**COMMON
      STOCK AND WARRANT PURCHASE AGREEMENT**




This
      Common Stock and Warrant Purchase Agreement (this “Agreement”) is made as of
      September 15, 2006 (the “Execution Date”), by and among O2Diesel Corporation, a
      Delaware corporation (the “Company”), and Energenics Holdings Pte Ltd (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 1,371,742
      shares (the “Shares”) of its Common Stock, par value $ 0.0001 per share (the
“Common Stock”), and warrants to purchase 685,871 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 1,371,742 Units at a
      per
      Unit purchase price of US$0.729 (the “Per Unit Price”), and at the aggregate
      purchase price of US$1,000,000 (the “Purchase Price”). The Per Unit Price shall
      be calculated as 75% of the daily volume weighted average closing price per
      share of Common Stock for each of the five (5) consecutive full trading days
      in
      which such shares are traded on the American Stock Exchange during the five
      days
      prior to and including September 13, 2006 (“VWAP”).




**1.3**  **Issuance
      of Additional Warrants** **.**




The
      Company has authorized the sale and issuance to the Purchaser of additional
      warrants (“Additional Warrants”) having the terms set forth in the form attached
      hereto as Exhibit
      B ,
      at 120%
      VWAP, based on the following purchases of O2D05 or equivalent, pursuant to
      the
      Supply and Distribution Agreement, by and between the Company and Energenics
      PTE
      Ltd, an affiliate of the Purchaser (“Energenics”), on September 15, 2006
      (“Supply Agreement”):




**Warrant
                Coverage**
            **Purchases
                (in metric tons)**10%
            *10%
            *10%
            *10%
            *10%
            *




“Warrant
      Coverage” shall mean the number of warrants received for purchasing O2D05 or
      equivalent, based on a percentage of the number of Shares purchased. “Purchases”
shall mean the total cumulative amount of metric tons of O2D05 or equivalent
      purchased.




[ ***** ]
        =
        CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
        WITH
        THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
        REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. OMITTED TEXT IS INDICATED
        BY A **“*”** .







**1.4**  **Sale
      and Issuance of Additional Shares** **.**




The
      Company has authorized the sale and issuance to the Purchaser of additional
      shares equal to twenty-five (25%) of the Shares (“Additional Shares”) at the Per
      Unit Price and at the aggregate purchase price of US$250,000 (the “Additional
      Purchase Price”). The purchase of the Additional Shares shall occur if
      Energenics purchases * milliion metric tons of O2D05 or the equivalent in any
      calendar year, pursuant to the Supply Agreement.




**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 Arnold &
Porter llp ,
      1600
      Tysons Boulevard, Suite 900, McLean, VA 22102 on September 30, 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 9.1, the parties will instruct counsel to return the funds to the
      Purchaser. Such funds shall be delivered to Arnold & Porter llp ,
      1600
      Tysons Boulevard, McLean, Virginia 22102, Attn.: Kevin J. Lavin, Esq. by wire
      transfer to the following account: ****




Account
                Name:
            Arnold
                & Porter llp Client Trust AccountAccount
                No.
            3700
                3879ABA
                No.
            254
                07 0116Bank
                Name:
            Citibank
                FSB1101
                Pennsylvania Avenue, NWWashington,
                DC 20004Note:
            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.




-2-


**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 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; Restrictive 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:




-3-


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.




Without
      in any way limiting the above, the Purchaser agrees not to make any disposition
      of all or any portion of the Shares or Warrants unless and until eighteen (18)
      months after the Closing Date. Notwithstanding anything to the contrary, the
      legend requirements shall terminate when (i) the security has 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.




**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 Securities Exchange Act of 1934, as amended (“Exchange
      Act”), 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.




-4-




**5.**  **COVENANTS.**




**5.1**  **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.




**5.2**  **Registration** **.**




(a)  The
      Company agrees it shall include the Shares and Additional Shares and all Common
      Stock issued or issuable upon the exercise of the Warrants and the Additional
      Warrants including the Common Stock issued pursuant to recapitalizations, stock
      splits, stock dividends and similar distributions with respect to such shares
      (the “Registrable Securities”) on the next registration statement filed by the
      Company (the “Registration Statement”) under the Securities Act with the SEC,
      qualify the Registrable Securities under all applicable state securities laws
      and include such Registrable Securities in all other applicable compliance,
      which registration, qualification and compliance shall in no event be later
      than
      one year following the Closing Date (“Deadline”). The
      Company will pay to the Purchaser, in cash or shares of Common Stock at the
      Company’s discretion, 1% of the Purchase Price as liquidated damages for every
      month after the Deadline that it takes for the Registration Statement to be
      declared effective; *provided
      that* the
      maximum aggregate liquidated damages payable to the Purchaser under this
      Section 5.1(a) shall not exceed eight percent (8%) of the Purchase Price. If
      a
      Registration Statement is not declared effective eighteen (18) months following
      the Closing Date, the registration rights set forth in this Section 5.2 may
      be
      transferred to any transferee of Registrable Securities.




(b)  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, in each case from the initial filing thereof.




