WARRANT
Exhibit 10.4
WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT
BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF, UNLESS REGISTERED
PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT OR AN OPINION OF COUNSEL IS OBTAINED STATING
THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
April ___, 2006
O2DIESEL CORPORATION
Warrant for the Purchase of Common Stock (Void after October___, 2009)
No. W-___
FOR VALUE RECEIVED, this Warrant is hereby issued by O2DIESEL
CORPORATION, a Delaware corporation (the “Company”), to
Standard Bank Plc (the “Holder”).
Subject to the provisions of this Warrant, the Company hereby grants to Holder the right to
purchase 1,666,667 shares of the Company’s common stock, par value $.0001 per share
(“Common Stock”), at $0.825 per share (“Exercise Price”) during the period of six (6) months to
forty two (42) months following the Closing (as defined in the Common Stock and Warrant
Purchase Agreement (the “Purchase Agreement”)).
The Holder agrees with the Company that this Warrant is issued, and all the rights
hereunder shall be held, subject to all of the conditions, limitations and provisions set
forth herein.
1. Exercise of Warrant. Subject to the terms and conditions set forth herein,
the
Holder may exercise this Warrant on or after October ___, 2006 and no later than October ,
2009. To exercise this Warrant the Holder shall present and surrender this Warrant to the
Company at its principal office, with the Warrant Exercise Form, attached hereto as
Appendix A, duly executed by the Holder and accompanied by payment in cash or by
check, payable to the order of the Company, of the aggregate Exercise Price for the total
aggregate number of securities for which this Warrant is exercised. The Common Stock
deliverable upon such exercise, and as adjusted from time to time, are hereinafter referred to
as “Warrant Stock.”
Upon receipt by the Company of this Warrant, together with the executed Warrant Exercise
Form and payment of the Exercise Price, if any, for the securities to be acquired, in proper
form for exercise, and subject to the Holder’s compliance with all requirements of this
Warrant for the exercise hereof, the Holder shall be deemed to be the holder of record of the
Warrant Stock issuable upon such exercise, notwithstanding that the stock transfer books of
the Company shall then be closed or that certificates representing such securities shall not
then be actually delivered to the Holder; provided, however, that no exercise of this Warrant
shall be effective, and the Company shall have no obligation to issue any Warrant Stock to
the Holder
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upon any attempted exercise of this Warrant, unless the Holder shall have first delivered to the
Company, in form and substance reasonably satisfactory to the Company, appropriate representations
so as to provide the Company reasonable assurances that the securities issuable upon exercise may
be issued without violation of the registration requirements of the Securities Act and applicable
state securities laws, including without limitation representations that the exercising Holder is
an “accredited investor” as defined in Regulation D under the Securities Act and that the Holder
is familiar with the Company and its business and financial condition and has had an opportunity
to ask questions and receive documents relating thereto to his reasonable satisfaction.
2. Reservation of Shares. The Company will reserve for issuance and delivery
upon exercise of this Warrant all shares of Warrant Stock. All such shares shall be duly
authorized and, when issued upon such exercise, shall be validly issued, fully paid and non-assessable and free of all preemptive rights.
3. Assignment or Loss of Warrant. Subject to the transfer restrictions herein
(including Section 6), upon surrender of this Warrant to the Company or at the office of its
stock
transfer agent, if any, with the Assignment Form, attached hereto as Appendix B, duly
executed
and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and
deliver a new Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and of
reasonably
satisfactory indemnification by the Holder, and upon surrender and cancellation of this
Warrant,
if mutilated, the Company shall execute and deliver a replacement Warrant of like tenor and
date.
4. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any
rights of a stockholder in the Company, either at law or in equity, and the rights of the
Holder are
limited to those expressed in this Warrant.
5. Adjustments.
(a) Adjustment for Recapitalization. If the Company shall at any time after
the date hereof subdivide its outstanding shares of Common Stock by recapitalization,
reclassification or split-up thereof, or if the Company shall declare a stock dividend or
distribute
shares of Common Stock to its shareholders, the number of shares of Common Stock subject to
this Warrant immediately prior to such subdivision shall be proportionately increased, and if
the
Company shall at any time after the date hereof combine the outstanding shares of Common
Stock by recapitalization, reclassification or combination thereof, the number of shares of
Common Stock subject to this Warrant immediately prior to such combination shall be
proportionately decreased.
