COMMON STOCK AND WARRANT PURCHASE AGREEMENT
Exhibit 10.1
This Common Stock and Warrant Purchase Agreement (this “Agreement”) is made as of September
20, 2005 (the “Execution Date”), by and among O2Diesel Corporation, a Delaware corporation (the
“Company”), and [Axwell Business S.A] (the “Purchaser”).
In consideration of the mutual promises and covenants herein, the receipt and sufficiency of
which are hereby acknowledged, and intending to be legally bound, the parties hereto agree as
follows:
1. AUTHORIZATION AND SALE OF COMMON STOCK AND WARRANTS
1.1 Authorization of Common Stock and Warrants.The Company has authorized the sale and
issuance to the Purchaser of [3,228,070] shares (the “Shares”) of its Common Stock, par value $
0.0001 per share (the “Common Stock”), and warrants to purchase [1,614,035] shares of Common Stock
(the “Warrants”), such Warrants having the terms set forth in the form attached hereto as Exhibit
A. The Shares and Warrants to be purchased hereunder are referred to collectively as the “Units”,
and a single “Unit” shall consist of one Share and a Warrant to purchase one half Share.
1.2 Sale and Issuance of Units.
Subject to the terms and conditions hereof, the Company will issue and sell to the Purchaser
and the Purchaser will buy from the Company [3,228,070] Units at a per Unit purchase price of
[US$0.7125] (the “Per Unit Price”), and at the aggregate purchase price of [US$2,300,000] (the
“Purchase Price”).
1.3 Sale and Issuance of Additional Units.
The Company has authorized the sale and issuance to the Purchaser of a further 982,456 Units
(the “Additional Units”) at the Per Unit Price and at the aggregate purchase price of US$700,000
(the “Additional Purchase Price”). The purchase of the Additional Units is at the sole discretion
of the Purchaser but is only available to the Purchaser for 180 days following the Execution Date
after which time the Purchaser’s right to acquire the Additional Units lapses (“Additional Units
Expiration Date”).
2. CLOSING DATE; DELIVERY
2.1 Closing Date. It is anticipated that the purchase and sale of the Units hereunder
shall be consummated at a closing (the “Closing”) held at the offices of Xxxxxx & Xxxxxx LLP, 0000
Xxxxxx Xxxxxxxxx, Xxxxx 000, XxXxxx, XX 00000 on September 20, 2005, at 10:00 a.m., local time, or
at such other date, time and place upon which the Company and the Purchaser shall agree (the date
and time of the Closing is hereinafter referred to as the “Closing Date”). It is anticipated that
the purchase and sale of the Additional Units hereunder shall be consummated at a closing (the
“Additional Closing”) held at the offices of Xxxxxx & Xxxxxx LLP, 0000 Xxxxxx Xxxxxxxxx, Xxxxx 000,
XxXxxx, XX 00000, at 10:00 a.m., local time, no later than 14 days following the receipt of the
Additional Purchase Price, or at such other date, time and place upon which the Company and the
Purchaser shall agree, but no later than the Additional Units Expiration Date (the date and time of the Additional Closing is hereinafter referred to as the
“Additional Closing Date”).
2.2 Delivery and Payment.
At the Closing and the Additional Closing, the Company will deliver to the Purchaser a
certificate or certificates, registered in the Purchaser’s name, representing the Shares and
Warrants to be purchased by the Purchaser at the Closing and the Additional Closing, against
payment of the Purchase Price therefor, by wire transfer per the Company’s instructions.
2.3 Escrow of Funds Pending Closing.
Concurrent with the execution of this Agreement, the Purchaser will tender to legal counsel
for the Company funds equal to the Purchase Price for the Units. Such funds will be held by such
counsel in escrow pending notice by the Company and Purchaser of the Closing. If the Closing has
not occurred by the termination date specified in Section 8.1, the parties will instruct counsel to
return the funds to the Purchaser. Such funds shall be delivered to Xxxxxx & Xxxxxx LLP, 0000
Xxxxxx Xxxxxxxxx, XxXxxx, Xxxxxxxx 00000, Attn.: Xxxxx X. Xxxxx, Esq. by wire transfer to the
following account:
| Account Name: | Xxxxxx & Xxxxxx LLP Client Trust Account | |||
| Account No. | 3700 3879 | |||
| ABA No. | 000 00 0000 | |||
| Bank Name: | Citibank FSB | |||
| 0000 Xxxxxxxxxxxx Xxxxxx, XX | ||||
| Xxxxxxxxxx, XX 00000 | ||||
| Note: | O2Diesel Corporation / Equity Subscription |
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser that, as of the Closing Date:
3.1 Organization and Standing; Certificate of Incorporation and Bylaws. The Company
is a corporation duly organized and existing under, and by virtue of, the laws of the State of
Delaware and is in good standing under such laws. The Company has all requisite legal and
corporate power and authority to execute and deliver this Agreement, to sell and to issue the Units
hereunder, and to issue the shares of Common Stock issuable upon exercise of the Warrants.
