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Exhibit 4.1
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 9, 2008
International Isotopes Inc., a Texas corporation
(the “ Company ”), hereby certifies that, for
value received,
or its registered assigns (the “ Holder ”), is
entitled to purchase from the Company up to a total of
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.__ 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.
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(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 .
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(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 the
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