(b) Adjustment for Reorganization, Consolidation, Merger, Etc. If at any
time after the date hereof the Company has a Change in Control, the Holder agrees that, either
(a) Holder shall exercise its purchase right under this Warrant and such exercise will be deemed
effective immediately prior to the consummation of such Change in Control or (b) if the Holder
elects not to exercise the Warrant, this Warrant will expire upon the consummation of the
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Change of Control. For purposes of this Warrant, a “Change in Control” shall be deemed to occur in
the event of a change in ownership or control of the Company effected through any of the following
transactions: (i) the acquisition, directly or indirectly, by any person or related group of
persons (other than the Company or a person that immediately before the Change of Control directly
or indirectly controls, or is controlled by, or is under common control with, the Company) of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of outstanding securities possessing more than fifty percent (50%) of the total combined
voting power of the Company’s outstanding securities; or (ii) the sale, transfer or other
disposition of all or substantially all of the Company’s assets; or (iii) the consummation of a
merger or consolidation of the Company with or into another entity or any other corporate
reorganization, if more than fifty percent (50%) of the combined voting power of the continuing or
surviving entity’s securities outstanding immediately after such merger, consolidation or other
reorganization is owned by persons who were not stockholders of the Company immediately prior to
such merger, consolidation or other reorganization.
(c) Certificate as to Adjustments. The adjustments provided in this
Section 5 shall be interpreted and applied by the Company in such a fashion so as to
reasonably
preserve the applicability and benefits of this Warrant (but not to increase or diminish the
benefits hereunder). In each case of an adjustment in the number of shares of Common Stock
receivable on the exercise of the Warrant, the Company at its expense will promptly compute
such adjustment in accordance with the terms of the Warrant and prepare a certificate
executed
by two executive officers of the Company setting forth such adjustment and showing in detail
the
facts upon which such adjustment is based. The Company will mail a copy of each such
certificate to each Holder.
(d) Notices of Record Date, Etc. In the event that:
(i) the Company shall declare any dividend or other distribution to the holders of Common
Stock, or authorizes the granting to Common Stock holders of any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other securities; or
(ii) the Company has a Change in Control; or
(iii) the Company authorizes any voluntary or involuntary dissolution, liquidation or
winding up of the Company,
then, and in each such case, the Company shall mail or cause to be mailed to the holder of this
Warrant at the time outstanding a notice specifying, as the case may be, (a) the date on which a
record is to be taken for the purpose of such dividend, distribution or right, and stating the
amount and character of such dividend, distribution or right, or (b) the date on which such
reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding up is to take place, and the time, if any is to be fixed, as to which the holders of
record of Common Stock shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding up. Such notice shall be mailed at least 20 days
prior to the date therein specified.
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(e) No Impairment. The Company will not, by any voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all the provisions of
this Section 5 and in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder of this Warrant against impairment.
6. Transfer to Comply with the Securities Act. This Warrant and any Warrant
Stock may not be sold, transferred, pledged, hypothecated or otherwise disposed of except as
follows: (a) to a person who, in the opinion of counsel to the Company, is a person to whom
this
Warrant or the Warrant Stock may legally be transferred without registration and without the
delivery of a current prospectus under the Securities Act with respect thereto and then only
against receipt of an agreement of such person to comply with the provisions of this Section 6
with respect to any resale or other disposition of such securities; or (b) to any person upon
delivery of a prospectus then meeting the requirements of the Securities Act relating to such
securities and the offering thereof for such sale or disposition, and thereafter to all
successive
assignees.
7. Legend. Unless the shares of Warrant Stock have been registered under the
Securities Act, upon exercise of this Warrant and the issuance of any of the shares of Warrant
Stock, all certificates representing shares shall bear on the face thereof substantially the
following legend:
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 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 02DIESEL CORPORATION (THE “COMPANY”)
OF AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION AND/ OR COMPLIANCE IS NOT REQUIRED.
8. Notices. All notices required hereunder shall be in writing and shall be deemed given
when telegraphed, delivered personally or within two days after mailing when mailed by certified
or registered mail, return receipt requested, to the Company or the Holder, as the case may be,
for whom such notice is intended, if to the Holder, at the address of such party as set forth in
the Purchase Agreement, or if to the Company, 02Diesel Corporation, 000 Xxxxxxxx Xxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxx 00000 or at such other address of which the Company or the Holder has been
advised by notice hereunder.
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9. Applicable Law. The Warrant is issued under and shall for all purposes be governed by and
construed in accordance with the laws of the State of Delaware, without regard to the conflict of
laws provisions of such State.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on its behalf, in its
corporate name, by its duly authorized officer, all as of the day and year first above written.
| O2Diesel Corporation |
||||
| By: | ||||
| Xxxx X. Xxx | ||||
| Chief Executive Officer | ||||
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Appendix A
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the within Warrant to purchase
shares of the Common Stock of 02DIESEL CORPORATION, a Delaware
corporation, pursuant to the provisions of Section 1 of the attached Warrant, and hereby makes
payment of $ in payment therefor. The undersigned’s execution of this form
constitutes the undersigned’s agreement to all the terms of the Warrant and to comply therewith.
| Signature | ||||||||
| Print Name: | ||||||||
| Signature, if jointly held | ||||||||
| Print Name: | ||||||||
| Date: | ||||||||
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