Document:

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                  ONLINE RESOURCES & COMMUNICATIONS CORPORATION

                          EMPLOYEE STOCK PURCHASE PLAN

1.      Purpose. The purpose of the Plan is to provide employees of the Company
        and its Designated Subsidiaries with an opportunity to purchase Common
        Stock of the Company through accumulated payroll deductions. It is the
        intention of the Company to have the Plan qualify as an "Employee Stock
        Purchase Plan" under Section 423 of the Internal Revenue Code of 1986,
        as amended. The provisions of the Plan, accordingly, shall be construed
        so as to extend and limit participation in a manner consistent with the
        requirements of that section of the Code.

2.      Definitions.

                a.      "Board" shall mean the Board of Directors of the
                        Company.

                b.      "Code" shall mean the Internal Revenue Code of 1986, as
                        amended.

                c.      "Common Stock" shall mean the Common Stock of the
                        Company.

                d.      "Company" shall mean Online Resources & Communications
                        Corporation, a Delaware corporation, and any Designated
                        Subsidiary of the Company.

                e.      "Compensation" shall mean all base straight time gross
                        earnings, commissions, payments for overtime, shift
                        premium, incentive compensation, incentive payments,
                        bonuses and other compensation; provided, however, that
                        for the first Offering Period under the Plan,
                        Compensation shall include only all base straight time
                        gross earnings.

                f.      "Designated Subsidiary" shall mean any Subsidiary which
                        has been designated by the Board from time to time in
                        its sole discretion as eligible to participate in the
                        Plan.

                g.      "Employee" shall mean any individual who is an Employee
                        of the Company for tax purposes whose customary
                        employment with the Company is at least twenty (20)
                        hours per week and more than five (5) months in any
                        calendar year. For purposes of the Plan, the employment
                        relationship shall be treated as continuing intact while
                        the individual is on sick leave or other leave of
                        absence approved by the Company. Where the period of
                        leave exceeds 90 days and the individual's right to
                        reemployment is not guaranteed either by statute or by
                        contract, the employment relationship shall be deemed to
                        have terminated on the 91st day of such leave.

                h.      "Enrollment Date" shall mean the first day of each
                        Offering Period.

                i.      "Exercise Date" shall mean the last day of each Offering
                        Period.

                j.      "Fair Market Value" shall mean, as of any date, the
                        value of Common Stock determined as follows:

                                1)      If the Common Stock is listed on any
                                        established stock exchange or a national
                                        market system, including without
                                        limitation the Nasdaq National Market or
                                        the Nasdaq SmallCap Market of the Nasdaq
                                        Stock Market, its Fair Market Value
                                        shall be the closing sales price for
                                        such stock (or the closing bid, if no
                                        sales were reported) as quoted on such
                                        exchange or system for the last market
                                        trading day on the date of such
                                        determination, as reported in The Wall
                                        Street Journal or such other source as
                                        the Board deems reliable, or;

                                2)      If the Common Stock is regularly quoted
                                        by a recognized securities dealer but
                                        selling prices are not reported, its
                                        Fair Market Value shall be the mean of
                                        the closing bid and asked prices for the
                                        Common Stock on the date of such
                                        determination, as reported in The Wall
                                        Street Journal or such other source as
                                        the Board deems reliable, or;

                                3)      In the absence of an established market
                                        for the Common Stock, the Fair Market
                                        Value thereof shall be determined in
                                        good faith by the Board.

                                4)      For purposes of the Enrollment Date of
                                        the first Offering Period under the
                                        Plan, the Fair Market Value shall be the
                                        closing price on the Nasdaq National
                                        Market as of the date the Company adopts
                                        the Plan.

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                      EMPLOYEE STOCK PURCHASE PLAN - PAGE 2

                k.      "Offering Period" shall mean a period of approximately
                        six (6) months during which an option granted pursuant
                        to the Plan may be exercised, commencing on the first
                        Trading Day on or after January 1 and terminating on the
                        last Trading Day in the period ending the following June
                        1, or commencing on the first Trading Day on or after
                        July 1 and terminating on the last Trading Day in the
                        period ending the following December 31; provided,
                        however, that the first Offering Period under the Plan
                        shall commence on the date that the Company adopts the
                        Plan. The duration of Offering Periods may be changed
                        pursuant to Section 4 of this Plan.

                l.      "Plan" shall mean this Employee Stock Purchase Plan.

                m.      "Purchase Price" shall mean an amount equal to 85% of
                        the Fair Market Value of a share of Common Stock on the
                        Enrollment Date or on the Exercise Date, whichever is
                        lower; provided, however, that the Purchase Price may be
                        adjusted by the Board Pursuant to Section 20.

                n.      "Reserves" shall mean the number of shares of Common
                        Stock covered by each option under the Plan which have
                        not yet been exercised and the number of shares of
                        Common Stock which have been authorized for issuance
                        under the Plan but not yet placed under option.

                o.      "Subsidiary" shall mean a corporation, domestic or
                        foreign, of which not less than 50% of the voting shares
                        are held by the Company or a Subsidiary, whether or not
                        such corporation now exists or is hereafter organized or
                        acquired by the Company or a Subsidiary.

                p.      "Trading Day" shall mean a day on which national stock
                        exchanges and the Nasdaq System are open for trading.

3.      Eligibility.

                a.      Any Employee who shall be employed by the Company on a
                        given Enrollment Date shall be eligible to participate
                        in the Plan.

                b.      Any provisions of the Plan to the contrary
                        notwithstanding, no Employee shall be granted an option
                        under the Plan (i) to the extent that, immediately after
                        the grant, such Employee (or any other person whose
                        stock would be attributed to such Employee pursuant to
                        Section 424(d) of the Code) would own capital stock of
                        the Company and/or hold outstanding options to purchase
                        such stock possessing five percent (5%) or more of the
                        total combined voting power or value of all classes of
                        the capital stock of the Company or of any Subsidiary,
                        or (ii) to the extent that his or her rights to purchase
                        stock under all employee stock purchase plans of the
                        Company and its subsidiaries accrues at a rate which
                        exceeds Fifteen Thousand Dollars ($15,000) worth of
                        stock (determined at the fair market value of the shares
                        at the time such option is granted) for each calendar
                        year in which such option is outstanding at any time.

4.      Offering Periods. The Plan shall be implemented by consecutive Offering
        Periods with a new Offering Period commencing on the first Trading Day
        on or after January 1 and July 1 each year, or on such other date as the
        Board shall determine, and continuing thereafter until terminated in
        accordance with Section 20 hereof; provided, however, that the first
        Offering Period under the Plan shall commence on the date the Company
        adopts the Plan and end on the last Trading Day on or before June 30,
        1999. The Board shall have the power to change the duration of Offering
        Periods (including the commencement dates thereof) with respect to
        future offerings without stockholder approval if such change is
        announced at least five (5) days prior to the scheduled beginning of the
        first Offering Period to be affected thereafter.

5.      Participation.

                a.      An eligible Employee may become a participant in the
                        Plan by completing a subscription agreement authorizing
                        payroll deductions in the form of Exhibit A to this Plan
                        and filing it with the Company's payroll office prior to
                        the applicable Enrollment Date.

                b.      Payroll deductions for a participant shall commence on
                        the first payroll following the Enrollment Date and
                        shall end on the last payroll in the Offering Period to
                        which such authorization is applicable, unless sooner
                        terminated by the participant as provided in Section 10
                        hereof.

