EXHIBIT 10.2
PLEASE EXECUTE SIGNATURE PAGE AND FAX THE
COMMITMENT LETTER TO ANN B. RUPLE AT CLEAN DIESEL
TECHNOLOGIES, INC., 203-323-0461
CLEAN DIESEL TECHNOLOGIES, INC.
UNITED STATES PRIVATE PLACEMENT OF COMMON STOCK
COMMITMENT LETTER
[INSERT NAME], a [INSERT JURISDICTION] company ("Buyer"), of [INSERT ADDRESS]
hereby agrees with Clean Diesel Technologies, Inc., a Delaware corporation (the
"Company") with a principal place of business at 300 Atlantic Street, Suite 702,
Stamford, Connecticut 06901 to purchase Shares of the Company on the Closing and
on the following terms and conditions as to which Company and Buyer agree.
Shares: , being the number of shares of Common Stock, par
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$0.05 per share, of the Company ("CDT Common") which
Buyer agrees to purchase from Company and Company agrees to
sell to Buyer for the Total Purchase Price at the Price per
Share (the "Primary Shares").
Price per Share: USD $1.35 per Primary Share.
Total Purchase
Price: USD $
Warrants: Included with the Primary Shares and for the Total Purchase
Price shall be (i) one Warrant for the purchase of
74,074 of Warrant Shares at the exercise price of $2.00 per
share (the "$2.00 Warrant Shares") and (ii) one Warrant for
the purchase of 74,074 of Warrant Shares at the exercise
price of $2.50 per share (the "$2.50 Warrant Shares"). The
Warrants shall expire 180 days after Closing for the $2.00
Warrant Shares and 360 days after Closing for the $2.50
Warrant Shares. The form of Warrants shall be that of
Schedule B attached to this Commitment Letter.
Voting Rights: Primary Shares and Warrant Shares shall have one vote per
share in accordance with Delaware law. Warrant Shares
shall have no voting rights until the Warrants are exercised
and the Warrant Shares are issued and outstanding.
Stock Exchange
Listing: The Company undertakes promptly to apply to list the Shares
when issued on the Alternative Investment Market of the
London Stock Exchange, and, when listing requirements are
satisfied, The American Stock Exchange, or at the Company's
election, another recognized U.S. stock exchange.
Purpose: Seller shall apply the Purchase Price of the Shares toward
the general corporate expenses of the Company.
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Resale
Limitations: The purchase and sale of the Shares is subject to Regulation
D of the U.S. Securities and Exchange Commission relating to
an available exemption from registration for the sale of
securities by U.S. issuers in private transactions. To that
end Buyer represents and agrees that (i) it is an
"Accredited Investor" within the meaning of Regulation D,
(ii) it is acquiring the Shares for its own account with no
present intention to sell or distribute the Shares, Warrants
or Warrant Shares, (iii) with respect to the Primary Shares,
Warrants and Warrant Shares, it shall comply with the
Transfer Restrictions set out on Schedule A attached to this
Commitment Letter, (iv) that such Transfer Restrictions
shall be set out in a legend on certificate(s) representing
the Primary Shares and Warrant Shares and on the Warrants,
and (v) that the Company may refuse (or cause its transfer
agent and registrar to refuse) transfer and registration of
any Primary or Warrant Shares or Warrant transferred
otherwise than in accordance with the Transfer restrictions.
Registration: The Company shall promptly after the completion of its
annual audit for the year 2006 prepare a registration
statement under the U.S. Securities Act of 1933 for the
registration for resale by Buyer of the Primary Shares, the
Warrants and the Warrant Shares, and file the same not later
than six months after the Closing with the U.S. Securities
and Exchange Commission and, to the extent commercially
practicable, shall use its best efforts to cause such
registration to become effective, all on the terms set forth
on Schedule C attached to this Commitment Letter.
Payment: Payment shall be made on December 29, 2006 (the "Payment
Date") by wire transfer to the Company's account, in
U.S. Dollars, to Bank of America N.A., One Landmark Square,
Stamford CT 06901 USA, ABA # 26009593, F/B/O/ Clean Diesel
Technologies, Inc. A/C # 0093698-10952
Closing: Closing shall be five (5) days following the Payment Date
and shall be effected by delivering certificates evidencing
the Primary Shares and the Warrants registered in the name
and address of the Buyer as set out above or in the name(s)
of such other nominee(s) or designee(s) of Buyer as Buyer
shall have advised the Company in writing on or before the
Payment Date at the office of the Buyer set out above.
