REGISTRATION RIGHTS AGREEMENT
Exhibit
10.2
This
Registration Rights Agreement (the “Agreement”) is made and entered into
as of this 29th
day of November, 2007 by and between Altair Nanotechnologies, Inc., a Canadian
corporation (the “Company”), and Xx Xxxxxx, LLC, a United Arab Emirates
limited liability company (the “Investor”).
The
parties hereby agree as follows:
1. Certain
Definitions.
As
used
in this Agreement, the following terms shall have the following
meanings:
“Additional
Selling Shareholders” means Persons offering securities under a Registration
other than the Investor or the Company.”
“Affiliate”
means, with respect to any Person, any other Person which directly or indirectly
Controls, is Controlled by, or is under common Control with, such
Person.
“Business
Day” means a day, other than a Friday, Saturday or Sunday, on which banks in
New York and the United Arab Emirates are open for the general transaction
of
business.
“Change
of Control” means (a) a consolidation of the Company with, or merger of the
Company into, another Person, (b) a sale or conveyance of all or substantially
all of the assets of the Company to another Person, or (c) a sale or conveyance
in a single transaction, or related transactions, of securities representing
a
majority of the votes in the election of directors of the Company; provided,
however, with respect to each of (a), (b) and (c), the acquiring Person is
not
controlled by the Company or a Person in which, prior to or as a result of
the
transaction, the shareholders of the Company hold a majority of the votes in
the
election of directors.
“Closing”
means the Initial Closing under the Purchase Agreement.
“Common
Stock” means the Company’s common shares, without par value, and any
securities into which such shares may hereinafter be reclassified.
“Control”
(including the terms “controlling”, “controlled by” or “under common control
with”) means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
“Investor”
means the Investor and any Affiliate or permitted transferee of the Investor
who
becomes a party to this Agreement and subsequently holds any Registrable
Securities or Restricted Securities.
“Person”
means an individual, corporation, partnership, limited liability company, trust,
business trust, association, joint stock company, joint venture, sole
proprietorship, unincorporated organization, governmental authority or any
other
form of entity not specifically listed herein.
“Prospectus”
means the prospectus included in any Registration Statement, as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities or Restricted Securities
covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
“Purchase
Agreement” means that certain Purchase Agreement by and between the Company
and Investor dated the date hereof.
“Register,”
“registered,” “registration,” and “Registration” refer to a
registration made by preparing and filing a Registration Statement or similar
document in compliance with the 1933 Act, and the declaration or ordering of
effectiveness of such Registration Statement or document. Unless
otherwise specified or evident from the context, the term “Registration” refers
to a Demand Registration or a Mandatory Registration.
“Registrable
Securities” means (a) the Shares or other securities issued or issuable to
Investor or its transferee or designee (i) upon any distribution with respect
to, any exchange for or any replacement of such Shares or (ii) upon any
conversion, exercise or exchange of any securities issued in connection with
any
such distribution, exchange or replacement; (b) securities issued or issuable
upon any stock split, stock dividend, recapitalization or similar event with
respect to the foregoing; and (c) any other security issued as a dividend or
other distribution with respect to, in exchange for, in replacement or
redemption of, any of the securities referred to in the preceding clauses;
provided, that, a security shall cease to be a Registrable Security (A) upon
sale by the Investor to any Person other than a Person who is a permitted
assignee under Section 7(c) and assumes the right and obligations of Investor
under this Agreement with respect to such transferred securities, or (B) the
expiration of the Effectiveness Period (as defined in Section 3(a)) with respect
to a Registration Statement in a Demand Registration that is declared
effective.
“Restricted
Securities” means (a) the Shares or other securities issued or issuable to
Investor or its transferee or designee (i) upon any distribution with respect
to, any exchange for or any replacement of such Shares or (ii) upon any
conversion, exercise or exchange of any securities issued in connection with
any
such distribution, exchange or replacement; (b) securities issued or issuable
upon any stock split, stock dividend, recapitalization or similar event with
respect to the foregoing; and (c) any other security issued as a dividend or
other distribution with respect to, in exchange for, in replacement or
redemption of, any of the securities referred to in the preceding clauses;
provided, that, a security shall cease to be a Restricted Security (A) upon
sale
by the Investor to any Person other than a Person who is a permitted assignee
under Section 7(c) and assumes the right and obligations of Investor under
this
Agreement with respect to such transferred securities, or (B) upon eligibility
for resale pursuant to Rule 144(k) (or any successor provision) or otherwise
under Rule 144 without either volume restrictions or manner of sale
restrictions.