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                      EMPLOYEE STOCK PURCHASE PLAN - PAGE 3

6.      Payroll Deductions.

                a.      At the time a participant files his or her subscription
                        agreement, he or she shall elect to have payroll
                        deductions made on each pay day during the Offering
                        Period in an amount not exceeding ten percent (10%) of
                        the Compensation which he or she receives on each pay
                        day during the Offering Period.

                b.      All payroll deductions made for a participant shall be
                        credited to his or her account under the Plan and shall
                        be withheld in whole, even percentages only. A
                        participant may not make any additional payments into
                        such account.

                c.      A participant may discontinue his or her participation
                        in the Plan as provided in Section 10 hereof, but no
                        other change can be made during an Offering Period and,
                        specifically, a participant may not alter the rate of
                        his or her payroll deductions for that Offering Period.
                        A participant may increase or decrease the rate of his
                        or her payroll deductions for successive Offering
                        Periods by completing and filing with the Company a new
                        subscription agreement authorizing a change in payroll
                        deduction rate before the start of the new Offering
                        Period. A participant's subscription agreement shall
                        remain in effect for successive Offering Periods unless
                        terminated as provided in Section 10 hereof.

                d.      Notwithstanding the foregoing, to the extent necessary
                        to comply with Section 423(b)(8) of the Code and Section
                        3(b) hereof, a participant's payroll deductions may be
                        decreased to zero percent (0%) at any time during an
                        Offering Period. Payroll deductions shall recommence at
                        the rate provided in such participant's subscription
                        agreement at the beginning of the first Offering Period
                        which is scheduled to end in the following calendar
                        year, unless terminated by the participant as provided
                        in Section 10 hereof.

                e.      At the time the option is exercised, in whole or in
                        part, or at the time some or all of the Company's Common
                        Stock issued under the Plan is disposed of, the
                        participant must make adequate provision for the
                        Company's federal, state, or other tax withholding
                        obligations, if any, which arise upon the exercise of
                        the option or the disposition of the Common Stock. At
                        any time, the Company may, but shall not be obligated
                        to, withhold from the participant's compensation the
                        amount necessary for the Company to meet applicable
                        withholding obligations, including any withholding
                        required to make available to the Company any tax
                        deductions or benefits attributable to sale or early
                        disposition of Common Stock by the Employee.

7.      Grant of Option. On the Enrollment Date of each Offering Period, each
        eligible Employee participant in such Offering Period shall be granted
        an option to purchase on the Exercise Date of such Offering Period (at
        the applicable Purchase Price) up to a number of shares of the Company's
        Common Stock determined by dividing such Employee's payroll deductions
        accumulated prior to such Exercise Date and retained in the
        Participant's account as of the Exercise Date by the applicable Purchase
        Price; provided that in no event shall an Employee be permitted to
        purchase during each Offering Period more than 1,000 shares (subject to
        any adjustment pursuant to Section 19), and provided further that such
        purchase shall be subject to the limitations set forth in Sections 3(b)
        and 12 hereof. The Board may, for future Offering Periods, increase or
        decrease, in its absolute discretion, the maximum number of shares of
        the Company' Common Stock an Employee may purchase during each Offering
        Period. Exercise of the option shall occur as provided in Section 8
        hereof, unless the participant has withdrawn pursuant to Section 10
        hereof. The Option shall expire on the last day of the Offering Period.

8.      Exercise of Option. Unless a participant withdraws from the Plan as
        provided in Section 10 hereof, his or her option for the purchase of
        shares shall be exercised automatically on the Exercise Date, and the
        maximum number of full shares subject to option shall be purchased for
        such participant at the applicable Purchase Price with the accumulated
        payroll deductions in his or her account. No fractional shares shall be
        purchased; any payroll deductions accumulated in a participant's account
        which are not sufficient to purchase a full share shall be retained in
        the participant's account for the subsequent Offering Period, subject to
        earlier withdrawal by the participant as provided in Section 10 hereof.
        Any other monies left over in a participant's account after the Exercise
        Date shall be returned to the participant. During a participant's
        lifetime, a participant's option to purchase shares hereunder is
        exercisable only by him or her.

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                      EMPLOYEE STOCK PURCHASE PLAN - PAGE 4

9.      Delivery. As promptly as practicable after each Exercise Date on which a
        purchase of shares occurs, the Company shall arrange the delivery to
        each participant, as appropriate, the shares purchased upon exercise of
        his or her option.

10.     Withdrawal.

                a.      A participant may withdraw all but not less than all the
                        payroll deductions credited to his or her account and
                        not yet used to exercise his or her option under the
                        Plan at any time by giving written notice to the Company
                        in the form of Exhibit B to this Plan. All of the
                        participant's payroll deductions credited to his or her
                        account shall be paid to such participant promptly after
                        receipt of notice of withdrawal and such participant's
                        option for the Offering Period shall be automatically
                        terminated, and no further payroll deductions for the
                        purchase of shares shall be made for such Offering
                        Period. If a participant withdraws from an Offering
                        Period, payroll deductions shall not resume at the
                        beginning of the succeeding Offering Period unless the
                        participant delivers to the Company a new subscription
                        agreement.

                b.      A participant's withdrawal from an Offering Period shall
                        not have any effect upon his or her eligibility to
                        participate in any similar plan which may hereafter be
                        adopted by the Company or in succeeding Offering Periods
                        which commence after the termination of the Offering
                        Period from which the participant withdraws.

11.     Termination of Employment. Upon a participant's ceasing to be an
        Employee for any reason, he or she shall be deemed to have elected to
        withdraw from the Plan and the payroll deductions credited to such
        participant's account during the Offering Period but not yet used to
        exercise the option shall be returned to such participant or, in the
        case of his or her death, to the person or persons entitled thereto
        under Section 15 hereof, and such participant's option shall be
        automatically terminated. The preceding sentence notwithstanding, a
        participant who receives payment in lieu of notice of termination of
        employment shall be treated as continuing to be an Employee for the
        participant's customary number of hours per week of employment during
        the period in which the participant is subject to such payment in lieu
        of notice.

12.     Interest. No interest shall accrue on the payroll deductions of a
        participant in the Plan.

13.     Stock.

                a.      Subject to adjustment upon changes in capitalization of
                        the Company as provided in Section 19 hereof, the
                        maximum number of shares of the Company's Common Stock
                        which shall be made available for sale under the Plan
                        shall be 400,000 shares, plus an annual increase to be
                        added on each anniversary date of the adoption of the
                        Plan equal to the lesser of (i) 100,000 shares or (ii) a
                        lesser amount determined by the Board. If, on a given
                        Exercise Date, the number of shares with respect to
                        which options are to be exercised exceeds the number of
                        shares then available under the Plan, the Company shall
                        make a pro rata allocation of the shares remaining
                        available for purchase in as uniform a manner as shall
                        be practicable and as it shall determine to be
                        equitable.

                b.      The participant shall have no interest or voting right
                        in shares covered by his option until such option has
                        been exercised.

                c.      Shares to be delivered to a participant under the Plan
                        shall be registered in the name of the participant or in
                        the name of the participant and his or her spouse.

14.     Administration. The Plan shall be administered by the Board or a
        committee of members of the Board appointed by the Board. The Board or
        its committee shall have full and exclusive discretionary authority to
        construe, interpret and apply the terms of the Plan, to determine
        eligibility and to adjudicate all disputed claims filed under the Plan.
        Every finding, decision and determination made by the Board or its
        committee shall, to the full extent permitted by law, be final and
        binding upon all parties.

