September 24, 2007 Private and Confidential Mr. Alan J. Gotcher, Ph.D. President & CEO
Exhibit
10.4
September
24, 2007
Private
and Confidential
Xx.
Xxxx
X. Xxxxxxx, Ph.D.
President
& CEO
000
Xxxxxx Xxx
Reno,
NV
890502
Ladies
and Gentlemen:
Pursuant
to the April 21, 2006 Letter
Agreement between Altair Nanotechnologies Inc. (the "Company") and X.X. Xxxxxx
Securities Inc. ("JPMorgan") the parties are entering into this letter agreement
in order to set forth the specific terms and conditions in connection with
the
proposed issuance, offering and sale by the Company (the "Offering") of
approximately $25 million to $50 million of equity or equity-linked securities
(the "Securities") on a private placement basis.
1. Best
Efforts Placement. The Company has engaged JPMorgan to act as
sole placement agent on a best efforts basis for the Offering. The
Company acknowledges and agrees that JPMorgan's engagement hereunder is not
an
agreement by JPMorgan or any of its affiliates to underwrite or purchase any
securities or otherwise provide any financing.
2. Exclusive
Engagement. During the period of JPMorgan’s engagement hereunder,
the Company will not, and will cause its affiliates not to, discuss the Offering
or any other placement or sale of equity or equity-related securities with
any
third parties (except through JPMorgan) and it will promptly notify JPMorgan
if
it receives any inquiry concerning the Securities. The Company
represents and agrees that no offers or sales of securities of the same or
a
similar class as the Securities have been made or will be made by the Company
or
on its behalf that would be integrated with the offer and sale of the Securities
under the doctrine of integration referred to in Regulation D under the
Securities Act of 1933, as amended. Notwithstanding the foregoing,
the Company shall not be prohibited by this Section 2 from discussing the
issuance, and or issuing, its equity or equity-linked securities to
counterparties in connection with licensing agreements entered into with such
counterparties provided that the
Company will take all necessary steps to ensure that any such offering and
sale
of its securities are exempt from the registration requirements of the
Securities Act pursuant to Rule 506 of Regulation D
thereunder.
3. Indemnification
and Contribution. In consideration of the engagement hereunder,
the Company agrees to the indemnification and contribution provisions set forth
in Annex A hereto, which provisions are incorporated by reference herein and
constitute a part hereof.
4. Fees
and Expenses. The Company agrees to pay JPMorgan an initial
retainer of $75,000 upon the signing of this letter agreement. This
retainer is nonrefundable but shall be credited against any further fees payable
to JPMorgan hereunder. In addition, as compensation for its services
hereunder, the Company agrees to pay JPMorgan at each closing for the sale
of
Securities a placement fee equal to 6.0% of the value of the Securities sold
at
such closing, in cash; provided, however, that the minimum aggregate cash
consideration, if any, to be paid to JPMorgan in connection with this engagement
shall not be less than $1,500,000.
The
Company agrees to reimburse JPMorgan promptly upon request for all reasonable
out-of-pocket costs and expenses (including, without limitation, reasonable
fees, disbursements and other charges of legal counsel and other experts)
incurred in connection with this letter agreement or any of the transactions
contemplated hereby, whether or not any Securities are issued, offered or sold;
provided, however, that the Company’s reimbursement obligation pursuant to this
sentence shall not exceed $75,000 in the aggregate without its prior
consent. In addition, as is customary in private placements, the
Company will also pay the fees and expenses of one counsel for the purchasers
of
the Securities, such counsel to be mutually acceptable to the Company and
JPMorgan.
5. Disclosure. In
connection with its engagement hereunder, JPMorgan will assist the Company
in
preparing a private placement memorandum and/or other documents to be used
in
connection with the Offering (the "Offering Document"). The Company
acknowledges and agrees that the Offering Document is its own work product,
that
JPMorgan may rely, without independent verification, upon the accuracy and
completeness of all information furnished by the Company to JPMorgan for use
in
connection with the Offering (collectively, the "Information") and that JPMorgan
does not assume any responsibility therefor.