Law: This Commitment Letter and the purchase of the Primary
Shares, the Warrants and the Warrant Shares shall be
governed by Delaware Law without reference to the conflicts
of laws rules of any jurisdiction.
Signatures: This Commitment Letter is signed by the following authorized
representatives of the parties as of the last date written
below.
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This Commitment Letter to buy and sell Shares has been executed and delivered by
the following authorized representatives of the Buyer and the Company.
Clean Diesel Technologies, Inc. [INSERT NAME OF BUYER]
By: By:
Name: Name:
Title: Title:
No. of Primary Shares:
No. of $2.00 Warrants:
No. of $2.50 Warrants:
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SCHEDULE A
REGULATION D PRIVATE PLACEMENT
TRANSFER RESTRICTIONS
The Shares have not been registered under the Securities Act of 1933 (the Act")
and may not be offered, sold, pledged or otherwise transferred except pursuant
to an exemption from or in transactions not subject to the registration
requirements of the Act. Accordingly, the Shares are being placed in a private
transaction in reliance on Regulation D the Act.
Each U.S. Holder of Shares represents and agrees, as follows:
A. It is an "Accredited Investor" within the meaning of Regulation D and is
acquiring the Primary Shares and the Warrants and Warrant Shares for its
own account or an account with respect to which it exercises sole
investment discretion and that it has no present intention of any further
sale or distribution of the Primary Shares, Warrants or Warrant Shares and
is aware that the acquisition of Shares is being made in reliance on
Regulation D under the U.S. Securities Act.
B. It acknowledges that the Shares have not been registered under the Act and
may not be offered or sold except as provided below.
C. It understands and agrees:
1. that the Shares are being offered in a private placement in
reliance upon Regulation D under the Act; and
2. that it shall not offer, sell, pledge or otherwise transfer the
Shares within two years after the date of original issuance of the
Shares or, in the case of an affiliate of the Company, at any time
until the later of (i) two years after the date of original issuance
of the Shares or (ii) three months after it ceases to be an affiliate
of the Company:
(a) to the Company;
(b) pursuant to an effective registration statement under the
Act and in accordance with any applicable securities laws of any
state of the United States;
(c) in an offshore transaction complying with Regulation S under
the Act;
(c) in a transaction in accordance with Rule 144 under the Act,
if applicable under the Act;
(d) pursuant to an exemption from the registration requirements
of the Act; or
(e) in a transaction that does not require registration under
the Act but is in accordance with applicable state securities
laws and in relation to which the transferor has furnished to the
Company an opinion to such effect from counsel of recognized
standing in form and substance satisfactory to the Company prior
to such offer, sale, pledge or transfer.
D. It understands that in any resale and transfer of Shares it will, and each
subsequent holder is required to notify any purchaser of Shares of the
resale restrictions referred to above, if then applicable. This
notification requirement will be satisfied, by virtue of the fact that the
following legend will be placed on the certificates of the Shares, unless
otherwise agreed to by the Company:
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THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF
THE COMPANY THAT THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED BY SUCH HOLDER PRIOR TO THE LATER OF THE (X) SECOND
ANNIVERSARY OF THE ISSUANCE HEREOF OR (Y) IF APPLICABLE, THREE MONTHS AFTER
IT CEASES TO BE AN AFFILIATE, OTHER THAN (1) TO THE COMPANY, (2) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY APPLICABLE LAWS OF ANY STATE OF THE UNITED STATES, (3)
IN AN OFFSHORE TRANSACTION COMPLYING WITH REGULATION S UNDER THE SECURITIES
ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144, IF APPLICABLE, UNDER THE SECURITIES ACT OR (5) IN
A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT
BUT IS IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND IN RELATION
TO WHICH THE HOLDER HAS FURNISHED TO THE COMPANY AN OPINION TO SUCH EFFECT
FROM COUNSEL OF RECOGNISED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO
THE COMPANY PRIOR TO SUCH OFFER, SALE, PLEDGE OR TRANSFER.
