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Exhibit 10.5

 

 
WAIVER AND RIGHTS AGREEMENT
 
THIS WAIVER AND RIGHTS AGREEMENT (the “Agreement”), dated as of September 20,
2010 among Altair Nanotechnologies, Inc., a company organized under the laws of
Canada (“Company”), Al Yousuf LLC, a company organized under the laws of United
Arab Emirates (“Al Yousuf”), and Canon Investment Holdings Limited, a company
organized under the laws of Hong Kong (“Canon”).
 
WHEREAS, Al Yousuf and the Company had entered into a Stock Purchase and
Settlement Agreement dated September 30, 2008 (the “Al Yousuf Purchase
Agreement”) pursuant to which Al Yousuf purchased from the Company, and the
Company sold and issued to Al Yousuf, certain shares of Common Stock (as defined
below) for US$10,000,000.10;
 
WHEREAS, the Company desires to issue and sell certain newly-issued shares of
Common Stock to Canon, and Canon desires to subscribe for such newly-issued
shares of Common Stock, pursuant to that certain Share Subscription Agreement
dated of even date herewith (the “Share Subscription Agreement”);
 
WHEREAS, pursuant to the Al Yousuf Purchase Agreement, the transactions
contemplated under the Share Subscription Agreement would (i) require notice to,
and the consent of and waiver by Al Yousuf of his right of first offer pursuant
to the terms of the Al Yousuf Purchase Agreement and (ii) result in the dilution
of Al Yousuf’s shareholding to less than 10% of the Company’s outstanding Common
Stock on a fully-diluted basis and termination of the Rights Period (as defined
below);
 
NOW, THEREFORE, in consideration of the foregoing premises and the covenants and
agreements set forth herein, as well as other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound thereby, the parties hereto agree as follows:
 
ARTICLE 1
Definitions
 
Section 1.01 . Definitions.  (a) The following terms, as used herein, have the
following meanings:
 
“Board of Directors” means the board of directors of the Company.
 
“Closing” has the meaning set forth in the Share Subscription Agreement.
 
“Common Stock” means the common stock, without par value, of the Company.
 
 “Law” has the meaning set forth in the Al Yousuf Purchase Agreement.
 
“Person” has the meaning set forth in the Al Yousuf Purchase Agreement.
 
“Proposed Transaction” means the issuance of shares of Common Stock contemplated
under the Share Subscription Agreement.
 
 “Registration Rights Agreement” means the Registration Rights Agreement dated
November 29, 2007 between Al Yousuf and the Company, as amended by Amendment No.
1 dated on September 30, 2008 and Amendment No. 2 dated August 14, 2009.
 
“Rights Period” has the meaning set forth in the Al Yousuf Purchase Agreement.
 
Section 1.02   Other Definitional and Interpretive Provisions. Unless specified
otherwise, in this Agreement the obligations of any party consisting of more
than one person are joint and several.  The words “hereof”, “herein” and
“hereunder” and words of like import used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.  The
captions herein are included for convenience of reference only and shall be
ignored in the construction or interpretation hereof.  References to Articles,
Sections, Exhibits and Schedules are to Articles, Sections, and Schedules of
this Agreement unless otherwise specified.  All Schedules annexed hereto or
referred to herein are hereby incorporated in and made a part of this Agreement
as if set forth in full herein.  Any singular term in this Agreement shall be
deemed to include the plural, and any plural term the singular.  Whenever the
words “include”, “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation”, whether or not
they are in fact followed by those words or words of like import.  “Writing”,
“written” and comparable terms refer to printing, typing and other means of
reproducing words (including electronic media) in a visible form.  References to
any agreement or contract are to that agreement or contract as amended, modified
or supplemented from time to time in accordance with the terms hereof and
thereof.  References to any Person include the successors and permitted assigns
of that Person.  References from or through any date mean, unless otherwise
specified, from and including or through and including, respectively.
 