The
Company represents that (i) the Information and the Offering Document will
not
include an untrue statement of a material fact or omit to state a material
fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (ii) all historical
financial data provided to JPMorgan will be prepared in accordance with
generally accepted accounting principles and practices then in effect in the
United States and will fairly present the financial condition and operations
of
the Company and (iii) any forecasted financial, market or industrial information
provided to JPMorgan will be prepared in good faith with a reasonable basis
for
the assumptions and the conclusions reached therein. In addition, the Company
agrees that it will notify JPMorgan promptly if any of the foregoing
representations ceases to be accurate at any time during the period of
JPMorgan's engagement hereunder.
6. Engagement
Period, Termination and Survival. JPMorgan’s engagement hereunder may be
terminated by JPMorgan or the Company at any time upon 10 days' prior written
notice to the other party. The provisions of this letter agreement
relating to the payment of fees and expenses, indemnification and contribution,
references to JPMorgan and governing law will survive any termination or
expiration of this letter agreement. In addition, if any person
contacted by JPMorgan during the term of its engagement hereunder and with
whom
JPMorgan had substantive discussions regarding the Offering purchases
Securities, or any substantially similar securities, from the Company during
the
12-month period following termination of this letter agreement, the Company
shall pay JPMorgan, upon the closing of such sale, a cash fee equal to the
amount that would have been payable had this letter agreement not been
terminated.
7. Matters
Relating to Engagement. The Company acknowledges that JPMorgan
has been retained solely to provide the services set forth herein. In
rendering such services, JPMorgan shall act as an independent contractor, and
any duties of JPMorgan arising out of its engagement hereunder shall be owed
solely to the Company. In addition, the Company agrees that JPMorgan
may perform the services contemplated hereby in conjunction with its affiliates,
and that any JPMorgan affiliates performing services hereunder shall be entitled
to the benefits and be subject to the terms of this letter
agreement.
Following
completion of this engagement, JPMorgan shall have the right to place
advertisements in financial and other newspapers and journals at its own expense
describing its services to the Company hereunder. JPMorgan may not,
without its prior written consent, which shall not be unreasonably withheld,
be
quoted or referred to in any document, release or communication prepared, issued
or transmitted by the Company (including any entity controlled by, or under
common control with, the Company or any director, officer, employee or agent
thereof).
The
Company acknowledges that JPMorgan is a securities firm engaged in securities
trading and brokerage activities and providing investment banking and financial
advisory services. In the ordinary course of business, JPMorgan and
its affiliates may at any time hold long or short positions, and may trade
or
otherwise effect transactions, for their own account or the accounts of
customers, in debt or equity securities of the Company, its affiliates or other
entities that may be involved in the transactions contemplated
hereby.
In
addition, JPMorgan and its
affiliates may from time to time perform various investment banking, commercial
banking and financial advisory services for other clients and customers who
may
have conflicting interests with respect to the Company or the
Offering. JPMorgan and its affiliates will not use confidential
information obtained from the Company pursuant to this engagement or their
other
relationships with the Company in connection with the performance by JPMorgan
and its affiliates of services for other companies, and JPMorgan and its
affiliates will not furnish any such information to other
companies. The Company also acknowledges that JPMorgan and its
affiliates have no obligation to use in connection with this engagement, or
to
furnish to the Company, confidential information obtained from other
companies.
Furthermore,
the Company acknowledges that JPMorgan and its affiliates may have fiduciary
or
other relationships whereby JPMorgan and its affiliates may exercise voting
power over securities of various persons, which securities may from time to
time
include securities of the Company or of potential purchasers of the Securities
or others with interests in respect of the Offering. The Company
acknowledges that JPMorgan and its affiliates may exercise such powers and
otherwise perform its functions in connection with such fiduciary or other
relationships without regard to JPMorgan’s relationship to the Company
hereunder.
The
Company acknowledges that JPMorgan
is not an advisor as to legal, tax, accounting or regulatory matters in any
jurisdiction. The Company shall consult with its own advisors
concerning such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and
JPMorgan shall have no responsibility or liability to the Company with respect
thereto.
