Exhibit 10.3


 


PRIVATE PLACEMENT WARRANTS PURCHASE AGREEMENT


 


THIS PRIVATE PLACEMENT WARRANTS
PURCHASE AGREEMENT, dated as of [●], 2021 (as it may from time to time be amended and including all exhibits referenced herein,
this “Agreement”), is entered into by and between Power & Digital Infrastructure Acquisition II Corp., a
Delaware corporation (the “Company”), and XPDI Sponsor II LLC, a Delaware limited liability company (the “Purchaser”).


 


WHEREAS, the Company intends
to consummate an initial public offering of the Company’s units (the “Public Offering”), each unit consisting
of one share of Class A common stock of the Company, par value $0.0001 per share (each, a “Share”), and one-half
of one redeemable warrant, each whole warrant entitling the holder to purchase one Share at an exercise price of $11.50 per Share, as
set forth in the Company’s Registration Statement on Form S-1, filed with the U.S. Securities and Exchange Commission (the “SEC”),
File Number 333-[●] (the “Registration Statement”), under the Securities Act of 1933, as amended (the
“Securities Act”); and


 


WHEREAS, the Purchaser has
agreed to purchase an aggregate of                  
warrants (and up to                   additional
warrants if the underwriters in the Public Offering exercise their over-allotment option in full) (the “Private Placement
Warrants”), each Private Placement Warrant entitling the holder to purchase one Share at an exercise price of $11.50 per
Share, subject to adjustment, at a price of $1.00 per warrant.


 


NOW THEREFORE, in consideration
of the mutual promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement hereby, intending legally to be bound, agree as follows:


 


AGREEMENT


 


Section 1. Authorization,
Purchase and Sale; Terms of the Private Placement Warrants.


 


A.
Authorization of the Private Placement Warrants. The Company has duly authorized the issuance and sale of the Private Placement
Warrants to the Purchaser.


 


B. Purchase
and Sale of the Private Placement Warrants.


 


(i) On
the date of the consummation of the Public Offering or on such earlier time and date as may be mutually agreed by the Purchaser and the
Company (the “IPO Closing Date”), the Company shall issue and sell to the Purchaser, and the Purchaser shall
purchase from the Company,                   Private
Placement Warrants at a price of $1.00 per warrant for an aggregate purchase price of $                 
(the “Purchase Price”). The Purchaser shall pay the Purchase Price by wire transfer of immediately available
funds in the following amounts: (i) to the Company, at a financial institution to be chosen by the Company, and (ii) $ to the trust account
maintained by Continental Stock Transfer & Trust Company, acting as trustee (the “Trust Account”), in each
case in accordance with the Company’s wiring instructions, at least one (1) business day prior to the IPO Closing Date. On the IPO
Closing Date, subject to the receipt of funds pursuant to the immediately prior sentence, the Company, at its option, shall deliver a
certificate evidencing the Private Placement Warrants purchased by the Purchaser on such date duly registered in the Purchaser’s
name to the Purchaser or effect such delivery in book-entry form.


 






     


     


    

 


(ii) On
the date of the closing of the option to purchase additional units, if any, in connection with the Public Offering or on such earlier
time and date as may be mutually agreed by the Purchaser and the Company (the “Option Closing Date”, and each
Option Closing Date (if any) and the IPO Closing Date, a “Closing Date”), the Company shall issue and sell to
the Purchaser, and the Purchaser shall purchase from the Company, up to                  
Private Placement Warrants (or, to the extent the option to purchase additional units is not exercised in full, a lesser number of Private
Placement Warrants in proportion to the portion of the option that is exercised) at a price of $1.00 per warrant for an aggregate purchase
price of up to $                  (the “Option
Purchase Price”). The Purchaser shall pay the Option Purchase Price in accordance with the Company’s wire instruction
by wire transfer of immediately available funds to the Trust Account, at least one (1) business day prior to the Option Closing Date.
On the Option Closing Date, subject to the receipt of funds pursuant to the immediately prior sentence, the Company shall, at its option,
deliver a certificate evidencing the Private Placement Warrants purchased by the Purchaser on such date duly registered in the Purchaser’s
name to the Purchaser or effect such delivery in book-entry form.


