INTERNATIONAL ISOTOPES INC. CLASS E WARRANT
NEITHER
THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS. NOTWITHSTANDING THE FOREGOING, THESE
SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY
BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY SUCH SECURITIES.
INTERNATIONAL
ISOTOPES INC.
CLASS
E WARRANT
|
Warrant
No. 1
|
Dated:
April 09, 2008
|
International
Isotopes Inc., a Texas corporation (the “Company”),
hereby certifies that, for value received, Firebird Global Master Fund II,
Ltd.
or its registered assigns (the “Holder”),
is
entitled to purchase from the Company up to a total of 5,555,555 shares of
common stock, $0.01 par value per share (the “Common
Stock”),
of
the Company (each such share, a “Warrant
Share”
and
all
such shares, the “Warrant
Shares”)
at an
exercise price equal to $0.869 per share (as adjusted from time to time as
provided in Section
9,
the
“Exercise
Price”),
at
any time and from time to time from and after the date hereof and through and
including March 20, 2011 (the “Expiration
Date”),
and
subject to the following terms and conditions. This Warrant (the “Warrant”)
is one
of a series of similar warrants issued as exchange warrants on the date hereof
in connection with the exercise of the Class C warrants issued pursuant to
that
certain Securities Purchase Agreement, dated as of March 20, 2007, by and among
the Company and the Purchasers identified therein (the “Purchase
Agreement”).
All
such warrants (not including the Class D Warrants) are referred to herein,
collectively, as the “Warrants.”
1.
Definitions.
In
addition to the terms defined elsewhere in this Warrant, capitalized terms
that
are not otherwise defined herein have the meanings given to such terms in the
Purchase Agreement.
2.
Registration
of Warrant.
The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant
Register”),
in
the name of the record Holder hereof from time to time. The Company may deem
and
treat the registered Holder of this Warrant as the absolute owner hereof for
the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.
3.
Transfers.
(a)
If,
at
the time of the surrender of this Warrant in connection with any transfer of
this Warrant, the transfer of this Warrant shall not be registered pursuant
to
an effective registration statement under the Securities Act and under
applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer (i) that the Holder or transferee of
this Warrant, as the case may be, furnish to the Company a written opinion
of
counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that such transfer
may be made without registration under the Securities Act and under applicable
state securities or blue sky laws, (ii) that the holder or transferee
execute and deliver to the Company an investment letter addressing the matters
set forth on Schedule
A
attached
hereto, and (iii) that the transferee be an “accredited investor” as
defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under
the Securities Act or a “qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act.
(b)
If
this
Warrant is transferable pursuant to subparagraph (a) above, the Company shall
register the transfer of any portion of this Warrant in the Warrant Register,
upon surrender of this Warrant, with the Form of Assignment attached hereto
duly
completed and signed, to the Transfer Agent or to the Company at its address
specified herein. Upon any such registration or transfer, a new warrant to
purchase Common Stock, in substantially the form of this Warrant (any such
new
warrant, a “New
Warrant”),
evidencing the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a holder
of a Warrant.
4.
Exercise
and Duration of Warrants.
(a)
This
Warrant shall be exercisable by the registered Holder at any time and from
time
to time on or after the date hereof through and including the Expiration Date.
At 6:30 P.M., New York City time on the Expiration Date, the portion of this
Warrant not exercised prior thereto shall be and become void and of no value;
provided that, if the average of the Closing Prices for the five Trading Days
immediately prior to (but not including) the Expiration Date exceeds the
Exercise Price on the Expiration Date, then this Warrant shall be deemed to
have
been exercised in full (to the extent not previously exercised) on a “cashless
exercise” basis at 6:30 P.M. New York City time on the Expiration Date if a
“cashless exercise” may occur at such time pursuant to Section 10 below.
Notwithstanding anything to the contrary herein, the Expiration Date shall
be
extended for each day following the Effective Date that the Registration
Statement is not effective.
(b)
A
Holder
may exercise this Warrant by delivering to the Company (i) an exercise notice,
in the form attached hereto (the “Exercise
Notice”),
appropriately completed and duly signed, and (ii) payment of the Exercise
Price for the number of Warrant Shares as to which this Warrant is being
exercised (which may take the form of a “cashless exercise” if so indicated in
the Exercise Notice and if a “cashless exercise” may occur at such time pursuant
to this Section 10 below), and the date such items are delivered to the Company
(as determined in accordance with the notice provisions hereof) is an
“Exercise
Date.”