“Registration
Statement” means any registration statement of the Company filed under the
1933 Act that covers the resale of any of the Registrable Securities or
Restricted Securities pursuant to the provisions of this Agreement, amendments
and supplements to such Registration Statement, including post-effective
amendments, and all exhibits and all material incorporated by reference in
such
Registration Statement.
“SEC”
means the U.S. Securities and Exchange Commission.
“Shares”
means the shares of Common Stock issued to Investor pursuant to the Purchase
Agreement.
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“1933
Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
“1934
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
2. Demand
Registration.
(a) Demand
Registration. Subjection to Section 2(h) below, at any time after the second
anniversary of the Closing and until the eighth anniversary of the Closing,
the
Investor may request a single registration under the 1933 Act of the resale
of
all or any portion of its Registrable Securities (such registration, the
“Demand Registration”). The Demand Registration shall be on
the registration form selected by the Company among the forms appropriate for
the proposed plan of distribution for which the Company is
eligible. The request for Demand Registration shall specify the
number of Registrable Securities requested to be registered and the intended
method of distribution, including an election as to (i) whether the Investor
intends to offer and sell the Registrable Securities on a continuous basis
pursuant to Rule 415 under the Securities Act, or (ii) whether the Investor
intends to request engagement of an underwriter with respect to the Demand
Registration and the identity of any underwriters the Investor is recommending
(with it being understood that (i) and (ii) are mutually exclusive
alternatives).
(b) Mandatory
Registration.
(i) The
Company shall prepare and file with the SEC, and have declared effective on
or
before the two-year anniversary of the Closing, a single Registration Statement
on Form S-3 (or, if Form S-3 is not then available to the Company, on such
form
of registration statement as is then available to effect a registration for
resale of the Restricted Securities) for a secondary or resale offering on
a
continuous basis pursuant to Rule 415 under the 1933 Act of the Restricted
Securities (such registration, the “Mandatory Registration”). Such
Registration Statement also shall cover, to the extent allowable under the
1933
Act and the rules promulgated thereunder (including Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock
splits, stock dividends or similar transactions with respect to the Restricted
Securities.
(ii) For
not more than twenty (20) consecutive days or for a total of not more than
forty-five (45) days in any twelve (12) month period, the Company may delay
the
disclosure of material non-public information concerning the Company, by
suspending the use of any Prospectus included in any Mandatory Registration
containing such information, the disclosure of which at the time is not, in
the
good faith opinion of the Chief Executive Officer and Chief Financial Officer
of
the Company, upon advice of counsel, in the best interests of the Company (an
“Allowed Delay”); provided, that the Company shall promptly (a) notify
Investor in writing of the existence of (but in no event, without the prior
written consent of Investor, shall the Company disclose to Investor any of
the
facts or circumstances regarding) material non-public information giving rise
to
an Allowed Delay, (b) advise Investor in writing to cease all sales under the
Registration Statement until the end of the Allowed Delay and (c) use its best
efforts to terminate an Allowed Delay as promptly as practicable.
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(c) Underwriting.
If a request for Demand Registration indicates the Investor’s intent to engage
an underwriter with respect to the Demand Registration, the Investor shall
promptly engage a managing underwriter to administer the offering of any
Registrable Securities registered in the Demand Registration, which managing
underwriter shall be an internationally or United States nationally recognized
investment bank approved by the Company in writing, such approval not to be
unreasonably withheld.
(d) Inclusion
of Additional Securities. Subject to Section 2(e), the Company
may include in any Demand Registration or Mandatory Registration common shares
to be offered and sold by the Company or Additional Selling Shareholders.
