MAXIM GROUP
February 11, 2005
Xx. Xx Xxxxxxxxx
Chief Financial Officer
Xx. Xxxx Xxxxxxx
Chief Executive Officer
Altair Nanotechnologies Inc.
000 Xxxxxx Xxx Xxxx, Xxxxxx 00000
Dear Sirs:
The purpose of this letter agreement ("Agreement") is to confirm the engagement
of Maxim Group LLC ("Maxim") by Altair Nanotechnologies Inc. ("Company") to act
as exclusive financial advisor and placement agent in connection with the
proposed offering ("Offering") of up to 5,000,000 shares of the Company's common
stock or other equity securities (the "Securities") of the Company to be issued
in one or more placements that shall either be (i) exempt from the
registration/qualification requirements of federal and state securities laws (a
"Private Placement"), or (ii) registered under the Securities Act of 1933, as
amended, pursuant to a Form S-3 "Shelf" Registration Statement (a "Registered
Offering").
1. Appointment.
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(a) Subject to the terms and conditions of this Agreement, the Company
hereby retains Maxim, and Xxxxx xxxxxx agrees to act, as the Company's exclusive
financial advisor and placement agent in connection with the Offering. As
exclusive financial advisor and placement agent, Xxxxx will advise and assist
the Company in identifying, and assist the Company in issuing, the Securities to
one or more investors (the "Investors") in the Offering. The Company
acknowledges and agrees that Xxxxx's obligations hereunder are on a
"commercially reasonable efforts" basis only and this Agreement does not
constitute a commitment by Maxim to purchase the Securities. The Company retains
the right to determine all of the terms and conditions of the Offering, to
accept or reject any proposals submitted to it by Xxxxx in its sole and absolute
discretion.
(b) During the Term of this Agreement (as such term is hereinafter
defined), neither the Company nor any of its subsidiaries will, directly or
indirectly, solicit or otherwise encourage the submission of any proposal or
offer ("Investment Proposal") from any person or entity, including any Investor
introduced to the Company by Xxxxx (the "Maxim Investors"), relating to any
issuance of the Company's or any of its subsidiaries' equity securities
(including debt securities with any equity feature) or participate in any
discussions regarding an Investment Proposal. The term "Investment Proposal"
shall not include (i) any investment in the equity securities of any other
Members NASD & SIPC
000 Xxxxxxxxx Xxx. * New York, NY 10174* tel (000) 000-0000 *
(000) 000-0000 * fax (000) 000-0000 *
xxx.xxxxxxxx.xxx
New York, NY * Long Island, NY * Chicago, IL
entity, (ii) any loans to the Company (excluding the issuance of any debt
securities with any equity feature), and (iii) any transaction or agreement with
one or more persons, firms or entities designated as a "strategic partner" of
the Company, as determined in good faith by the Board of Directors of the
Company, provided that each such person, firm or entity is, itself or through
its subsidiaries, an operating company in a business synergistic with the
business of the Company and in which the Company receives benefits in addition
to the investment of funds, but shall not include a transaction in which the
Company is issuing securities primarily for the purpose of raising capital or to
an entity whose primary business is investing in securities.
2. Compensation and Expenses.
--------------------------
(a) In consideration of the services rendered by Maxim in connection
with the Offering, the Company agrees to pay Maxim a cash fee payable upon the
closing of the transactions contemplated by this Agreement ("Closing") equal to
5.0% of the gross proceeds received by the Company from Maxim Investors at the
Closing. In addition, the Company shall deliver a warrant, or, if so requested,
warrants, to Maxim and/or its designees (the "Agent Warrant"), which Agent's
Warrant shall be exercisable to purchase additional Securities equal to 5.0% of
the total number of shares sold pursuant to the Offering. The Underwriter's
Warrant will be exercisable at any time and from time to time, in whole or in
part, during the four-year period commencing one year from the Offering, at a
price per share equal to 130% of the per share offering price of the Securities
in the Offering and shall allow for cashless exercise. The Agent's Warrant will
provide for registration rights (including a one time demand registration right
and unlimited piggyback rights but not including cashless exercise provisions)
and customary anti-dilution provisions (for stock dividends and splits and
recapitalizations) consistent with the National Association of Securities
Dealers, Inc. ("NASD") Rules of Fair Practice and satisfactory to Maxim and its
counsel.