The
Holder shall not be required to deliver the original Warrant in order to effect
an exercise hereunder until the Holder has purchased all of the Warrant Shares
available hereunder. Execution and delivery of the Exercise Notice shall have
the same effect as cancellation of the original Warrant and issuance of a New
Warrant evidencing the right to purchase the remaining number of Warrant
Shares.
5.
Delivery
of Warrant Shares.
(a)
Upon
exercise of this Warrant, the Company shall promptly (but in no event later
than
three Trading Days after the Exercise Date) issue or cause to be issued and
cause to be delivered to or upon the written order of the Holder and in such
name or names as the Holder may designate, a certificate for the Warrant Shares
issuable upon such exercise, free of restrictive legends unless a registration
statement covering the resale of the Warrant Shares and naming the Holder as
a
selling stockholder thereunder is not then effective and the Warrant Shares
are
not freely transferable without volume restrictions pursuant to Rule 144 under
the Securities Act. The Holder, or any Person so designated by the Holder to
receive Warrant Shares, shall be deemed to have become holder of record of
such
Warrant Shares as of the Exercise Date. The Company shall, upon request of
the
Holder, use its best efforts to deliver Warrant Shares hereunder electronically
through the Depository Trust Corporation or another established clearing
corporation performing similar functions, if the Company is then a participant
in any such system.
(b)
This
Warrant is exercisable, either in its entirety or, from time to time, for a
portion of the number of Warrant Shares. Upon surrender of this Warrant
following one or more partial exercises, the Company shall issue or cause to
be
issued, at its expense, a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares.
(c)
In
addition to any other rights available to a Holder, if the Company fails to
deliver to the Holder a certificate representing Warrant Shares by the fifth
Trading Day after the date on which delivery of such certificate is required
by
this Warrant, and if after such fifth Trading Day the Holder purchases (in
an
open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares that the Holder
anticipated receiving from the Company (a “Buy-In”),
then
the Company shall, within five Trading Days after the Holder’s request and in
the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to
the Holder’s total purchase price (including brokerage commissions, if any) for
the shares of Common Stock so purchased (the “Buy-In
Price”),
at
which point the Company’s obligation to deliver such certificate (and to issue
such Common Stock) shall terminate, or (ii) promptly honor its obligation to
deliver to the Holder a certificate or certificates representing such Common
Stock and pay cash to the Holder in an amount equal to the excess (if any)
of
the Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) the Closing Price on the date of the event giving rise to the
Company’s obligation to deliver such certificate.
(d)
The
Company’s obligations to issue and deliver Warrant Shares in accordance with the
terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or
any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation
of
law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to
the
Holder in connection with the issuance of Warrant Shares. Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to
timely deliver certificates representing shares of Common Stock upon exercise
of
the Warrant as required pursuant to the terms hereof.
6.
Charges,
Taxes and Expenses.
Issuance and delivery of certificates for shares of Common Stock upon exercise
of this Warrant shall be made without charge to the Holder for any issue or
transfer tax, withholding tax, transfer agent fee or other incidental tax or
expense in respect of the issuance of such certificates, all of which taxes
and
expenses shall be paid by the Company; provided, however, that the Company
shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the registration of any certificates for Warrant Shares or Warrants
in a name other than that of the Holder or an Affiliate thereof. The Holder
shall be responsible for all other tax liability that may arise as a result
of
holding or transferring this Warrant or receiving Warrant Shares upon exercise
hereof.
7.
Replacement
of Warrant.
If this
Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction and customary and reasonable bond or indemnity, if
requested. Applicants for a New Warrant under such circumstances shall also
comply with such other reasonable regulations and procedures and pay such other
reasonable third-party costs as the Company may prescribe.
8.
Reservation
of Warrant Shares.
The
Company covenants that it will at all times reserve and keep available out
of
the aggregate of its authorized but unissued and otherwise unreserved Common
Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares which
are then issuable and deliverable upon the exercise of this entire Warrant,
free
from preemptive rights or any other contingent purchase rights of persons other
than the Holder (after giving effect to the adjustments and restrictions of
Section
9,
if
any). The Company covenants that all Warrant Shares so issuable and deliverable
shall, upon issuance and the payment of the applicable Exercise Price in
accordance with the terms hereof, be duly and validly authorized, issued and
fully paid and nonassessable. The Company will take all such action as may
be
necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any securities exchange or automated quotation system upon
which
the Common Stock may be listed.