E. It acknowledges that the foregoing restrictions apply to holders of
beneficial interests in the Shares as well as to holders of Shares.
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SCHEDULE B
FORM OF WARRANT
NO.
NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR QUALIFIED UNDER ANY STATE
SECURITIES LAWS. THIS WARRANT OR SAID SECURITIES MAY NOT BE SOLD OR OFFERED FOR
SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND APPLICABLE STATE SECURITIES
LAWS OR UNLESS AN EXEMPTION TO SUCH REGISTRATION AND QUALIFICATION ARE
AVAILABLE.
[INSERT DATE]
[INSERT NO. OF SHARES] SHARES
WARRANT FOR PURCHASE OF COMMON STOCK
OF CLEAN DIESEL TECHNOLOGIES, INC.
(A DELAWARE CORPORATION)
This Certifies that [INSERT NAME] (the "Holder") of [INSERT ADDRESS] for
value received and subject to the provisions hereinafter set forth is entitled
to purchase from Clean Diesel Technologies, Inc. (the "Company"), [INSERT NO. OF
SHARES] SHARES of the Common Stock of the Company, par value $.05 per share (the
"Shares"), at a price of [INSERT EITHER $2.00/2.50] per share (the "Exercise
Price") on or before 5:00 p.m. local time at the then executive offices of the
Company on [INSERT DATE EITHER 180 OR 360 DAYS AFTER THE CLOSING DATE]. This
Warrant shall be void unless exercised on or before such time and date.
1. Commitment Letter. This Warrant is issued pursuant to that certain Commitment
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Letter and related correspondence, relating to the private placement on [INSERT
CLOSING DATE] of common shares of the Company, between the Company and the
Holder providing for the issuance to the Holder of Warrants evidencing the right
of the Holder to purchase shares of Common Stock of the Company.
2. Exercise. This Warrant may be exercised from time to time by the Holder as to
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the whole or any lesser number of the Shares upon tender of this Warrant at the
then executive office of the Company with a written notice signed by the Holder
to the attention of the Company Secretary expressing the Holder's intent to
exercise the same together with payment to the Company of the Exercise Price of
the Shares stated in the notice to be purchased. If this Warrant is exercised in
respect of less than all of the Shares, the number of Shares not purchased shall
be endorsed hereon by the Company Secretary and this Warrant as so endorsed
shall be returned by the Company Secretary to the Holder.
3. No Stockholder Rights. This Warrant does not confer upon the Holder or the
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Holder's permitted Assignees any right whatsoever as a stockholder of the
Company, including without limiting the generality of the foregoing, the right
to vote, to receive notices and the right to receive dividends, prior to the
exercise of the Holder's rights to purchase the Shares as provided herein.
4. Compliance with Securities Laws. This Warrant and the Shares have not been
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registered under the Securities Act of 1933 (the "Act") or qualified under the
securities laws of the several states of the United States ("State Laws"). This
Warrant and the Shares have been purchased for investment and not with a present
intention as to distribution or resale, and may not be assigned, sold or made
subject to a security
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interest, pledged, hypothecated, or otherwise transferred without an effective
registration statement for such Warrant or Shares under the Act and
qualification under State Laws or an opinion of counsel satisfactory to the
Company that such registration and qualification are not required. Any shares
issued upon the exercise of this Warrant (unless pursuant to an effective
registration statement under the Act) shall bear the following legend:
THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE
BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE OFFERED, SOLD,
PLEDGED, OR OTHERWISE TRANSFERRED BY SUCH HOLDER PRIOR TO THE LATER OF
THE (X) SECOND ANNIVERSARY OF THE ISSUANCE HEREOF OR (Y) IF
APPLICABLE, THREE MONTHS AFTER IT CEASES TO BE AN AFFILIATE, OTHER
THAN (1) TO THE COMPANY, (2) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE LAWS OF ANY STATE OF THE UNITED STATES, (3) IN AN OFFSHORE
TRANSACTION COMPLYING WITH REGULATION S UNDER THE SECURITIES ACT, (4)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144, IF APPLICABLE, UNDER THE SECURITIES ACT OR (5)
IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE
SECURITIES ACT BUT IS IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS AND IN RELATION TO WHICH THE HOLDER HAS FURNISHED TO THE COMPANY
AN OPINION TO SUCH EFFECT FROM COUNSEL OF RECOGNISED STANDING IN FORM
AND SUBSTANCE SATISFACTORY TO THE COMPANY PRIOR TO SUCH OFFER, SALE,
PLEDGE OR TRANSFER.