(b) The Company will reimburse Maxim in a timely manner for (i) any
reasonably incurred legal expenses incurred by counsel to Xxxxx and (ii) any
out-of-pocket expenses incurred by Xxxxx related to activities under this
Agreement; provided, however, the aggregate of (i) and (ii) shall not exceed
$25,000.
(c) The terms of Exhibit A attached hereto are incorporated by reference for the
benefit of Maxim and the Company.
3. Term of Engagement.
-------------------
(a) This Agreement will remain in effect until at least February 28,
2005, after which this Agreement shall remain in effect until either party
terminates this Agreement on at least two days prior written notice to the other
party, provided however that if Xxxxx has not presented an offering with terms
equal to or greater than $3.80 per share by February 17, 2005, the Company may,
at its options, terminate this Agreement. The date of termination of this
Agreement is referred to herein from time to time as the "Termination Date." The
period of time during which this Agreement remains in effect is referred to
herein from time to time as the "Term". If, within six months after the
Termination Date, the Company completes any private financing of equity or debt
or other capital raising activity of the Company (excluding the receipt of
proceeds from the exercise of warrants issued to the Maxim Investors in
connection with the Offering) with any of the Maxim Investors who participated
in the Offering or any other Maxim Investors that were introduced by the Company
by Maxim, the Company will pay to Maxim upon the closing of such financing the
compensation set forth in Section 2(a) as a "Source Fee".
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(b) Notwithstanding anything herein to the contrary, the obligation to
pay the compensation and expenses described in Section 2 if any, and the Source
Fees described in Section 3(a), if any, and the provisions of Sections 4 and
9-15 and all of Exhibit A attached hereto (the terms of which are incorporated
by reference hereto), will survive any termination or expiration of this
Agreement.
4. Information.
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(a) The Company recognizes that, in completing its engagement
hereunder, Xxxxx will be using and relying on publicly available information and
on data, material and other information furnished to Maxim by the Company or the
Company's affiliates and agents. The Company will promptly provide Maxim with
all relevant information about the Company (to the extent available to the
Company in the case of parties other than the Company) that is reasonably
requested by Xxxxx, which information will be accurate in all material respects
as of the time it is furnished. It is understood and agreed that in performing
under this engagement, Xxxxx will be relying upon the accuracy and completeness
of, and is not assuming any responsibility for independent verification of, such
publicly available information and the other information so furnished.
Notwithstanding the foregoing, it is understood that Xxxxx will conduct a due
diligence investigation of the Company and the Company will reasonably cooperate
with such investigation as a condition of Xxxxx's obligations hereunder. The
Company further recognizes, understands and confirms that Maxim: (i) will use
and rely primarily on data, material and other information furnished to Maxim by
the Company or the Company's affiliates and agents, including the Private
Placement Materials, and on information available from generally recognized
public sources in performing the services contemplated by this engagement
without having independently verified the same; (ii) is authorized as the
Company's placement agent to transmit to any prospective investor a copy or
copies of the Private Placement Materials, forms of purchase agreements and any
other legal documentation supplied to Maxim for transmission to any prospective
investor by or on behalf of the Company or by any of the Company's officers,
representatives or agents, in connection with the performance of Xxxxx's
services hereunder or any transaction contemplated hereby; (iii) does not assume
responsibility for the accuracy or completeness of any data, material and other
information furnished to Maxim by the Company or the Company's affiliates and
agents, including the Private Placement Materials, or any other information; and
(iv) will not make an appraisal of any assets of the Company. If at any time
during the course of Xxxxx's engagement, the Company becomes aware of any
material change in any of the information previously furnished to Maxim, it will
promptly advise Maxim of the change.
(b) Until the date that is two years from the date hereof, Xxxxx will
keep all information obtained from the Company strictly confidential except: (i)
information which is otherwise publicly available, or previously known to or
obtained by, Xxxxx independently of the Company and without breach of any of
Maxim's agreements with the Company; (ii) Maxim may disclose such information to
its employees and attorneys, and to its other advisors and financial sources on
a need to know basis only and will ensure that all such employees, attorneys,
advisors and financial sources will keep such information strictly confidential;
and (iii) pursuant to any order of a court of competent jurisdiction or other
governmental body or as may otherwise be required by law.
(c) The Company recognizes that in order for Maxim to perform properly
its obligations in a professional manner, the Company will keep Maxim informed
of and, to the extent practicable, permit Xxxxx to participate in meetings and
discussions between the Company and any third party relating to the matters
covered by the terms of Xxxxx's engagement.