9.
Certain
Adjustments.
The
Exercise Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in this
Section
9.
(a)
Stock
Dividends and Splits.
If the
Company, at any time while this Warrant is outstanding, (i) pays a stock
dividend on its Common Stock or otherwise makes a distribution on any class
of
capital stock that is payable in shares of Common Stock, (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, or (iii)
combines outstanding shares of Common Stock into a smaller number of shares,
then in each such case the Exercise Price shall be multiplied by a fraction
of
which the numerator shall be the number of shares of Common Stock outstanding
immediately before such event and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such event. Any
adjustment made pursuant to clause (i) of this paragraph shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution, and any adjustment pursuant to clause
(ii) or (iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination.
(b)
Pro
Rata Distributions.
If the
Company, at any time while this Warrant is outstanding, distributes to holders
of Common Stock (i) evidences of its indebtedness, (ii) any security (other
than
a distribution of Common Stock covered by the preceding paragraph),
(iii) rights or warrants to subscribe for or purchase any security, or (iv)
any other asset (in each case, “Distributed
Property”),
then
in each such case the Exercise Price in effect immediately prior to the record
date fixed for determination of stockholders entitled to receive such
distribution shall be adjusted (effective on such record date) to equal the
product of such Exercise Price times a fraction of which the denominator shall
be the average of the Closing Prices for the twenty (20) Trading Days
immediately prior to (but not including) such record date and of which the
numerator shall be such average less the then fair market value of the
Distributed Property distributed in respect of one outstanding share of Common
Stock, as determined by the Company's independent certified public accountants
that regularly examine the financial statements of the Company (an “Appraiser”).
In
such event, the Holder, after receipt of the determination by the Appraiser,
shall have the right to select an additional appraiser (which shall be a
nationally recognized accounting firm), in which case such fair market value
shall be deemed to equal the average of the values determined by each of the
Appraiser and such appraiser. As an alternative to the foregoing adjustment
to
the Exercise Price, at the request of the Holder delivered before the 90th
day
after such record date, the Company will deliver to such Holder, within five
(5)
Trading Days after such request (or, if later, on the effective date of such
distribution), the Distributed Property that such Holder would have been
entitled to receive in respect of the Warrant Shares for which this Warrant
could have been exercised immediately prior to such record date. If such
Distributed Property is not delivered to a Holder pursuant to the preceding
sentence, then upon expiration of or any exercise of the Warrant that occurs
after such record date, such Holder shall remain entitled to receive, in
addition to the Warrant Shares otherwise issuable upon such exercise (if
applicable), such Distributed Property.
(c)
Fundamental
Transactions.
If, at
any time while this Warrant is outstanding, (i) the Company effects any merger
or consolidation of the Company with or into another Person, (ii) the Company
effects any sale of all or substantially all of its assets in one or a series
of
related transactions, (iii) any tender offer or exchange offer (whether by
the
Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to tender or exchange their shares for other securities,
cash or property, or (iv) the Company effects any reclassification of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property
(other than as a result of a subdivision or combination of shares of Common
Stock covered by Section 9(a) above) (in any such case, a “Fundamental
Transaction”),
then
the Holder shall have the right thereafter to receive, upon exercise of this
Warrant, the same amount and kind of securities, cash or property as it would
have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of the number of Warrant Shares then issuable upon exercise in full
of this Warrant (the “Alternate
Consideration”).
The
aggregate Exercise Price for this Warrant will not be affected by any such
Fundamental Transaction, but the Company shall apportion such aggregate Exercise
Price among the Alternate Consideration in a reasonable manner reflecting the
relative value of any different components of the Alternate Consideration.
If
holders of Common Stock are given any choice as to the securities, cash or
property to be received in a Fundamental Transaction, then the Holder shall
be
given the same choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction. At the Holder’s
request, any successor to the Company or surviving entity in such Fundamental
Transaction shall issue to the Holder a new warrant consistent with the
foregoing provisions and evidencing the Holder’s right to purchase the Alternate
Consideration for the aggregate Exercise Price upon exercise thereof. The terms
of any agreement pursuant to which a Fundamental Transaction is effected shall
include terms requiring any such successor or surviving entity to comply with
the provisions of this paragraph (c) and insuring that the Warrant (or any
such
replacement security) will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction. If any Fundamental Transaction
constitutes or results in a Change of Control, then at the request of the Holder
delivered before the 90th day after such Fundamental Transaction, the Company
(or any such successor or surviving entity) will purchase the Warrant from
the
Holder for a purchase price, payable in cash within five (5) Trading Days after
such request (or, if later, on the effective date of the Fundamental
Transaction), equal to the Black-Scholes value of the remaining unexercised
portion of this Warrant on the date of such request.
