WAIVER AGREEMENT
THIS WAIVER AGREEMENT IS MADE as of July 10, 2003 BETWEEN:
O2DIESEL CORPORATION, a corporation governed by the laws of the State
of Washington
("O2DIESEL")
- and -
AAE TECHNOLOGIES INTERNATIONAL PLC, a corporation governed by the laws
of The Republic of Ireland
("AAE")
- and -
THE SHAREHOLDERS OF AAE set forth below
(collectively, the "SHAREHOLDERS").
RECITALS:
A. O2Diesel has made an offer to the shareholders of AAE offering to acquire
all of the outstanding ordinary shares in the capital of AAE (the "AAE
SUBJECT SHARES") in exchange for common stock in the capital of O2Diesel
pursuant to the terms of that certain Recommended Offer document dated June
16, 2003 (the "RECOMMENDED OFFER").
B. O2Diesel, AAE and the Shareholders entered into that certain Support
Agreement dated June 17, 2003 as a condition to the completion of the
Recommended Offer (the "SUPPORT AGREEMENT").
C. Under the terms of the Recommended Offer and Section 4.1 of Support
Agreement, O2Diesel was not obligated to complete the purchase and sale of
the AAE Subject Shares unless, at or before the Closing Time (as defined in
the Support Agreement), each of the conditions in the Recommended Offer
have been satisfied or waived in whole or in part by O2Diesel.
D. Under the terms of the Section 4.2 of Support Agreement, the Shareholders
were not obligated to complete the transactions contemplated in the Support
Agreement or to tender their AAE Shares (as such term is defined in the
Support Agreement) unless, at or before the Closing Time, each of the
conditions set forth in Section 4.2 of the Support Agreement have been
satisfied or waived in whole or in part by O2Diesel.
E. The Shareholders and O2Diesel have agreed to waive certain conditions to
the closing of the Recommended Offer pursuant to the terms of this
Agreement.
THEREFORE, the parties agree as follows:
1. O2Diesel, the Shareholders and AAE have agreed to that condition set
forth in Section 4.2(3), requiring that the Private Placement shall
have closed on or before the Completion Date (as defined in the
Support Agreement), shall be deemed to be satisfied by (a) O2Diesel's
placement of 630,000 shares of common stock of O2Diesel at US$1.50 per
share for proceeds of US$945,000 and (b) the issuance of a convertible
note in the principal amount of US$4,000,000 under the terms of that
certain Note Agreement dated July 10, 2003.
2. O2Diesel, the Shareholders and AAE have agreed to that condition set
forth in Section 4.2(8), requiring that the board of directors of
O2Diesel shall be comprised of six directors, three of whom shall be
nominated by the Shareholders, two of whom shall be nominated by
O2Diesel and one of whom shall be appointed by the nominees, shall be
deemed to be satisfied by O2Diesel's appointment of Xxxxxxx Xxxx
Xxxxx, Xxxx Xxx, Xxxxx Xxxxxx, Xxxxx Xxxxxxxxxx and Xxxxxxxx Xxxxxxxx
as directors of O2Diesel effective upon the later of the closing of
the Recommended Offer and the expiration of the waiting period under
Rule 14f-1 of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT").
3. O2Diesel, the Shareholders and AAE have agreed to that condition set
forth in Appendix I, Part A, Section 2(18), requiring that (a) AAE
shall have delivered to O2Diesel audited consolidated financial
statements of AAE for the 15 month fiscal period ended December 31,
2002 and unaudited consolidated financial statements of AAE for the
three month period ended March 31, 2003 (collectively, the "AAE
FINANCIAL STATEMENTS"), and (b) the AAE Financial Statements contain a
United States GAAP reconciliation note and comply with the
requirements under Item 17 of Form 20-F under the Exchange Act, shall
be deemed to be satisfied by AAE's delivery of the AAE Financial
Statements; provided that O2Diesel and AAE covenant to deliver United
States GAAP reconciliation note within 14 days of the Closing of the
Recommended Offer.
4. O2Diesel and AAE covenant and agree to deliver the AAE Financial
Statements containing a United States GAAP reconciliation note and
complying with the requirements under Item 17 of Form 20-F under the
Exchange Act no later than 14 days after the Closing of the
Recommended Offer.
5. O2Diesel and Shareholders agree that, except as otherwise provided
herein, no further action is required to be taken to satisfy the
conditions referenced in Sections 1, 2, and 3 of this Agreement.
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6. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which taken
together shall be deemed to constitute one and the same instrument.
Counterparts may be executed either in original or faxed form and the
parties adopt any signatures received by a receiving fax machine as
original signatures of the parties; provided, however, that either
party providing its signature in such manner shall promptly forward to
the other party an original of the signed copy of this Agreement which
was so faxed.
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IN WITNESS WHEREOF the Parties have executed this Agreement.
O2DIESEL CORPORATION
/s/ Xxxx Xxxxxxx
--------------------------------
By: Xxxx Xxxxxxx, President
AAE TECHNOLOGIES INTERNATIONAL PLC
/s/ Xxxx Xxx
-------------------------------
By: Xxxx Xxx, President
SIGNED, SEALED & DELIVERED |
In the presence of: |
|
/s/ Xxxxx Xxxxxx | /s/ Xxxx Xxx
-------------------------------------- ---------------------------------------
Witness XXXX XXX
SIGNED, SEALED & DELIVERED |
In the presence of: |
|
| Quarryside Ltd.
| By: /s/ Xxxxx X. Xxxxx
/s/ Xxxxx Xxxxxx | Xxxxx X. Xxxxx, Attorney-in-fact
-------------------------------------- ---------------------------------------
Witness QUARRYSIDE LTD.
SIGNED, SEALED & DELIVERED |
In the presence of: |
|
/s/ Xxxxx Xxxxxx | /s/ Xxxxxxx Xxxx-Xxxxx
-------------------------------------- ---------------------------------------
Witness XXXXXXX XXXX-XXXXX
SIGNED, SEALED & DELIVERED |
In the presence of: |
|
/s/ Xxxxx Xxxxxx | /s/ Xxxxx Xxxxxx
-------------------------------------- ---------------------------------------
Witness XXXXX XXXXXX
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SIGNED, SEALED & DELIVERED |
In the presence of: |
|
/s/ Xxxxx Xxxxxx /s/ Xxxxxxxx Xxx
-------------------------------------- ---------------------------------------
Witness XXXXXXXX XXX
SIGNED, SEALED & DELIVERED |
In the presence of: |
|
/s/ Xxxxx Xxxxxx /s/ Xxxxxxx Xxxx-Xxxxx
-------------------------------------- ---------------------------------------
Witness XXXXXXX XXXX-XXXXX
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