5. Sale; Assignment. (a) This Warrant may not be transferred, sold, or made
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subject to a security interest or charge, pledged, hypothecated, or otherwise
transferred absent compliance with the transfer restrictions set forth above in
this Warrant.
(b) Upon such compliance with the transfer restrictions and upon the delivery to
the Company at its executive office of this Warrant along with a duly completed
Assignment Form substantially in the form of Exhibit A hereto (and the required
legal opinion, if there shall be no registration under the Act), the Company
shall execute and deliver a new Warrant in the form of this Warrant (including
the legend set forth above on the first page hereof, unless registered under the
Act and any applicable State Laws), but registered in the name of the assignee,
to purchase the number of Shares or that fraction of the Shares issuable under
the original Warrant assigned to the assignee. In case the Holder shall assign
this Warrant with respect to less than all of the Shares that may be purchased
under this Warrant, the Company shall execute a new warrant in the form of this
Warrant for the balance of such Shares or the remaining fraction of the Shares
issuable under the original Warrant and deliver such new warrant to the Holder.
(c) Any transfer or sale or attempted transfer or sale of this Warrant in
violation of any provision of this Warrant shall be void, and the Company shall
not record such transfer on its books or treat any purported transferee of the
Warrant as the owner of the Warrant for any purpose.
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6. Representations of Holder. The Holder represents to the Company by acceptance
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of this Warrant, as follows:
(a) The Holder acquired this Warrant from the Company and will acquire
Shares issuable upon exercise hereof, for its own account, for investment
purposes only and not with a present view to the resale and distribution
thereof, in whole or in part.
(b) The Holder shall comply with the transfer restrictions set out above
and the Holder understands that this Warrant and the Shares issuable on exercise
hereof must be held indefinitely unless subsequently registered under the Act
and qualified under any applicable State Laws, or unless exemptions from
registration and qualification are otherwise available.
7. Capital Adjustments. The Exercise Price and the number of Shares purchasable
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hereunder are subject to adjustment from time to time, as follows:
(a) If at any time there shall be a merger or consolidation of the Company with
or into another corporation when the Company is not the surviving corporation,
then, as part of such merger or consolidation, lawful provision shall be made so
that the Holder shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified herein and upon payment of the aggregate
Exercise Price then in effect, the number of shares of stock or other securities
or property of the successor corporation resulting from such merger or
consolidation, to which the Holder would have been entitled in such merger or
consolidation, if this Warrant had been exercised immediately before such merger
or consolidation.
(b) If the Company at any time shall, by subdivision, combination or
reclassification of securities or otherwise, change any of the Shares into the
same or a different number of securities of any other class or classes, this
Warrant shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with respect
to the Shares immediately prior to such subdivision, combination,
reclassification or other change.
(c) If the Company at any time shall split or subdivide its Common Stock, the
Exercise Price shall be proportionately decreased and the number of Shares
issuable pursuant to this Warrant shall be proportionately increased. If the
Company at any time shall combine its Common Stock, the Exercise Price shall be
proportionately increased and the number of Shares issuable pursuant to this
Warrant shall be proportionately decreased.
8. Governing Law. This Warrant shall be governed by and construed for all
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purposes by in accordance with the laws of the State of Delaware without
reference to the conflicts of laws rules of any jurisdiction.
9. Notices. Any notice effecting an exercise of this Warrant shall, if in
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writing, be effective upon receipt by the Company of the Warrant, notice of
exercise and payment of the Exercise Price. Other notices shall, if in writing,
be effective on receipt, if delivered in person or by facsimile transmission,
or, if given by mail, four (4) days after deposit in the mail service, air-mail
postage pre-paid, in any case to the then executive office of the Company to the
attention of the Company Secretary, or, if to the Holder, to the address given
above or to such other address by notice so given.
