SECURITIES EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: November 25, 1997
Commission file number:
333-26269
INTERNATIONAL ISOTOPES INC.
(Exact name of registrant as specified in its charter)
Texas 74-2763837
(State of incorporation) (IRS Employer Identification Number)
2600 Longhorn Boulevard, Suite 105 78758
Austin, Texas (Zip Code)
(Address of principal executive offices)
512-834-1822
(Registrant's telephone number, including area code)
<PAGE>
Page 2
Item 2. Acquisition of Disposition of Assets
On November 13, 1997, International Isotopes Inc. (the "Company") completed the
acquisition of two buildings and twelve (12) acres of land located at 3100 Jim
Christal Rd., Denton, Texas. The property was purchased from the Union Camp
Corporation for $2,100,000. The Union Camp Corporation had previously utilized
the property for the manufacture of paper and paper products. The Company plans
to locate executive offices and provide for expansion of radiochemistry and
radiopharmaceutical operations in the 80,000 square foot building and will use
the smaller 12,000 square foot metal building for storing assets held for sale.
The Company obtained a loan in the amount of $2,475,000 from Texas Bank for the
purchase and planned improvements to the building. The financing is a
twenty-year amortizing loan with interest payable monthly beginning in November
1997, and principal payable beginning May 1998. The interest rate is adjustable
every three years based on Chase Manhattan Bank Prime.
Item 5. Other Events
In November 1997, the Company signed a letter of intent with IMAGYN Medical
Technologies, Inc. wherein the companies will collaborate on the development of
radioactive seed products to be used in the treatment of prostate cancer. Under
the proposed terms, International Isotopes Inc. will be responsible for the
development and manufacturing of Iodine 125 and other radioactive seeds. IMAGYN
would grant International Isotopes Inc. a minimum three year supply contract
valued at several million dollars, and, in exchange, would receive an exclusive,
worldwide right to market the IMAGYN radioactive seed product.
Item 7. Financial Statements and Exhibits
(c) Exhibits
7.1 Press release related to building purchase dated November 14, 1997.
7.2 Sales Contract Dated September 25, 1997 between Union Camp
Corporation and International Isotopes Inc.
7.3 Promissory Note between International Isotopes Inc. and Texas
Bank in the amount of $2,475,000 with an effective date of
October 22, 1997.
7.4 Press release related to IMAGYN letter of intent dated
November 24, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
International Isotopes Inc.
(Registrant)
By:
--------------------------
Joan Gillett, CPA
Chief Financial Officer
By:
--------------------------
Ira Lon Morgan, Ph.D.
Chairman of the Board
Date: November 25, 1997
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[Logo of International Isotopes Inc.]
Contacts:
Carl W. Seidel Douglas MacDougall or
President and Chief Executive Officer Vivienne Blake
International Isotopes Inc. Feinstein Kean Partners Inc.
Or (617) 577-8110
Dr. Ira Lon Morgan
Chairman
International Isotopes Inc.
(940) 484-9492
For Immediate Release:
- ----------------------
INTERNATIONAL ISOTOPES PURCHASES 92,000 Sq. Ft. FACILITY FOR CONTRACT
MANUFACTURING AND REPORTS RESULTS FOR THIRD QUARTER 1997
- -Building Expands Radiochemical and Radiopharmaceutical Manufacturing Capacity-
Denton, TX, November 14, 1997 -- International Isotopes Inc. (Nasdaq: INIS, BSE:
ITL) today announced that it has signed a purchase and sale agreement to acquire
92,000 square feet of manufacturing and warehouse space for contract
manufacturing of radiopharmaceuticals as well as pharmaceutical grade
radioisotopes. International Isotopes today also reported financial results for
the third quarter and nine months ending September 30, 1997.
The new facilities, located in Denton, Texas, were purchased for $2.1 million
and will be financed under a 20 year first lien mortgage. The Company plans to
dedicate approximately 10,000 square feet to manufacturing administration,
22,000 square feet to proton linear accelerator storage and construction and the
balance to contract manufacturing of pharmaceutical grade radioisotopes and
radiopharmaceuticals. The Company is also nearing completion of its 27,000
square foot corporate headquarters facility for administration, manufacturing
and research and development. In addition, architectural and engineering plans
are being drawn up for the LINAC and radioisotope production/radiochemistry
facility which will be approximately 28,000 square feet.
"Purchasing this space will allow us to consolidate many of our current
operations and offer dedicated contract manufacturing space to our future
customers," said Ira Lon Morgan, Ph.D., Chairman of International Isotopes Inc.
"This purchase also has allowed us to considerably reduce the size of our
dedicated radioisotope production/radiochemistry facility, which we originally
planned to utilize for contract manufacturing. We hope to complete this facility
in early spring of 1998."