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5. Securities Law Compliance. If the Offering is a Private Placement, the
Company, at its own expense, will obtain any registration or qualification
required to sell any Securities under the Blue Sky laws of any applicable
jurisdictions. If the Offering is a Registered Offering, the Offering shall be
limited to investors located in the State of New York or outside of the United
States. Xxxxx represents and warrants to the Company that it licensed with the
NASD as a broker-dealer and that it has all qualifications and licenses, and as
filed all notifications and other documentation necessary, to act as agent with
respect to the Offering.
6. No General Solicitation. The Securities will be offered only by approaching
prospective purchasers on an individual basis. If the Offering is a Private
Placement, no general solicitation or general advertising in any form will be
used by the Company or Maxim in connection with the offering of the Securities.
If the Offering is a Registered Offering, solicitation and advertising
activities shall be limited to those permitted by the Securities Act of 1933, as
amended.
7. Confidentiality. The Company will not provide or release any information
with respect to this Agreement or the Offering except as required by law.
8. Representations and Warranties. The Company represents and warrants that:
(a) it has full right, power and authority to enter into this Agreement and to
perform all of its obligations hereunder; (b) this Agreement has been duly
authorized and executed and constitutes a legal, valid and binding agreement of
the Company enforceable in accordance with its terms; and (c) the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby does not conflict with or result in a breach of (i) the Company's
certificate of incorporation or by-laws or (ii) any agreement to which the
Company is a party or by which any of its property or assets is bound. The
Company hereby acknowledges and agrees that Xxxxx shall be entitled to rely upon
the representations and warranties made by the Company (whether pursuant to a
subscription agreement or in any other format) to the Investors, and the Company
shall be deemed to have made such representations and warranties to and for the
benefit of Maxim.
9. Parties; Assignment; Independent Contractor. This Agreement has been and is
made solely for the benefit of Maxim and the Company and each of the persons,
agents, employees, officers, directors and controlling persons referred to in
Exhibit A and their respective heirs, executors, personal representatives,
successors and assigns, and nothing contained in this Agreement will confer any
rights upon, nor will this Agreement be construed to create any rights in, any
person who is not party to such Agreement, other than as set forth in this
paragraph. The rights and obligations of either party under this Agreement may
not be assigned without the prior written consent of the other party hereto and
any other purported assignment will be null and void. Xxxxx has been retained
under this Agreement as an independent contractor, and it is understood and
agreed that this Agreement does not create a fiduciary relationship between
Xxxxx and the Company or their respective Boards of Directors. Xxxxx shall not
be considered to be the agent of the Company for any purpose whatsoever and
Xxxxx is not granted any right or authority to assume or create any obligation
or liability, express or implied, on the Company's behalf, or to bind the
Company in any manner whatsoever.
10. Validity. In case any term of this Agreement will be held invalid, illegal
or unenforceable, in whole or in part, the validity of any of the other terms of
this Agreement will not in any way be affected thereby.
11. Waiver of Breach. The failure of any party hereto to insist upon strict
performance of any of the covenants and agreements herein contained, or to
exercise any option or right herein conferred in any one or more instances, will
not be construed to be a waiver or relinquishment of any such option or right,
or of any other covenants or agreements, and the same will be and remain in full
force and effect.
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12. Counterparts. This Agreement may be executed in counterparts and each of
such counterparts will for all purposes be deemed to be an original, and such
counterparts will together constitute one and the same instrument.
13. Governing Law; Jurisdiction Law. This Agreement will be governed as to
validity, interpretation, construction, effect and in all other respects by the
internal law of the State of New York. The Company and Maxim each (i) agree that
any legal suit, action or proceeding arising out of or relating to this
Agreement shall be instituted exclusively in the New York State Supreme Court,
County of New York, or in the United States District Court for the Southern
District of New York, (ii) waives any objection to the venue of any such suit,
action or proceeding, and the right to assert that such forum is an inconvenient
forum, and (iii) irrevocably consents to the jurisdiction of the New York State
Supreme Court, County of New York, and the United States District Court for the
Southern District of New York in any such suit, action or proceeding. Each of
the Company and Xxxxx further agrees to accept and acknowledge service of any
and all process that may be served in any such suit, action or proceeding in the
New York State Supreme Court, County of New York, or in the United States
District Court for the Southern District of New York and agree that service of
process upon it mailed by certified mail to its address shall be deemed in every
respect effective service of process in any such suit, action or proceeding.