 


C. Terms
of the Private Placement Warrants.


 


(i) Each
Private Placement Warrant shall have the terms set forth in a Warrant Agreement to be entered into by the Company and a warrant agent
on the IPO Closing Date, in connection with the Public Offering (the “Warrant Agreement”).


 


(ii) At
the time of, or prior to, the IPO Closing Date, the Company and the Purchaser shall enter into a registration and stockholder rights agreement
(the “Registration and Stockholder Rights Agreement”) pursuant to which the Company will grant certain registration
rights to the Purchaser relating to the Private Placement Warrants and the Shares underlying the Private Placement Warrants.


 


Section
2. Representations and Warranties of the Company.
As a material inducement to the Purchaser to enter into this
Agreement and purchase the Private Placement Warrants, the Company hereby represents and warrants to the Purchaser (which representations
and warranties shall survive each Closing Date) that as of the Closing Date:


 


A.
Incorporation and Corporate Power. The Company is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably
be expected to have a material adverse effect on the financial condition, operating results or assets of the Company. The Company possesses
all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement and the Warrant Agreement.


 






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B. Authorization;
No Breach.


 


(i) The
execution, delivery and performance of this Agreement and the Private Placement Warrants have been duly authorized by the Company as of
the IPO Closing Date. This Agreement constitutes the valid and binding obligation of the Company, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating
to or affecting creditors’ rights and to general equitable principles (whether considered in a proceeding in equity or law). Upon
issuance in accordance with, and payment pursuant to, the terms of the Warrant Agreement and this Agreement, the Private Placement Warrants
will constitute valid and binding obligations of the Company, enforceable in accordance with their terms as of the Closing Date.


 


(ii) The
execution and delivery by the Company of this Agreement and the Private Placement Warrants, the issuance and sale of the Private Placement
Warrants, the issuance of the Shares upon exercise of the Private Placement Warrants and the fulfillment of and compliance with the respective
terms hereof and thereof by the Company, do not and will not as of the Closing Date (a) conflict with or result in a breach of the terms,
conditions or provisions of, (b) constitute a default under, (c) result in the creation of any lien, security interest, charge or encumbrance
upon the Company’s capital stock or assets under, (d) result in a violation of, or (e) require any authorization, consent, approval,
exemption or other action by or notice or declaration to, or filing with, any court or administrative or governmental body or agency pursuant
to the amended and restated certificate of incorporation of the Company or the amended and restated bylaws of the Company (in effect on
the date hereof or as may be amended prior to completion of the Public Offering) or any material law, statute, rule or regulation to which
the Company is subject, or any agreement, order, judgment or decree to which the Company is subject, except for any filings required after
the date hereof under federal or state securities laws.


 


C. Title
to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, the Shares
issuable upon exercise of the Private Placement Warrants will be duly and validly issued, fully paid and nonassessable. On the date
of issuance of the Private Placement Warrants, the Shares issuable upon exercise of the Private Placement Warrants shall have been
reserved for issuance. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, the
Purchaser will have good title to the Private Placement Warrants purchased by it and the Shares issuable upon exercise of such
Private Placement Warrants, free and clear of all liens, claims and encumbrances of any kind, other than (i) transfer restrictions
hereunder and under the other agreements contemplated hereby, (ii) transfer restrictions under federal and state securities laws,
and (iii) liens, claims or encumbrances imposed due to the actions of the Purchaser.


 


D. Governmental
Consents. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is
required in connection with the execution, delivery and performance by the Company of this Agreement or the consummation by the
Company of any other transactions contemplated hereby.


 






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E. Regulation
D Qualification. Neither the Company nor, to its actual knowledge, any of its affiliates, members, officers, directors or
beneficial stockholders of 20% or more of its outstanding securities, has experienced a disqualifying event as enumerated pursuant
to Rule 506(d) of Regulation D under the Securities Act.