(e) Priority
on Underwritten Demand Registrations. .In connection with any Demand
Registration involving an underwriting, if the total number of securities,
including Registrable Securities, requested by the Investor, the Company and
Additional Selling Shareholders to be included in such offering exceeds the
amount of securities that the underwriters determine in their reasonable
discretion is compatible with the success of the offering, then the Company
shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters determine
in their reasonable discretion will not jeopardize the success of the
offering. In the event that the underwriters determine that less than
all of the securities requested to be registered can be included in such
offering, then (i) no securities other than Registrable Securities shall be
included in the Demand Registration unless all Registration Securities
designated by the Investor for inclusion in the Demand Registration are
included, and (ii) if all Registrable Securities designated by the Investor
for
inclusion are included and the underwriters determine that the inclusion of
additional securities would not jeopardize the success of the offering, the
Company may allocate in its discretion the additional securities to be included
in the Demand Registration among itself and any Additional Selling
Shareholders.
(f) Delay
of Demand Registration. The Company may postpone for up to 120 days the
filing or the effectiveness of a Registration Statement for a Demand
Registration if the Company’s board of directors determines in its reasonable
good faith judgment that such Demand Registration would reasonably be expected
to have a material adverse effect on any proposal or plan by the Company or
any
of its subsidiaries to engage in any acquisition of assets (other than in the
Ordinary Course of Business), financing, joint venture, merger, consolidation,
tender offer, reorganization or other material strategic transaction; provided
that in such event, the Investor shall be entitled to withdraw such request
and,
if such request is withdrawn, such Demand Registration shall not count as the
single permitted Demand Registration hereunder and the Company shall pay all
expenses in connection with such registration. The Company may delay
a Demand Registration hereunder only once in any twelve-month
period.
(g) Registration
Expenses. The Company will pay the following expenses associated with the
Demand Registration of Registrable Securities and a Mandatory Registration
of
Restricted Securities: filing, registration and printing fees, fees and expenses
of the Company’s counsel and auditors, fees and expenses associated with
clearing the Registrable Securities for sale under applicable state securities
or “blue sky” laws, listing fees, transfer taxes, fees of transfer agents and
registrars and other direct expenses of the Company. The Investor and
each Additional Selling Shareholders shall pay fees and expenses of any legal
counsel, auditor or other advisor engaged by such Person. Subject to
the Company’s obligation to pay all expenses in connection with a registration
delayed pursuant to Section 2(f), all other fees and expenses associated with
any Demand Registration or Mandatory Registration, including, without
limitation, discounts, commissions and fees of underwriters, expenses and fees
of underwriters and their counsel, and fees and expenses of selling brokers,
dealer managers or similar securities industry professionals, shall be paid
by
the Investor and other participants in the Registration (including the Company
if it participates), with such expenses being allocated pro rata among the
participants based upon the number of securities registered for sale in the
Registration.
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(h) Change
of Control. The rights of the Investor under this Section 2, and the
obligations of the Company under Section 2 and Section 3, shall immediately
and
automatically terminate upon the closing of Change of Control in which the
shares of Common Stock of the Company are exchanged for the right to receive
(i)
cash and/or (ii) securities that are registered on a United States national
stock exchange, issued by a Person with a market capitalization in excess of
$1
Billion and not subject to restrictions on trading (other than under Rule 145
under the Securities Act).
3. Company
Obligations. The Company will use its commercially best efforts
to effect the registration of the Registrable Securities in a Registration
in
accordance with the terms hereof, and pursuant thereto the Company will, as
expeditiously as possible:
(a) prepare
and file with the SEC such amendments and post-effective amendments to the
Registration Statement and the Prospectus as may be necessary to keep the
Registration Statement effective for the period specified in Section 3 and to comply with the provisions
of the
1933 Act and the 1934 Act with respect to the distribution of all of the
Registrable Securities or Restricted Securities covered thereby;
(b) use
its commercially best efforts to cause such Registration Statement to become
effective and to remain continuously effective for a period (the
“Effectiveness Period”) that will terminate upon the earliest of
:
(i)
for a Demand Registration, (A) the
date on which all Registrable Securities covered by such Registration Statement,
as amended from time to time, have been sold or cease to be Registrable
Securities, (B) if the Investor requests engagement of, and the Company engages,
an underwriter, the earlier of the date that is 90 days after the effectiveness
of the Registration Statement and the date the managing underwriter terminates
or closes the offering, and (C) the eighth anniversary of the Closing;
and.