 
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ARTICLE 2
Right of First Offer; Registration Rights
 
Section 2.01 .  Waiver of Right of First Offer.  Notwithstanding anything to the
contrary in the Al Yousuf Purchase Agreement, including, without limitation,
Section 8 (Right of First Offer) and Section 14.4 (Notices) of the Al Yousuf
Purchase Agreement, Al Yousuf hereby consents to the Proposed Transaction, and
irrevocably waives any and all rights arising under the Al Yousuf Purchase
Agreement to receive notice of and/or to exercise any right of first offer
relating to or in connection with the Proposed Transaction, including waiver of
its rights under Section 8 and Section 14.4 of the Al Yousuf Purchase Agreement,
and irrevocably waives any breach of any provisions of the Al Yousuf Purchase
Agreement relating to the Proposed Transaction.

Section 2.02 .  Waiver of Priority.  Notwithstanding anything to the contrary in
the Registration Rights Agreement, including without limitation, Section 2(a)
(Demand Registration) and Section 2(e) (Priority on Underwritten Demand
Registrations), Al Yousuf hereby agrees that with respect any underwritten
Demand Registration (as such term is defined under the Registration Rights
Agreement) under the Registration Rights Agreement, to the extent Canon
exercises Piggyback Registration rights under the Investor Rights Agreement (as
defined in the Share Subscription Agreement) and there is an underwriter
cutback, Canon and Al Yousuf shall rank pro rata (in accordance with their
respective ownership percentages in the Company) with respect to securities to
be included in such registration.
 
Section 2.03   Amendment to Al Yousuf Purchase Agreement & Registration Rights
Agreement.  Each of the Company and Al Yousuf agrees that the provisions of this
Article 2 and Article 4 (when they become effective after the Closing pursuant
to the Share Subscription Agreement) constitute valid amendments of and waivers
of the Al Yousuf Purchase Agreement and the Registration Rights Agreement, as
applicable. Except as specifically modified by this Agreement, the Al Yousuf
Purchase Agreement and the Registration Rights Agreement each remains unmodified
and in full force and effect.
 
 
ARTICLE 3
Termination of Rights Period; Right to Designate Director
 
Section 3.01 .  Termination of Rights Period.  Each of the parties hereby
acknowledges and agrees that the Rights Period shall expire, with immediate
effect, upon the Closing.  At or prior to the Closing, Al Yousuf agrees to cause
its director designees on the Board of Directors to submit their resignations
effective as of the Closing, except as provided in this Section 3.01.  The
parties agree that the Board of Directors at the Closing shall include one AY
Director designated by Al Yousuf pursuant to Section 3.02 (the “Initial AY
Director”) who shall be one of the independent directors of the Company and
serve as a member of the Audit Committee of the Board of Directors.  Al Yousuf
agrees that the Initial AY Director designated by it must satisfy the
qualification requirements for independent directors and for members of Audit
Committee, in each case under applicable Law (including, without limitation, the
Nasdaq listing rules and the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder) (such requirements,
collectively, “Specified Director Requirements”).  Al Yousuf further agrees to
provide the name and relevant qualification and other information for the
individual it shall designate as the Initial AY Director reasonably promptly
after the date hereof for inclusion in the proxy statement to be filed by the
Company as contemplated by the Share Subscription Agreement; provided that the
parties agree that the Initial AY Director may be an existing director designee
of Al Yousuf so long as such existing director designee satisfies the Specified
Director Requirements (in which case such existing director designee shall not
be required to submit his resignation at the Closing and shall be deemed
designated by Al Yousuf pursuant to Section 3.02).  At the next annual
stockholder meeting of the Company following the Closing (or if the Board of
Directors decided to call a special stockholder meeting, at such stockholder
meeting), the Company agrees to propose to amend its articles to increase the
size of the Board of Directors to no less than 11 directors and nominate two new
directors to the Board of Directors (one of whom shall be designated by Canon
and the other director shall be an independent director nominated by the Board
of Directors pursuant to the Company’s then existing director nomination
practice), and Canon and Al Yousuf agree to vote their shares of Common Stock in
favor of such proposal and the election of the two new directors.  The new
independent director nominated pursuant to the preceding sentence shall satisfy
the Specified Director Requirements.  The parties contemplate that the new
independent director elected pursuant to the preceding sentence shall serve on
the Audit Committee, and Al Yousuf agrees to cause the Initial AY Director to
resign from the Audit Committee effective as of the election of such new
independent director.
 
