stock and Warrants at the Second Closing is subject to the
satisfaction or waiver (with prior written notice to each Purchaser) by the
Company, at or before the Second Closing Date of each of the following
conditions:
(x) (i) Accuracy of the Purchasers' Representations and Warranties.
The representations and warranties of each Purchaser in this
Agreement shall be true and correct in all material respects as
of the date when made and as of the Second Closing;
(y) (ii) No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this
Agreement or the Transaction Documents.
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b. Documents and Certificates. On the Second Closing Date, the Company shall
deliver to each Purchaser electing to acquire shares of Preferred Stock and
Warrants in accordance with Section 1.2(b), the following in form and substance
reasonably satisfactory to such Purchasers:
(z) (i) Registration Rights Agreement. An executed Registration
Rights Agreement substantially in the form of Exhibit C attached
hereto pursuant to which the Company shall agree to provide
certain registration rights under the Securities Act and the
rules and regulations promulgated thereunder and applicable state
laws with respect to the shares of Common Stock issuable upon the
conversion of the shares of Preferred Stock, and upon the
exercise of the Warrants, to be issued at the Second Closing;
(aa) (ii) Preferred Stock Certificate. A Preferred Stock
certificate(s) representing the number of shares of Preferred
Stock purchased by such Purchaser as set forth next to such
Purchaser's name on the Second Closing Schedule, registered in
the name of such Purchaser, each in form satisfactory to the
Purchaser and issued pursuant to the Certificate of Designation
with a Conversion Price equal to $4.00;
(bb) (iii) Warrant. A Warrant(s), in the form of Exhibit B hereto and
with the Exercise Price equal to $4.00 representing the
Warrant(s) being purchased by each Purchaser as set forth next to
such Purchaser's name on the Second Closing Schedule, registered
in the name of such Purchaser;
(iv) Legal Opinion. Legal Counsel for the Company shall have
rendered a legal opinion in form and substance similar to the legal opinion
delivered at the First Closing.
(v) Officers Certificate. The Company shall have delivered a
Certificate of an executive officer certifying that the representations and
warranties contained herein continue to be true as of the Second Closing Date.
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MISCELLANEOUS
ENTIRE AGREEMENT. THIS AGREEMENT, TOGETHER WITH THE EXHIBITS AND SCHEDULES
HERETO AND THE TRANSACTION DOCUMENTS CONTAIN THE ENTIRE UNDERSTANDING OF THE
PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS, ORAL OR WRITTEN, WITH RESPECT TO SUCH MATTERS.
NOTICES. ANY NOTICES, CONSENTS, WAIVERS OR OTHER COMMUNICATIONS REQUIRED OR
PERMITTED TO BE GIVEN UNDER THE TERMS OF THIS AGREEMENT MUST BE IN WRITING AND
WILL BE DEEMED TO HAVE BEEN DELIVERED (I) UPON RECEIPT, WHEN DELIVERED
PERSONALLY; (II) ON DATE OF DELIVERY, WHEN SENT BY FACSIMILE, PROVIDED
CONFIRMATION OF TRANSMISSION IS MECHANICALLY OR ELECTRONICALLY GENERATED AND
KEPT ON FILE BY THE SENDING PARTY (IF DELIVERED BY 8:00 P.M. CST WHERE SUCH
NOTICE IS DELIVERED) OR THE FIRST BUSINESS DAY FOLLOWING SUCH DELIVERY (IF
DELIVERED AFTER 8:00 P.M. CST WHERE SUCH NOTICE IS DELIVERED); OR (III) ONE
BUSINESS DAY AFTER DEPOSIT WITH A NATIONALLY RECOGNIZED OVERNIGHT DELIVERY
SERVICE, IN EACH CASE PROPERLY ADDRESSED TO THE PARTY TO RECEIVE THE SAME. THE
ADDRESSES AND FACSIMILE NUMBERS FOR SUCH COMMUNICATIONS SHALL BE:
If to the Company:
International Isotopes Inc.