15.     Designation of Beneficiary.

                a.      A participant may file a written designation of a
                        beneficiary who is to receive any shares and cash, if
                        any, from the participant's account under the Plan in
                        the event of such

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                        participant's death subsequent to an Exercise Date on
                        which the option is exercised but prior to delivery to
                        such participant of such shares and cash. In addition, a
                        participant may file a written designation of a
                        beneficiary who is to receive any cash from the
                        participant's account under the Plan in the event of
                        such participant's death prior to exercise of the
                        option. If a participant is married and the designated
                        beneficiary is not the spouse, spousal consent shall be
                        required for such designation to be effective.

                b.      Such designation of beneficiary may be changed by the
                        participant at any time by written notice. In the event
                        of the death of a participant and in the absence of a
                        beneficiary validly designated under the Plan who is
                        living at the time of such participant's death, the
                        Company shall deliver such shares and/or cash to the
                        executor or administrator of the estate of the
                        participant, or if no such executor or administrator has
                        been appointed (to the knowledge of the Company), the
                        Company, in its discretion, may deliver such shares
                        and/or cash to the spouse or to any one or more
                        dependents or relatives of the participant, or if no
                        spouse, dependent or relative is known to the Company,
                        then to such other person as the Company may designate.

16.     Transferability. Neither payroll deductions credited to a participant's
        account nor any rights with regard to the exercise of an option or to
        receive shares under the Plan may be assigned, transferred, pledged or
        otherwise disposed of in any way (other than by will, the laws of
        descent and distribution or as provided in Section 15 hereof) by the
        participant. Any such attempt at assignment, transfer, pledge or other
        disposition shall be without effect, except that the Company may treat
        such act as an election to withdraw funds from an Offering Period in
        accordance with Section 10 hereof.

17.     Use of Funds. All payroll deductions received or held by the company
        under the Plan may be used by the Company for any corporate purpose, and
        the Company shall not be obligated to segregate such payroll deductions.

18.     Reports. Individual accounts shall be maintained for each participant in
        the Plan. Statements of account shall be given to participating
        Employees at least annually, which statements shall set forth the
        amounts of payroll deductions, the Purchase Price, the number of shares
        purchased and the remaining cash balance, if any.

19.     Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
        Merger or Asset Sale.

                a.      Changes in Capitalization. Subject to any required
                        action by the stockholders of the Company, the Reserves,
                        the maximum number of shares each participant may
                        purchase per Offering Period (pursuant to Section 7), as
                        well as the price per share and the number of shares of
                        Common Stock covered by each option under the Plan which
                        has not yet been exercised shall be proportionately
                        adjusted for any increase or decrease in the number of
                        issued shares of Common Stock resulting from a stock
                        split, reverse stock split, stock dividend, combination
                        or reclassification of the Common Stock, or any other
                        increase or decrease in the number of shares of Common
                        Stock effected without receipt of consideration by the
                        Company; provided, however, that conversion of any
                        convertible securities of the Company shall not be
                        deemed to have been "effected without receipt of
                        consideration". Such adjustment shall be made by the
                        Board, whose determination in that respect shall be
                        final, binding and conclusive. Except as expressly
                        provided herein, no issuance by the Company of shares of
                        stock of any class, or securities convertible into
                        shares of stock of any class, shall affect, and no
                        adjustment by reason thereof shall be made with respect
                        to, the number or price of shares of Common Stock
                        subject to an option.

                b.      Dissolution or Liquidation. In the event of the proposed
                        dissolution or liquidation of the Company, the Offering
                        Period then in progress shall be shortened by setting a
                        new Exercise Date (the "New Exercise Date"), and shall
                        terminate immediately prior to the consummation of such
                        proposed dissolution or liquidation, unless provided
                        otherwise by the Board. The New Exercise Date shall be
                        before the date of the Company's proposed dissolution or
                        liquidation. The Board shall notify each participant in
                        writing, at least ten (10) business days prior to the
                        New Exercise Date, that the Exercise Date for the

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                      EMPLOYEE STOCK PURCHASE PLAN - PAGE 6

                        participant's option has been changed to the New
                        Exercise Date and that the participant's option shall be
                        exercised automatically on the New Exercise Date, unless
                        prior to such date the participant has withdrawn from
                        the Offering Period as provided in Section 10 hereof.

                c.      Merger or Asset Sale. In the event of a proposed sale of
                        all or substantially all of the assets of the Company,
                        or the merger of the Company with or into another
                        corporation, each outstanding option shall be assumed or
                        an equivalent option substituted by the successor
                        corporation or a Parent or Subsidiary of the successor
                        corporation. In the event that the successor corporation
                        refuses to assume or substitute for the option, the
                        Offering Period then in progress shall be shortened by
                        setting a new Exercise Date (the "New Exercise Date").
                        The New Exercise Date shall be before the date of the
                        Company's proposed sale or mreger. The Board shall
                        notify each participant in writing, at least ten (10)
                        business days prior to the New Exercise Date, that the
                        Exercise Date for the participant's option has been
                        changed to the New Exercise Date and that the
                        participant's option shall be exercised automatically on
                        the New Exercise Date, unless prior to such date the
                        participant has withdrawn from the Offering Period as
                        provided in Section 10 hereof.

20.     Amendment or Termination.

                a.      The Board of Directors of the Company may at any time
                        and for any reason terminate or amend the Plan. Except
                        as provided in Section 19 hereof, no such termination
                        can affect options previously granted, provided that an
                        Offering Period may be terminated by the Board of
                        Directors on any Exercise Date if the Board determines
                        that the termination of the Offering Period or the Plan
                        is in the best interests of the Company and its
                        stockholders. Except as provided in Section 19 and
                        Section 20 hereof, no amendment may make any change in
                        any option theretofore granted which adversely affects
                        the rights of any participant. To the extent necessary
                        to comply with Section 423 of the Code (or any other
                        applicable law, regulation or stock exchange rule), the
                        Company shall obtain shareholder approval in such a
                        manner and to such a degree as required.

                b.      Without stockholder consent and without regard to
                        whether any participant rights may be considered to have
                        been "adversely affected," the Board (or its committee)
                        shall be entitled to change the Offering Periods, change
                        the frequency and/or number of changes in the amount
                        withheld during an Offering Period, establish the
                        exchange ratio applicable to amounts withheld in a
                        currency other than U.S. dollars, permit payroll
                        withholding in excess of the amount designated by a
                        participant in order to adjust for delays or mistakes in
                        the Company's processing of properly completed
                        withholding elections, establish reasonable waiting and
                        adjustment periods and/or accounting and crediting
                        procedures to ensure that amounts applied toward the
                        purchase of Common Stock for each participant properly
                        correspond with amounts withheld from the participant's
                        Compensation, and establish such other limitations or
                        procedures as the Board (or its committee) determines in
                        its sole discretion advisable which are consistent with
                        the Plan.

                c.      In the event the Board determines that the ongoing
                        operation of the Plan may result in unfavorable
                        financial accounting consequences, the Board may, in its
                        discretion and, to the extent necessary or desirable,
                        modify or amend the Plan to reduce or eliminate such
                        accounting consequences including, but not limited to:

                                1)      altering the Purchase Price for any
                                        Offering Period including an Offering
                                        Period underway at the time of the
                                        change in Purchase Price;

                                2)      shortening any Offering Period so that
                                        Offering Period ends on a new Exercise
                                        Date, including an Offering Period
                                        underway at the time of the Board
                                        action; and

                                3)      allocating shares.

                        Such modifications or amendment shall not require
                        stockholder approval or the consent of any Plan
                        participants.

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                      EMPLOYEE STOCK PURCHASE PLAN - PAGE 7

21.     Notices. All notices or other communications by a participant to the
        Company under or in connection with the Plan shall be deemed to have
        been duly given when received in the form specified by the Company at
        the location, or by the person, designated by the Company for the
        receipt thereof.