For the quarter ended September 30, 1997, the Company reported a net loss of
$1,014,000 or $(0.19) per share, compared to a net profit of $564,000 or $0.15
per share, for the same period in 1996. Operating costs and expenses, net of
$377,000 in non-cash expenses related to incentive compensation, increased to
$685,000 for the third quarter 1997, compared to $309,000 for the same three
month period in 1996. The increase in net operating costs and expenses is due to
new hires and the development of the necessary infrastructure to support the
growth of the Company.
-more-
Corporate Operations
2600 Longhorn Blvd. Suite #105 523 North Elm Street
Austin, Texas 78758 Denton, Texas 76201
Phone: (512) 834-1822 Phone: (940) 484-9492
Fax: (512) 834-2257 Fax: (940) 484-0877
<PAGE>
INTERNATIONAL ISOTOPES INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(a development stage enterprise)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
---------- ---------- ---------- ----------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Sale of accelerator components $ 152,000 $1,571,000 $ 17,000 $1,571,000
Cost of sales 79,000 697,000 11,000 698,000
---------- ---------- ---------- ----------
Gross profit 73,000 874,000 6,000 873,000
Operating costs and expenses:
General and administrative 1,266,000 822,000 677,000 309,000
Non-cash incentive compensation* 2,022,000 -- 377,000 --
Sales and marketing 8,000 -- 8,000 --
---------- ---------- ---------- ----------
Total operating expenses 3,296,000 822,000 1,062,000 309,000
---------- ---------- ---------- ----------
Income (loss) from development
stage operations (3,223,000) 52,000 (1,056,000) 564,000
Other income
Gain on sale of assets held for sale 15,000 -- 15,000 --
Interest income 72,000 2,000 64,000 1,000
Interest expense (186,000) (4,000) (37,000) (3,000)
Net income (loss) $(3,322,000) $ 50,000 $(1,014,000) $ 562,000
========== ========== ========== ==========
Net income (loss) per share
of common stock $ (0.71) $ 0.01 $ (0.19) $ 0.15
========== ========== ========== ==========
Weighted average number of common and
common equivalent shares outstanding 4,669,575 3,660,836 5,433,279 3,806,353
========== ========== ========== ==========
</TABLE>
*Non-recurring charge to earnings taken over fiscal 1997
SELECTED BALANCE SHEET INFORMATION
(Unaudited) (Audited)
September 30, December 31,
1997 1996
----------- ----------
Cash and cash equivalents and investments $14,619,000 $ 631,000
Property and equipment (net) 1,733,000 1,061,000
Long-term debt, less current portion 206,000 --
Total shareholders' equity 16,066,000 310,000
PURCHASE AND SALE AGREEMENT
REAL PROPERTY
THIS AGREEMENT, made this 25th day of September, 1997, by and between
UNION CAMP CORPORATION, a Virginia corporation with a principal place of
business at 1600 Valley Road, Wayne, New Jersey 07470 (hereinafter referred to
as "Seller"), and INTERNATIONAL ISOTOPES INC. (hereinafter referred to as
"Buyer");
WITNESSETH:
WHEREAS, Seller owns certain real estate located at 3100 Jim Crystal
Road, Denton, Texas, being approximately an 80,000 square feet office and
warehouse building and an approximately 12,000 square feet warehouse, and
approximately 12.0 acres of land;
WHEREAS, Seller desires to sell, in accordance with the terms and
subject to the conditions hereinafter set forth, the real estate and
improvements;
WHEREAS, Buyer, in accordance with the terms and subject to the
conditions hereinafter set forth, desires to purchase such real estate and
improvements;
NOW, THEREFORE, the parties hereto, in consideration of the premises,
the respective agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, do
hereby agree as follows:
1. Real Property to be sold
At the Closing, Seller shall sell to Buyer, and Buyer shall purchase from
Seller, that certain real property, together with all improvements thereon
and all appurtenances thereunto belonging, situated in the City and County
of Denton, Texas and more particularly described as being Lot 1, Block 1,
of HARLEY ADDITION, an Addition to the City of Denton, Texas according to
the plat thereof recorded in Cabinet B. Slide 103, Plat Records, Denton
County, Texas (hereinafter the "Real Property"). The Real Property shall
include all easements, rights-of-way, and appurtenances thereto, including
all of Seller's right, title and interest (if any) in all public ways
adjoining the property, subject to all restrictions of record and matters
as noted in the commitment for title insurance.
2. Purchase Price
(a) The purchase price hereunder shall be Two Million One Hundred Thousand
($2,100,000.00) Dollars (hereinafter the "Purchase Price"):
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(b) The Purchase Price shall be payable as provided in Section 4(b).
3. Closing
The closing hereunder (the "Closing") shall take place on or before
November 1, 1997, which date may be extended upon written consent of both
Buyer and Seller, and the parties may effectuate the Closing by mail,
courier and/or wire transmission of documents or at such other time and
manner as Seller and Buyer may agree upon in writing. Any personal
property belonging to Seller remaining on the Real Property at Closing
shall become the personal property of Buyer.
