FORM OF WARRANT
FORM
OF 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.
July
____, 2007
O2DIESEL
CORPORATION
Warrant
for the Purchase of Common Stock
(Void
after January _____, 2013)
No.
W-________
FOR
VALUE
RECEIVED, this Warrant is hereby issued by O2DIESEL CORPORATION, a Delaware
corporation (the “Company”), to [ ], having its registered office at [ ] (the
“Holder”). Subject to the provisions of this Warrant, the Company hereby grants
to Holder the right to purchase [ ] shares of the Company’s common stock, par
value $.0001 per share (“Common Stock”), at US$[ ] per share 120% of VWAP during
the period of six (6) months to sixty-six (66) months following the Closing
(as
defined in the Common Stock and Warrant Purchase Agreement (the “Purchase
Agreement”)) (“Exercise Price”). In the event a Transaction occurs (as defined
in the Purchase Agreement), the Exercise Price shall be adjusted to the exercise
price of the warrants purchased in the Transaction.
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 January __, 2008 and no later than January ___, 2013. 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 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.
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(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
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. Reports
Under Securities Exchange Act of 1934.
With a
view to making available to the Holder the benefits of Rule 144 under the
Securities Act (“Rule 144”) and any other rule or regulation of the Securities
Exchange Commission (“Commission”) that may at any time permit a Holder to sell
securities of the Company to the public without registration, the Company
shall:
(a) make
and
keep public information available, as required by Rule 144, at all
times;
(b) file
with
the Commission in a timely manner all reports and other documents required
of
the Company under the Securities Act and the Exchange Act; and
(c) furnish
to the Holder, forthwith upon request (i) a written statement by the Company
that it has complied with the reporting requirements of Rule 144, the Securities
Act and the Exchange Act; (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the Commission which permits
the selling of any such securities without registration.
8. Legend.
(a) 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:
4
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.
(b) The
legend requirements shall terminate when (i) the shares in question shall have
been effectively registered under the Securities Act and disposed of pursuant
thereto or (ii) the Company shall have received an opinion of counsel reasonably
satisfactory to it that such legend is not required in order to insure
compliance with the Securities Act.
(c) Upon
termination of the legend requirements as per Section 8(b) above, the Company
shall instruct its transfer agent to issue a new share certificate at no cost
to
the Holder without a legend limiting the sale or transfer of the
shares.
9. 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, O2Diesel 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.
10. 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.
5
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: | ||
|
Xxxxx X. Xxxxxxx |
||
| Chief Financial Officer | ||
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Appendix
A
WARRANT
EXERCISE FORM
The
undersigned hereby irrevocably elects to (i) exercise the within Warrant to
purchase __________ shares of the Common Stock of O2DIESEL CORPORATION, a
Delaware corporation, pursuant to the provisions of Section 1 of the attached
Warrant, and hereby makes payment of $__________ in payment therefor, or (ii)
exercise this Warrant for the purchase of _______ shares of Common Stock,
pursuant to the provisions of Section 1 of the attached Warrant. 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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Appendix
B
ASSIGNMENT
FORM
FOR
VALUE
RECEIVED_____________________________ (“Assignor”) hereby sells, assigns and
transfers unto _______________________________ (“Assignee”) all of Assignor’s
right, title and interest in, to and under Warrant No. W-____ issued by
____________________________, dated ______________.
DATED:
_________________
|
ASSIGNOR:
__________________________________________
Signature
Print
Name:_________________________________
__________________________________________
Signature,
if jointly held
Print
Name:_________________________________
ASSIGNEE:
|
The
undersigned agrees to all of the terms of the Warrant and to comply
therewith.
|
__________________________________________
Signature
Print
Name:_________________________________
__________________________________________
Signature,
if jointly held
Print
Name:_________________________________
|
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