22.     Conditions Upon Issuance of Shares. Shares shall not be issued with
        respect to an option unless the exercise of such option and the issuance
        and delivery of such shares pursuant thereto shall comply with all
        applicable provision of law, domestic or foreign, including, without
        limitation, the Securities Act of 1933, as amended, the Securities
        Exchange Act of 1934, as amended, the rules and regulations promulgated
        thereunder, and the requirements of any stock exchange upon which the
        shares may then be listed, and shall be further subject to the approval
        of counsel for the Company with respect to such compliance.

        As a condition to the exercise of an option, the Company may require the
        person exercising such option to represent and warrant at the time of
        any such exercise that the shares are being purchased only for
        investment and without any present intention to sell or distribute such
        shares if, in the opinion of counsel for the Company, such a
        representation is required by any of the aforementioned applicable
        provisions of law.

23.     Non-U.S. Participants. With respect to any Designated Subsidiary which
        employs participants who reside outside the United States, and
        notwithstanding anything herein to the contrary, the Board or its
        committee administering the Plan may in its sole discretion amend the
        terms of the Plan in order to conform such terms with the requirements
        of local law or to meet the objectives of the Plan, and may, where
        appropriate, establish one or more sub-plans to reflect such amended
        provisions.

24.     Term of Plan. The Plan shall become effective upon the earlier to occur
        of is adoption by the Board of Directors or its approval by the
        stockholders of the Company. It shall continue in effect for a term of
        ten (10) years unless sooner terminated under Section 20 hereof.

<PAGE>   8

                                    EXHIBIT A
                  ONLINE RESOURCES & COMMUNICATIONS CORPORATION
                          EMPLOYEE STOCK PURCHASE PLAN
                             SUBSCRIPTION AGREEMENT

_____   Original Application Enrollment Date: ___
_____   Change in Payroll Deduction Rate
_____   Change in Beneficiary(ies)

        1.      ___________________________ hereby elects to participate in the
                Online Resources & Communications Corporation Employee Stock
                Purchase Plan (the "Employee Stock Purchase Plan") and
                subscribes to purchase shares of the Company's Common Stock in
                accordance with this Subscription Agreement and the Employee
                Stock Purchase Plan.

        2.      I hereby authorize payroll deductions from each paycheck in the
                amount of ______% of my Compensation on each payday (from 0 to
                10%, in even percentages only) during the Offering Period in
                accordance with the Employee Stock Purchase Plan. (Please note
                that no fractional percentages are permitted.)

        3.      I understand that said payroll deduction shall be accumulated
                for the purchase of shares of Common Stock at the applicable
                Purchase Price determined in accordance with the Employee Stock
                Purchase Plan. I understand that if I do not withdraw from an
                Offering Period, any accumulated payroll deductions will be used
                to automatically exercise my option.

        4.      I have received a copy of the complete Employee Stock Purchase
                Plan. I understand that my participation in the Employee Stock
                Purchase Plan is in all respects subject to the terms of the
                Plan. I understand that my ability to exercise the option under
                this Subscription Agreement is subject to stockholder approval
                of the Employee Stock Purchase Plan.

        5.      Shares purchased for me under the Employee Stock Purchase Plan
                should be issued in the name(s) of (Employee or Employee and
                Souse only): _________________________________________.

        6.      I understand that if I dispose of any shares received by me
                pursuant to the Plan within 2 years after the Enrollment Date
                (the first day of the Offering Period during which I purchased
                such shares), I will be treated for federal income tax purposes
                as having received ordinary income at the time of such
                disposition in an amount equal to the excess of the fair market
                value of the shares at the time such shares were purchased by me
                over the price which I paid for the shares. I hereby agree to
                notify the Company in writing within 30 days after the date of
                any disposition of shares and I will make adequate provision for
                Federal, state or other tax withholding obligations, if any,
                which arise upon the disposition of the Common Stock. The
                Company may, but will not be obligated to, withhold from my
                compensation the amount necessary to meet any applicable
                withholding obligation including any withholding necessary to
                make available to the Company any tax deductions or benefits
                attributable to sale or early disposition of Common Stock by me.
                If I dispose of such shares at any time after the expiration of
                the 2-year holding period, I understand that I will be treated
                for federal income tax purposes as having received income only
                at the time of such disposition, and that such income will be
                taxed as ordinary income only to the extent of an amount equal
                to the lesser of (1) the excess of the fair market value of the
                shares at the time of such disposition over the purchase price
                which I paid for the shares, or (2) 15% of the fair market value
                of the shares on the first day of the Offering Period. The
                remainder of the gain, if any, recognized on such disposition
                will be taxed as capital gain.

<PAGE>   9

        7.      I hereby agree to be bound by the terms of the Employee Stock
                Purchase Plan. The effectiveness of this Subscription Agreement
                is dependent upon my eligibility to participate in the Employee
                Stock Purchase Plan.

        8.      In the event of my death, I hereby designate the following as my
                beneficiary(ies) to receive all payments and shares due me under
                the Employee Stock Purchase Plan:

        Name:   ________________________________________________  (please print)
                (First)            (Middle)               (Last)

        Relationship:
                             ---------------------------------
        Address:
                             ---------------------------------

                             ---------------------------------

                             ---------------------------------
        Employee's SSN:              -       -
                             -------  -------  -------
        Employee's Address:
                             ---------------------------------

                             ---------------------------------

                             ---------------------------------

        I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT
        THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

<TABLE>
<S>                                               <C>
        Dated:
               ---------------------              -----------------------------------------------------
                                                  Signature of Employee

                                                  -----------------------------------------------------
                                                  Spouse's Signature (if beneficiary other than spouse)
</TABLE>

<PAGE>   10

                                    EXHIBIT B

                  ONLINE RESOURCES & COMMUNICATIONS CORPORATION
                          EMPLOYEE STOCK PURCHASE PLAN
                              NOTICE OF WITHDRAWAL

        The undersigned participant in the Offering Period of the Online
Resources & Communications Corporation Employee Stock Purchase Plan which began
on ____________, 2000 (the "Enrollment Date") hereby notifies the Company that
he or she hereby withdraws from the Offering Period. He or she hereby directs
the Company to pay to the undersigned as promptly as practicable all the payroll
deductions credited to his or her account with respect to such Offering Period.
The undersigned understands and agrees that his or her option for such Offering
Period will be automatically terminated. The undersigned understands further
that no further payroll deductions will be made for purchase of shares in the
current Offering Period and the undersigned shall be eligible to participate in
succeeding Offering Periods only be delivering to the Company a new Subscription
Agreement.

Name and Address of Participant:

-----------------------------------------

-----------------------------------------

-----------------------------------------

-----------------------------------------

Date:
     ------------------------------------      ---------------------------------
                                               Signature

HOW TO ENROLL: To enroll in the Employee Stock Purchase Plan send a copy of
Exhibit A and a Merrill Lynch Employee Stock Purchase Plan Enrollment Form to
_________, Human Resources. To make change to you contribution you only need to
send Exhibit A. The contribution amount must be a whole, EVEN number (2-10%).
For further information and to obtain any of these forms, you can contact
_________________ at (___) ________ or _________@ __________.com<PAGE>   1
                                                                     EXHIBIT 4.2

                                     WARRANT

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.

JUNE 1, 2000

__________ shares                                             Warrant No. ______

                           INTERNATIONAL ISOTOPES INC.
                             STOCK PURCHASE WARRANT

Registered Owner:

         This certifies that, for value received, International Isotopes Inc., a
Texas corporation, the ("Company") grants the following rights to the Registered
Owner, or assigns, of this Warrant:

         1. ISSUE. Upon tender (as defined in Section 5) to the Company, the
Company, within five (5) Business Days of the date thereof, shall issue to the
Registered Owner, or assigns, up to the number of shares specified in Section 2
of fully paid and nonassessable shares of Common Stock that the Registered
Owner, or assigns, is otherwise entitled to purchase.

