NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES, BUT ANY PLEDGEE SHALL BE SUBJECT TO THE
REQUIREMENTS SET FORTH IN THIS WARRANT AS A HOLDER.
COMMON STOCK PURCHASE WARRANT
To Purchase 250,000 Shares of Common Stock of
Altair Nanotechnologies Inc.
Warrant No. 1
THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value
received, Maxim Group LLC (the "Holder"), is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after February 15, 2005 (the "Initial Exercise Date") and on
or prior to the close of business on the fourth anniversary of the Initial
Exercise Date (the "Termination Date") but not thereafter, to subscribe for and
purchase from Altair Nanotechnologies Inc., a corporation incorporated in Canada
(the "Company"), up to Two Hundred Fifty Thousand (250,000) shares (the "Warrant
Shares") of Common Stock, of the Company (the "Common Stock"). The purchase
price of one share of Common Stock (the "Exercise Price") under this Warrant
shall be $5.265, subject to adjustment hereunder. Capitalized terms used and not
otherwise defined herein shall have the meanings set forth in that certain
Securities Purchase Agreement (the "Purchase Agreement"), dated February 14,
2005, between the Company and the Purchasers signatory thereto.
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1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Sections 7 and 15 of this Warrant, this
Warrant and all rights hereunder are transferable, in whole or in part (but if
in part, not in amounts less than the right to purchase 10,000 Warrant Shares),
at the office or agency of the Company by the Holder in person or by duly
authorized attorney, upon surrender of this Warrant together with the Assignment
Form annexed hereto properly endorsed, provided that any such transferee is an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act. Prior to any transfer, the transferee shall sign an investment letter in
form and substance reasonably satisfactory to the Company. Notwithstanding
anything to the contrary contained herein, no Holder may assign this Warrant or
any of its rights hereunder to a competitor or potential competitor of the
Company.
2. Authorization of Warrant Shares. The Company represents and warrants
that all Warrant Shares which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue or income taxes, if any, payable by the Holder).
3. Exercise of Warrant.
(a) Exercise of the purchase rights represented by
this Warrant may be made at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the
Company of a duly executed original or facsimile copy of the Notice of
Exercise Form annexed hereto (or such other office or agency of the
Company as the Company may designate by notice in writing to the
registered Holder at the address of such Holder appearing on the books
of the Company) together with payment of the aggregate Exercise Price
of the shares thereby purchased by wire transfer to an account
designated by the Company or cashier's check drawn on a United States
bank; provided, however, that within 3 Trading Days after the date such
Notice of Exercise is delivered to the Company, the Holder shall
surrender this Warrant to the Company. Certificates for shares
purchased hereunder shall be delivered to the Holder within 5 Trading
Days after the date on which the Notice of Exercise shall have been
delivered by original or facsimile copy and payment of the aggregate
Exercise Price shall have been received by the Company as set forth
above ("Warrant Share Delivery Date"); provided, however, that in the
event the Warrant is not surrendered by the Holder and received by the
Company within 4 Trading Days after the date on which the aggregate
exercise price shall have been paid and the Notice of Exercise shall be
delivered by facsimile copy, the Warrant Share Delivery Date shall be
extended to the extent such 4 Trading Day period is exceeded. This
Warrant shall be deemed to have been exercised on the date the Notice
of Exercise is delivered to the Company and the aggregate Exercise
Price shall have been paid. The Warrant Shares shall be deemed to have
been issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date the Warrant has been exercised
by payment to the Company of the Exercise Price and all taxes required
to be paid by the Holder, if any, pursuant to Section 5 prior to the
issuance of such shares, have been paid. If the Company fails to
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deliver to the Holder a certificate or certificates representing the
Warrant Shares pursuant to this Section 3(a) by the 2nd Trading Day
following the Warrant Share Delivery Date, then the Holder will have
the right to rescind such exercise. In addition to any other rights
available to the Holder, if the Company fails to deliver to the Holder
a certificate or certificates representing the Warrant Shares pursuant
to an exercise on or before the Warrant Share Delivery Date, and if
after such date the Holder is required by its broker to purchase (in an
open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Warrant Shares which the
Holder anticipated receiving upon such exercise (a "Buy-In"), then the
Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder's total purchase price (including brokerage commissions, if any)
for the shares of Common Stock so purchased exceeds (y) the amount
obtained by multiplying (A) the number of Warrant Shares that the
Company was required to deliver to the Holder in connection with the
exercise at issue times (B) the price at which the sell order giving
rise to such purchase obligation was executed, and (2) at the option of
the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or
deliver to the Holder the number of shares of Common Stock that would
have been issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder purchases
Common Stock having a total purchase price of $11,000 to cover a Buy-In
with respect to an attempted exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase obligation of
$10,000, under clause (1) of the immediately preceding sentence the
Company shall be required to pay the Holder $1,000. The Holder shall
provide the Company written notice indicating the amounts payable to
the Holder in respect of the Buy-In, together with applicable
confirmations and other evidence reasonably requested by the Company.
