FORM
      OF COMMON STOCK AND WARRANT PURCHASE AGREEMENT

     

    This
      Common Stock and Warrant Purchase Agreement (this “Agreement”) is made as of
      _________, 2007 (the “Execution Date”), by and among O2Diesel Corporation, a
      Delaware corporation (the “Company”), and ______________ (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 [ ] shares
      (the
“Shares”) of its Common Stock, par value $ 0.0001 per share (the “Common
      Stock”), and warrants to purchase [ ] 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 fourth 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 [ ] Units at a per Unit
      purchase price of US$[0.___] (the “Per Unit Price”), and at the aggregate
      purchase price of US$[___,000] (the “Purchase Price”). The Per Unit Price shall
      be calculated as 80% 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 June ___, 2007 (“VWAP”). 

     

    1.3 Price
      Adjustment.
      

     

    In
      the
      event the Company enters into any agreement for the sale of shares of Common
      Stock at less than the Per Unit Price during the twelve months following the
      Closing (a “Transaction”), the Purchaser shall receive the difference between
      the number of Shares and Warrants and the number of shares of Common Stock
      and
      warrants that the Purchaser would have been entitled to purchase had the
      Purchaser purchased shares of Common Stock and warrants in such Transaction.
      

    


    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 the
      14th
      of June,
      2007, 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 Account

              
	
                Account
                  No.

              	
                3700
                  3879

              
	
                ABA
                  No.

              	
                254
                  07 0116

              
	
                Bank
                  Name:

              	
                Citibank
                  FSB

              
	 	
                1101
                  Pennsylvania Avenue, NW

              
	 	
                Washington,
                  DC 20004

              
	
                Note:

              	
                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.

     

    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:

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    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:

     

    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.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    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.

     

    5.    REGISTRATION.

     

    5.1  Registration.
      

    


    (a) 
      The
      Company agrees it shall include the Shares and all Common Stock issued or
      issuable upon the exercise of the Warrants including the Common Stock issued
      pursuant to recapitalizations, stock splits, stock dividends and similar
      distributions with respect to such shares (the “Registration 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 90 days following the Closing Date
      (“Deadline”). The Company agrees to pay penalties equal to 1.0% of the
      investment amount for the first 30 days and 1.5% of the investment amount price
      for every 30 days thereafter if the registration is not filed by the Deadline,
      with a maximum penalty of 8% of the face value of the common stock. The penalty
      may be paid in cash or stock at the option of Company provided that the shares
      are registered. If the Company elects to pay the penalty in shares, the shares
      will be priced at Volume Weighted Average Price for the 20 trading days prior
      to
      the payment date.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    


    (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
      and Warrants shall be borne by the Company.

    


    6.    INDEMNIFICATION

     

    6.1  Indemnification
      by the Company.
      If
      the
      Closing occurs, the Company shall 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 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.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    6.2 Indemnification
      by Holders.
      If
      the
      Closing occurs, 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.

     

    6.3 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.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    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.    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

        
          

        

      

      
         

      

    

     

    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 Purchaser 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 AMEX, 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 (30th)
      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.

     

    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.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    9.3 Survival.
      

     

    Except
      as
      provided in Section 5 or as otherwise expressly provided herein, the warranties,
      representations, and covenants of the Company and the Purchaser contained in
      or
      made pursuant to this Agreement shall not 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:

     

    [            ]

    Attn: 

    Fax:
       

    


    (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 Purchaser, 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 Purchaser 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.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    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.

     

    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:  	___________________________________
	 	Name: 	Alan R. Rae 
	 	Title: 	Chief Executive Officer 
	 	 	 
	 	 	 
	 	[PURCHASER] 
	 	 	 
	 	By: 	___________________________________ 
	 	Name: 	 
	 	Title: 	 


    

    


    


    [Signature
      Page to Common Stock and Warrant Purchase Agreement]

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    


    EXHIBIT
      A

     

    FORM
      OF WARRANT