(ii)
for a Mandatory Registration, the
date on which all Restricted Securities covered by such Registration Statement,
as amended from time to time, have been sold or cease to be Restricted
Securities.
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(c) provide
copies to and permit a single counsel designated by Investor to review the
Registration Statement and all amendments and supplements thereto no fewer
than
four (4) Business Days prior to their filing with the SEC and not file any
document to which any such counsel reasonably objects; provided, however, in
the
event that the Company receives a notice that the Registration Statement or
amendment to the Registration Statement will not be reviewed by the SEC or
that
the SEC will accept a request for effectiveness of the Registration Statement,
the Company may make immaterial updates to the prior version of the Registration
Statement or amendment and file such updated Registration Statement or amendment
without providing such counsel an opportunity to review the Registration
Statement or amendment.
(d) furnish
to Investor and its legal counsel (which may be by email or portable document
format (pdf) file) (i) promptly after the same is prepared and publicly
distributed, filed with the SEC, or received by the Company (but not later
than
two (2) Business Days after the filing date, receipt date or sending date,
as
the case may be) one (1) copy of the Registration Statement and any amendment
thereto, each preliminary prospectus and Prospectus and each amendment or
supplement thereto, and (ii) such number of copies of a Prospectus, including
a
preliminary prospectus, and all amendments and supplements thereto and such
other documents as Investor may reasonably request in order to facilitate the
disposition of the Registrable Securities or Restricted Securities owned by
Investor that are covered by the Registration Statement;
(e) if
an underwriter is engaged for the offering, the Company shall enter into and
perform its reasonable obligations under an underwriting agreement, in usual
and
customary form, including, without limitation, customary indemnification and
contribution obligations, with the underwriter of such offering;
(f) if
required by any underwriter engaged for the offering, the Company shall furnish,
on the effective date of the Registration Statement (except with respect to
clause (i) below) and on the date that Registrable Securities or Restricted
Securities are delivered to an underwriter, if any, for sale in connection
with
the Registration Statement, (i)(A) in the case of an underwritten offering,
an
opinion, dated as of the closing date of the sale of Registrable Securities
or
Restricted Securities to the underwriters, from independent legal counsel
representing the Company for purposes of such Registration Statement, in form,
scope and substance as is customarily given in an underwritten public offering,
addressed to the underwriters participating in such underwritten offering and
Investor or (B) in the case of an “at the market” offering, an opinion, dated as
of or promptly after the effective date of the Registration Statement to
Investor, from independent legal counsel representing the Company for purposes
of such Registration Statement, in form, scope and substance as is customarily
given in a public offering, addressed to Investor, and (ii) a letter, dated
as
of the effective date of such Registration Statement and confirmed as of the
applicable dates described above, from the Company’s independent certified
public accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriters (including any Investor deemed to be an
underwriter);
(g) use
its best efforts to (i) prevent the issuance of any stop order or other
suspension of effectiveness and, (ii) if such order is issued, obtain the
withdrawal of any such order at the earliest possible moment;
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(h) use
its best efforts to register or qualify or cooperate with Investor and its
counsel in connection with the registration or qualification of such Registrable
Securities or Restricted Securities for offer and sale under the securities
or
blue sky laws of such jurisdictions reasonably requested by Investor and do
any
and all other acts or things necessary or advisable to enable the distribution
in such jurisdictions of the Registrable Securities or Restricted Securities
covered by the Registration Statement; provided, however, that the Company
shall
not be required in connection therewith or as a condition thereto to (i) qualify
to do business in any jurisdiction where it would not otherwise be required
to
qualify but for this Section 3(h), (ii) subject itself to general taxation
in
any jurisdiction where it would not otherwise be so subject but for this Section
3(h), or (iii) file a general consent to service of process in any jurisdiction
where it would not otherwise be required to qualify but for this Section
3(h);
(i) if
applicable, list all Registrable Securities or Restricted Securities covered
by