Nothing herein shall limit a Holder's right to pursue any other
remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company's failure to timely deliver
certificates representing shares of Common Stock upon exercise of the
Warrant as required pursuant to the terms hereof.
(b) If this Warrant shall have been exercised in part, the
Company shall promptly deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for
by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.
(c) The Company shall not effect any exercise of this Warrant,
and the Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 3(a) or otherwise, to the extent that
after giving effect to such issuance after exercise, the Holder
(together with the Holder's affiliates), as set forth on the applicable
Notice of Exercise, would beneficially own in excess of 4.99% of the
number of shares of the Common Stock outstanding immediately after
giving effect to such issuance. For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by the Holder
and its affiliates shall include the number of shares of Common Stock
issuable upon exercise of this Warrant with respect to which the
determination of such sentence is being made, but shall exclude the
number of shares of Common Stock which would be issuable upon (A)
exercise of the remaining, nonexercised portion of this Warrant or any
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other warrant or Capital Shares Equivalents beneficially owned by the
Holder or any of its affiliates and (B) payment by the Company in
shares of Common Stock of the principal of, or interest on, any
debentures held by the Holder or its affiliates, and (ii) dividends on
any securities, or exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company subject to
a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by the Holder or any of its
affiliates. Except as set forth in the preceding sentence, for purposes
of this Section 3(c), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act. (To the extent that
the limitation contained in this Section 3(c) applies, the
determination of whether this Warrant is exercisable (in relation to
other securities owned by the Holder, together with any of its
Affiliates) and of which portion of this Warrant is exercisable shall
be in the sole discretion of such Holder, and the submission of a
Notice of Exercise shall be deemed to be such Holder's determination of
whether this Warrant is exercisable (in relation to other securities
owned by such Holder, together with any of its Affiliates) and of which
portion of this Warrant is exercisable, in each case subject to such
aggregate percentage limitation.) To ensure compliance with this
restriction, the Holder will be deemed to represent to the Company each
time it delivers a Notice of Exercise that such Notice of Exercise has
not violated the restrictions set forth in this paragraph and the
Company shall have no obligation to verify or confirm the accuracy of
such determination. For purposes of this Section 3(c), in determining
the number of outstanding shares of Common Stock, the Holder may rely
on the number of outstanding shares of Common Stock as reflected in the
most recent of the following: (x) the Company's Form 10-Q or Form 10-K,
as the case may be, (y) a public announcement by the Company or (z) any
other notice by the Company or the Company's Transfer Agent setting
forth the number of shares of Common Stock outstanding. Upon the
written or oral request of the Holder, the Company shall within two
Trading Days confirm orally and in writing to the Holder the number of
shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its affiliates since the date
as of which such number of outstanding shares of Common Stock was
reported. The provisions of this Section 3(c) may be waived by the
Holder upon, at the election of the Holder, not less than 61 days'
prior notice to the Company, and the provisions of this Section 3(c)
shall continue to apply until such 61st day (or such later date, as
determined by the Holder, as may be specified in such notice of
waiver).
4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.
5. Charges, Taxes and Expenses. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company, and such certificates
4
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
6. Closing of Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
7. Transfer, Division and Combination.
(a) Subject to compliance with any applicable securities laws
and the conditions set forth in Sections 1 and 7(e) hereof, this
Warrant and all rights hereunder are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company,
together with a written assignment of this Warrant substantially in the
form attached hereto duly executed by the Holder or its duly authorized
agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of
assignment, and shall issue to the assignor a new Warrant evidencing
the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled.
