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.
1
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.
2
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.
3
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/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: President
LENDER:
By: /S/ Xxxxx Xxxxxxx
-----------------
Name: Xxxxx Xxxxxxx
SIGNATURE PAGE TO INTERNATIONAL ISOTOPES INC.
NOTE PURCHASE AGREEMENT
4
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A
VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THE SECURITIES
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION AND
QUALIFICATION WITHOUT, EXCEPT UNDER CERTAIN SPECIFIC LIMITED CIRCUMSTANCES, AN
OPINION OF COUNSEL FOR THE HOLDER, CONCURRED IN BY COUNSEL FOR THE COMPANY THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
UNSECURED CONVERTIBLE PROMISSORY NOTE
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 Xxxxx
Xxxxxxx (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.
5
(i) If to Company:
International Isotopes Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 00000
Fax: (208) 000-000 0
(ii) If to Holder:
Xxxxx Xxxxxxx
VC 14-212
000 Xxxx 000xx Xx.
Xxx Xxxx, XX 00000
(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.
2
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/ Xxxxx Xxxxxxx By: /S/ Xxxxx X. Xxxxxx
------------------ -------------------
Name: Xxxxx Xxxxxxx Name: Xxxxx X. Xxxxxx
Address: VC 14-212 Title: President
000 Xxxx 000xx Xx.
Xxx Xxxx, XX 00000
3
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.
1
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.
2
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.
3
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/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: President
LENDER:
By: /S/ Xxxxxxx Xxxxxxxxx
---------------------
Name: Xxxxxxx Xxxxxxxxx
SIGNATURE PAGE TO INTERNATIONAL ISOTOPES INC.
NOTE PURCHASE AGREEMENT
4
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A
VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THE SECURITIES
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION AND
QUALIFICATION WITHOUT, EXCEPT UNDER CERTAIN SPECIFIC LIMITED CIRCUMSTANCES, AN
OPINION OF COUNSEL FOR THE HOLDER, CONCURRED IN BY COUNSEL FOR THE COMPANY THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
UNSECURED CONVERTIBLE PROMISSORY NOTE
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 Xxxxxxx
Xxxxxxxxx (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
1
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/ Xxxxxxx Xxxxxxxxx By: /S/ Xxxxx X. Xxxxxx
--------------------- -------------------
Name: Xxxxxxx Xxxxxxxxx Name: Xxxxx X. Xxxxxx
Address: 000 X. Xxxx Xxx Xx. Ste. 2105 Title: President
Xxxxxxx, XX 00000
3
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.
1
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.
2
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.
3
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/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: President
LENDER:
By: /S/ Xxxxxxxxxxx Xxxxxx
----------------------
Name: Xxxxxxxxxxx Xxxxxx
SIGNATURE PAGE TO INTERNATIONAL ISOTOPES INC.
NOTE PURCHASE AGREEMENT
4
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A
VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THE SECURITIES
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION AND
QUALIFICATION WITHOUT, EXCEPT UNDER CERTAIN SPECIFIC LIMITED CIRCUMSTANCES, AN
OPINION OF COUNSEL FOR THE HOLDER, CONCURRED IN BY COUNSEL FOR THE COMPANY THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
UNSECURED CONVERTIBLE PROMISSORY NOTE
Idaho Falls, Idaho
$26,000.00 January 21,2004
1. Principal and Interest.
(a) International Isotopes Inc., a Texas corporation (the
"Company"), for value received, hereby promises to pay to the order of
Xxxxxxxxxxx Xxxxxx (the "Holder") in lawful money of the United States at the
address of the Holder set forth below, the principal amount of Twenty Six
Thousand Dollars ($ 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.
1
(i) If to Company:
International Isotopes Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 00000
Fax: (000) 000-0000
(ii) If to Holder:
Xxxxxxxxxxx Xxxxxx
000 Xxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
(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.
2
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/ Xxxxxxxxxx Xxxxxx By: /S/ Xxxxx X. Xxxxxx
--------------------- -------------------
Name: Xxxxxxxxxx Xxxxxx Name: Xxxxx X. Xxxxxx
Address: 000 Xxxxxxxx, Xxxxx 000 Title: President
Xxxxxxxx Xxxxxxx, XX 00000
3
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.
1
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.
2
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.
3
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/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: President
LENDER:
By: /S/ Xxxxxx Xxxxxxxx
-------------------
Name: Xxxxxx Xxxxxxxx
SIGNATURE PAGE TO INTERNATIONAL ISOTOPES INC.
NOTE PURCHASE AGREEMENT
4
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A
VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THE SECURITIES
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION AND
QUALIFICATION WITHOUT, EXCEPT UNDER CERTAIN SPECIFIC LIMITED CIRCUMSTANCES, AN
OPINION OF COUNSEL FOR THE HOLDER, CONCURRED IN BY COUNSEL FOR THE COMPANY THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
UNSECURED CONVERTIBLE PROMISSORY NOTE
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 Xxxxxx
Xxxxxxxx (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.