 


Section
3. Representations and Warranties of the Purchaser. As a material
inducement to the Company to enter into this Agreement and issue and sell the Private Placement Warrants to the Purchaser, the Purchaser
hereby represents and warrants to the Company (which representations and warranties shall survive each Closing Date) that as of the Closing
Date:


 


A. Organization
and Requisite Authority. The Purchaser possesses all requisite power and authority necessary to carry out the transactions
contemplated by this Agreement.


 


B. Authorization;
No Breach.


 


(i) This
Agreement constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’
rights and to general equitable principles (whether considered in a proceeding in equity or law).


 


(ii) The
execution and delivery by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof by the Purchaser
does not and shall not as of each Closing Date (a) conflict with or result in a breach by the Purchaser of the terms, conditions or provisions
of, (b) constitute a default under, (c) result in the creation of any lien, security interest, charge or encumbrance upon the Purchaser’s
equity or assets under, (d) result in a violation of, or (e) require authorization, consent, approval, exemption or other action by or
notice or declaration to, or filing with, any court or administrative or governmental body or agency pursuant to the Purchaser’s
organizational documents in effect on the date hereof or as may be amended prior to completion of the contemplated Public Offering, or
any material law, statute, rule or regulation to which the Purchaser is subject, or any agreement, instrument, order, judgment or decree
to which the Purchaser is subject, except for any filings required after the date hereof under federal or state securities laws.


 


C. Investment
Representations.


 


(i) The
Purchaser is acquiring the Private Placement Warrants and, upon exercise of the Private Placement Warrants, the Shares issuable upon such
exercise (collectively, the “Securities”) for its own account, for investment purposes only and not with a view
towards, or for resale in connection with, any public sale or distribution thereof.


 


(ii) The
Purchaser is an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation D, and the Purchaser
has not experienced a disqualifying event as enumerated pursuant to Rule 506(d) of Regulation D under the Securities Act.


 






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(iii) The
Purchaser understands that the Securities are being offered and will be sold to it in reliance on specific exemptions from the registration
requirements of the United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and
the Purchaser’s compliance with, the representations and warranties of the Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire such Securities.


 


(iv) The
Purchaser did not decide to enter into this Agreement as a result of any general solicitation or general advertising within the meaning
of Rule 502(c) of Regulation D under the Securities Act.


 


(v) The
Purchaser has been furnished with all materials relating to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities which have been requested by the Purchaser. The Purchaser has been afforded the opportunity to
ask questions of the executive officers and directors of the Company. The Purchaser understands that its investment in the Securities
involves a high degree of risk and it has sought such accounting, legal and tax advice as it has considered necessary to make an informed
investment decision with respect to the acquisition of the Securities.


 


(vi) The
Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made
any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities by the Purchaser
nor have such authorities passed upon or endorsed the merits of the offering of the Securities.


 


(vii) The
Purchaser understands that: (a) the Securities have not been and are not being registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (1) subsequently registered thereunder or (2) sold in reliance
on an exemption therefrom; and (b) except as specifically set forth in the Registration and Stockholder Rights Agreement, neither the
Company nor any other person is under any obligation to register the Securities under the Securities Act or any state securities laws
or to comply with the terms and conditions of any exemption thereunder. In this regard, the Purchaser understands that the SEC has taken
the position that promoters or affiliates of a blank check company and their transferees, both before and after an initial business combination,
are deemed to be “underwriters” under the Securities Act when reselling the securities of a blank check company.
Based on that position, Rule 144 adopted pursuant to the Securities Act would not be available for resale transactions of the Securities
despite technical compliance with the requirements of such Rule, and the Securities can be resold only through a registered offering or
in reliance upon another exemption from the registration requirements of the Securities Act.


 


(viii) The
Purchaser has such knowledge and experience in financial and business matters, knowledge of the high degree of risk associated with investments
in the securities of companies in the development stage such as the Company, is capable of evaluating the merits and risks of an investment
in the Securities and is able to bear the economic risk of an investment in the Securities in the amount contemplated hereunder for an
indefinite period of time. The Purchaser has adequate means of providing for its current financial needs and contingencies and will have
no current or anticipated future needs for liquidity which would be jeopardized by the investment in the Securities. The Purchaser can
afford a complete loss of its investments in the Securities.