(b) This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the
Holder or its duly authorized agent or attorney; provided, however,
that Warrants to purchase less than 10,000 Warrant Shares need not be
issued (except that on one occasion the holder may request that a
Warrant to purchase 5,000 Warrant Shares be issued) unless the total
number of Warrant Shares for which the Warrant may be exercised is less
than 10,000 Warrant Shares (or 5,000 Warrant Shares, if applicable), in
which case a Warrant to purchase that number of remaining Warrant
Shares may be issued. Subject to compliance with Section 7(a), as to
any transfer which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange
for the Warrant or Warrants to be divided or combined in accordance
with such notice.
(c) The Company shall prepare, issue and deliver at its own
expense (other than transfer taxes) the new Warrant or Warrants under
this Section 7.
(d) The Company agrees to maintain, at its aforesaid office,
books for the registration and the registration of transfer of the
Warrants.
(e) If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this
Warrant shall not be registered pursuant to an effective registration
5
statement under the Securities Act and under applicable state
securities or blue sky laws, the Company may require, as a condition of
allowing such transfer (i) that the Holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion
of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions and shall
be reasonably satisfactory to the Company) to the effect that such
transfer may be made without registration under the Securities Act and
under applicable state securities or blue sky laws, (ii) that the
holder or transferee execute and deliver to the Company an investment
letter in form and substance acceptable to the Company and (iii) that
the transferee be an "accredited investor" as defined in Rule 501(a)
promulgated under the Securities Act.
8. No Rights as Shareholder until Exercise. This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price and all applicable taxes, if any, the
Warrant Shares so purchased shall be and be deemed to be issued to such Holder
as the record owner of such shares as of the close of business on the later of
the date of such surrender or payment. The Company shall be entitled to treat
the Holder of the Warrant as the owner in fact thereof for all purposes and
shall not be bound to recognize any equitable or other claim to or interest in
such Warrant on the part of any other person, and shall not be liable for any
registration or transfer of Warrants which are registered or to be registered in
the name of a fiduciary or the nominee of a fiduciary unless made with the
actual knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration or transfer, or with the knowledge of such facts
that its participation therein amounts to bad faith.
9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.
10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.
11. Adjustments of Exercise Price and Number of Warrant Shares.
The number and kind of securities purchasable upon the
exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the
following. In case the Company, at any time while the Warrant is
outstanding, shall (i) pay a dividend in shares of Common Stock or make
a distribution in shares of Common Stock to all holders of its
outstanding Common Stock, (ii) subdivide its outstanding shares of
6
Common Stock into a greater number of shares, (iii) combine (including
by way of reverse stock split) its outstanding shares of Common Stock
into a smaller number of shares of Common Stock, or (iv) issue any
shares of its capital stock in a reclassification of the Common Stock,
then the number of Warrant Shares purchasable upon exercise of this
Warrant immediately prior thereto shall be adjusted so that the Holder
shall be entitled to receive the kind and number of Warrant Shares or
other securities of the Company which it would have owned or have been
entitled to receive had such Warrant been exercised in advance thereof.
Upon each such adjustment of the kind and number of Warrant Shares or
other securities of the Company which are purchasable hereunder, the
Holder shall thereafter be entitled to purchase the number of Warrant
Shares or other securities resulting from such adjustment at an
Exercise Price per Warrant Share or other security obtained by
multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of Warrant Shares purchasable pursuant hereto
immediately prior to such adjustment and dividing by the number of
Warrant Shares or other securities of the Company that are purchasable
pursuant hereto immediately after such adjustment. An adjustment made
pursuant to this paragraph shall become effective immediately after the
effective date of such event retroactive to the record date, if any,
for such event.
12. Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets.