         2. NUMBER OF SHARES. The total number of shares of Common Stock that
the Registered Owner, or assigns, of this Warrant is entitled to receive upon
exercise of this Warrant (the "Warrant Shares") is _________ shares, subject to
adjustment from time to time as set forth in Section 6. The Company shall at all
times reserve and hold available sufficient shares of Common Stock to satisfy
all conversion and purchase rights represented by outstanding convertible
securities, options and warrants, including this Warrant. The Company covenants
and agrees that all shares of Common Stock that may be issued upon the exercise
of this Warrant shall, upon issuance, be duly and validly issued, fully paid and
nonassessable, free from all taxes, liens and charges with respect to the
purchase and the issuance of the shares, and shall not have

<PAGE>   2

any legend or restrictions on resale, except as required by Section 3.2(b) of
the Purchase Agreement.

         3. EXERCISE PRICE. The initial per share exercise price of this
Warrant, representing the price per share at which the shares of stock issuable
upon exercise of this Warrant may be purchased, is four dollars and zero cents
($4.00) (the "Exercise Price").

         4. EXERCISE PERIOD. This Warrant may be exercised from the Closing Date
(as defined in the Purchase Agreement) up to and including May 31, 2003 (the
"Exercise Period"). If not exercised during this period, this Warrant and all
rights granted under this Warrant shall expire and lapse.

         5. TENDER; ISSUANCE OF CERTIFICATES.

               a. This Warrant may be exercised, in whole or in part, by (i)
actual delivery of (a) the Exercise Price in cash, (b) a duly executed Warrant
Exercise Form, a copy of which is attached to this Warrant as Exhibit A,
properly executed by the Registered Owner, or assigns, of this Warrant, and (c)
by surrender of this Warrant, or (ii) if the resale of the Warrant Shares by the
Registered Owner is not then registered pursuant to an effective registration
statement under the Securities Act, delivery to the Company of a written notice
of an election to effect a "Cashless Exercise" (as defined below) for the
Warrant Shares specified in the Warrant Exercise Form. The Warrant Shares so
purchased shall be deemed to be issued to the Registered Owner as of the close
of business on the date on which this Warrant shall have been surrendered, the
completed Warrant Exercise Form shall have been delivered and payment shall have
been made for such shares as set forth above. The payment and Warrant Exercise
Form must be delivered to the registered office of the Company either in person
or as set for in Section 14.

               b. Commencing ninety (90) days from the Filing Date (as defined
in the Registration Rights Agreement), if, and only if, at the time of exercise
of this Warrant, the Warrant Shares are not saleable pursuant to an effective
registration statement, then in addition to the exercise of all or a part of
this Warrant by payment of the Exercise Price in cash as provided above, and in
lieu of such payment, the Registered Owner shall have the right to effect a
cashless exercise (a "Cashless Exercise"). In the event of a Cashless Exercise,
the Registered Owner may exercise this Warrant in whole or in part by
surrendering this Warrant in exchange for the number of shares of Common Stock
equal to the product of (x) the number of shares as to which this Warrant is
being exercised multiplied by (y) a fraction, the numerator of which is the Per
Share Market Value of the Common Stock less the Exercise Price then in effect
and the denominator of which is the Per Share Market Value (in each case
adjusted for fractional shares as herein provided).

               c. In lieu of physical delivery of the Warrant, provided the
Company's transfer agent is participating in the Depositary Trust Company
("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the
Registered Owner and in compliance with the provisions hereof, the Company shall
use its best efforts to cause its transfer agent to electronically transmit the
Warrant Shares to the Registered Owner by

                                       2
<PAGE>   3

crediting the account of the Registered Owner's Prime Broker with DTC through
its Deposit Withdrawal Agent Commission system. The time period for delivery
described herein shall apply to the electronic transmittals described herein.

               d. Certificates for the Warrant Shares so purchased, representing
the aggregate number of shares specified in the Warrant Exercise Form, shall be
delivered to the Registered Owner within a reasonable time, not exceeding five
(5) Business Days, after this Warrant shall have been so exercised. The
certificates so delivered shall be in such denominations as may be requested by
the Registered Owner and shall be registered in the name of the Registered Owner
or such other name as shall be designated by such Registered Owner. If this
Warrant shall have been exercised only in part, then, unless this Warrant has
expired, the Company shall, at its expense, at the time of delivery of such
certificates, deliver to the Registered Owner a new Warrant representing the
number of shares with respect to which this Warrant shall not then have been
exercised.

               e. If, at any time, the Registered Owners of this Warrant submits
this Warrant, a Warrant Exercise Form and payment to the Company of the Exercise
Price for each of the shares of Common Stock specified in the Warrant Exercise
Form Shares in accordance with Section 5 above, and the Company, for any reason,
fails to deliver, on or prior to the last possible date which the Company could
have issued such Common Stock to the Registered Owner without violating this
Section 5, the number of shares of Common Stock for which the Registered Owner
is entitled upon such exercise, the Company shall pay damages to the Registered
Owners equal to the actual damages incurred by the Registered Owner as a result
of the Registered Owner's needing to "buy in" shares of Common Stock to the
extent necessary to satisfy its securities delivery requirements ("Buy in Actual
Damages").

6. ADJUSTMENT OF EXERCISE PRICE.

               a. Common Stock Dividends; Common Stock Splits; Reverse Common
Stock Splits. If the Company, at any time while this Warrant is outstanding, (a)
shall pay a stock dividend on its Common Stock, (b) subdivide outstanding shares
of Common Stock into a larger number of shares, (c) combine outstanding shares
of Common Stock into a smaller number of shares or (d) issue by reclassification
of shares of Common Stock any shares of capital stock of the Company, then (i)
the Exercise Price thereafter shall be determined by multiplying the Exercise
Price by a fraction the numerator of which shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding before such event
and the denominator of which shall be the number of shares of Common Stock
outstanding after such event and (ii) the number of Warrant Shares shall be
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock (excluding treasury shares, if any) outstanding after such event
and the denominator of which shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding before such event. Any
adjustment made pursuant to this paragraph (6)(a) shall become effective
immediately after the record date for the determination of shareholders entitled
to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
re-classification.

                                       3
<PAGE>   4

               b. Rounding. All calculations under this Section 6 shall be made
to the nearest cent or the nearest l/l00th of a share, as the case may be.

               c. Notice of Adjustment. Whenever the Exercise Price is adjusted
pursuant to paragraphs 6(a), the Company shall promptly deliver to the
Registered Owner a notice setting forth the Exercise Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment.

               d. Reclassification, Etc. If:

                    (i) the Company shall declare a dividend (or any other
               distribution) on its Common Stock; or

                    (ii) the Company shall declare a special nonrecurring cash
               dividend on or a redemption of its Common Stock; or

                    (iii) the Company shall authorize the granting to the
               holders of the Common Stock rights or warrants to subscribe for
               or purchase any shares of capital stock of any class or of any
               rights; or

                    (iv) the approval of any shareholders of the Company shall
               be required in connection with any reclassification of the Common
               Stock of the Company, any consolidation or merger to which the
               Company is a party, any sale or transfer of all or substantially
               all of the assets of the Company, or any compulsory share
               exchange whereby the Common Stock is converted into other
               securities, cash or property; or

                    (v) the Company shall authorize the voluntary or involuntary
               dissolution, liquidation or winding up of the affairs of the
               Company;

then the Company shall cause to be filed at each office or agency maintained for
the purpose of exercise of this Warrant, and shall cause to be delivered to the
Registered Owner, at least 10 Business Days prior to the applicable record or
effective date hereinafter specified, a notice (provided such notice shall not
include any material non-public information) stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined or (y) the
date on which such reclassification, consolidation, merger, sale, transfer or
share exchange is expected to become effective or close, and the date as of
which it is expected that holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided, however, that the failure to mail such notice or any
defect therein or in the mailing thereof shall not affect the validity of the
corporate action required to be specified in such notice.