a Registration Statement to be listed on each securities exchange, interdealer
quotation system or other market on which similar securities issued by the
Company are then listed;
(j) immediately
notify Investor, at any time when a Prospectus relating to Registrable
Securities or Restricted Securities is required to be delivered under the 1933
Act, upon discovery that, or upon the happening of any event as a result of
which, the Prospectus included in a Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing, and at the request
of any such holder, promptly prepare and furnish to such holder a reasonable
number of copies of a supplement to or an amendment of such Prospectus as may
be
necessary so that, as thereafter delivered to the purchasers of such Registrable
Securities or Restricted Securities, such Prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;
(k) otherwise
use its best efforts to comply with all applicable rules and regulations of
the
SEC under the 1933 Act and the 1934 Act, and take such other actions as may
be
reasonably necessary to facilitate the registration of the Registrable
Securities or Restricted Securities hereunder; and
(l) with
a view to making available to Investor the benefits of Rule 144 (or its
successor rule) and any other rule or regulation of the SEC that may at any
time
permit Investor to sell Registrable Securities or Restricted Securities to
the
public without registration, the Company covenants and agrees to, during the
Effectiveness Period: (i) make and keep public information available,
as those terms are understood and defined in Rule 144; (ii) file with the SEC
in
a timely manner all reports and other documents required of the Company under
the 1934 Act; and (iii) furnish to Investor upon request, as long as Investor
owns any Registrable Securities or Restricted Securities, (A) a written
statement by the Company that it has complied with the reporting requirements
of
the 1934 Act, (B) a copy of the Company’s most recent Annual Report on Form 10-K
or Quarterly Report on Form 10-Q, and (C) such other information as may be
reasonably requested in order to avail Investor of any rule or regulation of
the
SEC that permits the selling of any such Registrable Securities or Restricted
Securities without registration.
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4. Due
Diligence Review; Information. During a period beginning thirty
days prior to the filing of the Registration Statement and continuing until
the
effectiveness of such Registration Statement, the Company shall make available,
during normal business hours, for inspection and review by Investor, advisors
to
and representatives of Investor (who may or may not be affiliated with Investor,
and who are reasonably acceptable to the Company), and any underwriter
participating in any disposition of shares of Common Stock on behalf of Investor
pursuant to a Registration Statement or amendments or supplements thereto or
any
blue sky, FINRA or other filing, all financial and other records, all SEC
Filings (as defined in the Purchase Agreement) and other filings with the SEC,
and all other corporate documents and properties of the Company as may be
reasonably necessary for the purpose of such review, and cause the Company’s
officers, directors and employees, within a reasonable time period, to supply
all such information reasonably requested by Investor or any such
representative, advisor or underwriter in connection with such Registration
Statement (including, without limitation, in response to all questions and
other
inquiries reasonably made or submitted by any of them), for the sole purpose
of
enabling Investor and such representatives, advisors and underwriters and their
respective accountants and attorneys to conduct initial and ongoing due
diligence with respect to the Company and the accuracy of such Registration
Statement. The Company shall not disclose material nonpublic
information to Investor, or to advisors to or representatives of Investor,
unless prior to disclosure of such information the Company identifies such
information as being material nonpublic information and provides Investor,
such
advisors and representatives with the opportunity to accept or refuse to accept
such material nonpublic information for review and any Investor wishing to
obtain such information enters into an appropriate confidentiality agreement
with the Company with respect thereto. Notwithstanding the breadth of
the foregoing, the Company shall be permitted to limit or deny any Investor,
and
that Investor’s representatives, advisors and underwriters and their respective
accountants and attorneys, copies of or access to any document or information
if
the Company determines that, because of such Investor’s affiliation with a
competitor, customer, supplier or for any other reason, disclosure of such
information to any such person may harm the ability of the Company to keep
confidential information from its customers, competitors and supplier or would
otherwise harm the competitive position of the Company.
5. Obligations
of Investor.