4. Deliveries at the Closing
(a) Subject to the terms and conditions hereof, Seller shall at the
Closing:
(1) Deliver to Buyer the Seller's duly executed special warranty
deed conveying to Buyer good, marketable, fee-simple title to the Real
Property, free and clear of all liens and encumbrances and subject only to
such conditions, restriction and easements as shall be of record, and
other matters which would be noted in the commitment for title insurance.
(2) Such deed will be in substantially the same form as Exhibit A
attached hereto and incorporated herein by reference.
(3) Deliver exclusive possession of the Real Property to Buyer.
(4) To the extent Seller is legally capable, assign all railway
agreements and spur agreements (if any) applicable to the Real Property to
Buyer.
(b) Subject to the Terms and conditions hereof, Buyer shall at Closing:
(1) Pay the Purchase Price in cash.
5. Prorations
Property taxes, utility expenses and similar expenses and/or costs
relating to the Real Property due and payable on, before and after the
Closing shall be prorated as of the Closing Date.
6. Expenses
Except as otherwise provided herein, each party hereto shall pay its own
costs and expenses for its performance of and compliance with all
agreements and conditions
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to be performed and complied with hereunder. Seller shall pay all expenses
of title insurance (issued by Commonwealth Land Title Insurance Co.),
survey, deed preparation, the grantor's tax on said deed, and fees of its
counsel. Buyer shall pay all other expenses normally paid by Buyer,
including, without limitation, costs of recording all documents and fees
of its counsel.
7. Brokers
Seller and Buyer each represents and warrants to the other that it has not
dealt directly or indirectly, with any broker or finder in connection with
this Agreement or any of the transaction contemplated by this Agreement
and that no broker or finder is entitled to any brokerage or finder's fee
or other commission based on agreements, arrangements or understandings
made by it, except as follows:
Andrew R. Beckman with Fultsoncor (representing Seller only) shall receive
a total cash fee of $78,000.00 per agreement with Seller. See also
"Agreement Between Brokers" attached hereto as Exhibit B.
8. Amendment and Waiver
The parties hereto may by mutual agreement amend this Agreement in any
respect. Either party hereto may (a) extend the time for performance of
any of the obligations of the other; (b) waive any inaccuracies in
representations by the other contained in this Agreement or in any
document delivered pursuant hereto; (c) waive compliance by the other with
any of the covenants contained in this Agreement and performance of any
obligations by the other; or (d) waive the fulfillment of any conditions
that is precedent to the performance by the party so waiving of any of its
obligations under this Agreement. Any agreement on the part of a party to
any such amendment, extension or waiver must be in writing and signed by
such party.
9. Assignment
This Agreement shall not be assignable by either party without the consent
of the other, which shall not be unreasonably withheld. Nothing in this
Agreement, express or implied, is intended to confer upon any person,
other than the parties hereto, and their successors and permitted assigns,
any rights or remedies under or by reason of this Agreement.
Notwithstanding the foregoing, Buyer may, upon 14 days advance written
notice to Seller, designate a different grantee under the deed to be
transferred at closing.
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10. Parties in Interest
All the terms and provisions of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the successors and permitted
assigns of Buyer and Seller as their interest, rights and obligations
appear herein.
11. Notices
All notices, requests, demands or other communications hereunder shall be
in writing and shall be deemed to have been duly given (a) when delivered
in person, or (b) five (5) days after having been deposited in the mails
(certified or registered mail, postage prepaid) addressed to a party
hereto at its address given below or at such other address as such party
may hereafter specify in like manner to the other party from time to time:
(a) If to Seller, to:
Union Camp Corporation
1600 Valley Road
Wayne, NJ 07470
Attention: Keith Wong
(b) If to Buyer, to:
International Isotopes Inc.
523 N. Elm Street
Denton, TX 76201
Attention: Dr. Ira Lon Morgan, Chairman of the Board
With Copy to:
Lawrence Chapman, Esquire
One Riverway, Suite 1950
Houston, TX 77056
12. Counterparts
This Agreement may be executed simultaneously in one or more counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
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13. Governing Law
This Agreement shall be construed and enforced in accordance with laws of
the State of Texas. In the event a dispute between the parties requires
recourse to the courts for resolution, the parties agree that any such
proceeding will be instituted and maintained in the appropriate State
Court or Federal Court having jurisdiction over the Real Property.
14. Headings
The title or headings of sections and subsections set forth in this
Agreement have been inserted merely to facilitate reference and shall have
no bearing upon the interpretation or effect of any of the provisions of
this Agreement.
15. Exhibits
All exhibits referred to in this Agreement are attached hereto and made a
part of this Agreement.