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxx, President
With a copy to:
Xxxxx Xxxxxxx & Xxxx LLC
000 Xxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Telephone: (000)000-0000
Facsimile: (000)000-0000
Attention: Xxxxxx X. Xxxxxx
e-mail: xxxxxxx@xxxxxxxxxxxx.xxx
If to the Transfer Agent:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000)000-0000
Facsimile: (000)000-0000
Attention: Xxxxxx Xxxxxx
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If to Purchaser, to the address listed on Schedule II hereto. Any
person may modify its address for notice by delivery to each other party of a
notice in the manner set forth in this Section.
AMENDMENTS; WAIVERS. NO PROVISION OF THIS AGREEMENT MAY BE WAIVED OR AMENDED
EXCEPT IN A WRITTEN INSTRUMENT SIGNED, IN THE CASE OF AN AMENDMENT, BY BOTH THE
COMPANY AND AT A MAJORITY IN OWNERSHIP INTEREST OF THE PURCHASERS EXCEPT
CONVERSION AND EXERCISE PRICE WHICH REQUIRES CONSENT OF PURCHASER IMPACTED OR,
IN THE CASE OF A WAIVER, BY THE PARTY AGAINST WHOM ENFORCEMENT OF ANY SUCH
WAIVER IS SOUGHT. NO WAIVER OF ANY DEFAULT WITH RESPECT TO ANY PROVISION,
CONDITION OR REQUIREMENT OF THIS AGREEMENT SHALL BE DEEMED TO BE A CONTINUING
WAIVER IN THE FUTURE OR A WAIVER OF ANY OTHER PROVISION, CONDITION OR
REQUIREMENT HEREOF, NOR SHALL ANY DELAY OR OMISSION OF EITHER PARTY TO EXERCISE
ANY RIGHT HEREUNDER IN ANY MANNER IMPAIR THE EXERCISE OF ANY SUCH RIGHT ACCRUING
TO IT THEREAFTER. NOTWITHSTANDING THE FOREGOING, NO SUCH AMENDMENT SHALL BE
EFFECTIVE TO THE EXTENT THAT IT APPLIES TO LESS THAN ALL OF THE HOLDERS OF THE
SHARES OF PREFERRED STOCK OUTSTANDING. THE COMPANY SHALL NOT OFFER OR PAY ANY
CONSIDERATION TO A PURCHASER FOR CONSENTING TO SUCH AN AMENDMENT OR WAIVER
UNLESS THE SAME CONSIDERATION IS OFFERED TO EACH PURCHASER AND THE SAME
CONSIDERATION IS PAID TO EACH PURCHASER WHICH CONSENTS TO SUCH AMENDMENT OR
WAIVER.
HEADINGS. THE HEADINGS HEREIN ARE FOR CONVENIENCE ONLY, DO NOT CONSTITUTE A PART
OF THIS AGREEMENT AND SHALL NOT BE DEEMED TO LIMIT OR AFFECT ANY OF THE
PROVISIONS HEREOF.
REFERENCES. REFERENCES HEREIN TO SECTIONS ARE TO SECTIONS OF THIS AGREEMENT,
UNLESS OTHERWISE EXPRESSLY PROVIDED.
SUCCESSORS AND ASSIGNS. THIS AGREEMENT SHALL BE BINDING UPON AND INURE TO THE
BENEFIT OF THE PARTIES AND THEIR SUCCESSORS AND PERMITTED ASSIGNS. THE COMPANY
MAY NOT ASSIGN THIS AGREEMENT OR ANY RIGHTS OR OBLIGATIONS HEREUNDER WITHOUT THE
PRIOR WRITTEN CONSENT OF A MAJORITY IN OWNERSHIP INTEREST OF THE PURCHASERS. THE
PURCHASERS MAY ASSIGN THIS AGREEMENT OR ANY RIGHTS OR OBLIGATIONS HEREUNDER
WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY, PROVIDED, THAT ANY ASSIGNEES
MUST MAKE THE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 2.2 AND
OTHERWISE COMPLY WITH THE TERMS OF THIS AGREEMENT OTHERWISE APPLICABLE TO ITS
ASSIGNOR. THIS PROVISION SHALL NOT LIMIT A PURCHASER'S RIGHT TO TRANSFER
SECURITIES IN ACCORDANCE WITH ALL OF THE TERMS OF THIS AGREEMENT OR THE
TRANSACTION DOCUMENTS.