The
Company acknowledges that the terms
of this letter agreement are contingent upon the receipt by JPMorgan of
appropriate Commitment Committee approval. JPMorgan shall promptly
notify the Company upon receipt of Commitment Committee approval.
8. Governing
Law. This letter agreement, including Annex A hereto, shall be
governed by and construed in accordance with the laws of the State of New York,
without giving effect to the conflicts of laws principles
thereof. The Company and JPMorgan irrevocably agree to waive trial by
jury in any action, proceeding, claim or counterclaim brought by or on behalf
of
either party related to or arising out of this letter agreement or the
performance of services hereunder.
9. Miscellaneous. This
letter agreement contains the entire agreement between the parties relating
to
the subject matter hereof and supersedes all oral statements and prior writings
with respect thereto. This letter agreement may not be amended or
modified except by a writing executed by each of the parties
hereto. Section headings herein are for convenience only and are not
a part of this letter agreement. This letter agreement is solely for
the benefit of the Company and JPMorgan, and no other person (except for
indemnified persons to the extent set forth in Annex A hereto) shall acquire
or
have any rights under or by virtue of this letter agreement. This
letter agreement may not be assigned by either party hereto without the other
party’s prior written consent provided that this letter agreement may be
assigned to the successor in interest of either the Company or JPMorgan in
connection with a sale of all or substantially all of the assets of such party
or a merger in which such party is not the surviving entity. Neither
party hereto shall be responsible or have any liability to any other party
for
any indirect, special or consequential damages arising out of or in connection
with this letter agreement or the transactions contemplated hereby, even if
advised of the possibility thereof.
This
letter agreement may be executed
in counterparts, each of which will be deemed an original, but all of which
taken together will constitute one and the same instrument.
If
the foregoing correctly sets forth
our understanding, please so indicate by executing this letter, together with
the enclosed duplicate originals, in the place indicated and returning two
(2)
of these originals for our files, together with a check for our retainer in
the
amount of $75,000 (payable to X.X. Xxxxxx Securities Inc.).
|
Very
truly yours,
X.X.
XXXXXX SECURITIES INC.
By:
/s/ Xxxxxx X. Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
Title:
Managing Director
|
Accepted
and agreed to as of
the
date
first written above.
By:
/s/ Xxxx X.
Xxxxxxx
Name:
Xxxx X. Xxxxxxx, Ph.D.
Title:
President & CEO
 X.X.
Xxxxxx Securities Inc.
000
Xxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx, XX
00000
|
ANNEX
A
The
Company agrees to indemnify and hold harmless JPMorgan, its affiliates and
their
respective officers, directors, employees, agents and controlling persons (each
an "Indemnified Person") from and against any and all losses, claims, damages,
liabilities and expenses, joint or several, to which any such Indemnified Person
may become subject arising out of or in connection with the transactions
contemplated by the letter agreement to which this Annex A is attached (the
“Agreement”), or any claim, litigation, investigation or proceedings relating to
the foregoing ("Proceedings") regardless of whether any of such Indemnified
Persons is a party thereto, and to reimburse such Indemnified Persons for any
legal or other expenses as they are incurred in connection with investigating,
responding to or defending any of the foregoing, provided that the
foregoing indemnification will not, as to any Indemnified Person, apply to
losses, claims, damages, liabilities or expenses to the extent that they are
finally judicially determined to have resulted from the gross negligence or
willful misconduct of any Indemnified Person. The Company also agrees
that no Indemnified Person shall have any liability (whether direct or indirect,
in contract, tort or otherwise) to the Company for or in connection with the
Agreement, any transactions contemplated thereby or JPMorgan's role or
services in connection therewith, except to the extent that any
liability for losses, claims, demands, damages, liabilities or
expenses incurred by the Company are finally judicially determined to
have resulted from the gross negligence or willful misconduct of such
Indemnified Person.