                                       4
<PAGE>   5

               e. Adjustment to Exercise Price.

                    (i) If the Company, at any time while this Warrant is
               outstanding, takes any of the actions described in this Section
               6e, then, in order to prevent dilution of the rights granted
               under this Warrant, the Exercise Price will be subject to
               adjustment from time to time as provided in this Section 6e.

                    (ii) Adjustment of Exercise Price upon Issuance of Common
               Stock. If at any time while this Warrant is outstanding the
               Company issues or sells, or is deemed to have issued or sold, any
               shares of Common Stock (other than the shares of Common Stock
               underlying the Warrants or the Preferred Stock or shares issued
               upon exercise of the Warrants or conversion of the Preferred
               Stock or shares of Common Stock deemed to have been issued by the
               Company in connection with a Stock Option Plan, or shares of
               Common Stock issuable upon the exercise of any options or
               warrants outstanding on the date hereof or any securities to be
               issued in an Underwritten Offering, or shares of Common Stock
               issued or deemed to have been issued as consideration for an
               acquisition by the Company of a division, assets or business (or
               stock constituting any portion thereof) from another Person), for
               a consideration per share less than the Exercise Price in effect
               immediately prior to such issuance or sale, then immediately
               after such issuance or sale the Exercise Price then in effect
               shall be reduced to an amount equal to the consideration per
               share of Common Stock in such issuance or sale. For the purpose
               of determining the adjusted Exercise Price under this Section 6e,
               the following shall be applicable:

                    A. Issuance of Options. If at any time while this Warrant is
               outstanding the Company in any manner grants any rights or
               options to subscribe for or to purchase Common Stock or any stock
               or other securities convertible into or exchangeable for Common
               Stock (other than the Underlying Shares or shares of Common Stock
               deemed to have been issued by the Company in connection with a
               Stock Option Plan, or shares of Common Stock issuable upon the
               exercise of any options or warrants outstanding on the date
               hereof, or any securities to be issued in an Underwritten
               Offering, or shares of Common Stock issued or deemed to have been
               issued as consideration for an acquisition by the Company of a
               division, assets or business (or stock constituting any portion
               thereof) from another Person) (such rights or options being
               herein called "Options" and such convertible or exchangeable
               stock or securities being herein called "Convertible Securities")
               and the price per share for which Common Stock is issuable upon
               the exercise of such Options or upon conversion or exchange of
               such Convertible Securities is less than the Exercise Price in
               effect immediately prior to such grant, then the Exercise Price
               then in effect shall be reduced to equal the price per share for
               which Common Stock is issuable upon the exercise of such Options
               or upon the conversion or exchange of such Convertible
               Securities. No adjustment of the Exercise Price shall be made
               upon the actual issuance of such Common Stock upon conversion or
               exchange of such Options.

                                       5
<PAGE>   6

                    B. Issuance of Convertible Securities. If at any time while
               this Warrant is outstanding the Company in any manner issues or
               sells any Convertible Securities and the price per share for
               which Common Stock is issuable upon such conversion or exchange
               (other than the Underlying Shares or shares of Common Stock
               deemed to have been issued by the Company in connection with a
               Stock Option Plan, shares of Common Stock issuable upon the
               exercise of any options or warrants outstanding on the date
               hereof, shares of Common Stock issued or deemed to have been
               issued as consideration for an acquisition by the Company of a
               division, assets or business (or stock constituting any portion
               thereof) from another Person) is less than the Exercise Price in
               effect immediately prior to issuance or sale, then the Exercise
               Price then in effect shall be reduced to an amount equal to the
               price per share for which the Common Stock is issuable upon the
               conversion or exchange of such Convertible Securities. No
               adjustment of the Exercise Price shall be made upon the actual
               issuance of such Common Stock upon conversion or exchange of such
               Convertible Securities.

               f. Adjustment of Number of Shares. Upon each adjustment of the
Exercise Price as a result of the calculations made in this Section 6, this
Warrant shall thereafter evidence the right to receive, at the adjusted Exercise
Price, that number of shares of Common Stock (calculated to the nearest
one-hundredth) obtained by dividing (i) the product of the aggregate number of
shares covered by this Warrant immediately prior to such adjustment and the
Exercise Price in effect immediately prior to such adjustment of the Exercise
Price by (ii) the Exercise Price in effect immediately after such adjustment of
the Exercise Price.

7.       OPTIONAL REDEMPTION.

               a. Optional Redemption. This Warrant is redeemable in whole or in
part at the option of the Company during the following time periods, from time
to time, under the following conditions and subject also to the conditions set
forth in Section 7(b) (the "Optional Redemption"):

                    (i) Prior to the first anniversary of the Closing Date, the
               Company may redeem the Warrant, subject to the other conditions
               herein, if the average closing price of the Company's Common
               Stock over five (5) consecutive Trading Days reaches over 200% of
               the Exercise Price as at the Closing Date;

                    (ii) During the period commencing on the First Business Day
               immediately after the first anniversary of the Closing Date and
               ending on the second anniversary of the Closing Date, the Company
               may redeem the Warrant, subject to the other conditions herein,
               if the average closing price of the Company's Common Stock over
               five (5) consecutive Trading Days reaches over 175% of the
               Exercise Price as at the Closing Date; and

                    (iii) After the second anniversary of the Closing Date, the
               Company may redeem the Warrant, subject to the other conditions
               herein, if the average

                                       6
<PAGE>   7

               closing price of the Company's Common Stock over five (5)
               consecutive Trading Days reaches over 150% of the Exercise Price
               as at the Closing Date.

               b. Redemption Notice. Subject to the conditions set forth in
          Section 7(a), so long as (i) no Event of Default (or any event that
          with the passage of time or giving of notice or both would constitute
          an Event of Default) shall have occurred and be continuing, (ii) any
          Registration Statement required to be filed and be effective pursuant
          to the Registration Rights Agreement is then in effect and has been in
          effect and sales of all of the Registrable Securities can be made
          thereunder for at least twenty (20) days prior to the Redemption
          Notice Date (as defined below) and (iii) the Company has a sufficient
          number of authorized shares of Common Stock reserved for issuance upon
          full exercise of the outstanding Warrants, upon ten (10) Business Days
          prior written notice to the Registered Owner (a "Redemption Notice"),
          the Warrant may be redeemed by the Company, in whole or in part, at a
          redemption price equal to $.01 per Warrant (the "Redemption Price").

               c. Mechanics of Redemption. The Company shall exercise its right
          to redeem by delivering its Redemption Notice by facsimile and
          overnight courier to each Registered Owner (such date that the
          Redemption Notice is given on the "Redemption Notice Date"). Such
          Redemption Notice shall indicate (A) the Redemption Price, (B) each
          Registered Owner's pro rata allocation of such maximum amount, and (C)
          a confirmation of the date that the Company shall effect the
          redemption (the "Redemption Date"). The Redemption Date shall be not
          less than thirty (30) Business Days and not more than sixty (60)
          calendar days after the Redemption Notice Date. Notwithstanding
          anything in this Section 7(c), the Company shall convert any Warrant
          pursuant to Section 5 if the Warrant Exercise Form for a Warrant
          submitted for exercise is (i) delivered before the Redemption Date,
          (ii) for an Exercise Price greater than or equal to the Redemption
          Price (appropriately adjusted in accordance with the terms hereof) or
          (iii) in excess of such Registered Owner's pro rata allocation of the
          maximum Redemption Price indicated in its Redemption Notice.

               d. Payment of Redemption Price. The Company shall pay the
          applicable Redemption Price to the Registered Owner of the Warrants
          being redeemed in cash on the Redemption Date. If the Company shall
          fail to pay the applicable Redemption Price to such Registered Owner
          on the Redemption Date, in addition to any remedy such Registered
          Owner may have under this Warrant and the Purchase Agreement, such
          unpaid amount shall bear interest at the rate of 1.0% per month until
          paid in full.