NO THIRD-PARTY BENEFICIARIES. THIS AGREEMENT IS INTENDED FOR THE BENEFIT OF THE
PARTIES HERETO AND THEIR RESPECTIVE PERMITTED SUCCESSORS AND ASSIGNS AND IS NOT
FOR THE BENEFIT OF, NOR MAY ANY PROVISION HEREOF BE ENFORCED BY, ANY OTHER
PERSON.
GOVERNING LAW. THE CORPORATE LAWS OF THE STATE OF TEXAS SHALL GOVERN ALL ISSUES
CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS. ALL OTHER
QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION
OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO
THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY
OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF THE ANY OF THE
TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT
IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
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MAILING A COPY THEREOF TO SUCH PARTY AT THE ADDRESS FOR SUCH NOTICES TO IT UNDER
THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED
TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
SURVIVAL. THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PURCHASERS
CONTAINED IN THIS AGREEMENT, AND THE AGREEMENTS AND COVENANTS SET FORTH IN
SECTION 3, AND THE INDEMNIFICATION PROVISIONS SET FORTH IN SECTION 5, SHALL
SURVIVE THE CLOSING AND ANY CONVERSION OF THE SHARES OF PREFERRED STOCK OR
EXERCISE OF THE WARRANTS REGARDLESS OF ANY INVESTIGATION MADE BY OR ON BEHALF OF
THE SUCH PURCHASER OR BY OR ON BEHALF OF THE COMPANY, EXCEPT THAT, IN THE CASE
OF REPRESENTATIONS AND WARRANTIES SUCH SURVIVAL SHALL BE LIMITED TO THE PERIOD
OF ONE YEAR FOLLOWING THE CLOSING DATE ON WHICH THEY WERE MADE OR DEEMED TO HAVE
BEEN MADE (OTHER THAN WITH RESPECT TO ANY CLAIM BY A THIRD PARTY AGAINST THE
PARTY TO THIS AGREEMENT WHO SEEKS TO ASSERT A CLAIM BASED ON SUCH
REPRESENTATIONS AND WARRANTIES). THIS SECTION SHALL HAVE NO EFFECT ON THE
SURVIVAL OF THE INDEMNIFICATION PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT.
COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN TWO OR MORE COUNTERPARTS, ALL OF
WHICH WHEN TAKEN TOGETHER SHALL BE CONSIDERED ONE AND THE SAME AGREEMENT AND
SHALL BECOME EFFECTIVE WHEN COUNTERPARTS HAVE BEEN SIGNED BY EACH PARTY AND
DELIVERED TO THE OTHER PARTY, IT BEING UNDERSTOOD THAT BOTH PARTIES NEED NOT
SIGN THE SAME COUNTERPART. IN THE EVENT THAT ANY SIGNATURE IS DELIVERED BY
FACSIMILE TRANSMISSION, SUCH SIGNATURE SHALL CREATE A VALID AND BINDING
OBLIGATION OF THE PARTY EXECUTING (OR ON WHOSE BEHALF SUCH SIGNATURE IS
EXECUTED) THE SAME WITH THE SAME FORCE AND EFFECT AS IF SUCH FACSIMILE SIGNATURE
PAGE WERE AN ORIGINAL THEREOF.