(a) Investor
shall furnish in writing to the Company such information regarding itself,
the
Registrable Securities or Restricted Securities held by it and the intended
method of disposition of the Registrable Securities or Restricted Securities
held by it, as shall be reasonably required to effect the registration of such
Registrable Securities or Restricted Securities (or to complete any amendment
to
any Registration Statement) and shall execute such documents in connection
with
such registration as the Company may reasonably request. At least
fifteen (15) Business Days prior to the first anticipated filing date of any
Registration Statement, the Company shall notify Investor of the information
the
Company requires from Investor if Investor elects to have any of the Registrable
Securities or Restricted Securities included in the Registration
Statement. Investor shall provide such information to the Company at
least four (4) Business Days prior to the first anticipated filing date of
such
Registration Statement if Investor elects to have any of the Registrable
Securities or Restricted Securities included in the Registration
Statement. At least ten (10) Business Days prior to the anticipated
filing date of any pre-effective or post-effective amendment to any Registration
Statement (provided that, if any amendment is filed in response to comment
receive by the SEC, notice within two (2) Business Days the Company’s receipt of
the SEC comment shall be sufficient), the Company shall notify Investor of
the
information the Company reasonably requires from Investor if Investor elects
to
have any of the Registrable Securities or Restricted Securities included in
the
Registration Statement. Investor shall provide such information to
the Company prior to the later of (i) at least four (4) Business Days prior
to
the first anticipated filing date of such Registration Statement, or (ii) two
(2) Business Days after a timely request therefor from the Company, in each
case
if Investor elects to have any of the Registrable Securities or Restricted
Securities included in the Registration Statement. If Investor fails
to provide information to the Company as required by this subsection, at all
or
on a timely basis, and the Company reasonably expects the Registration Statement
or amendment in question to be an effective version of the Registration
Statement, the Company may exclude Investor’s Registrable Securities or
Restricted Securities from the Registration Statement or amendment in question
without penalty
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(b) Investor,
by its acceptance of the Shares agrees to cooperate with the Company as
reasonably requested by the Company in connection with the preparation and
filing of a Registration Statement hereunder, unless Investor has notified
the
Company in writing of its election to exclude all of its Registrable Securities
or Restricted Securities from the Registration Statement.
(c) If
an underwriter is engaged at the request of Investor with respect to a
Registration, Investor agrees to enter into and perform its obligations under
an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
managing underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the dispositions of
the
Registrable Securities or Restricted Securities.
(d) Investor
agrees that, upon receipt of any notice from the Company of the happening of
an
event pursuant to Section 3(j) hereof, Investor will immediately discontinue
disposition of Registrable Securities or Restricted Securities pursuant to
the
Registration Statement covering such Registrable Securities or Restricted
Securities, until Investor’s receipt of the copies of the supplemented or
amended prospectus filed with the SEC and until any related post-effective
amendment is declared effective and, if so directed by the Company, Investor
shall deliver to the Company (at the expense of the Company) or destroy (and
deliver to the Company a certificate of destruction) all copies in Investor’s
possession of the Prospectus covering the Registrable Securities or Restricted
Securities current at the time of receipt of such notice.
(e) If
an underwriter is engaged at the request of Investor with respect to a
Registration , Investor agrees to (i) sell the Registrable Securities or
Restricted Securities on the basis provided in any underwriting arrangements
in
usual and customary form requested by the managing underwriter, (ii) complete
and execute all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements, and (iii) pay its pro rata share of all underwriting
discounts and commissions, in addition to other expenses allocated to the
Investor (and other selling shareholders, if any) under Section
2(g). Notwithstanding the foregoing, Investor shall not be required
to make any representations to such underwriter, other than those with respect
to itself and the Registrable Securities or Restricted Securities owned by
it,
including its right to sell the Registrable Securities or Restricted Securities,
and any indemnification in favor of the underwriter by Investor shall be several
and not joint and limited in the case of Investor, to the net proceeds received
by Investor from the sale of its Registrable Securities or Restricted
Securities. The scope of any such indemnification in favor of an
underwriter shall be limited to the same extent as the indemnity provided in
Section 6(b) hereof.
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6. Indemnification.