(a) In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or
where there is a change in, or distribution with respect to, the Common
Stock of the Company), or sell, transfer or otherwise dispose of all or
substantially all of its property, assets or business to another
corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of all or
substantially all of its assets, shares of common stock of the
successor or acquiring corporation, or any cash, shares of stock or
other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in
lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of
Common Stock of the Company, then the Holder shall have the right
thereafter to receive upon exercise of this Warrant, the number of
shares of common stock of the successor or acquiring corporation or of
the Company, if it is the surviving corporation, and Other Property
receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a
Holder of the number of shares of Common Stock for which this Warrant
is exercisable immediately prior to such event. In case of any such
reorganization, reclassification, merger, consolidation or disposition
of assets, the successor or acquiring corporation (if other than the
Company) shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this Warrant to
be performed and observed by the Company and all the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of
Warrant Shares for which this Warrant is exercisable which shall be as
7
nearly equivalent as practicable to the adjustments provided for in
this Section 12. For purposes of this Section 12, "common stock of the
successor or acquiring corporation" shall include stock of such
corporation of any class which is not preferred as to dividends or
assets over any other class of stock of such corporation and which is
not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible
into or exchangeable for any such stock, either immediately or upon the
arrival of a specified date or the happening of a specified event and
any warrants or other rights to subscribe for or purchase any such
stock. The foregoing provisions of this Section 12 shall similarly
apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.
(b) Notwithstanding anything to the contrary herein contained,
in the event of a transaction contemplated by Section 12(a) or similar
transaction in which the surviving, continuing, successor, or
purchasing person, corporation or entity demands that all outstanding
Warrants be extinguished prior to the closing date of the contemplated
transaction, the Company shall give prior notice (the "Merger Notice")
thereof to the Holders advising them of such transaction. The Holders
shall have ten calendar days after the date of the Merger Notice to
elect to (i) exercise the Warrants in the manner provided herein, (ii)
receive from the surviving, continuing, successor, or purchasing
corporation the same consideration receivable by a holder of the number
of shares of Common Stock for which this Warrant might have been
exercised immediately prior to such consolidation, merger, sale, or
purchase reduced by such amount of the consideration as has a market
value equal to the Exercise Price, as determined by the Board of
Directors of the Company, whose determination shall be conclusive and
binding, or (iii) receive cash equal to the value of this Warrant as
determined in accordance with the Black-Scholes option pricing formula
using the method agreed upon among the parties at the Closing. If any
Holder fails to timely notify the Company of its election, the Holder
shall be deemed for all purposes to have elected the option set forth
in (ii) above. Any amounts receivable by a Holder who has elected the
option set forth in (ii) above shall be payable at the same time as
amounts payable to stockholders in connection with any such
transactions.
13. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.
14. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.
8
15. REGISTRATION UNDER THE SECURITIES ACT.
(a) Demand Registration.
(i) Right to Demand Registration. At one time during
the term of this Warrant, the Holder shall have the right to request in writing
that the Company register all (but not less than all) of the Holders' Warrant
Shares (a "Request") (which Request shall specify the amount of Warrant Shares
intended to be disposed of by the Holder and the intended method of disposition
thereof) by filing with the SEC a Demand Registration Statement (defined below).
The Company shall, as expeditiously as possible following a Request, use its
best efforts to cause to be filed with the SEC a registration statement (a
"Demand Registration Statement") providing for the registration under the
Securities Act of the Warrant Shares which the Company has been so requested to
register by the Holder, to the extent necessary to permit the disposition of
such Warrant Shares so to be registered in accordance with the intended methods
of disposition thereof specified in such Request (including, without limitation,
by means of a shelf registration pursuant to Rule 415 under the Securities Act
(a "Shelf Registration") if so requested and if the Company is then eligible to
use such a registration). The Company shall use its best efforts to have such
Demand Registration Statement declared effective by the SEC as soon as
practicable thereafter and to keep such Demand Registration Statement
continuously effective (except in the case of a shelf registration statement)
for the earlier of (A) nine (9) months and (B) such time as all Warrant Shares
covered by such Demand Registration Statement have been sold, but in any event
at least 90 days.
A Request may be withdrawn prior to the filing of the
Demand Registration Statement by the Holder (a "Withdrawn Request") and a Demand
Registration Statement may be withdrawn prior to the effectiveness thereof by
the Holder (a "Withdrawn Demand Registration"), and such withdrawal shall be
treated as a Demand Registration which shall have been effected pursuant to this
Section 15(a), unless the Holder reimburses the Company for its reasonable
out-of-pocket expenses incident to performance of or compliance with this
agreement by the Company ("Registration Expenses") relating to the preparation
and filing of such Demand Registration Statement (to the extent actually
incurred); provided; however, that if a Withdrawn Request or Withdrawn
Registration Statement is made (A) because of a material adverse change in the
business, financial condition or prospects of the Company then such withdrawal
shall not be treated as a Demand Registration effected pursuant to this Section
15(a), and the Company shall pay all Registration Expenses in connection
therewith. The Holder may, at any time prior to the effective date of the Demand
Registration Statement (and for any reason) revoke such request by delivering
written notice to the Company revoking such requested inclusion.