SEVERABILITY. IN CASE ANY ONE OR MORE OF THE PROVISIONS OF THIS AGREEMENT SHALL
BE INVALID OR UNENFORCEABLE IN ANY RESPECT, THE VALIDITY AND ENFORCEABILITY OF
THE REMAINING TERMS AND PROVISIONS OF THIS AGREEMENT SHALL NOT IN ANY WAY BE
AFFECTED OR IMPAIRED THEREBY AND THE PARTIES WILL ATTEMPT TO AGREE UPON A VALID
AND ENFORCEABLE PROVISION WHICH SHALL BE A REASONABLE SUBSTITUTE THEREFOR, AND
UPON SO AGREEING, SHALL INCORPORATE SUCH SUBSTITUTE PROVISION IN THIS AGREEMENT.
INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS. THE OBLIGATIONS OF
EACH PURCHASER HEREUNDER IS SEVERAL AND NOT JOINT WITH THE OBLIGATIONS OF THE
OTHER PURCHASERS HEREUNDER, AND NO PURCHASER SHALL BE RESPONSIBLE IN ANY WAY FOR
THE PERFORMANCE OF THE OBLIGATIONS OF ANY OTHER PURCHASER HEREUNDER. NOTHING
CONTAINED HEREIN OR IN ANY OTHER AGREEMENT OR DOCUMENT DELIVERED AT ANY CLOSING,
AND NO ACTION TAKEN BY ANY PURCHASER PURSUANT HERETO OR THERETO, SHALL BE DEEMED
TO CONSTITUTE THE PURCHASERS AS A PARTNERSHIP, AN ASSOCIATION, A JOINT VENTURE
OR ANY OTHER KIND OF ENTITY, OR CREATE A PRESUMPTION THAT THE PURCHASERS ARE IN
ANY WAY ACTING IN CONCERT WITH RESPECT TO SUCH OBLIGATIONS OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PURCHASER SHALL BE ENTITLED TO PROTECT AND
ENFORCE ITS RIGHTS, INCLUDING WITHOUT LIMITATION THE RIGHTS ARISING OUT OF THIS
AGREEMENT OR OUT OF THE TRANSACTION DOCUMENTS, AND IT SHALL NOT BE NECESSARY FOR
ANY OTHER PURCHASER TO BE JOINED AS AN ADDITIONAL PARTY IN ANY PROCEEDING FOR
SUCH PURPOSE.
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FURTHER ASSURANCES. EACH PARTY SHALL DO AND PERFORM, OR CAUSE TO BE DONE AND
PERFORMED, ALL SUCH FURTHER ACTS AND THINGS, AND SHALL EXECUTE AND DELIVER ALL
SUCH OTHER AGREEMENTS, CERTIFICATES, INSTRUMENTS AND DOCUMENTS, AS THE OTHER
PARTY MAY REASONABLY REQUEST IN ORDER TO CARRY OUT THE INTENT AND ACCOMPLISH THE
PURPOSES OF THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREBY.
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IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized persons as
of the date first indicated above.
INTERNATIONAL ISOTOPES INC.
By:
------------------------------------
Name: Xxxxx X. Xxxx
Title: President and CEO
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Purchasers:
AIG SoundShore Holdings Ltd.
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
AIG SoundShore Opportunity Holding Fund Ltd.
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
AIG SoundShore Strategic Holding Fund Ltd.
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
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----------------------------------------------
Xxxxxx X. Xxxxxx
----------------------------------------------
Xxxxxxxx X. Xxxxxx
----------------------------------------------
Xxxxx X. Xxxxxx "Special"
Belfer Investments, L.P.
By:
-------------------------------------------
Name:
----------------------------------
Title:
---------------------------------
----------------------------------------------
Xxxxxxxxxxx Xxxxxx
----------------------------------------------
Xxxxx Xxxxxx
----------------------------------------------
Xxxxx Xxxxxxx
----------------------------------------------
Xxxxx Xxxxxxx, Xx., Benefit Trust
----------------------------------------------
Xxxxxx Xxxxxxxx
----------------------------------------------
X. Xxxxxxxx Hull
----------------------------------------------
X.X. Xxxxxxxx
----------------------------------------------
Xxxxxx X. X'Xxxxx, Xx.