(d)
Annual
Price Adjustment.
Each
year on the anniversary of the date of issuance hereof (the “Anniversary
Date”),
if
the average Closing Price on all of the Trading Days since the previous
Anniversary Date is lower than the Exercise Price then in effect, then the
Exercise Price shall be reduced to such average Closing Price; provided,
however, that the Exercise Price shall not be reduced to less than $.005 per
share. The calculation of the average Closing Price since the previous
Anniversary Date shall include the Closing Price, if any, on the Anniversary
Date on which such calculation is being made.
(e)
Number
of Warrant Shares.
Simultaneously with any adjustments to the Exercise Price pursuant to paragraphs
(a) or (b) of this Section, the number of Warrant Shares that may be purchased
upon exercise of this Warrant shall be increased proportionately, so that after
such adjustment the aggregate Exercise Price payable hereunder for the increased
number of Warrant Shares shall be the same as the aggregate Exercise Price
in
effect immediately prior to such adjustment.
(f)
Calculations.
All
calculations under this Section
9
shall be
made to the nearest cent or the nearest 1/100th of a share, as applicable.
The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the disposition
of any such shares shall be considered an issue or sale of Common
Stock.
(g)
Notice
of Adjustments.
Upon
the occurrence of each adjustment pursuant to this Section
9,
the
Company at its expense will promptly compute such adjustment in accordance
with
the terms of this Warrant and prepare a certificate setting forth such
adjustment, including a statement of the adjusted Exercise Price and adjusted
number or type of Warrant Shares or other securities issuable upon exercise
of
this Warrant (as applicable), describing the transactions giving rise to such
adjustments and showing in detail the facts upon which such adjustment is based.
Upon written request, the Company will promptly deliver a copy of each such
certificate to the Holder and to the Company’s Transfer Agent.
(h)
Notice
of Corporate Events.
If the
Company (i) declares a dividend or any other distribution of cash, securities
or
other property in respect of its Common Stock, including without limitation
any
granting of rights or warrants to subscribe for or purchase any capital stock
of
the Company or any Subsidiary, (ii) authorizes or approves, enters into any
agreement contemplating or solicits stockholder approval for any Fundamental
Transaction, or (iii) authorizes the voluntary dissolution, liquidation or
winding up of the affairs of the Company, then the Company shall deliver to
the
Holder a notice describing the material terms and conditions of such
transaction, at least fourteen (14) calendar days prior to the applicable record
or effective date on which a Person would need to hold Common Stock in order
to
participate in or vote with respect to such transaction, and the Company will
take all steps reasonably necessary in order to insure that the Holder is given
the practical opportunity to exercise this Warrant prior to such time so as
to
participate in or vote with respect to such transaction; provided, however,
that
the failure to deliver such notice or any defect therein shall not affect the
validity of the corporate action required to be described in such notice.
10.
Payment
of Exercise Price.
The
Holder shall pay the Exercise Price in immediately available funds; provided,
however, that the Holder may satisfy its obligation to pay the Exercise Price
through a “cashless exercise,” in which event the Company shall issue to the
Holder the number of Warrant Shares determined as follows:
|
X
=
Y [(A-B)/A]
|
|
|
where:
|
|
|
X
=
the number of Warrant Shares to be issued to the
Holder.
|
|
|
Y
=
the number of Warrant Shares with respect to which this Warrant is
being
exercised.
|
|
|
A
=
the average of the Closing Prices for the twenty Trading Days immediately
prior to (but not including) the Exercise Date.
|
|
|
B
=
the Exercise Price.
|
For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced,
on
the date this Warrant was originally issued pursuant to the Purchase
Agreement.
11.
Call
Right.
Subject
to the provisions of this Section
11,
if
following the second Anniversary Date, the Closing Prices for any twenty (20)
consecutive Trading Days exceeds 300% of the Exercise Price (the “Threshold
Price”),
then
the Company will have the right, but not obligation (the “Call
Right”),
on 30
Trading Days prior written notice to the Holder, to redeem any unexercised
portion of this Warrant for which an Exercise Notice has not yet been delivered
(the “Call
Amount”);
provided, however, that the Call Right shall only be exercisable during a period
in which the Closing Prices for the twenty (20) consecutive Trading Days
immediately preceding the Call Date (as defined below) have exceeded the
Threshold Price.