In no event shall the Company be required to effect
more than one (1) registration pursuant to this Section 15(a). The registration
rights granted pursuant to the provisions of this Section 15(a) shall be in
addition to the registration rights granted pursuant to the provisions of
Section 15 (b) hereof.
(ii) Registration of Other Securities. Whenever the
Company shall effect a Demand Registration, other than Warrant Shares, no
securities in excess of 250,000 shares of common stock shall be covered by such
registration unless the Holder shall have consented in writing to the inclusion
of such other securities.
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(iii) Effective Registration Statement; Suspension.
Except as otherwise set forth in this Warrant, a Demand Registration Statement
shall not be deemed to have become effective (and the related registration will
not be deemed to have been effected) (A) unless it has been declared effective
by the SEC and remains effective in compliance with the provisions of the
Securities Act with respect to the disposition of all Warrant Shares covered by
such Demand Registration Statement for the time period specified in this Section
15 or (B) if the offering of any Warrant Shares pursuant to such Demand
Registration Statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or court.
(iv) Registration Statement Form. Registrations under
this Section 15(a) shall be on such appropriate registration form of the SEC (A)
as shall be selected by the Company and (B) which shall be available for the
sale of the Warrant Shares in accordance with the intended method or methods of
disposition specified in the requests for registration. The Company agrees to
include in any such Registration Statement all information concerning the Holder
which the Holder, upon advice of counsel, shall reasonably request.
(b) Incidental Registration. If the Company at any time or from time to
time during the term of this Warrant proposes to register any of its securities
under the Securities Act (other than in a registration on Form S-4 or S-8 or any
successor form to such forms and other than pursuant to Section 15(a)) whether
or not pursuant to registration rights granted to other holders of its
securities and whether or not for sale for its own account, the Company shall
deliver prompt written notice (which notice shall be given at least 30 days
prior to such proposed registration) to the Holder of its intention to undertake
such registration, describing in reasonable detail the proposed registration and
distribution (including the anticipated range of the proposed offering price,
the class and number of securities proposed to be registered and the
distribution arrangements) and of the Holders' right to participate in such
registration under this Section 15(b) as hereinafter provided. Subject to the
other provisions of this paragraph 15(b), upon the written request of the Holder
made within 20 days after the receipt of such written notice (which request
shall specify the amount of securities to be registered and the intended method
of disposition thereof), the Company shall effect the registration under the
Securities Act of all Warrant Shares requested by the Holder to be so registered
(an "Incidental Registration"), to the extent requisite to permit the
disposition (in accordance with the intended methods thereof as aforesaid) of
the Warrant Shares so to be registered, by inclusion of such Warrant Shares in
the Registration Statement which covers the securities which the Company
proposes to register and shall cause such Registration Statement to become and
remain effective (except in the case of a shelf registration statement) for the
earlier of (A) nine (9) months and (B) the date all Warrant Shares covered by
such Registration Statement are sold, but in any event at least 90 days. The
Holder may, at any time prior to the effective date of the Incidental
Registration Statement (and for any reason), revoke such request by delivering
written notice to the Company revoking such requested inclusion.
If at any time after giving written notice of its intention to register
any securities and prior to the effective date of the Incidental Registration
Statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to the Holder and, thereupon, (A) in the case of a determination
10
not to register, the Company shall be relieved of its obligation to register any
Warrant Shares in connection with such registration (but not from its obligation
to pay the Registration Expenses incurred in connection therewith), without
prejudice, however, to the rights of the Holder to cause such registration to be
effected as a registration under Section 15(a), and (B) in the case of a
determination to delay such registration, the Company shall be permitted to
delay the registration of the Warrant Shares for the same period as the delay in
registering such other securities; provided, however, that if such delay shall
extend beyond 120 days from the date the Company received a request to include
Warrant Shares in such Incidental Registration, then the Company shall again
give the Holder the opportunity to participate therein and shall follow the
notification procedures set forth in the preceding paragraph. There is no
limitation on the number of such Incidental Registrations pursuant to this
Section 15(b) which the Company is obligated to effect.