Section 3.02 .  Right to Designate Director.  Effective from and after the
Closing and until such time as Al Yousuf ceases to hold more than 5% of the
outstanding shares of Common Stock on a fully-diluted basis (the “Designation
Period”), the Company shall take all such action as is necessary or advisable
and within its control (except to the extent such actions, upon advice of
counsel, would be a breach of, contrary to or otherwise in conflict with any
applicable law or fiduciary duty imposed thereby), including without limitation
calling special Board of Director and stockholder meetings, so that:
 
(a) during the Designation Period, one individual designated by Al Yousuf (the
“AY Director”) shall be appointed or elected to the Board of Directors;
 
(b) during the Designation Period, the removal from the Board of Directors
(without cause) of the AY Director shall be at the written request of Al Yousuf;
and
 
(c) in the event the AY Director ceases to serve as a member of the Board of
Directors during his term of office (whether by death, resignation or removal)
during the Designation Period, the resulting vacancy on the Board of Directors
shall be filled by an individual designated by Al Yousuf.
 
 
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ARTICLE 4
Amendment of Lock Up Provisions; Right of First Offer
 
Section 4.01 .  Amendment of Lock Up if Closing Occurs; Right of First
Offer.  Effective upon, and conditioned upon the occurrence of, the Closing
pursuant to the Share Subscription Agreement:
 
(a) the Al Yousuf Purchase Agreement shall be amended to remove Section 12
(Lock-up; Leak-out); and
 
(b) Al Yousuf may elect to first offer to Canon the right to purchase Shares (as
defined in the Al Yousuf Purchase Agreement) if Al Yousuf desires or proposes to
transfer any such Shares.
 
 
ARTICLE 5
Representations and Warranties of Al Yousuf
 
Al Yousuf represents and warrants to the Company that:
 
Section 5.01 .  Corporation Authorization.  The execution, delivery and
performance by Al Yousuf of this Agreement and the consummation by Al Yousuf of
the transactions contemplated hereby are within the corporate powers of Al
Yousuf and have been duly authorized by all necessary corporate action.  This
Agreement constitutes a valid and binding Agreement of Al Yousuf, enforceable
against it in accordance with the respective terms herein, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar legal requirements affecting creditors’ rights generally and subject, as
to enforceability, the general principles of equity.
 
Section 5.02   Non-Contravention.  The execution, delivery and performance by Al
Yousuf of this Agreement and the agreements, consents and waivers herein do not
and will not (i) violate the articles or bylaws or comparable organizational
documents of Al Yousuf, (ii) violate any applicable Law, (iii) require any
consent or other action by any Person under any provision of any agreement or
other instrument binding on Al Yousuf, (iv) result in the imposition of any lien
on the shares of Common Stock beneficially owned by Al Yousuf, or (v) require a
filing with, or consent, approval, authorization, order, registration,
qualification or decree of, any person or entity or any court or governmental
authority or agency, domestic or foreign.
 
Section 5.03 .  Ownership of Shares. As of the date of this Agreement, Al Yousuf
is the record and beneficial owner of the shares of Common Stock listed on
Schedule 1 hereto, including the number of securities convertible into shares of
Common Stock.
 
 
ARTICLE 6
Representations and Warranties of Company
 
The Company represents and warrants to Al Yousuf that:
 
Section 6.01 .   Corporation Authorization.  The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby are within the corporate powers of the
Company and have been duly authorized by all necessary corporate action.  This
Agreement constitutes a valid and binding Agreement of the Company, enforceable
against it in accordance with the respective terms herein, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar legal requirements affecting creditors’ rights generally and subject, as
to enforceability, the general principles of equity.
 