3.2 Disclosure Documents. The Disclosure Documents (as hereinafter defined) are true,
correct and complete in all material respects, and do not contain an untrue statement of material
fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
Since the respective dates as of which information was given in the Disclosure Documents, except as
otherwise stated therein, there has been no material adverse change in the financial condition, or
in the results of operations or affairs of the Company.
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4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as follows:
4.1 Preexisting Relationship with Company; Business and Financial Experience. By
reason of its business or financial experience or the business or financial experience of its
professional advisors who are unaffiliated with the Company and who are not compensated by the
Company, the Purchaser has the capacity to protect its own interests in connection with the
purchase of the Units. Purchaser is an “accredited investor” as defined in Rule 501(a) under the
Securities Act of 1933, as amended (“Securities Act”).
4.2 Investment Intent; Blue Sky.
It is acquiring the Units for investment for its own account, not as a nominee or agent, and
not with a view to, or for resale in connection with, any distribution thereof. It understands
that the issuance of the Units and the Shares of Common Stock issuable upon exercise of the
Warrants have not been, and will not be, registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Securities Act, the availability of
which depends upon, among other things, the bona fide nature of the Purchaser’s investment intent
and the accuracy of the Purchaser’s representations as expressed herein. The Purchaser’s address
set forth herein represents the Purchaser’s true and correct state of domicile, upon which the
Company may rely for the purpose of complying with applicable “Blue Sky” laws.
4.3 Rule 144.
It acknowledges that the Units and the shares of Common Stock issuable upon exercise of the
Warrants must be held indefinitely unless subsequently registered under the Securities Act or
unless an exemption from such registration is available. It is aware of the provisions of Rule 144
promulgated under the Securities Act which permit limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among other things, the
existence of a public market for the shares, the availability of certain current public information
about the Company, the resale occurring not less than one year after a party has purchased and paid
for the security to be sold, the sale being effected through a “broker’s transaction” or in a
transaction directly with a “market maker,” and the number of shares being sold during any
three-month period not exceeding specified limitations.
4.4 Restrictions on Transfer; Restrictive Legends.
It understands that the transfer of the Units and the shares of Common Stock issuable upon
exercise of the Warrants is restricted by applicable state and Federal securities laws and by the
provisions of this Agreement, and that the certificates representing the Shares, the Warrants and
the shares of Common Stock issuable upon exercise of the Warrants will be imprinted with legends in
the following form restricting transfer except in compliance therewith:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED BY THE HOLDER FOR ITS OWN ACCOUNT, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO THE
DISTRIBUTION OF SUCH SECURITIES. THESE SECURITIES HAVE NOT
ACQUIRED BY THE HOLDER FOR ITS OWN ACCOUNT, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO THE
DISTRIBUTION OF SUCH SECURITIES. THESE SECURITIES HAVE NOT
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BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT
(I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND COMPLIANCE
WITH SUCH STATE SECURITIES LAWS, (II) IN COMPLIANCE WITH RULE 144 UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS, OR (III) UPON THE DELIVERY TO O2DIESEL CORPORATION
(THE “COMPANY”) OF AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION AND/ OR COMPLIANCE IS NOT REQUIRED.
4.5 Access to Data; Disclosure Documents.
Purchaser acknowledges that it has received all such information as Purchaser deems necessary
and appropriate to enable it to evaluate the financial risk inherent in making an investment in the
Units, including but not limited to the Company’s reports filed under the Securities Exchange Act
of 1934, as amended, with the SEC (“Disclosure Documents”). Purchaser further acknowledges that
Purchaser has (a) received satisfactory and complete information concerning the business and
financial condition of the Company in response to all inquiries in respect thereof, and (b) been
given the opportunity to meet with management of the Company. Purchaser has relied solely upon the
Disclosure Documents, advice of its representatives, if any, and independent investigations made by
the Purchaser and/or its representatives, if any, in making the decision to purchase the Units and
acknowledges that no representations or agreements other than those set forth in this Agreement
have been made to the Purchaser in respect thereto.