In connection with any offering involving an underwriting of shares of
the Company's capital stock pursuant to this Section 15(b), the Company shall
not be required to include any of the Warrant Shares securities in such
underwriting unless the Holder accepts the terms of the underwriting as agreed
upon between the Company and its underwriters, and then only in such quantity as
the underwriters determine in their reasonable discretion will not jeopardize
the success of the offering by the Company. If the total number of securities,
including Warrant Shares, requested by stockholders to be included in such
offering exceeds the amount of securities to be sold other than by the Company
that the underwriters determine in their sole 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 Warrant Shares, which
the underwriters and the Company determine in their sole discretion will not
jeopardize the success of the offering. The Company shall include in such
registration, to the extent of the number which the Company is so advised may be
included in such offering without such effect, (i) in the case of a registration
initiated by the Company, (A) first, the securities that the Company proposes to
register for its own account, (B) second, the Warrant Shares requested to be
included in such registration by the Holder, and (C) third, other securities of
the Company to be registered on behalf of any other Person, and (ii) in the case
of a registration initiated by a Person other than the Company, (A) first, the
securities requested to be included in such registration by the Persons
initiating such registration, (B) second, the Warrant Shares requested to be
included in such registration by the Holder; (C) third, the securities that the
Company proposes to register for its own account, and (D) fourth, other
securities of the Company to be registered on behalf of any other Person
The registration rights granted pursuant to the provisions of this
Section 15(b) shall be in addition to the registration rights granted pursuant
to the other provisions of Section 15(a) hereof.
(c) Certain Limitations.
(i) Furnish Information. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to
Section 15 with respect to the Warrant Shares of any selling Holder that such
Holder shall furnish to the Company such information regarding itself, the
Warrant Shares held by it, and the intended method of disposition of such
securities as shall be reasonably required to effect the registration of such
Holder's Warrant Shares.
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(ii) Nontransferability of Rights. In the event, this
Warrant is subdivided into one or more Warrants, only a Holder of a Warrant
relating to more than 50% of the Warrants Shares initially subject to Warrant
No. 1 of this Warrant shall succeed to the rights and obligations under this
Section 15. Notwithstanding anything in this Warrant to the contrary, this
Section 15 shall be omitted from any replacement or substitute Warrant that does
not relate to at least 50% of the number of Warrant Shares initially subject to
Warrant Certificate No. 1 of this Warrant.
(iii) Confidentiality Requirement. The Company's
obligations under Section 15(b) shall be subject to the Holder's prior execution
of a confidentiality agreement in form and substance reasonably acceptable to
the Company to keep confidential the fact of the proposed registration, and not
to enter into any agreements with respect to the purchase or sale of securities
of the Company, until the Company has publicly announced the details related to
such registration (or determined not to proceed with such registration).
16. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Principal Market
upon which the Common Stock may be listed.
Except and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including amending its certificate of
incorporation 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 of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company will
(a) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (b)
take all such action as may be reasonably necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant, and (c) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the
number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
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17. Miscellaneous.
(a) Governing Law; Venue; Waiver of Jury Trial. All 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 agrees
that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Warrant (whether
brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New
York, borough of Manhattan (the "New York Courts"). Each party hereby
irrevocably submits to the exclusive jurisdiction of the New York
Courts for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed
herein, 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, or that the New York Courts are
an improper or inconvenient venue for such proceeding. 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 via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for
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. The parties hereto
hereby irrevocably waive, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising
out of or relating to this Warrant or the transactions contemplated
thereby. If either party shall commence an action or proceeding to
enforce any provisions of this Warrant, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for
its attorneys' fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or
proceeding.
(b) Restrictions. The Holder acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered,
will have restrictions upon resale imposed by state and federal
securities laws.
(c) Nonwaiver and Expenses. No course of dealing or any delay
or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice Xxxxxx's
rights, powers or remedies, notwithstanding all rights hereunder
terminate on the Termination Date.