Section 6.02   Non-Contravention.  The execution, delivery and performance by
the Company of this Agreement and the agreements, consents and waivers herein do
not and will not (i) violate the articles or bylaws or comparable organizational
documents of the Company, (ii) violate any applicable Law, (iii) require any
consent or other action by any Person under, constitute a default under, or give
rise to any right of termination, cancellation or acceleration or to a loss of
any benefit to which the Company is entitled under any provision of any
agreement or other instrument binding on the Company, (iv) result in the
imposition of any lien on any asset of the Company, or (v) require a filing
with, or consent, approval, authorization, order, registration, qualification or
decree of, any person or entity or any court or governmental authority or
agency, domestic or foreign (other than filings under the Securities Exchange
Act of 1934, as amended and similar statutes in Canada).
 
 
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ARTICLE 7
Representations and Warranties of Canon
 
Canon represents and warrants to Al Yousuf and the Company that:
 
Section 7.01 .  Corporation Authorization.  The execution, delivery and
performance by Canon of this Agreement and the consummation by Canon of the
transactions contemplated hereby are within the corporate powers of Canon and
have been duly authorized by all necessary corporate action.  This Agreement
constitutes a valid and binding Agreement of Canon, enforceable against it in
accordance with the respective terms herein, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar legal
requirements affecting creditors’ rights generally and subject, as to
enforceability, the general principles of equity.
 
Section 7.02   Non-Contravention.  The execution, delivery and performance by
Canon of this Agreement and the agreements, consents and waivers herein do not
and will not (i) violate the articles or bylaws or comparable organizational
documents of Canon, (ii) violate any applicable Law, (iii) require any consent
or other action by any Person under any provision of any agreement or other
instrument binding on Canon, or (iv) require a filing with, or consent,
approval, authorization, order, registration, qualification or decree of, any
person or entity or any court or governmental authority or agency, domestic or
foreign (other than filings under the Securities Exchange Act of 1934, as
amended and similar statutes in Canada).
 
 
ARTICLE 8
Miscellaneous
 
Section 8.01 .  Governing Law.  This Agreement shall be governed by and
construed in accordance with the law of the State of New York, without regard to
the conflicts of law rules of such state.
 
Section 8.02 .  Jurisdiction.  The parties hereto agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought in the United States District Court for the Southern
District of New York or any New York State court sitting in New York City, so
long as one of such courts shall have subject matter jurisdiction over such
suit, action or proceeding, and that any cause of action arising out of this
Agreement shall be deemed to have arisen from a transaction of business in the
State of New York, and each of the parties hereby irrevocably consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.  Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court.
 
Section 8.03 . WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
 
Section 8.04   Counterparts; Delivery; Effectiveness.  This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.  Any signed counterpart may be delivered by facsimile or other form
of electronic transmission with the same legal force and effect, for all
purposes, as delivery of an originally signed agreement. This Agreement shall
become effective when each party hereto shall have received a counterpart hereof
signed by all of the other parties hereto; provided that Section 2.02, Article 3
and Article 4 shall be null and void if the Share Subscription Agreement is
terminated without Closing having occurred. Until and unless each party has
received a counterpart hereof signed by the other party hereto, this Agreement
shall have no effect and no party shall have any right or obligation hereunder
(whether by virtue of any other oral or written agreement or other
communication).
 
Section 8.05    Severability.  If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
governmental authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
 
Section 8.06 .  Specific Performance.  The parties hereto agree that irreparable
damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof and that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement or to enforce
specifically the performance of the terms and provisions hereof in the United
States District Court for the Southern District of New York or any New York
State court sitting in New York City, in addition to any other remedy to which
they are entitled at law or in equity.
 
[signature page follows]
 
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.

 

 
ALTAIR NANOTECHNOLOGIES, INC.
 
By:
  /s/    
Name:
     
Title:
 

 
AL YOUSUF LLC
 
By:
 /s/ Al Yousuf    
Name:
 Al Yousuf    
Title:
 

 
CANON INVESTMENT HOLDINGS LIMITED
 
By:
  /s/    
Name:
     
Title:
 

 

 
 
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Schedule 1

 
Holder of shares of Common Stock
 
Number
 
AL YOUSUF LLC
 
 
20,395,863
 

 
 
 
 
 
 
 
 
 
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