If
for
any reason the foregoing indemnification is unavailable to any Indemnified
Person or insufficient to hold it harmless, then the Company shall contribute
to
the amount paid or payable by such Indemnified Person as a result of such loss,
claim, damage, liability or expense in such proportion as is appropriate to
reflect not only the relative benefits received by the Company on the one hand
and such Indemnified Person on the other hand but also the relative fault of
the
Company and such Indemnified Person, as well as any relevant equitable
considerations. It is hereby agreed that the relative benefits to the
Company on the one hand and all Indemnified Persons on the other hand shall
be
deemed to be in the same proportion as (i) the total value received or proposed
to be received by the Company pursuant to any sale of the Securities (whether
or
not consummated) bears to (ii) the fee paid or proposed to be paid to JPMorgan
in connection with such sale. The indemnity, reimbursement and
contribution obligations of the Company under these paragraphs shall be in
addition to any liability which the Company may otherwise have to an Indemnified
Person and shall be binding upon and inure to the benefit of any successors,
assigns, heirs and personal representatives of the Company and any Indemnified
Person.
Promptly
after receipt by an
Indemnified Person of notice of the commencement of any Proceedings, such
Indemnified Person will, if a claim is to be made hereunder against the Company
in respect thereof, notify the Company in writing of the commencement thereof;
provided that (i) the omission so to notify the Company will not relieve
it from any liability which it may have hereunder except to the extent it has
been materially prejudiced by such failure and (ii) the omission so to notify
the Company will not relieve it from any liability which it may have to an
Indemnified Person otherwise than on account of this indemnity
agreement. In case any such Proceedings are brought against any
Indemnified Person and it notifies the Company of the commencement thereof,
the
Company will be entitled to participate therein and, to the extent that it
may
elect by written notice delivered to the Indemnified Person, to assume the
defense thereof with counsel reasonably satisfactory to such Indemnified Person;
provided that if the defendants in any such Proceedings include both the
Indemnified Person and the Company and the Indemnified Person shall have
concluded that there may be legal defenses available to it which are different
from or additional to those available to the Company, the Indemnified Person
shall have the right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such Proceedings on behalf of
such Indemnified Person. Upon receipt of notice from the Company to
such Indemnified Person of its election so to assume the defense of such
Proceedings and approval by the Indemnified Person of counsel, the Company
will
not be liable to such Indemnified Person for expenses incurred by the
Indemnified Person in connection with the defense thereof (other than reasonable
costs of investigation) unless (i) the Indemnified Person shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that the Company shall not be liable for the expenses
of
more than one separate counsel (in addition to any local counsel), approved
by
JPMorgan, representing the Indemnified Persons who are parties to such
Proceedings), (ii) the Company shall not have employed counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person
within a reasonable time after notice of commencement of the Proceedings or
(iii) the Company has authorized in writing the employment of counsel for the
Indemnified Person.
The
Company shall not be liable for any settlement of any Proceedings effected
without its written consent (which consent shall not be unreasonably withheld),
but if settled with its written consent or if there be a final judgment for
the
plaintiff in any such Proceedings, the Company agrees to indemnify and hold
harmless each Indemnified Person from and against any and all losses, claims,
damages, liabilities and expenses by reason of such settlement or
judgment. Notwithstanding the immediately preceding sentence, if at
any time an Indemnified Person shall have requested the Company to reimburse
such Indemnified Person for legal or other expenses in connection with
investigating, responding to or defending any Proceedings as contemplated by
this Annex A, the Company shall be liable for any settlement of any Proceedings
effected without its written consent if (i) such settlement is entered into
more
than 30 days after receipt by the Company of such request for reimbursement
and
(ii) the Company shall not have reimbursed such Indemnified Person in accordance
with such request prior to the date of such settlement. The Company
shall not, without the prior written consent of an Indemnified Person (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened Proceedings in respect of which indemnity could have
been
sought hereunder by such Indemnified Person unless such settlement includes
an
unconditional release of such Indemnified Person in form and substance
satisfactory to such Indemnified Person from all liability on claims that are
the subject matter of such Proceedings.
Capitalized
terms used but not defined
in this Annex A have the meanings assigned to such terms in the
Agreement.
2