(d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall
be delivered in accordance with the notice provisions of the Purchase
Agreement.
13
(e) Limitation of Liability. No provision hereof, in the
absence of any affirmative action by Holder to exercise this Warrant or
purchase Warrant Shares, and no enumeration herein of the rights or
privileges of Holder, shall give rise to any liability of Holder for
the purchase price of any Common Stock or as a stockholder of the
Company, whether such liability is asserted by the Company or by
creditors of the Company.
(f) Remedies. Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Warrant.
The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be
adequate.
(g) Successors and Assigns. Subject to applicable securities
laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors of the
Company and the successors and permitted assigns of Holder; provided,
however, that the Holder may not assign its rights to a competitor or
potential competitor of the Company. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this
Warrant and shall be enforceable by any such Holder or holder of
Warrant Shares.
(h) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and
the Holder.
(i) Severability. If any provision of this Warrant is held to
be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant
shall not in any way be affected or impaired thereby and the parties
will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Warrant.
(j) Construction. The headings herein are for convenience
only, do not
constitute a part of this Warrant and shall not be deemed to limit or
affect any of the provisions hereof. The language used in this Warrant
will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be
applied against any party.
(k) Interpretation. Unless the context otherwise requires, the
terms defined in this Section 17 shall have the meanings herein
specified for all purposes of this Warrant, applicable to both the
singular and plural forms of any of the terms defined herein. When a
reference is made in this Warrant to a Section, such reference shall be
to a Section of this Warrant unless otherwise indicated. Whenever the
words "include," "includes" or "including" are used in this Warrant,
they shall be deemed to be followed by the words "without limitation."
The use of any gender herein shall be deemed to include the neuter,
masculine and feminine genders wherever necessary or appropriate. When
any matter is disclosed (a) in any Transaction Document (including any
exhibit or schedule thereto), (b) any place in the Disclosure Schedule,
or (c) , in the Company's Form 10-K for the year ended December 31,
14
2003, any Form 8-K filed since the filing date of the Company's Form
10-K for the year ended December 31, 2003, the Proxy Statement for the
2004 Annual Meeting of Shareholders, the Forms 10-Q for the quarters
ended March 31, 2004, June 30, 2004 or September 30, 2004, or all press
releases issued after the filing of the Form 10-Q for the quarter ended
September 30, 2004 and prior to the Closing Date, such matter shall be
deemed to have been disclosed to all of the Holders for all purposes
pursuant to all of the Transaction Documents. If any period of time for
the performance under the Transaction Documents ends on a day that is
not a Trading Day, such period of time shall be automatically extended
to end at the end of the next succeeding Trading Day.
********************
IN WITNESS WHEREOF, the Company has caused this Warrant
to be executed by its officer thereunto duly authorized.
Dated: February 15, 2005
ALTAIR NANOTECHNOLOGIES INC.
By:___________________________________________________
Name:
Title:
NOTICE OF EXERCISE
To: ALTAIR NANOTECHNOLOGIES INC.
(1) The undersigned hereby elects to purchase ________ Warrant Shares
of Altair Nanotechnologies Inc. pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price
in full, together with all applicable transfer taxes, if any.
Payment shall take the form of lawful money of the United States.
(2) Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:
_______________________________________________________
The Warrant Shares shall be delivered to the following:
_______________________________________________________
_______________________________________________________
_______________________________________________________
(3) Accredited Investor. The undersigned is an "accredited investor" as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.
(4) Investment Intent. The undersigned is acquiring the Warrant Shares
for its own account and not with a view towards, or for resale in connection
with, the public sale or distribution thereof, except pursuant to sales
registered or exempted under the 1933 Act; provided, however, that the
undersigned does not agree to hold any of the Warrant Shares for any minimum or
other specific term and reserves the right to dispose of the Warrant Shares at
any time in accordance with or pursuant to a registration statement or an
exemption under the Securities Act of 1933, as amended.
[PURCHASER]
By: __________________________________________
Name:
Title:
Dated: ______________________________________
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
_______________________________________________ whose address is
________________________________________________________________________
________________________________________________________________________
Dated: ______________, _______
Holder's Signature: ___________________________________
Holder's Address:______________________________________
______________________________________
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