----------------------------------------------
Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Xxxxxxx Xxxxxx
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----------------------------------------------
Xxxx X. XxXxxxxxx
----------------------------------------------
Xxxxxxx X. Xxxxxx
Elkhorn Partners Limited
By:
-------------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Himalaya Capital Partners
By:
-------------------------------------------
Name:
----------------------------------
Title:
---------------------------------
PW Family Associates LLC
By:
-------------------------------------------
Name: Xxxxxx X. Plum
Title:
---------------------------------
----------------------------------------------
Xxxxxxx X. Xxxxxxxx
----------------------------------------------
Xxxxxx Xxxxxxxx
Futurtec LP
By:
-------------------------------------------
Name: Ido Klear
Title:
---------------------------------
----------------------------------------------
Xxxxxxx xx Xxxxxxx
----------------------------------------------
Xxxxx X. Xxxxx
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----------------------------------------------
Xxxxx Xxxxx
----------------------------------------------
Xxxxxx Xxxx
Xxxxxx Xxxx Capital
By:
-------------------------------------------
Name: Xxxxxx Xxxx
Title:
---------------------------------
----------------------------------------------
XxXxx Xxxxxxxx
----------------------------------------------
Xxxxxxx Hamblitt
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SCHEDULE I
Number of Shares of
Preferred Stock at Number of Shares
Name of Purchaser First Closing Purchase Price Underlying Warrant
----------------- ------------- -------------- ------------------
AIG SoundShore Holdings Ltd. 2,032 $2,032,000 508,000
AIG SoundShore Opportunity 778 $ 778,000 194,500
Holding Fund Ltd.
AIG SoundShore 690 $ 690,000 172,500
Holding Fund Ltd.
Xxxxxx X. Xxxxxx 1,000 $1,000,000 250,000
Xxxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
"Special"
Belfer Investments, L.P.
Xxxxxxxxxxx Xxxxxx 75 $ 75,000 18,750
Xxxxx Xxxxxx 75 $ 75,000 18,750
Xxxxx Xxxxxxx 400 $ 400,000 100,000
Xxxxx Xxxxxxx, Xx. 50 $ 50,000 12,500
Benefit Trust
Xxxxxx Xxxxxxx 50 $ 50,000 12,500
Benefit Trust
Xxxxxx Xxxxxxxx 100 $ 100,000 25,000
X. Xxxxxxxx Xxxx 000 $ 250,000 62,500
X.X. Xxxxxxxx 150 $ 150,000 37,500
Xxxxxx X. X'Xxxxx, Xx. 100 $ 100,000 25,000
Xxxxx X. Xxxxx, Xx. 100 $ 100,000 25,000
27
Number of Shares of
Preferred Stock at Number of Shares
Name of Purchaser First Closing Purchase Price Underlying Warrant
----------------- ------------- -------------- ------------------
Xxxxxxx Xxxxxx 100 $ 100,000 25,000
Xxxx X. XxXxxxxxx 300 $ 300,000 75,000
Xxxxxxx X. Xxxxxx 100 $ 100,000 25,000
Elkhorn Partners Limited 125 $ 125,000 31,250
Himalaya Capital 1,000 $1,000,000 250,000
Partners
PW Family Associates 100 $ 100,000 25,000
LLC
Xxxxxxx X. Xxxxxxxx 25 $ 25,000 6,250
and Xxxxxx Xxxxxxxx
JTWROS
Futurtec LP (Ido Klear) 100 $ 100,000 25,000
Xxxxxxx xx Xxxxxxx 100 $ 100,000 25,000
Xxxxx X. Xxxxx and 100 $ 100,000 25,000
Xxxxx Xxxxx JTWROS
Xxxxxx Xxxx 400 $ 400,000 100,000
Xxxxxx Xxxx Capital
XxXxx Xxxxxxxx 100 $ 100,000 25,000
Xxxxxxx Hamblitt 25 $ 25,000 6,250
2
28
SCHEDULE II
Name of Purchaser Address
----------------- -------
AIG SoundShore Holdings Ltd. c/o AIG International Management Company, Inc.