          8. NASDAQ LIMITATION. In no event shall the Issuer be required to
issue shares of Common Stock upon the exercise of a Warrant if such issuance
would violate the rules of Nasdaq.

          9. ADJUSTMENTS FOR CONSOLIDATION, MERGER, SALE OF ASSETS,
REORGANIZATION, ETC. In case the Company after the date hereof (a) shall
consolidate with or merge into any other entity and shall not be the continuing
or surviving corporation of such consolidation or merger, or (b) shall permit
any other entity to consolidate with or merge into the Company and the Company
shall be the continuing or surviving entity but, in connection with such
consolidation or merger,

                                       7
<PAGE>   8

the Common Stock shall be changed into or exchanged for stock or other
securities of any other entity or cash or any other property, or (c) shall
transfer all or substantially all of its properties or assets to any other
entity, or (d) shall effect a capital reorganization or reclassification of the
Common Stock (other than a capital reorganization or reclassification resulting
in the issue of additional shares of Common Stock for which adjustment in the
Exercise Price is provided in Section 6, then, and in the case of each such
transaction, proper provision shall be made so that, upon the basis and the
terms and in the manner provided in this Warrant, the Registered Owner of this
Warrant, upon the exercise hereof at any time after the consummation of such
transaction shall be entitled to receive (at the aggregate Exercise Price in
effect at the time of such consummation for all Common Stock issuable upon such
exercise immediately prior to such consummation), in lieu of the Common Stock
issuable upon such exercise prior to such consummation, the amount of
securities, cash or other property to which such Registered Owner would actually
have been entitled as a stockholder upon such consummation. If such Registered
Owner had exercised this Warrant immediately prior thereto.

          10. OFFICER'S CERTIFICATE. Whenever the number of shares purchasable
upon exercise shall be adjusted as required by the provisions of Section 6, the
Company shall forthwith file in the custody of its Secretary or an Assistant
Secretary at its principal office and with its stock transfer agent, if any, an
officer's certificate showing the adjusted number of shares determined as herein
provided, setting forth in reasonable detail the facts requiring such adjustment
and the manner of computing such adjustment. Each such officer's certificate
shall be signed by the chairman, president or chief financial officer of the
Company and by the secretary or any assistant secretary of the Company. Each
such officer's certificate shall be made available at all reasonable times for
inspection by any Registered Owner of the Warrants and the Company shall,
forthwith after each such adjustment, deliver a copy of such certificate to the
each of the Registered Owners.

          11. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have the meanings given to such terms in the Purchase
Agreement. As used in this Warrant, the following terms have the following
meanings:

          "Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms of "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.

          "Appraiser" shall mean a nationally recognized or major regional
investment banking firm or firm of independent certified public accountants of
recognized standing.

          "Approved Stock Plan" shall mean any contract, plan or agreement which
has been approved by the Board of Directors of the Company, pursuant to which
the Company's securities may be issued to any employee, officer, director or
consultant.

          "Average Price" has the meaning set forth in the Preferred Stock.

                                       8
<PAGE>   9

          "Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the state of
New York generally are authorized or required by law or other government actions
to close.

          "Closing" has the meaning set forth for "First Closing" as in Section
1.2(a) of the Purchase Agreement.

          "Common Stock" means the shares of the Company's Common Stock, par
value $0.01 per share.

          "Company" means International Isotopes Inc., a Texas corporation.

          "Convertible Securities" has the meaning assigned to it in Section
6(h)(A).

          "Distribution Date" has the meaning assigned to it in Section 22.

          "Exercise Period" has the meaning assigned to it the Section 4.

          "Exercise Price" has the meaning assigned to it in Section 3

          "Options" has the meaning assigned to it in Section 6(h)(i)(A).

          "Per Share Market Value" means on any particular date (i) the closing
bid price per share of the Common Stock on such date on the Nasdaq SmallCap
Market or other registered national stock exchange on which the Common Stock is
then listed or if there is no such price on such date, then the closing bid
price on such exchange or quotation system on the date nearest preceding such
date, or (ii) if the Common Stock is not listed then on the Nasdaq National
Market or the Nasdaq SmallCap Market or any registered national stock exchange,
the closing bid price for a share of Common Stock in the over-the-counter
market, as reported by the National Quotation Bureau Incorporated (or similar
organization or agency succeeding to its functions of reporting prices) at the
close of business on such date, or (iii) if the Common Stock is not then
publicly traded the fair market value of a share of Common Stock as determined
by an Appraiser selected in good faith by the holder of this Warrant; provided,
however, that the Company, after receipt of the determination by such Appraiser,
shall have the right to select, in good faith, an additional Appraiser, in which
case the fair market value shall be equal to the average of the determinations
by each such Appraiser; and provided, further that all determinations of the Per
Share Market Value shall be appropriately adjusted for any stock dividends,
stock splits or other similar transactions during such period.

          "Preferred Stock" means the shares of the Series B 7% convertible
redeemable preferred stock issued pursuant to the Company's Certificate Of
Designation Of Preferences and Rights and sold pursuant to the Purchase
Agreement.

          "Prepayment Amount" has the meaning assigned to it in Section 8.

          "Purchase Agreement" means that certain Securities Purchase Agreement,
dated June 1, 2000, among the Company and the Purchasers.

                                       9
<PAGE>   10

          "Purchaser" has the meaning set forth in the Purchase Agreement.

          "Redemption Date" has the meaning assigned to it in Section 7(c).

          "Redemption Event" has the meaning assigned to it in Section 6(f).

          "Redemption Notice" has the meaning assigned to it in Section 7(b).

          "Registered Owner" means the person identified on the face of this
Warrant as the registered owner hereof or such other person as shown on the
records of the Company as being the registered owner of this Warrant.

          "Redemption Price" has the meaning assigned to it in Section 7(b)
hereof.

          "Registrable Securities" has the meaning assigned to it in the
Registration Rights Agreement.

          "Registration Rights Agreement" means that certain Registration Rights
Agreement, dated June 1, 2000, among the Company and the Purchasers.

          "Rights" has the meaning assigned to it in Section 22.

          "Trading Day(s)" means any day on which the primary market on which
shares of Common Stock are listed is open for trading.

          "Underlying Shares" has the meaning assigned to it in Section 2.1(d)
of the Purchase Agreement.

          "Void Redemption Notice" has the meaning assigned to it in Section
7(d).

          "Warrant(s)" means the warrants issuable at the Closing.

          12. REGISTRATION RIGHTS. The Company will undertake the registration
of the Common Stock into which such Warrants are exercisable at such times and
upon such terms pursuant to the provisions of the Registration Rights Agreement.