10. Holidays. If the last or appointed day for the taking of any action or the
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expiration of any right required or granted herein shall be a Saturday, Sunday
or a legal holiday, then such action may be taken or such right may be exercised
on the next succeeding day not a Saturday, Sunday or a legal holiday.
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11. Lost Warrants. The Company covenants with the Holder that, upon receipt of
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evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Company will make and deliver a new Warrant of like tenor,
in lieu of the lost, stolen, destroyed or mutilated Warrant.
12. Fractional Shares. Fractional Shares may not be purchased hereunder. In lieu
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of fractional Shares the Holder shall be entitled to receive a cash payment
equal to the fair market value for such fractional share. Fair market value
shall be the average of the high and low trading prices of a Share both (i) in
the U.S., on the over the counter market (OTC-BB) or on a recognized stock
Exchange, if listed, and (ii) also in the U.K., on the Alternative Investment
Market (AIM) on the date of exercise, or if there shall be no such trading
prices in either location, then the average of the bid and asked prices.
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SCHEDULE C
ADDITIONAL PROVISIONS RELATING TO
REGISTRATION OF PRIMARY SHARES
The Company's undertaking to register the Primary Shares and the Shares
underlying the Warrants with the Securities and Exchange Commission (the
"Commission"), is subject to the following terms and conditions:
1. Effective Period. The effectiveness of the registration statement covering
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the Primary Shares (the "Statement") shall be maintained until the earlier of
(i) the second anniversary of the Closing or (ii) the eligibility for resale of
the Primary Shares by the several Buyers thereof within the volume and time
restrictions of Commission Rule 144 under the Act.
2. Expenses. The Company shall pay all expenses related to the filing,
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effectiveness and maintenance of the effectiveness of the Statement; provided,
however, the Buyer shall assume all expenses, fees and commissions, if any, of
its own attorneys, accountants and financial or other advisors with respect to
the Statement or any resale of the Primary Shares.
3. Amendments. The Company shall from time to time file such amendments to the
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Statement as, in the opinion of the Company, shall be necessary or appropriate
for purposes of resale of the Primary Shares by the Buyers thereof or otherwise
to comply with applicable law.
4. Buyer Information. Buyer shall furnish to the Company all such information
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concerning Buyer as shall be required for inclusion in the Statement and Buyer
hereby indemnifies the Company and its Directors and Officers against any and
all liability accruing to the Company arising out of a material misstatement or
omission of a material fact with respect to such required information in the
form furnished by Buyer.
5. Blue Sky Law. The Company shall undertake to qualify the Primary Shares for
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resale under the securities laws of the several states of the United States in
those jurisdictions where, in the opinion of the Company, it will substantially
facilitate the resale of the Primary Shares and it shall be commercially
practicable to do so; provided, however, that Company shall not be required to
effect any such qualification in any jurisdiction, if such qualification shall
require the Company to qualify to do business in a jurisdiction where it is not
so qualified, or to consent to general service of process in any jurisdiction,
or to require any of its directors or officers to register as a securities
dealer or investment advisor in any jurisdiction, or to subject itself to
taxation in any such jurisdiction.
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WITNESS the seal of the Company and the signature of its duly authorized
officers as of the date first written above.
CLEAN DIESEL TECHNOLOGIES, INC.
By:
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Name: Ann B. Ruple
Title: Vice President & Treasurer
Attest:
Name: Charles W. Grinnell
Title: Secretary
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Exhibit A
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Form of Assignment
[To be executed only upon permitted transfer of Warrant]
To: Clean Diesel Technologies, Inc.
For value received, the undersigned registered holder of the attached Warrant
hereby sells, assigns and transfers unto pursuant to and in accordance with the
terms of such Warrant, the right represented by such Warrant to purchase Shares
of Clean Diesel Technologies, Inc. to which such Warrant relates and appoints
Attorney to make such transfer on the books of Clean Diesel Technologies, Inc.
maintained for such purpose, with full power of substitution in the premises.
Warrant Holder
By:
Name:
Title:
Signed in the presence of:
Date:
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