16. Earnest Money
Buyer shall, upon the execution of this Agreement, deposit $20,000.00 with
the Escrow Agent as earnest money. This money shall be retained by Escrow
Agent and shall be credited against the Purchase Price at Closing. Any
interest earned on such earnest money from delivery to Seller until
closing shall be credited to Buyer.
17. Default
If Buyer fails to comply with this contract, Buyer shall be in default.
Seller may terminate this contract and retain the earnest money, plus
applicable interest, as liquidated damages as its sole and exclusive
remedy, thereby releasing the parties from this Agreement. If Seller is
unable to deliver the required deed at closing, Buyer may terminate this
contract and receive the earnest money as its sole and exclusive remedy,
thereby releasing the parties from this Agreement. In the alternative,
either party may seek to enforce this contract thorough specific
performance as its sold and exclusive remedy.
18. Time
Time is of the essence of his Agreement. Strict compliance with the times
for performance in this Agreement is required.
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19. Effective Date
The effective date of this Agreement for purposes of performance of all
obligations shall be the date the Escrow Agent receives a copy of this
Agreement which has been fully executed by the parties.
20. Casualty Loss And/Or Condemnation
If any part of the property is significantly damaged or destroyed by fire
or other casualty loss, or if condemnation proceedings are commenced
against any portion of the property, the parties shall negotiate an
adjustment to this Agreement. If no such adjustment can be agreed to by
the parties, either party may terminate this contract upon written notice
to the other and the earnest money shall be refunded to Buyer, thereby
releasing the parties from this Agreement.
21. Condition of Property/Inspection
The real property is sold by Seller "as is." Seller makes no
representation, warranty or other guaranty as to the condition of the
property. Buyer may, at its sole option and expense, inspect the property
as it deems necessary. By the execution of this Agreement, Buyer
acknowledges that it has not relied upon any representations, either made
orally or in writing, concerning the condition of the real property and is
relying on its own investigation and inspection.
22. Title Policy and Survey
(A) TITLE POLICY: Seller shall furnish to Buyer at Seller's expense and
Owner Policy of Title Insurance (the Title Policy) issued by Commonwealth
Land Title Insurance Company (the Escrow Agent) in the amount of the Sales
Price, dated at or after closing, insuring Buyer against loss under the
provisions of the Title Policy, subject only to those title exceptions
permitted by this contract, or as may be approved by Buyer in writing, and
the standard printed exceptions contained in the promulgated form of Title
Policy; provided however that: the exception as to restrictive covenants
shall be endorsed "None of Record", unless restrictions are approved by
Buyer. With 10 days after the Escrow Agent receives a copy of this
contract Seller shall furnish Buyer a commitment for Title Insurance (the
commitment) including copies of recorded documents evidencing title
exceptions. Seller authorizes the Escrow Agent to deliver the Commitment
and related documents to Buyer at Buyer's address. Buyer shall have 10
days after receipt of the Commitment and legible copies of documents
evidencing title exceptions required by this contract to object in writing
to matters disclosed in the Commitment other than the standard printed
exceptions as described or limited in this paragraph.
(B) SURVEY REQUIRED: Within 10 days after the Effective Date of this
contract,
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Seller, at Seller's expense, shall furnish to Buyer a Category 1A survey
of the Property dated after the effective date of this contract, provided,
however, that the cost thereof shall be reimbursed to Seller from earnest
money if Buyer fails to close.
Buyer may, within ten days after Buyer's receipt of the survey object in
writing to any matter that constitutes a defect or encumbrance to title on
the survey or if the survey shows any part of the Property to lie in a
100-year floodplain area.
23. Miscellaneous
Buyer should have an Abstract covering the Property examined by an
attorney of Buyer's selection, or Buyer should be furnished with or obtain
a Title Policy.
24. Inspections and Feasibility Studies
Within 30 days after the Effective Date of this contract, Buyer, at
Buyer's expense, may complete or cause to be completed inspections of the
Property (including all improvements and fixtures) by inspectors of
Buyer's choice. Inspections may include but are not limited to: (I)
physical property inspections including, but limited to , structural, pest
control, mechanical, structural, electrical, or plumbing inspections; (ii)
economic feasibility studies; (iii) any type of environmental assessment
or engineering study including the performance of tests such as soils
tests, air sampling, or paint sampling; (iv) compliance inspections to
determine compliance with zoning ordinances, restrictions, building codes,
and statutes(e.g., ADA, OSHA, and others). Seller shall permit Buyer and
Buyer's inspectors access to the Property at reasonable times. Seller
shall pay for turning utilities on for inspections. If Buyer determines,
in Buyer's sole judgment, that the Property is not suitable for any reason
for Buyer's intended use or is not in satisfactory condition, then Buyer
may terminate this contract by providing written notice of termination to
Seller within the time required to complete the inspections, studies, or
assessments under this paragraph, and the Earnest Money shall be refunded
to Buyer less the sum of $100.00 to be retained by Seller as independent
consideration for Buyer's right to terminate under this paragraph. If
Buyer does not terminate this contract within the time required, any
objections with respect to the inspections, studies and assessments under
this paragraph shall be deemed waived by Buyer, If this contract does not
close through no fault of Seller, Buyer shall restore the Property to its
original condition if altered due to inspections, studies, or assessments
completed by Buyer or Buyer's inspectors.