(a)To
exercise this Call Right, the Company shall deliver to the Holder (a) an
irrevocable written notice (a “Call
Notice”),
indicating the Call Amount and (b) an Exchange Warrant (as defined below).
The
date that the Company delivers the Call Notice to the Holders will be referred
to as the “Call
Date.”
Within
30 Trading Days of receipt of the Call Notice, the Holder shall exercise this
Warrant for up to the Call Amount in accordance with Section 4(b) above. Any
portion of the Call Amount that is not exercised by 6:30 p.m. (New York City
time) on the 30th Trading Day following the date of receipt of the Call Notice
(the “Redemption
Date”)
shall
be cancelled. Any unexercised portion of this Warrant to which the Call Notice
does not pertain (the “Remaining
Portion”)
will
be unaffected by such Call Notice. The Company covenants and agrees that it
will
honor any Exercise Notice with respect to the Call Amount that are tendered
from
the Call Date through and including 6:30 p.m. (New York City time) on the
Redemption Date.
(b)Notwithstanding
anything to the contrary set forth in this Warrant, the Company may not require
the cancellation of any unexercised Call Amount (and any Call Notice will be
void), unless from the beginning of the twenty (20) consecutive Trading Days
used to determine whether the Common Stock has achieved the Threshold Price
through the Redemption Date (the “Call
Period”)
(i)
the Closing Prices for each Trading Day during such Call Period exceeds 90%
of
the Threshold Price, (ii) the Company shall have honored in accordance with
the
terms of this Warrant any Exercise Notice delivered by 6:30 p.m. (New York
City
time) on the Redemption Date, and (iii) the Registration Statement shall be
effective as to all Warrant Shares and the Prospectus thereunder available
for
use by the Holder for the resale all such Warrant Shares.
(c)Concurrently
with the delivery of a Call Notice, the Company shall issue and deliver to
the
Holder an Exchange Warrant (the “Exchange
Warrant”),
containing the same terms and conditions as this Warrant, except that (i) the
Exchange Warrant will expire on the date that this Warrant would have expired
with respect to the shares subject to such Call Notice, (ii) the Exchange
Warrant will entitle the Holder to purchase up to such number of shares of
Common Stock equal to the amount of Warrant Shares indicated in the Call Notice
as being subject to such Call Notice, and (iii) the “Exercise Price” for the
Exchange Warrant will equal 110% of the Closing Price on the Trading Day
immediately preceding the Call Date. Any Call Notice that is delivered without
an Exchange Warrant meeting the requirements of this Section
11(c)
will be
void and of no effect.
12.
Limitation
on Exercise.
(a)
Notwithstanding
anything to the contrary contained herein, the number of shares of Common Stock
that may be acquired by the Holder upon any exercise of this Warrant (or
otherwise in respect hereof) shall be limited to the extent necessary to insure
that, following such exercise (or other issuance), the total number of shares
of
Common Stock then beneficially owned by such Holder and its Affiliates and
any
other Persons whose beneficial ownership of Common Stock would be aggregated
with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not
exceed 4.999% (the “Maximum
Percentage”)
of the
total number of issued and outstanding shares of Common Stock (including for
such purpose the shares of Common Stock issuable upon such exercise). For such
purposes, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
Each delivery of an Exercise Notice hereunder will constitute a representation
by the Holder that it has evaluated the limitation set forth in this paragraph
and determined that issuance of the full number of Warrant Shares requested
in
such Exercise Notice is permitted under this paragraph. The Company’s obligation
to issue shares of Common Stock in excess of the limitation referred to in
this
Section shall be suspended (and shall not terminate or expire notwithstanding
any contrary provisions hereof) until such time, if any, as such shares of
Common Stock may be issued in compliance with such limitation, but in no event
later than the Expiration Date. By written notice to the Company, the Holder
may
waive the provisions of this Section or increase or decrease the Maximum
Percentage to any other percentage specified in such notice (but not in excess
of 9.999%, or such lower percentage if Section 16 of the Exchange Act or the
rules promulgated thereunder (or any successor statute or rules) is changed
to
reduce the beneficial ownership percentage threshold thereunder to a percentage
less than 9.999%), but (i) any such waiver or increase will not be effective
until the 61st day after such notice is delivered to the Company, and (ii)
any
such waiver or increase or decrease will apply only to the Holder and not to
any
other holder of Warrants.