14. Entire Agreement; Modification. This agreement constitutes the entire
understanding and agreement between the parties with respect to its subject
matter and there are no agreements or understandings with respect to the subject
matter hereof which are not contained in this Agreement. This Agreement may be
modified only in writing signed by the party to be charged hereunder.
15. Notices. All notices will be in writing and will be effective when
delivered in person or sent via facsimile and confirmed by letter, to the party
to whom it is addressed at the following addresses or such other address as such
party may advise the other in writing:
To the Company: Xx. Xx Xxxxxxxxx
Chief Financial Officer
Altair Nanotechnologies Inc.
000 Xxxxxx Xxx
Xxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Maxim: Xxxxxxx X Xxxxxx
Maxim Group LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
[Signature Page Follows]
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If the foregoing correctly sets forth our agreement, please confirm
this by signing and returning to us the duplicate copy of this letter.
We appreciate this opportunity to be of service and are looking forward
to working with you on this matter.
Very truly yours,
MAXIM GROUP LLC
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
XXXXXXX X. XXXXXX
HEAD OF INVESTMENT BANKING
ALTAIR NANOTECHNOLOGIES INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
XX XXXXXXXXX
CHIEF FINANCIAL OFFICER
By: /s/ Xxxx Xxxxxxx
--------------------------------
XXXX XXXXXXX
CHIEF EXECUTIVE OFFICER
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EXHIBIT A
INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless Maxim, any person who
controls Maxim within the meaning of the Securities Act, Section 20(a) of the
Exchange Act or any applicable statute, and each partner, director, officer,
employee, agent and representative of Maxim from and against any loss, damage,
expense, liability or claim, or actions or proceedings in respect thereof
(including, without limitation, reasonable attorneys' fees and expenses incurred
in investigating, preparing or defending against any litigation commenced) which
any such person may incur or which may be made or brought against any such
person, but only to the extent the same arises out of or is based upon: (i) any
breach of any of the agreements, representations or warranties of the Company
contained in or contemplated by this Agreement, the Private Placement Materials
or any documents executed by the Company and delivered to an Investor in
connection with the Offering (collectively, the Offering Documents"), including,
without limitation, those arising out of or based on any alleged untrue
statement of a material fact contained in the Private Placement Materials or
Offering Documents or omission to state a material fact required to be stated in
the Private Placement Materials or Offering Documents or necessary in order to
make the statements appearing therein not misleading in the light of the
circumstances in which they were made, (ii) any violation of any federal or
state securities laws attributable to the Offering, (iii) any violation of law
by the Company or any affiliate of the Company, or any director, officer,
employee, agent or representative of any of them, related to or arising out of
the Offering or (iv) Maxim's entering into or performing services under this
Agreement, or arising out of any other matter referred to in this Agreement.
This indemnity agreement by, and the agreements, warranties and representations
of, the Company shall survive the offer, sale and delivery of the Securities and
the termination of this Agreement and shall remain in full force and effect
regardless of any investigation made by or on behalf of any person indemnified
hereunder, and termination of this Agreement and acceptance of any payment for
the Securities hereunder. Notwithstanding the breadth of the foregoing, the
indemnity obligations of the Company set forth in this subparagraph (a) shall
not apply with respect to (A) any breach of any of the agreements,
representations or warranties of Maxim contained in this Agreement or (B) any
alleged untrue statement of a material fact in any information provided to the
Company in writing by and solely with respect to Maxim (and not any Maxim
Investor), for use in and used in the Private Placement Materials or Offering
Documents or (C) any violation of law by Xxxxx or any affiliate of maxim, or any
director, officer, employee, agent or representative of any of them, related to
or arising out of the Offering.
(b) Xxxxx agrees to indemnify and hold harmless the Company and its
affiliates, any person who controls any of them within the meaning of the
Securities Act, Section 20(a) of the Exchange Act or any applicable statute, and
each officer, director, employee, agent and representative of the Company or any
of its affiliates from and against any loss, damage, expense, liability or claim
or actions or proceedings in respect thereof (including, without limitation,
reasonable attorneys' fees and expenses incurred in investigating, preparing or
defending against any litigation commenced) which any such person may incur or
which may be made or brought against any such person, but only to the extent the
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same arises out of or is based upon: (i) any breach of any of the agreements,
representations or warranties of Maxim contained in this Agreement or (ii) any
alleged untrue statement of a material fact in any information provided to the
Company in writing by and solely with respect to Maxim (and not any Maxim
Investor), for use in and used in the Private Placement Materials or Offering
Documents or (iii) any violation of law by Maxim or any affiliate of maxim, or
any director, officer, employee, agent or representative of any of them, related
to or arising out of the Offering. This indemnity agreement by, and the
agreements, warranties and representations of, Xxxxx shall survive the offer,
sale and delivery of the Securities and the termination of this Agreement and
shall remain in full force and effect regardless of any investigation made by or
on behalf of any person indemnified hereunder, and termination of this Agreement
and acceptance of any payment for the Securities hereunder.