25. Entire Agreement
This Agreement contains the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes any prior
agreements or
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understandings between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date and year first above written.
BY: Ira Lon Morgan INTERNATIONAL ISOTOPES INC.
Its: Chairman & Treasurer By: T.L. Thompson
-------------------------
Its: Executive Vice President
-------------------------
Attest: Carl W. Seidel
-------------------------
Its: President & CEO
-------------------------
(Seal)
UNION CAMP CORPORATION
By: William G. Stewart
------------------------
Its: Vice President
------------------------
Attest: Mary Beth Elliott
------------------------
Its: Assistant Secretary
------------------------
(Seal)
8
TEXAS BANK
PROMISSORY NOTE
$2,475,000.00 October 22, 1997
- ------------- ----------------
Effective Date
April 22, 2018
- ------------- --------------
Note Number Maturity Date
1. Definitions. As used in this Promissory Note, the following terms have
the meanings indicated below.
"Amortization Date" means April 22, 1998.
"Bank" means Texas Bank and its successors and assigns.
"Borrower" means International Isotopes Inc. and its successors and
permitted assigns.
"Change Date" means April 22, 2001 and the same day of every third year
thereafter until the Maturity Date.
"Effective Date" means October 22, 1997.
"Highest Lawful Rate" has the meaning assigned to such term in Section 8.
"Loan Documents" has the meaning assigned to such term in Section 6.
"Loan Rate" means the Prime Rate which is in effect on the Eeffective Date
and on each Change Date until the Maturity Date.
"Maturity Date" means April 22, 2018.
"Note" means this Promissory Note and all modifications, increases,
replacements, renewals, and extensions of this Promissory Note.
"Prime Rate" means the rate of interest announced by Chase Manhattan Bank
U.S.A., N.A. ("Chase") from time to time at its principal office in New York,
New York as its prime commercial lending rate.
2. Promise to Pay. For value received, Borrower unconditionally hereby
promises to pay to the order of Bank, at its principal place of business in the
City of Denton, Texas, or at such other place as the holder of this Note may
hereafter designate, the principal sum of Two Million Four Hundred Seventy-Five
Thousand and no/100 Dollars ($2,475,000.00) or so much thereof as may be
advanced, in lawful money of the United States of America for the payment of
private debts, together with interest on the unpaid principal balance from time
to time owing hereon computed from the date hereof until maturity at a per annum
rate which shall be, except as otherwise provided in this Note, the lesser of
(a) the Loan Rate in effect from day to day, or (b) the Highest Lawful Rate.
Interest on this Note is computed on a 365/360 simple interest basis, that is
by applying the ratio of the annual interest over a year of 360 days times the
outstanding principal balance, times the actual number of days the principal
balance is outstanding, unless such calculation would
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result in a usurious rate, in which case interest shall be calculated on a per
diem basis of 365 or 366 days, as the case may be.
3. Interest Rate. The Prime Rate shall be established on the Effetive
Date and on each Change Date and shall be fixed between such dates until the
Maturity Date. From the Effective Date until the first Change Date, the Loan
Rate shall be the Prime Rate. Effective the first Change Date and on each Change
Date thereafter, the Loan Rate is subject to change depending on the Prime Rate;
provided, however, the Loan Rate shall be fixed from Change Date to Change Date
until the Maturity Date. If Chase no longer announces the Prime Rate, then Bank
shall select another comparable, nationally recognized index, at its reasonable
discretion and provide notice thereof to Borrower. Borrower understands that the
Prime Rate may or may not be the lowest rate charged by Bank from time to time
on similar loans, and that Bank may make loans based on other indices as well.
All past due principal and matured interest shall bear interest at the Highest
Lawful Rate.