          13. RESERVATION OF UNDERLYING SHARES; LISTING. The Company covenants
that it will at all times reserve and keep available out of its authorized
shares of Common Stock, free from preemptive rights, solely for the purpose of
issue upon exercise of the Warrants as herein provided, such number of shares of
the Common Stock as shall then be issuable upon the exercise of all outstanding
Warrants into Common Stock. The Company covenants that all shares of the Common
Stock issued upon exercise of the Warrant which shall be so issuable shall, when
issued, be duly and validly issued and fully paid and non-assessable. The
Company shall promptly secure the listing of the shares of Common Stock issuable
upon exercise of the Warrant upon each national securities exchange or automated
quotation system, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance upon exercise of this Warrant) and shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing of all shares of Common Stock form time to time issuable upon the

                                       10
<PAGE>   11

exercise of this Warrant; and the Company shall so list on each national
securities exchange or automated quotation system, as the case may be, and shall
maintain such listing of, any other shares of capital stock of the Company
issuable upon the exercise of this Warrant if and so long as any shares of the
same class shall be listed on such national securities exchange or automated
quotation system.

          14. NOTICES. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be deemed to have been
received (a) upon hand delivery (receipt acknowledged) or delivery by telex
(with correct answer back received), telecopy or facsimile (with transmission
confirmation report) at the address or number designated below (if received by
8:00 p.m. CST where such notice is to be received), or the first Business Day
following such delivery (if received after 8:00 p.m. CST where such notice is to
be received) or (b) on the second Business Day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications are (i) if to the Company to International Isotopes Inc.,
1500 Spencer Road, Denton, Texas 76205, Telephone: (940) 323-2612, Facsimile:
(940) 484-0877, Attention: David M. Camp with copies (except for exercise
notices) to Locke Liddell & Sapp LLP, 100 Congress, Suite 300, Austin, Texas,
78701, Attention: Curtis R. Ashmos and (ii) if to the Registered Owner to the
address set forth on the Signature page hereof or such other address as may be
designated in writing hereafter, in the same manner, by such person.

          15. COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. The Company covenants
that if any shares of Common Stock required to be reserved for purposes of
exercise of Warrants hereunder require registration with or approval of any
governmental authority under any Federal or state law, or any national
securities exchange, before such shares may be issued upon exercise, the Company
will use its best efforts to cause such shares to be duly registered or
approved, as the case may be.

          16. FRACTIONAL SHARES. Upon any exercise hereunder, the Company shall
not be required to issue stock certificates representing fractions of shares of
the Common Stock, but may if otherwise permitted make a cash payment in respect
of any final fraction of a share based on the Per Share Market Value at such
time. If the Company elects not, or is unable, to make such a cash payment, the
Registered Owner shall be entitled to receive, in lieu of the final fraction of
a share, one whole share of Common Stock.

          17. PAYMENT OF TAX UPON ISSUE OF TRANSFER. The issuance of
certificates for shares of the Common Stock upon exercise of the Warrants shall
be made without charge to the Registered Owners thereof for any documentary
stamp or similar taxes that may be payable in respect of the issue or delivery
of such certificate, provided that the Company shall not be required to pay any
tax that may be payable in respect of any transfer involved in the issuance and
delivery of any such certificate upon exercise in a name other than that of the
Registered Owner of such Warrant so converted and the Company shall not be
required to issue or deliver such certificates unless or until the person or
persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.

                                       11
<PAGE>   12

          18. WARRANTS OWNED BY COMPANY DEEMED NOT OUTSTANDING. In determining
whether the holders of the outstanding Warrants have concurred in any direction,
consent or waiver under this Warrant, Warrants which are owned by the Company or
any other obligor on the Warrants or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Warrants shall be disregarded and deemed not
to be outstanding for the purpose of any such determination; provided that any
Warrants owned by the Purchasers (as defined in the Purchase Agreement) shall be
deemed outstanding for purposes of making such a determination. Warrants so
owned which have been pledged in good faith may be regarded as outstanding if
the pledgee establishes to the satisfaction of the Company the pledgee's right
so to act with respect to such Warrants and that the pledgee is not the Company
or any other obligor upon the Warrants or any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Warrants.

          19. EFFECT OF HEADINGS; REFERENCES. The section headings herein are
for convenience only and shall not affect the construction hereof. References
herein to Sections are to Sections of this Warrant, unless otherwise expressly
provided.

          20. NO RIGHTS AS STOCKHOLDER. This Warrant shall not entitle the
Registered Owner to any rights as a stockholder of the Company, including
without limitation, the right to vote, to receive dividends and other
distributions, or to receive notice of, or to attend, meetings of stockholders
or any other proceedings of the Company, unless and to the extent exercised for
shares of Common Stock in accordance with the terms hereof.

          21. CERTAIN ACTIONS PROHIBITED. The Company will not, by amendment of
its charter 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 to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

          22. SHAREHOLDER RIGHTS PLAN. Notwithstanding the foregoing, in the
event that the Company shall distribute "poison pill" rights pursuant to a
"poison pill" shareholder rights plan (the "Rights"), the Company shall, in lieu
of making any adjustment pursuant to Section 6, make proper provision so that
each Registered Owner who exercises a Warrant after the record date for such
distribution and prior to the expiration or redemption of the Rights shall be
entitled to receive upon such exercise, in addition to the shares of Common
Stock issuable upon such exercise, a number of Rights to be determined as
follows: (i) if such exercise occurs on or prior to the date for the
distribution to the holders of Rights of separate certificates evidencing such
Rights (the "Distribution Date"), the same number of Rights to which a holder of
a number of shares of Common Stock equal to the number of shares of Common Stock
issuable upon such

                                       12
<PAGE>   13

exercise at the time of such exercise would be entitled in accordance with the
terms and provisions of and applicable to the Rights; and (ii) if such exercise
occurs after the Distribution Date, the same number of Rights to which a holder
of the number of shares into which the Warrant to exercised was exercisable
immediately prior to the Distribution Date would have been entitled on the
Distribution Date in accordance with the terms and provisions of and applicable
to the Rights, and in each case subject to the terms and conditions of the
Rights.

          23. SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon and
inure to the benefit of the Registered Owners and its assigns, and shall be
binding upon any entity succeeding to the Company by merger or acquisition of
all or substantially all the assets of the Company. The Company may not assign
this Warrant or any rights or obligations hereunder without the prior written
consent of the Registered Owner. The Registered Owner may assign this Warrant
without the prior written consent of the Company.

          24. GOVERNING LAW. The corporate laws of the State of Texas shall
govern all issues concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of the any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Warrant and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

                                       13
<PAGE>   14

         IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized officer as of the date first set forth above.

                                     INTERNATIONAL ISOTOPES INC.
                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------

                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------

                                       14
<PAGE>   15

                                                                       EXHIBIT A

                              Warrant Exercise Form

TO:      INTERNATIONAL ISOTOPES INC.

         The undersigned hereby: (1) irrevocably subscribes for and offers to
purchase _______ shares of Common Stock of International Isotopes Inc., pursuant
to Warrant No. ___ heretofore issued to ___________________ on ____________,
2000; (2) encloses a payment of $__________ for these shares at a price of $____
per share (as adjusted pursuant to the provisions of the Warrant); and (3)
requests that a certificate for the shares be issued in the name of the
undersigned and delivered to the undersigned at the address specified below.

                  Date:
                                               -----------------------
                  Investor Name:
                                               -----------------------
                  Taxpayer Identification
                                               -----------------------
                  Number:
                                               -----------------------
                  By:
                                               -----------------------
                  Printed Name:
                                               -----------------------
                  Title:
                                               -----------------------
                  Address:
                                               -----------------------

                                               -----------------------

                                               -----------------------

                  Note: The above signature should correspond exactly with the
                  name on the face of this Warrant Certificate or with the name
                  of assignee appearing in assignment form below.

AND, if said number of shares shall not be all the shares purchasable under the
within Warrant, a new Warrant Certificate is to be issued in the name of said
undersigned for the balance remaining of the shares purchasable thereunder less
any fraction of a share paid in cash and delivered to the address stated above.

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