(a) Indemnification
by the Company. The Company will indemnify and hold harmless
Investor and its officers, directors, members, employees and agents, successors
and assigns, and each other person, if any, who controls Investor within the
meaning of the 1933 Act, against any losses, claims, damages or liabilities,
joint or several, to which they may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in
respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof; (ii) any blue sky application
or other document executed by the Company specifically for that purpose or
based
upon written information furnished by the Company filed in any state or other
jurisdiction in order to qualify any or all of the Registrable Securities or
Restricted Securities under the securities laws thereof (any such application,
document or information herein called a “Blue Sky
Application”); (iii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make
the statements therein, in light of the circumstances under which they are
made,
not misleading; or (iv) any violation by the Company or its agents of any rule
or regulation promulgated under the 1933 Act applicable to the Company or its
agents and relating to action or inaction required of the Company in connection
with such registration, and will reimburse Investor, and each such officer,
director, member, employee or agent and each such controlling person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such
case if and to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information reasonably
relied on by the Company and furnished by Investor or any such controlling
person in writing specifically for use in such Registration Statement or
Prospectus. The Company shall notify Investor promptly of the
institution of any proceeding of which the Company is aware in connection with
the transactions contemplated by this Agreement. Such indemnity shall
survive the transfer of the Registrable Securities or Restricted Securities
by
Investor, but the right to receive indemnification under this Agreement shall
not be transferable without the express written consent of the
Company.
(b) Indemnification
by Investor. In connection with any registration pursuant to the
terms of this Agreement, Investor will furnish to the Company in writing such
information as the Company reasonably requests concerning the holders of
Registrable Securities or Restricted Securities or the proposed manner of
distribution for use in connection with any Registration Statement or Prospectus
and agrees to indemnify and hold harmless, to the fullest extent permitted
by
law, the Company, its directors, officers, employees, stockholders and each
person who controls the Company (within the meaning of the 0000 Xxx) against
any
losses, claims, damages, liabilities and expense (including reasonable attorney
fees) resulting from any untrue statement of a material fact or any omission
of
a material fact required to be stated in the Registration Statement or
Prospectus or preliminary prospectus or amendment or supplement thereto or
necessary to make the statements therein not misleading, to the extent, but
only
to the extent that such untrue statement or omission is contained in any
information reasonably relied on by the Company and furnished in writing by
Investor to the Company specifically for inclusion in such Registration
Statement or Prospectus or amendment or supplement thereto. In no
event shall the liability of Investor be greater in amount than the dollar
amount of the proceeds (net of all expense paid by Investor in connection with
any claim relating to this Section 6 and the amount of any damages Investor
has
otherwise been required to pay by reason of such untrue statement or omission)
received by Investor upon the sale of the Registrable Securities or Restricted
Securities included in the Registration Statement giving rise to such
indemnification obligation.
10
(c) Conduct
of Indemnification Proceedings. Any person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying
party
of any claim with respect to which it seeks indemnification and (ii) permit
such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any person entitled
to indemnification hereunder shall have the right to employ separate counsel
and
to participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such person unless (a) the indemnifying
party
has agreed to pay such fees or expenses, or (b) the indemnifying party shall
have failed to assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of any such
person, based upon written advice of its counsel, a conflict of interest exists
between such person and the indemnifying party with respect to such claims
(in
which case, if the person notifies the indemnifying party in writing that such
person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense
of
such claim on behalf of such person); and provided, further, that
the failure of any indemnified party to give notice promptly as provided herein
shall not relieve the indemnifying party of its obligations hereunder, except
to
the extent that such failure to give notice promptly shall materially adversely
affect the indemnifying party in the defense of any such claim or
litigation. It is understood that the indemnifying party shall not,
in connection with any proceeding in the same jurisdiction, be liable for fees
or expenses of more than one separate firm of attorneys at any time for all
such
indemnified parties. No indemnifying party will, except with the
consent of the indemnified party, not to be unreasonably withheld, consent
to
entry of any judgment or enter into any settlement that (y) does not include
as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim
or
litigation, or (z) imposes any monetary or other obligation or restriction
on
the indemnified party.