(b)
Notwithstanding
anything to the contrary contained herein, if the Trading Market is the New
York
Stock Exchange or any other market or exchange with similar applicable rules,
then the maximum number of shares of Common Stock that the Company may issue
pursuant to the Transaction Documents at an effective purchase price less than
the Closing Price on the Trading Day immediately preceding the Closing Date
equals 19.99% of the outstanding shares of Common Stock immediately preceding
the Closing Date (the “Issuable
Maximum”),
unless the Company obtains stockholder approval in accordance with the rules
and
regulations of such Trading Market. If, at the time any Holder requests an
exercise of any of the Warrants, the Actual Minimum (excluding any shares issued
or issuable at an effective purchase price in excess of the Closing Price on
the
Trading Day immediately preceding the Closing Date) exceeds the Issuable Maximum
(and if the Company has not previously obtained the required stockholder
approval), then the Company shall issue to the Holder requesting such exercise
a
number of shares of Common Stock not exceeding such Holder’s pro-rata portion of
the Issuable Maximum (based on such Holder’s share (vis-à-vis other Holders) of
the aggregate purchase price paid under the Purchase Agreement and taking into
account any Warrant Shares previously issued to such Holder). For the purposes
hereof, “Actual
Minimum”
shall
mean, as of any date, the maximum aggregate number of shares of Common Stock
then issued or potentially issuable in the future pursuant to the Transaction
Documents, including any Underlying Shares issuable upon exercise in full of
all
Warrants, without giving effect to (x) any limits on the number of shares of
Common Stock that may be owned by a Holder at any one time, or (y) any
additional Underlying Shares that could be issuable as a result of any future
possible adjustments.
13.
Fractional
Shares.
The
Company shall not be required to issue or cause to be issued fractional Warrant
Shares on the exercise of this Warrant. If any fraction of a Warrant Share
would, except for the provisions of this Section, be issuable upon exercise
of
this Warrant, the number of Warrant Shares to be issued will be rounded up
to
the nearest whole share.
14.
Notices.
Any and
all notices or other communications or deliveries hereunder (including without
limitation any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice
or
communication is delivered via facsimile at the facsimile number specified
in
the Purchase Agreement prior to 6:30 p.m. (New York City time) on a Trading
Day,
(ii) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified
in
the Purchase Agreement on a day that is not a Trading Day or later than 6:30
p.m. (New York City time) on any Trading Day, (iii) the Trading Day following
the date of mailing, if sent by nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to
be
given. The address for such notices or communications shall be as set forth
in
the Purchase Agreement.
15.
Warrant
Agent.
The
Company shall serve as warrant agent under this Warrant. Upon thirty (30) days'
written notice to the Holder, the Company may appoint a new warrant agent.
Any
corporation into which the Company or any new warrant agent may be merged or
any
corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
stockholders services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder's last address as shown
on
the Warrant Register.
16.
Miscellaneous.
(a)
Subject
to the restrictions on transfer set forth on the first page hereof, this Warrant
may be assigned by the Holder. This Warrant may not be assigned by the Company
except to a successor in the event of a Fundamental Transaction. This Warrant
shall be binding on and inure to the benefit of the parties hereto and their
respective successors and assigns. Subject to the preceding sentence, nothing
in
this Warrant shall be construed to give to any Person other than the Company
and
the Holder any legal or equitable right, remedy or cause of action under this
Warrant. This Warrant may be amended only in writing signed by the Company
and
the Holder and their successors and assigns.
(b)
The
Company will not, by amendment of its governing documents or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at
all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder against impairment. Without limiting the generality
of
the foregoing, the Company (i) will not increase the par value of any Warrant
Shares above the amount payable therefor on such exercise, (ii) will take all
such action as may be reasonably necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares on the exercise of this Warrant, and (iii) will not close its stockholder
books or records in any manner which interferes with the timely exercise of
this
Warrant.
(C)
GOVERNING
LAW; VENUE; WAIVER OF JURY TRIAL.
ALL
QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION
OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HEREBY IRREVOCABLY SUBMITS
TO
THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY
OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE
TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT
IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING
IS
IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS
AND
CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY
(WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES
TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD
AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN
SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER
PERMITTED BY LAW. THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY
JURY.