4.6 Authorization.
All action on the part of the Purchaser’s partners, members, board of directors, and
stockholders, as applicable, necessary for the authorization, execution, delivery and performance
of this Agreement by the Purchaser, the purchase of and payment for the Units and the performance
of all of the Purchaser’s obligations under this Agreement have been taken or will be taken prior
to the Closing.
5. COVENANTS.
5.1 Registration.
The Company agrees it shall within thirty (30) days following the Closing and the Additional
Closing, prepare and file, at its own expense, a registration statement or registration statements
for all the Shares (the “Registration Statements”) under the Securities Act with the SEC. The
Company will use its reasonable best efforts to cause such Registration Statements to become
effective within ninety (90) days, or one hundred twenty (120) days if such Registration Statement
is subject to review by the staff of the SEC (the “Deadline”), in each case from the initial filing
thereof. The Company will pay to the Purchaser, in cash or shares of Common Stock at the Company’s
discretion, 1% of the Purchaser Price as liquidated damages for every month after the Deadline that
it takes for the Registration Statements to be declared effective.
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Any damages paid by the Company in shares of Common Stock will be calculated at the Per Unit
Price.
5.2 Continuing Board Representation.
For so long as the Purchaser holds at least seventy five percent (75%) of the Shares purchased
hereunder, the Company undertakes to nominate to the first available seat on the Board of Directors
of the Company, a candidate put forward by the Purchaser; provided, however, that such candidate
must meets all the necessary criteria required by the American Stock Exchange (the “AMEX”) and the
SEC to qualify as “independent director” and must otherwise be reasonably acceptable to the
Nominating Committee of the Board of Directors of the Company.
5.3 Intellectual Property. No patent or intellectual property of the Company is
subject to any litigation, proceeding or judgment restricting in any manner the use, transfer, or
licensing thereof by the Company, or that may affect the validity, use, or enforceability of the
patent or intellectual property. Following the Closing, the Company will provide to the Purchaser
all necessary documentation to verify the Company’s ownership in the patents and intellectual
property.
6. CONDITIONS TO CLOSING OF THE PURCHASER
The Purchaser’s obligation to purchase the Units is, unless waived in writing by the
Purchaser, subject to the fulfillment as of the date of Closing of the following conditions:
6.1 Representations and Warranties Correct.
The representations and warranties made by the Company in Section 3 hereof shall be true and
correct in all material respects as of the date of the Closing.
6.2 Covenants.
All covenants, agreements and conditions contained in this Agreement to be performed or
complied with by the Company on or prior to the Closing Date shall have been performed or complied
with.
6.3 Listing.
The Shares to be issued to the Purchaser under this Agreement shall have been authorized for
listing on the AMEX, subject to official notice of issuance.
6.4 Compliance and Incumbency Certificates.
The Company shall have delivered to the Purchaser a certificate of the Company, executed by
the Chief Executive Officer of the Company, dated as of the date of the Closing and certifying to
the fulfillment of the conditions specified in Sections 6.1 and 6.2 of this Agreement.
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7. CONDITIONS TO CLOSING OF THE COMPANY
The Company’s obligation to sell and issue the Units is, unless waived in writing by the
Company, subject to the fulfillment as of the date of Closing of the following conditions:
7.1 Representations and Warranties Correct.
The representations made in Section 4 hereof by the Purchasers shall be true and correct in
all material respects as of the date of Closing.
7.2 Covenants.
All covenants, agreements, and conditions contained in this Agreement to be performed or
complied with by the Purchaser on or prior to the date of Closing shall have been performed or
complied with in all material respects.
7.3 Listing.
The Shares to be issued to the Purchaser under this Agreement shall have been authorized for
listing on the American Stock Exchange, subject to official notice of issuance.
8. MISCELLANEOUS
8.1 Termination.
This Agreement may be terminated (a) by mutual agreement of the Company and the Purchaser at
any time or (b) by either the Company or the Purchaser if the Closing shall not have occurred by
the thirtieth (30th) day following the date of this Agreement. If this Agreement is
terminated in accordance with this Section 8.1 and the transactions contemplated hereby are not
consummated, (i) this Agreement shall become null and void and of no further force and effect
except that the terms and provisions of this Section 8 shall survive the termination of this
Agreement and (ii) any termination of this Agreement shall not relieve any party hereto from any
liability for any willful breach of its obligations hereunder.