4. Payments. This Note is payable as follows: accrued interest shall be
due and payable on November 22, 1997, and on the same day of each succeeding
calendar month through the Amortization Date. Thereafter principal and interest
shall be payable in equal monthly installments of $21,479.00 (subject to an
adjustment in the installment amount caused by a change in the Loan Rate
effective as of the first and all subsequent Change Dates) with the first of
such installments due on May 22, 1998, and a like installment shall be due on
the same day of each succeeding calendar month thereafter until the Maturity
Date, on which date all unpaid principal and accrued, unpaid interest shall be
due and payable. On the Amortization Date Bank will determine the amount of the
monthly installment (estimated to be $21,479.00) which would be sufficient to
amortize the unpaid principal (based on a 20-year amortization as of the
Amortization Date) by the stated Maturity Date in substantially equal payments,
which payments shall include accrued interest. The result of this calculation
will be Borrower's new monthly payment until the payment following the first
Change Date. On each Change Date, Bank will determine the amount of the monthly
installment which would be sufficient to amortize the unpaid principal (based on
a straight line amortization as of the applicable Change Date) by the stated
Maturity Date in substantially equal payments, which payments shall include
accrued interest. The result of this calculation will be Borrower's new monthly
payment until the payment following the next Change Date. Bank will provide
Borrower with written notice of any change in the interest rate and monthly
payment from time to time either prior to or as these changes become effective.
All regularly scheduled payments of the indebtedness evidenced by this Note
shall be applied first to any accrued, unpaid interest then due and payable
hereunder and then to the principal amount then due and payable. All
non-regularly scheduled payments shall be applied to such indebtedness in such
order and manner as the holder of this Note may from time to time determine in
its sole discretion. Borrower agrees that all payments of any obligation due
hereunder shall be final, and if any such payment is recovered in any
bankruptcy, insolvency or similar proceedings instituted by or against the
Borrower, all obligations due hereunder shall be automatically reinstated in
respect of the obligation as to which payment is so recovered.
5. Prepayment. Borrower may prepay this Note in part or in full without
penalty before final maturity, whether by cash, a new loan, renewal, or
otherwise. Prepayment in full shall consist of payment of the remaining unpaid
principal balance together with all accrued and unpaid interest and all other
amounts, costs and expenses for which Borrower is responsible under this Note or
any other agreement with Bank pertaining to this loan, and in no event will
Borrower ever be required to pay any unearned interest. Early payments will
not, unless agreed in writing, relieve Borrower of Borrower's obligation to
continue to make payments under the above payment schedule. Upon a prepayment in
full, points, if any, are not refundable except and to the extent the total
interest and points for the time the loan is outstanding would exceed the
maximum interest allowed by law at the time of prepayment.
6. Waiver. Except as otherwise provided herein or in the Loan Agreement,
Borrower hereby waives all notices of nonpayment, demands for payment,
presentments for payment, notices of intention to
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<PAGE>
accelerate maturity, notices of actual acceleration of maturity, grace,
protests, notices of protest, and any other demands or notices of any kind as to
this Note, diligence in collection hereof and in bringing suit hereon, and any
notice of, or defense on account of, the extension of time of payments or change
in the method of payments, and without further notice hereby consents to any and
all renewals and extensions in the time of payment hereof either before or after
maturity and the release of any party primarily or secondarily liable hereon.
Borrower agrees that Bank's acceptance of partial or delinquent payments, or
failure of Bank to exercise any right or remedy contained herein or in any
instrument given as security for the payment of this Note shall not be a waiver
of any obligation of Borrower to Bank or constitute waiver of any similar
default subsequently occurring. This Note, the Deed of Trust and all other
documents evidencing, securing, governing, guaranteeing and/or pertaining to
this Note are hereinafter collectively referred to as the "Loan Documents." The
holder of this Note is entitled to the benefits and security provided in the
Loan Documents.
7. Events of Default and Remedies. At the option of Bank, the entire
unpaid principal balance and accrued interest owing hereon shall at once become
due and payable without notice of demand upon the occurrence at any time of any
of the following "Events of Default" (herein so called):
A. The failure of Borrower to pay (or cause to be paid) any
installment of principal or interest of this Note in accordance with its terms,
through acceleration, or otherwise and such failure continues for a period of
five (5) days after written notification from Bank to Borrower: provided,
however, Borrower is not entitled to more than three (3) such notices during any
twelve (12) month period; or
B. A Default occurs under the Deed of Trust or any other Loan
Document.
It is understood and agreed by Borrower that the foregoing "Events of
Default" are cumulative and in addition to any "Defaults" or "Events of Default"
contained in the other Loan Documents, or other documents modifying, renewing,
extending, evidencing, securing or pertaining to this Note or the loan evidenced
hereby. Upon the occurrence of any of the Events of Default, and if such has not
been cured within the designated period of time, if any, then the holder hereof
may, at its option, do any one or more of the following: (a) declare the entire
unpaid balance of principal of and accrued, unpaid interest upon this Note to be
immediately due and payable, (b) reduce any claim to judgment, (c) foreclose all
liens and security interests securing payment thereof or any part thereof,
and/or (d) without notice of default or demand, pursue and enforce any of Bank's
other rights and remedies provided under or pursuant to any applicable laws or
agreement. All rights and remedies of Bank shall be cumulative and concurrent
and may be pursued singularly, successively, or together, at the sole discretion
of Bank, and may be exercised as often as the occasion therefor shall arise.