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
(000) 000-0000
Fax (000) 000-0000
AIG SoundShore Opportunity Holding Fund Ltd. c/o AIG International Management Company, Inc.
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
(000) 000-0000
Fax (000) 000-0000
AIG SoundShore Strategic Holding Fund Ltd. c/o AIG International Management Company, Inc.
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
(000) 000-0000
Fax (000) 000-0000
Xxxxxx X. Xxxxxx Belco Oil & Gas Corp.
000 0xx Xxx., 00xx Xx.
Xxx Xxxx, XX 00000
Xxxxxxxx X. Xxxxxx Family 1997 Trust
Xxxxx X. Xxxxxx "Special"
Belfer Investments, L.P.
Xxxxxxxxxxx Xxxxxx 000 X. Xxxxxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Xxxxx Xxxxxx 0000 Xxxxxxx Xxx.
Xxxxxxxxx, XX 00000
Xxxxx Xxxxxxx 000 Xxxxx Xx.
Xxxxxxx, XX 00000
Xxxxx Xxxxxxx, Xx. 0000 Xxxxxx Xxx
Xxxxxxx Xxxxx Xxxxxxx Xxxx, XX 00000
Xxxxxx Xxxxxxx, 0000 Xxxxxx Xxx
Xxxxxxx Xxxxx Xxxxxxx Xxxx, XX 00000
Xxxxxx Xxxxxxxx 000 Xxxx Xxxxxxx Xx.
Xxxx Xxxxx, XX 00000
X. Xxxxxxxx Hull Hull Capital
000 X. 00xx Xx., 00xx Xx.
Xxx Xxxx, XX 00000
29
X.X. Xxxxxxxx 0000 Xxxxxxxxx Xxxxxxx
Xxx. 000
Xxxxxxx, XX 00000
Xxxxxx X. X'Xxxxx, Xx. 0000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxx X. Xxxxx, Xx. 00 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Xxxxxxx Xxxxxx 0000 Xxx Xxxxxxx Xxx.
Xxx Xxxxxx, XX 00000
Xxxx X. XxXxxxxxx 0000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxxx 0000 Xxxxx'x Xxxxx
Xxxxxxxxx, XX 00000
Elkhorn Partners Limited 0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Himalaya Capital Partners 00 Xxxx 00xx Xx., 00xx Xx.
Xxx Xxxx, XX 00000
PW Family Associates LLC 000 Xxxxx Xxxx Xx., Xxxx. 000
(Xxxxxx X. Plum) Xxxxx, XX 00000
Xxxxxxx X. Xxxxxxxx and 000 Xxxxxxxxx Xxxx
Xxxxxx Xxxxxxxx XXXXXX Xxxxxxxxx, XX 00000
Futurtec LP (Ido Klear) 00 Xxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Xxxxxxx xx Xxxxxxx 00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Name of Purchaser Address
----------------- -------
Xxxxx X. Xxxxx and Xxxxxx Xxxx
Xxxxx Xxxxx XXXXXX Xxxxxx, XX 00000
Xxxxxx Xxxx 301 Commerce, Ste. 0000
Xxxxxx Xxxx Xxxxxxx Xxxx Xxxxx, XX 00000
XxXxx Xxxxxxxx 000 X. Xxxxxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Xxxxxxx Hamblitt 0 XxXxxxxx Xxx.
Xxxxxxxx, XX 00000
2
30
Exhibit A
[Form of Certificate of Designation]
31
Exhibit B
[Form of Warrant]
32
Exhibit C
[Registration Rights Agreement]
