COMMON STOCK AND WARRANT PURCHASE AGREEMENT
Exhibit 10.3
This Common Stock and Warrant Purchase Agreement (this
“Agreement”) is made as of April 6th, 2006 (the “Execution Date”), by
and among O2Diesel Corporation, a Delaware corporation (the
“Company”), and Standard Bank Plc (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
3,333,333 shares (the “Shares”) of its Common Stock, pur
value $0.0001 per share (the “Common Stock”), and warrants to
purchase 1,666,667 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 3,333,333 Units at a per Unit purchase price of US$0.75 (the
“Per Unit Price”), and at the aggregate purchase price of
US$2,500,000 (the “Purchase Price”).
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,
x000 Xxxxxx Xxxxxxxxx, Xxxxx 000, XxXxxx, XX 00000 on April _,
2006, 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”).
2.2 Delivery and Payment.
At the 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, 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 3379 | |
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.
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
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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; Restrictions 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 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
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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, 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. Any damages paid by the Company in shares of
Common Stock will be calculated at the Per Unit Price.
5.2
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:
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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.
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
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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.
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:
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Attn:
Fax:
(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
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.
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8.8 Expenses.
The Company and the Purchasers shall bea 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,
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 first set forth
above.
| O2DIESEL CORPORATION | ||||||||
| By: | /s/ Xxxx X. Xxx | |||||||
| Name: | Xxxx X. Xxx | |||||||
| Title: | Chief Executive Officer | |||||||
| [PURCHASER] | ||||||||
| By: | /s/ Nic Contomichalos | |||||||
| Name: | Nic Contomichalos | |||||||
| Title: | Managing Director | |||||||
SUBJECT
TO FORMAL APPROVAL OF O2DIESEL’S BOARD OF DIRECTORS
[Signature Page to Common Stock and Warrant Purchase Agreement]
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