Failure by Bank to exercise any right or remedy upon the occurrence of an Event
of Default shall not constitute a waiver of the right to exercise such right or
remedy upon the occurrence of any subsequent Event of Default. In the event that
Bank, after the occurrence of an Event of Default hereunder, consults an
attorney regarding the enforcement of any of its rights under this Note or if
this Note is placed in the hands of an attorney for collection or if suit be
brought to enforce this Note, Borrower promises to pay all costs thereof,
including reasonable attorneys' fees. Such costs and attorneys' fees shall
include, without limitation, costs and reasonable attorneys' fees incurred by
Bank in any appellate proceedings or in any proceedings under any present or
future federal bankruptcy act, state receivership law or probate.
8. Highest Lawful Rate; Usury. The Note and all of the other Loan
Documents are intended to be performed in accordance with, and only to the
extent permitted by, all applicable usury laws. If any provision hereof or of
any of the other Loan Documents or the application thereof to any person or
circumstance shall, for any reason and to any extent, be invalid or
unenforceable, neither the application of such provision to any other person or
circumstance nor the remainder of the instrument in which such provision is
contained shall be affected thereby and shall be enforced to the greatest extent
permitted by
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<PAGE>
applicable laws. It is expressly stipulated and agreed to be the intent of
Borrower and Bank to at all times comply with the usury and other applicable
laws now or hereafter governing the interest payable on the Obligations. If the
applicable law is ever revised, repealed or judicially interpreted so as to
render usurious any amount called for under the Note or under any of the other
Loan Documents, or contracted for, charged, taken, reserved or received with
respect to the Obligations, or if Bank's exercise of the option to accelerate
the maturity of the Note, or if any prepayment of the Note results in the
payment of any interest in excess of that permitted by law, then it is the
express intent of Borrower and Bank that all excess amounts theretofore
collected by Bank be credited on the principal balance of the Note (or, if the
Note and all of the Obligations have been paid in full, refunded), and the
provisions of the Note and the other Loan Documents immediately be deemed
reformed and the amounts thereafter collectable hereunder and thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the then applicable laws, but so as to permit the recovery of the
fullest amount otherwise called for hereunder or thereunder. All sums paid, or
agreed to be paid, for the use, forbearance, detention, taking, charging,
receiving or reserving on the Obligation shall, to the extent permitted by
applicable laws, be amortized, prorated, allocated and spread throughout the
full term of such Obligations until payment in full so that the rate or amount
of interest on account of such Obligations does not exceed the usury ceiling
from time to time in effect and applicable thereto for so long as debt is
outstanding under the Note. To the extent that Bank is relying on Chapter 303 of
the Texas Finance Code to determine the maximum rate ("Highest Lawful Rate")
payable on the Note, Bank will utilize the weekly ceiling from time to time in
effect as provided in such Chapter 303. To the extent federal law permits Bank
to contract for, charge or receive a greater amount of interest, Bank will rely
on federal law instead of such article, as amended, for the purpose of
determining the Highest Lawful Rate. Additionally, to the extent permitted by
applicable law now in effect, Bank may, at its option and from time to time,
implement any other method of computing the Highest Lawful Rate under such
article, as amended, or under other applicable law by giving notice, if
required, to Borrower as provided by applicable law now or hereafter in effect.
In no event shall the provisions of Chapter 346 of the Texas Finance Code (which
regulates certain revolving credit loan accounts and revolving triparty
accounts) apply to the Obligations. Notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents, it is not the intention
of Bank to accelerate the maturity of any interest that has not accrued at the
time of such acceleration or to collect unearned interest at the time of such
acceleration.
9. Fees. Borrower will pay a processing fee of $20.00 if any check
given by Borrower to Bank as a payment of any obligation owing to Bank under the
Loan Documents is dishonored.
10. Miscellaneous.
A. Notices or communications to be given under this Note shall be
given to the respective parties in writing as set forth in the Deed of Trust.
B. Time is of the essence of this Note.
C. This Note may not be changed or terminated orally, but only by
an agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, termination or discharge is sought.
D. This Note and all the covenants, promises and agreements
contained herein shall be binding upon Borrower's successors, assigns, heirs
and personal representatives and inure to the benefit of Bank's successors and
assigns.
E. This Note is secured by that certain Deed of Trust to Tony R.
Clark, Trustee for the benefit of Bank (the "Deed of Trust") against certain
property in Denton County, Texas, dated of even date herewith, executed and
delivered by Borrower to Bank, to which reference is hereby made for a
description
4
<PAGE>
of the mortgaged premises, the nature and extent of the security, and the rights
of the Bank in respect thereof.
Effective October 22, 1997.
INTERNATIONAL ISOTOPES INC.