8.2 Governing Law.
This Agreement shall be governed in all respects by the internal laws of the State of Delaware
without regard to conflict of laws provisions.
8.3 Survival.
The warranties, representations, and covenants of the Company and the Purchasers contained in
or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and
Closing.
8.4 Successors and Assigns.
Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective successors and assigns of the parties.
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Nothing in this Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
8.5 Entire Agreement; Amendment.
This Agreement, including the exhibits hereto, constitutes the full and entire understanding
and agreement among the parties with regard to the subjects hereof and thereof, and no party shall
be liable or bound to any other party in any manner by any warranties, representations or covenants
except as specifically set forth herein or therein. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of the Company
and Purchaser.
8.6 Notices, etc.
All notices and other communications required or permitted hereunder shall be in writing and
shall be mailed by registered or certified mail, postage prepaid, or otherwise delivered by
facsimile transmission, by hand or by messenger, addressed:
| (a) | if to the Purchaser, to: |
Axwell Business S.A.
x/x Xxxxxxx & Xxxxxxx
Xxxxxxxxxxx, Xxxxxx, Xxxxxxxxxxx
x/x Xxxxxxx & Xxxxxxx
Xxxxxxxxxxx, Xxxxxx, Xxxxxxxxxxx
Attn: Mrs. Xxxxxxxxx Crochet
Fax: 00000000000000
| (b) | if to the Company, to: |
O2Diesel Corporation
000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxx
Fax: 000-000-0000
000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxx
Fax: 000-000-0000
or at such other address as the Company shall have furnished to the Purchasers, with a copy to:
Xxxxxx & Xxxxxx, LLP
0000 Xxxxxx Xxxx.
Xxxxx 000
XxXxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx
Fax: 000-000-0000
0000 Xxxxxx Xxxx.
Xxxxx 000
XxXxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx
Fax: 000-000-0000
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Each such notice or other communication shall for all purposes of this Agreement be treated as
effective or having been given when received if delivered personally, if sent by facsimile, the
first business day after the date of confirmation that the facsimile has been successfully
transmitted to the facsimile number for the party notified, or, if sent by mail, at the earlier of
its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States mail, addressed and mailed as aforesaid.
8.7 Delays or Omissions.
Except as expressly provided herein, no delay or omission to exercise any right, power or
remedy accruing to any party, upon any breach or default of another party under this Agreement,
shall impair any such right, power or remedy of such party nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any breach or default
under this Agreement, or any waiver on the part of any party of any provisions or conditions of
this Agreement, must be in writing and shall be effective only to the extent specifically set forth
in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.
8.8 Expenses.
The Company and the Purchasers shall bear their own expenses incurred on their own behalf with
respect to this Agreement and the transactions contemplated hereby.
8.9 Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be an
original, and all of which together shall constitute one instrument.
8.10 Severability.
In the event that any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full
force and effect without said provision, which shall be replaced with an enforceable provision
closest in intent and economic effect as the severed provision; provided that no such severability
shall be effective if it materially changes the economic benefit of this Agreement to any party.
8.11 Titles and Subtitles.
The titles and subtitles used in this Agreement are used for convenience only and are not to
be considered in construing or interpreting this Agreement.
8.12 Designation of Forum and Consent to Jurisdiction.
The parties hereto (i) designate the courts of the State of Delaware as the forum where all
matters pertaining to this Agreement may be adjudicated, and (ii) by the foregoing designation,
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consent to the exclusive jurisdiction and venue of such courts for the purpose of adjudicating
all matters pertaining to this Agreement.
8.13 Waiver of Jury Trial.
Each of the parties hereto waives any right it may have to have a jury participate in
resolving any dispute arising out of or related to this Agreement. Instead, any such disputes
resolved in court shall be resolved in a bench trial without a jury.
[Remainder of Page Intentionally Left Blank]
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The foregoing agreement is hereby executed effective as of the date first set forth above.
| O2DIESEL CORPORATION | ||||
| By: | /s/ Xxxx X. Xxx | |||
| Name: | Xxxx X. Xxx | |||
| Title: | Chief Executive Officer | |||
| [PURCHASER] AXWELL BUSINESS S.A. | ||||
| By: | /s/ Xxxxxxxxx Crochet | |||
| Name: | Xxxxxxxxx Crochet | |||
| Title: | Director | |||
[Signature Page to Common Stock and Warrant Purchase Agreement]
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EXHIBIT A
FORM OF WARRANT