(c) If any action is brought against a party (the "Indemnified Party") in
respect of which indemnity may be sought against one or more other parties (the
"Indemnifying Party" or "Indemnifying Parties"), the Indemnified Party shall
promptly notify the Indemnifying Party or Parties in writing of the institution
of such action; provided, however, the failure to give such notice shall not
release the Indemnifying Party or Parties from its or their obligation to
indemnify the Indemnified Party hereunder except to the extent the Indemnifying
Party actually incurs substantial damage by reason of such failure and shall not
release the Indemnifying Party or Parties from any other obligations or
liabilities to the Indemnified Party in any event. The Indemnifying Party or
Parties may at its or their own expense elect to assume the defense of such
action, including the employment of counsel reasonably acceptable to the
Indemnified Party; provided, however, that no Indemnifying or Indemnified Party
shall consent to the entry of any judgment or enter into any settlement by which
the other party is to be bound without the prior written consent of such other
party, which consent shall not be unreasonably withheld. In the event the
Indemnifying Party or Parties assume a defense hereunder, the Indemnified Party
shall be entitled to retain its own counsel in connection therewith and, except
as provided below, shall bear the fees and expenses of any such counsel, and
counsel to the Indemnified Party or Parties shall cooperate with such counsel to
the Indemnifying Party in connection with such proceeding. If an Indemnified
Party reasonably determines that there are or may be differing or additional
defenses available to the Indemnified Party which are not available to the
Indemnifying Party, or that there is or may be a conflict between the respective
positions of the Indemnifying Party and of the Indemnified Party in conducting
the defense of any action, then the Indemnifying Party shall bear the reasonable
fees and expenses of any counsel retained by the Indemnified Party in connection
with such proceeding. All references to the Indemnified Party contained in this
paragraph (c) include, and extend to and protect with equal effect, any persons
who may control the Indemnified Party within the meaning of the Securities Act,
Section 20(a) of the Exchange Act or any applicable statute, any successor to
the Indemnified Party and each of its partners, officers, directors, employees,
agents and representatives. The indemnity agreements set forth in this Exhibit A
shall be in addition to any other obligations or liabilities of the Indemnifying
Party or Parties hereunder or at common law or otherwise.
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(d) If recovery is not available under the foregoing indemnification
provisions of Exhibit A, for any reason other than as specified therein, the
party entitled to indemnification by the terms thereof shall be entitled to
contribution to losses, damages, liabilities and expenses of the nature
contemplated by such indemnification provisions. In determining the amount of
such contribution, there shall be considered the relative benefits received by
the Company, on the one hand, and the Maxim, on the other hand, from the
Offering (which shall be deemed to be the portion of the proceeds of the
Offering realized by each party), the parties' relative knowledge and access to
information concerning the matter with respect to which the claim was asserted,
the opportunity to correct and prevent any statement or omission, the relative
culpability of the parties, the relative benefits received by the parties and
any other equitable considerations appropriate under the circumstances. No party
shall be liable for contribution with respect to any action or claim settled
without its consent. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Exhibit A, notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Exhibit A or otherwise. For
purposes of this Exhibit A, each person, if any, who controls a party to this
Agreement within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as that
party to this Agreement. Notwithstanding the foregoing, in no event will the
aggregate contribution by Xxxxx xxxxxxxxx exceed the amount of fees actually
received by Xxxxx pursuant to this Agreement. The reimbursement, indemnity and
contribution obligations of the Company hereinabove set forth shall be in
addition to any liability which the Company may otherwise have and these
obligations and the other provisions hereinabove set forth shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, Xxxxx and any other Indemnified Person.
(e) In any claim for indemnification for United States Federal or state
securities law violations, the party seeking indemnification shall place before
the court the position of: (i) the SEC and (ii) if applicable, any state
securities commissioner or agency having jurisdiction with respect to the issue
of indemnification for securities law violations.
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