(d) Contribution. If
for any reason the indemnification provided for in the preceding paragraphs
(a)
and (b) is unavailable to an indemnified party or insufficient to hold it
harmless, other than as expressly specified therein, then the indemnifying
party
shall contribute to the amount paid or payable by the indemnified party as
a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable
considerations. No person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the 1933 Act shall be entitled to
contribution from any person not guilty of such fraudulent
misrepresentation. In no event shall the contribution obligation of a
holder of Registrable Securities or Restricted Securities be greater in amount
than the dollar amount of the proceeds (net of all expenses paid by such holder
in connection with any claim relating to this Section 6 and the amount of any
damages such holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission) received by it
upon
the sale of the Registrable Securities or Restricted Securities giving rise
to
such contribution obligation. The relative fault of such indemnifying
party and indemnified party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact,
has been taken or made by, or relates to information supplied by, such
indemnifying party or indemnified party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission.
11
7. Miscellaneous.
(a) Amendments
and Waivers. This Agreement may be amended only by a writing
signed by the Company and Investor. The Company may take any action
herein prohibited, or omit to perform any act herein required to be performed
by
it, only if the Company shall have obtained the written consent to such
amendment, action or omission to act, of Investor.
(b) Notices. All
notices and other communications provided for or permitted hereunder shall
be
made as set forth in Section 10.4 of the Purchase Agreement.
(c) Assignments
and Transfers by Investor. The provisions of this Agreement shall
be binding upon and inure to the benefit of Investor and its respective
successors and assigns. Investor may transfer or assign, in whole or
from time to time in part, to one or more persons its rights hereunder in
connection with the transfer of a minimum of 1,000,000 Registrable
Securities by Investor to such person, provided that Investor complies with
all
laws applicable thereto, provides written notice of assignment to the Company
promptly after such assignment is effected and the assignee executes a
counterpart to this Agreement assuming all rights and obligations of Investor
hereunder and pays all costs and expenses associated with any such
transfer.
(d) Assignments
and Transfers by the Company. This Agreement may not be assigned
by the Company without the prior written consent of Investor, provided, however,
that the Company may assign its rights and delegate its duties hereunder to
any
surviving or successor corporation in connection with a merger or consolidation
of the Company with another corporation, or a sale, transfer or other
disposition of all or substantially all of the Company’s assets to another
corporation, without the prior written consent of Investor.
(e) Benefits
of the Agreement. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective permitted
successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
12
(f) Counterparts;
Faxes. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
may also be executed via facsimile, which shall be deemed an
original.
(g) Titles
and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
(h) Severability. Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof but shall be interpreted as if it were written so as to be
enforceable to the maximum extent permitted by applicable law, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the
extent permitted by applicable law, the parties hereby waive any provision
of
law which renders any provisions hereof prohibited or unenforceable in any
respect.
(i) Further
Assurances. The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and
to
evidence the fulfillment of the agreements herein contained.
(j) Entire
Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of
the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
(k) Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the choice of law principles
thereof. Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and United States
District Courts located in New York City, New York for the purpose of any suit,
action, proceeding or judgment relating to or arising out of this Agreement
and
the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement. Each of the parties hereto
irrevocably consents to the jurisdiction of any such court in any such suit,
action or proceeding and to the laying of venue in such court. Each
party hereto irrevocably waives any objection to the laying of venue of any
such
suit, action or proceeding brought in such courts and irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES
ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS
AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO
THIS
WAIVER.
13
(l) Currency.
All reference to dollars ($) or currency in this Agreement are to United States
Dollars.
[signature
page follows]
14
IN
WITNESS WHEREOF, the parties have executed this Agreement or caused their duly
authorized officers to execute this Agreement as of the date first above
written.
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The
Company:
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ALTAIR
NANOTECHNOLOGIES, INC.
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By:
/s/ Xxxx
Xxxxxxx
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|
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Name:
Xxxx Xxxxxxx
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Title:
President and CEO
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Investor:
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XX
XXXXXX LLC
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By:
/s/ Xxxxx Xx
Xxxxxx
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|
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Name:
Xxxxx Xx Xxxxxx
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|
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Title:
President
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