1
(i) If to Company:
International Isotopes Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 00000
Fax: (000) 000-0000
(ii) If to Holder:
Xxxxxx Xxxxxxxx
258E. Xxxxxxx 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.
2
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/ Xxxxxx Xxxxxxxx By: /S/ Xxxxx X. Xxxxxx
------------------- -------------------
Name: Xxxxxx Xxxxxxxx Name: Xxxxx X. Xxxxxx
Address: 000 X. Xxxxxxx Xx. Title: President
Xxxxx Xxxxx, XX 00000
3
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.
1
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.
2
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.
3
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/ Xxxxx X. Xxxxxx
----------------------
Name: Xxxxx X. Xxxxxx
Title: President
LENDER:
By: /S/ Xxxx XxXxxxxxx
---------------------
Name: Xxxx XxXxxxxxx
SIGNATURE PAGE TO INTERNATIONAL ISOTOPES INC.
NOTE PURCHASE AGREEMENT
4
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A
VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THE SECURITIES
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION AND
QUALIFICATION WITHOUT, EXCEPT UNDER CERTAIN SPECIFIC LIMITED CIRCUMSTANCES, AN
OPINION OF COUNSEL FOR THE HOLDER, CONCURRED IN BY COUNSEL FOR THE COMPANY THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
UNSECURED CONVERTIBLE PROMISSORY NOTE
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 Xxxx
XxXxxxxxx (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.
1
(i) If to Company:
International Isotopes Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 00000
Fax: (000) 000-0000
(ii) If to Holder:
Xxxx XxXxxxxxx
0000 Xxxxxxxx
Xxxxxxx, XX 00000
(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.
2
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/ Xxxx XxXxxxxxx By: /S/ Xxxxx X. Xxxxxx
------------------ -------------------
Name: Xxxx XxXxxxxxx Name: Xxxxx X. Xxxxxx
Address: 0000 Xxxxxxxx Xx. Title: President
Xxxxxxx, XX 00000
3
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.
1
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.
2
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.
3
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/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: President
LENDER:
By: /S/ Xxxxx Xxxxx
------------------
Name: Xxxxx Xxxxx
SIGNATURE PAGE TO INTERNATIONAL ISOTOPES INC.
NOTE PURCHASE AGREEMENT
4
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A
VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THE SECURITIES
MAY NOT BE SOLD OK OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION AND
QUALIFICATION WITHOUT, EXCEPT UNDER CERTAIN SPECIFIC LIMITED CIRCUMSTANCES, AN
OPINION OF COUNSEL FOR THE HOLDER, CONCURRED IN BY COUNSEL FOR THE COMPANY THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
UNSECURED CONVERTIBLE PROMISSORY NOTE
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 Xxxxx
Xxxxx (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.
1
(i) If to company:
International Isotopes Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 00000
Fax: (000) 000-0000
(ii) If to Holder:
Xxxxx Xxxxx
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.
2
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/ Xxxxx Xxxxx By: /S/ Xxxxx X. Xxxxxx
--------------- -------------------
Name: Xxxxx Xxxxx Name: Xxxxx X. Xxxxxx
Address: Fifty Broadway Title: President
Xxx Xxxx, XX 00000
3
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.
1
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.
2
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.
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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/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: President
LENDER:
By: /S/ Xxxxxx X'Xxxxx
------------------
Name: Xxxxxx X'Xxxxx
SIGNATURE PAGE TO INTERNATIONAL ISOTOPES INC.
NOTE PURCHASE AGREEMENT
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THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A
VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THE SECURITIES
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION AND
QUALIFICATION WITHOUT, EXCEPT UNDER CERTAIN SPECIFIC LIMITED CIRCUMSTANCES, AN
OPINION OF COUNSEL FOR THE HOLDER, CONCURRED IN BY COUNSEL FOR THE COMPANY THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
UNSECURED CONVERTIBLE PROMISSORY NOTE
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 Xxxxxx
X'Xxxxx (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.
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(i) If to Company:
International Isotopes Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 00000
Fax: (208) 000- 00 00
(ii) If to Holder:
Xxxxxx X'Xxxxx
0000 0xx Xxx, Xxx 0X
Xxx Xxxx, XX 00000
(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.
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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/ Xxxxxx X'Xxxxx By: /S/ Xxxxx X. Xxxxxx
------------------ -------------------
Name: Xxxxxx X'Xxxxx Name: Xxxxx X. Xxxxxx
Address: 0000 0xx Xxx, Xxx 0X Title: President Xxx
Xxxx, XX 00000
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