(d)
The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.
(e)
In
case
any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its
authorized officer as of the date first indicated above.
|
INTERNATIONAL
ISOTOPES INC.
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||
|
By:
|
|
|
| Name: |
|
|
|
Title:
|
SCHEDULE
A
1. The
[Holder][Transferee] understands and agrees that the Warrant has not been and
will not be registered under the United States Securities Act of 1933, as
amended (the “Securities
Act”)
and
that as of the date hereof, the common stock of the Company underlying the
Warrant (together with the Warrant, the “Securities”),
has
not been registered under the Securities Act. Capitalized terms not defined
herein shall have the meanings ascribed in the Warrant.
2. The
[Holder][Transferee] understands that the Securities must be held by the
[Holder][Transferee] indefinitely unless a subsequent disposition thereof is
registered under the Securities Act and applicable state securities laws or
is
exempt from registration. The [Holder][Transferee] possesses the financial
resources to bear the risk of economic loss with respect to the purchase of
the
Securities.
3. The
[Holder][Transferee] is an “accredited investor” (as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act). The Company has made
available to the [Holder][Transferee] or its representatives all agreements,
documents, records and books that the [Holder][Transferee] has requested
relating to an investment in the Securities to be acquired by the
[Holder][Transferee] hereunder. The [Holder][Transferee] has had an opportunity
to ask questions of, and receive answers from, a person or persons acting on
behalf of the Company, concerning the terms and conditions of this investment,
and answers have been provided to all of such questions to the full satisfaction
of the [Holder][Transferee]. The [Holder][Transferee] has such knowledge and
experience in financial and business matters that it is capable of evaluating
the risks and merits of this investment.
4. The
[Holder][Transferee] acknowledges that the representations and warranties and
agreements contained in this letter are made by him, her or it with the intent
that they may be relied upon by the Company in determining his, her or its
eligibility to receive the Securities. The [Holder][Transferee] agrees that
by
accepting the Securities he, she or it is representing and warranting that
the
representations and warranties contained in this letter are true as of the
date
upon which the Warrant is exercised and that they shall survive the purchase
of
the Securities and shall continue in full force and effect notwithstanding
any
subsequent disposition by it of such Securities.
FORM
OF
EXERCISE NOTICE
(To
be
executed by the Holder to exercise the right to purchase shares of Common Stock
under the foregoing Warrant)
To:
INTERNATIONAL
ISOTOPES INC.
The
undersigned is the Holder of Warrant No. _______ (the “Warrant”)
issued
by International Isotopes Inc., a Texas corporation (the “Company”).
Capitalized terms used herein and not otherwise defined have the respective
meanings set forth in the Warrant.
|
1.
|
The
Warrant is currently exercisable to purchase a total of ______________
Warrant Shares.
|
|
2.
|
The
undersigned Holder hereby exercises its right to purchase
_________________ Warrant Shares pursuant to the
Warrant.
|
|
3.
|
The
Holder intends that payment of the Exercise Price shall be made as
(check
one):
|
____ “Cash
Exercise” under Section 10
____ “Cashless
Exercise” under Section 10
|
4.
|
If
the holder has elected a Cash Exercise, the holder shall pay the
sum of
$____________ to the Company in accordance with the terms of the
Warrant.
|
|
5.
|
Pursuant
to this exercise, the Company shall deliver to the holder _______________
Warrant Shares in accordance with the terms of the
Warrant.
|
|
6.
|
Following
this exercise, the Warrant shall be exercisable to purchase a total
of
______________ Warrant Shares.
|
|
Dated:
_________________,
_______
|
Name of Xxxxxx: | |
|
(Print)
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
| (Signature must conform in all respects to name of holder as specified on the face of the Warrant) | ||
FORM
OF
ASSIGNMENT
[To
be
completed and signed only upon transfer of Warrant]
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________ the right represented by the within Warrant
to
purchase ____________ shares of Common Stock of INTERNATIONAL
ISOTOPES INC.
to which
the within Warrant relates and appoints ________________ attorney to transfer
said right on the books of INTERNATIONAL
ISOTOPES INC.
with
full power of substitution in the premises.
|
Dated:
_________________,
_______
|
||
|
(Signature
must conform in all respects to name of holder as specified on the
face of
the Warrant)
|
||
|
Address
of Transferee
|
||
|
In
the presence of:
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