By: /s/ Ira Lon Morgan
-------------------------
Name: IRA LON MORGAN
-------------------------
Title: CHAIRMAN
-------------------------
By: /s/ TOMMY L. THOMSPON
-------------------------
Name: TOMMY L. THOMPSPON
-------------------------
TITLE: EXECUTIVE VICE PRESIDENT
-------------------------
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[Logo of International Isotopes Inc.]
Contacts:
Carl W. Seidel, Imagyn Contacts:
President and CEO or Charles A. Laverty, Chairman and CEO or
Dr. Ira Lon Morgan, Chairman Michael Montevideo, CFO
International Isotopes Inc. Imagyn Medical Technologies
(940) 484-9492 (714) 668-5858
Douglas MacDougall or
Vivienne Blake
Feinstein Kean Partners Inc.
(617) 577-8110
For Immediate Release:
- ----------------------
INTERNATIONAL ISOTOPES SIGNS LETTER OF INTENT
TO SUPPLY RADIOISOTOPE SEEDS TO IMAGYN MEDICAL TECHNOLOGIES
-Agreement Includes Up to $10 Million Supply Contract-
Denton, TX, November 24, 1997 - International Isotopes Inc. (Nasdaq: INIS, BSE:
ITL) (I(3)), a producer of radioisotopes, pharmaceutical grade radiochemicals
and contract manufacturing of radiopharmaceuticals and devices, today announced
that it has signed a letter of intent with Imagyn Medical Technologies (Nasdaq:
IMTI). The letter of intent is to develop and manufacture proprietary
radioisotope seeds for Imagyn Medical Technologies to market in the treatment of
cancer and other diseases (brachytherapy). When the transaction is completed,
Imagyn Medical Technologies will make a commitment to pay International Isotopes
up to $1 million for the development of seeds and processes, and also provide
I(3) with a minimum three year supply contract valued at several million
dollars.
"When completed, this will be the first of numerous commercial contract
manufacturing agreements for I(3) and represents a significant milestone for the
Company," stated Carl W. Seidel, President and CEO of International Isotopes
Inc. "We are experiencing overwhelming interest in I(3) from potential customers
in the health care industry and anticipate securing several additional
manufacturing contracts.
"The management team and technology essential to manufacture high-purity
radioisotopes at I(3) is first class," stated Charles A. Laverty, Chairman and
CEO of Imagyn Medical Technologies. "We look forward to a long and prosperous
relationship in our endeavor to develop new products and applications for
brachytherapy--an emerging and promising new technique for the treatment of
cancer and other diseases."
-more-
Corporate Operations
2600 Longhorn Blvd. Suite #105 523 North Elm Street
Austin, Texas 78758 Denton, Texas 76201
Phone: (512) 834-1822 Phone: (940) 484-9492
Fax: (512) 834-2257 Fax: (940) 484-0877
<PAGE>
International Isotopes and Imagyn Agreement
Page 2
Permanent implant brachytherapy is a relatively new technique currently used
for the treatment of prostate cancer. The procedure involves the placement of
tiny pellets containing radioactive material into the prostate under ultrasound
guidance. Because the radiation is delivered locally to the tumor, brachytherapy
delivers therapeutic doses of radiation while sparing normal tissues.
Physicians generally perform the 60-90 minute procedure in an outpatient setting
and patients are able to return home the same day with few side effects.
Current details of the transaction include progress payments form Imagyn to
International Isotopes of $1 million for development of their proprietary seeds
and the manufacturing processes which will be matched by I(3) for the
development and construction of mass production lines and facilities for the
manufacture of radioactive seeds. The letter of intent grants Imagyn an
exclusive, worldwide license to market proprietary radioactive (Iodine 125 and
Palladium 1(3) seeds, for the treatment of cancer and other areas of medical
radiation therapy. In return, I(3) will receive a three year purchase
requirement for Iodine 125 seeds valued at several million dollars. Imagyn will
distribute the initial products through the 70 member sales force of the urology
division of Imagyn Medical.
Imagyn Medical Technologies, Inc. is a designer, manufacturer and marketer of
disease specific urological, gynecological and general surgery medical products
for the health care market.
International Isotopes Inc. plans to be the premier supplier of radioisotopes
for the production of diagnostic and therapeutic radiophamaceuticals for the
nuclear medicine industries. The Company and its internationally recognized
management team are also developing instrumentation for radiation therapy and
medical imaging.
International Isotopes Safe Harbor Statement:
- ---------------------------------------------
Statements in this press release may constitute forward-looking statements and
are subject to numerous risks and uncertainties, including the ability to
complete a definitive agreement with Imagyn, the Company's ability to meet time
schedules set forth in the agreement, the development of competitive products
by others and other risks detailed from time to time in the Company's filings
with the Securities and Exchange Commission. The Company disclaims any
obligation to update statements in this press release.
8