 






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(ix) The
Purchaser understands that the Private Placement Warrants shall bear the legend substantially in the form set forth in the Warrant Agreement.


 


Section
4. Conditions of the Purchaser’s Obligations. The obligations of the Purchaser to purchase and
pay for the Private Placement Warrants are subject to the fulfillment, on or before each Closing Date, of each of the following conditions:


 


A. Representations
and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct at and as of
the Closing Date as though then made.


 


B. Performance. The
Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before such Closing Date.


 


C. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Warrant Agreement.


 


D. Warrant
Agreement and Registration and Stockholder Rights Agreement. The Company shall have entered into the Warrant Agreement, in the
form of Exhibit A hereto, and the Registration and Stockholder Rights Agreement, in the form of Exhibit B hereto, in each case on
terms satisfactory to the Purchaser.


 


Section
5. Conditions of
the Company’s Obligations. The
obligations of the Company to the Purchaser under this Agreement are subject to the fulfillment, on or before each Closing Date, of each
of the following conditions:


 


A. Representations
and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct at and as
of such Closing Date as though then made.


 


B. Performance. The
Purchaser shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by the Purchaser on or before such Closing Date.


 


C. Corporate
Consents. The Company shall have obtained the consent of its Board of Directors authorizing the execution, delivery and
performance of this Agreement and the Warrant Agreement and the issuance and sale of the Private Placement Warrants hereunder.


 






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D. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Warrant Agreement.


 


E. Warrant
Agreement. The Company shall have entered into the Warrant Agreement with a warrant agent on terms satisfactory to the
Company.


 


Section
6. Termination. This Agreement may be terminated at any time after March 31, 2021 upon the election
by either the Company or the Purchaser upon written notice to the other party if the closing of the Public Offering does not occur prior
to such date.


 


Section
7. Survival of Representations and Warranties. All of the representations
and warranties contained herein shall survive each Closing Date.


 


Section
8. Definitions. Terms used but not otherwise defined in this Agreement shall have the meaning assigned
to such terms in the Registration Statement on Form S-l the Company has filed with the SEC under the Securities Act.


 


Section 9. Miscellaneous.


 


A. Successors
and Assigns.


 


Except as otherwise
expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors of the parties hereto whether so expressed or not. Notwithstanding the foregoing
or anything to the contrary herein, the parties may not assign this Agreement, other than assignments by the Purchaser to affiliates thereof
(including, without limitation one or more of its members).


 


B. Severability.


 


Whenever possible,
each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent
of such prohibition or invalidity, without invalidating the remainder of this Agreement.


 


C. Counterparts.


 


This Agreement may
be executed simultaneously in two or more counterparts, none of which need contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same agreement. Signatures to this Agreement transmitted via facsimile or e-mail
shall be valid and effective to bind the party so signing.


 


D.
Descriptive Headings; Interpretation.


 


The descriptive
headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement. The use of the
word “including” in this Agreement shall be by way of example rather than by limitation.


 


E. Governing
Law.


 


This Agreement shall
be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with the
internal laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the
laws of another jurisdiction.


 


F. Amendments.


 


This Agreement may
not be amended, modified or waived as to any particular provision, except by a written instrument executed by the parties hereto.


 


[Signature page follows]


 






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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.


 


	 	COMPANY:
	 	 
	 	POWER & DIGITAL INFRASTRUCTURE ACQUISITION II CORP.
	 	 	 
	 	By:	 
	 	Name:	John P. McGarrity
	 	Title:	Secretary
	 	 	 
	 	PURCHASER:
	 	 
	 	XPDI SPONSOR II LLC
	 	 	 
	 	By:	 
	 	Name:	John P. McGarrity
	 	Title:	Secretary



 






     


     


    

 


EXHIBIT A


Warrant Agreement


 


 


 



     


     


    

 


EXHIBIT B


Registration and Stockholder Rights Agreement