(c)  All
      the
      costs and expenses incurred in connection with the registration of the Shares,
      Warrants and Additional Warrants shall be borne by the Company.




**6.**  **INDEMNIFICATION**




**6.1**  **I** **ndemnification
      by the Company** **.**




The
      Company shall, notwithstanding any termination of this Agreement, indemnify
      and
      hold harmless the Purchaser, and each subsequent holder of the Registrable
      Securities (each a “Holder,” and collectively, the “Holders”), the officers,
      directors, members, partners, agents, brokers (including brokers who offer
      and
      sell Registrable Securities as principal as a result of a pledge or any failure
      to perform under a margin call of Common Stock), investment advisors and
      employees (and any other persons with a functionally equivalent role of a person
      holding such titles, notwithstanding a lack of such title or any other title)
      of
      each of them, each person who controls any such Holder (within the




-5-




meaning
      of Section 15 of the Securities Act or Section 20 of the Exchange Act) and
      the
      officers, directors, members, shareholders, partners, agents and employees
      (and
      any other persons with a functionally equivalent role of a person holding such
      titles, notwithstanding a lack of such title or any other title) of each such
      controlling person, to the fullest extent permitted by applicable law, from
      and
      against any and all losses, claims, damages, liabilities, costs (including,
      without limitation, reasonable attorneys’ fees) and expenses (collectively,
“Losses”), as incurred, arising out of or relating to (1) any untrue or alleged
      untrue statement of a material fact contained in a Registration Statement,
      any
      prospectus or any form of prospectus or in any amendment or supplement thereto
      or in any preliminary prospectus, or arising out of or relating to any omission
      or alleged omission of a material fact required to be stated therein or
      necessary to make the statements therein (in the case of any prospectus or
      form
      of prospectus or supplement thereto, in light of the circumstances under which
      they were made) not misleading, or (2) any violation or alleged violation by
      the
      Company of the Securities Act, Exchange Act or any state securities law, or
      any
      rule or regulation thereunder, in connection with the performance of its
      obligations under this Agreement, except to the extent, but only to the extent,
      that (i) such untrue statements or omissions are based solely upon information
      regarding such Holder furnished in writing to the Company by such Holder
      expressly for use therein, or to the extent that such information relates to
      such Holder or such Holder’s proposed method of distribution of Registrable
      Securities and was reviewed and expressly approved in writing by such Holder
      expressly for use in a Registration Statement, such prospectus or such form
      of
      prospectus or in any amendment or supplement thereto or (ii) the use by such
      Holder of an outdated or defective prospectus after the Company has notified
      such Holder in writing that the prospectus is outdated or defective. The Company
      shall notify the Holders promptly of the institution, threat or assertion of
      any
      an action, claim, suit, investigation or proceeding (including, without
      limitation, an investigation or partial proceeding, such as a deposition),
      whether commenced or threatened (“Proceeding”) arising from or in connection
      with the transactions contemplated by this Agreement of which the Company is
      aware.




**6.2**  **Indemnification
      by Holders** **.** Each
      Holder shall, severally and not jointly, indemnify and hold harmless the
      Company, its directors, officers, agents and employees, each person who controls
      the Company (within the meaning of Section 15 of the Securities Act and Section
      20 of the Exchange Act), and the directors, officers, agents or employees of
      such controlling persons, to the fullest extent permitted by applicable law,
      from and against all Losses, as incurred, to the extent arising out of or based
      solely upon: (x) such Holder’s failure to comply with the prospectus delivery
      requirements of the Securities Act or (y) any untrue or alleged untrue statement
      of a material fact contained in any Registration Statement, any prospectus,
      or
      any form of prospectus, or in any amendment or supplement thereto or in any
      preliminary prospectus, or arising out of or relating to any omission or alleged
      omission of a material fact required to be stated therein or necessary to make
      the statements therein not misleading (i) to the extent, but only to the extent,
      that such untrue statement or omission is contained in any information so
      furnished in writing by such Holder to the Company specifically for inclusion
      in
      such Registration Statement or such prospectus or (ii) to the extent that such
      information relates to such Holder’s proposed method of distribution of
      Registrable Securities and was reviewed and expressly approved in writing by
      such Holder expressly for use in a Registration Statement, such prospectus
      or
      such form of prospectus or in any amendment or supplement thereto or (ii) the
      use by such Holder of an outdated or defective prospectus after the Company
      has
      notified such Holder in writing that the prospectus is outdated or defective.
      In
      no event shall the liability of any selling Holder hereunder be greater in
      amount than the dollar amount of the net proceeds received by such Holder upon
      the sale of the Registrable Securities giving rise to such indemnification
      obligation.




-6-


**6.3**  **Conduct
      of Indemnification Proceedings** **.** If
      any
      Proceeding shall be brought or asserted against any person entitled to indemnity
      hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify
      the person from whom indemnity is sought (the “Indemnifying Party”) in writing,
      and the Indemnifying Party shall have the right to assume the defense thereof,
      including the employment of counsel reasonably satisfactory to the Indemnified
      Party and the payment of all fees and expenses incurred in connection with
      defense thereof; provided, that the failure of any Indemnified Party to give
      such notice shall not relieve the Indemnifying Party of its obligations or
      liabilities pursuant to this Agreement, except (and only) to the extent that
      it
      shall be finally determined by a court of competent jurisdiction (which
      determination is not subject to appeal or further review) that such failure
      shall have prejudiced the Indemnifying Party.




An
      Indemnified Party shall have the right to employ separate counsel in any such
      Proceeding and to participate in the defense thereof, but the fees and expenses
      of such counsel shall be at the expense of such Indemnified Party or Parties
      unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
      expenses; (2) the Indemnifying Party shall have failed within thirty days of
      written notice to assume the defense of such Proceeding and to employ counsel
      reasonably satisfactory to such Indemnified Party in any such Proceeding; or
      (3)
      the named parties to any such Proceeding (including any impleaded parties)
      include both such Indemnified Party and the Indemnifying Party, and counsel
      to
      the Indemnified Party shall reasonably believe that a material conflict of
      interest is likely to exist if the same counsel were to represent such
      Indemnified Party and the Indemnifying Party (in which case, if such Indemnified
      Party notifies the Indemnifying Party in writing that it elects to employ
      separate counsel at the expense of the Indemnifying Party, the Indemnifying
      Party shall not have the right to assume the defense thereof and the reasonable
      fees and expenses of no more than one separate counsel shall be at the expense
      of the Indemnifying Party). The Indemnifying Party shall not be liable for
      any
      settlement of any such Proceeding effected without its written consent, which
      consent shall not be unreasonably withheld or delayed. No Indemnifying Party
      shall, without the prior written consent of the Indemnified Party, effect any
      settlement of any pending Proceeding in respect of which any Indemnified Party
      is a party, unless such settlement includes an unconditional release of such
      Indemnified Party from all liability on claims that are the subject matter
      of
      such Proceeding.




Subject
      to the terms of this Agreement, all reasonable fees and expenses of the
      Indemnified Party (including reasonable fees and expenses to the extent incurred
      in connection with investigating or preparing to defend such Proceeding in
      a
      manner not inconsistent with this Section) shall be paid to the Indemnified
      Party, as incurred, within ten business days of written notice thereof to the
      Indemnifying Party; provided, that the Indemnified Party shall promptly
      reimburse the Indemnifying Party for that portion of such fees and expenses
      applicable to such actions for which such Indemnified Party is judicially
      determined to be not entitled to indemnification hereunder.




-7-


**7.**  **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:




**7.1**  **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.




**7.2**  **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.




**7.3**  **Listing** **.**




The
      Shares and Warrants to be issued to the Purchaser under this Agreement shall
      have been authorized for listing on the AMEX, subject to official notice of
      issuance.




**7.4**  **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 7.1 and 7.2 of this Agreement.




**8.**  **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:




**8.1**  **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.




**8.2**  **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.




**8.3**  **Listing** **.**




The
      Shares and Warrants 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.




**9.**  **MISCELLANEOUS**




**9.1**  **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 (30 th )
      day
      following the date of this Agreement. If this Agreement is terminated in
      accordance with this Section 9.1 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 9 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-


**9.2**  **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.




**9.3**  **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.




**9.4**  **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.




**9.5**  **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.




**9.6**  **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:




Energenics
      Holdings Pte Limited


7
      Temasek
      Boulevard


Suntec
      City Tower 1 #04-01A


Singapore
      038987


Attn:  Ronen
      Hazarika


Fax:  +65
      6415
      1656





(b)  if
      to the
      Company, to:




O2Diesel
      Corporation


100
      Commerce Drive


Suite
      300


Newark,
      Delaware 19713


Attn:
      Alan Rae


Fax:  302-266-7076




-9-


or
      at
      such other address as the Company shall have furnished to the Purchasers, with
      a
      copy to:




Arnold
      & Porter, llp


1600
      Tysons Blvd.


Suite
      900


McLean,
      Virginia 22102


Attn:
      Kevin J. Lavin


Fax:
      703-720-7399




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.




**9.7**  **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.




**9.8**  **Expenses** **.**




The
      Company and the Purchasers shall bear their own expenses incurred on their
      own
      behalf with respect to this Agreement and the transactions contemplated
      hereby.




**9.9**  **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.




**9.10**  **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.




**9.11**  **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.




-10-




**9.12**  **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.




**9.13**  **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]***






-11-





The
      foregoing agreement is hereby executed effective as of the date first set forth
      above.







**O2DIESEL
      CORPORATION**








By:  /s/
      Alan R. Rae


Name: Alan R.
      Rae


Title: Chief
      Executive Officer








**ENERGENICS
      HOLDINGS PTE LTD**








By:   /s/
      Ronen Hazarika


Name:  Ronen
      Hazarika


Title:  Director




















***[Signature
      Page to Common Stock and Warrant Purchase Agreement]***










-12-


**EXHIBIT
      A**




**FORM
      OF WARRANT**









**EXHIBIT
      B**





**FORM
      OF ADDITIONAL WARRANT**