Security Devices International Inc.: Exhibit 10.4 - Filed by newsfilecorp.com
















Exhibit 10.4



Issue Date: •, 2013 


Expiry Date: •, 2015 


UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE •, 2013. 


THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON THE EXERCISE OF SUCH SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), NOR QUALIFIED UNDER OR
PURSUANT TO THE SECURITIES OR "BLUE SKY" LAWS OF ANY STATE NOR UNDER OR PURSUANT TO THE SECURITIES LAWS OF ANY PROVINCE IN CANADA. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED, EXCEPT PURSUANT TO
(i) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER THE SECURITIES ACT, (ii) RULE 144 OR RULE 144A UNDER THE SECURITIES ACT, IF AVAILABLE, OR (iii) ANY OTHER EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND
FROM QUALIFICATION UNDER ANY SECURITIES LAWS APPLICABLE IN CANADA, IF AVAILABLE, AND IN EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE STATE OR PROVINCIAL SECURITIES LAWS INCLUDING ALL APPLICABLE RESALE RESTRICTIONS AND HOLD PERIODS. 


THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR ANY OTHER EXCHANGE IN THE UNITED STATES, OR ANY OTHER OTHERWISE IN CANADA OR
THE UNITED STATES TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL •, 2016. 


EXERCISABLE ONLY PRIOR TO 5:00 P.M., TORONTO, ONTARIO CANADA TIME, ON THE 


EXPIRY DATE 


AFTER WHICH TIME THESE WARRANTS 


SHALL BE NULL AND VOID 


WARRANTS TO PURCHASE COMMON SHARES 


OF 


SECURITY DEVICES INTERNATIONAL INC. (the “Corporation”) 


(Incorporated under the laws of Delaware) 


Number of Warrants represented by this certificate --- • 






- 2 - 

CERTIFICATE REPRESENTING WARRANTS 

TO ACQUIRE COMMON SHARES OF 

SECURITY DEVICES INTERNATIONAL INC. 

THIS CERTIFIES that, for good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), y., (the
“Holder”) is the registered holder of y common share purchase
warrants (the “Warrants”) of Security Devices International Inc.,
a corporation existing under the laws of the State of Delaware, USA (the
“Corporation”). Each Warrant entitles the Holder, subject to the terms,
conditions and adjustments set forth in this warrant certificate (the
“Certificate”), to acquire from the Corporation, at an exercise price per
common share as set out below (the “Exercise Price”), one fully paid and
non-assessable common share (each a “Common Share”) in the capital of the
Corporation. The number of Common Shares which the Holder is entitled to acquire
upon exercise of each Warrant is subject to adjustment as hereinafter provided.


The Warrants are exercisable at any time and from time to time
until 5:00PM (Toronto time) on y, (the “Expiry Time”), in
accordance with the terms set out in this Certificate.

	1. 	
      Exercise of
Warrants




	(a) 	
      Exercise Price. The Exercise Price of the Warrants
      shall be:




	 	(i) 	
      $0.y per Warrant with respect to the Warrants
      exercised.




	(b) 	
      Election to Exercise. The Warrants may be
      exercised by the Holder at any time and from time to time during the
      period commencing on the date hereof and ending at the Expiry Time. The
      Warrants may be exercised, in whole or in part, by delivering of each of
      the following (the "Exercise Deliveries") to the
  Corporation:




	 	(i) 	
      this Certificate;

	 	 	 
	 	(ii) 	
      an election to exercise (the "Exercise Notice"),
      in substantially the form attached to this Certificate as Schedule A,
      specifying the number of Warrants being exercised and otherwise properly
      completed and executed by the Holder, and

	 	 	 
	 	(iii) 	
      payment to the Corporation (in cash, by certified cheque
      or by bank draft) of the Exercise Price for the Warrants being
      exercised.




		
      In order to be effective, the Exercise Deliveries must be
      received by the Corporation prior to the Expiry Time at the Corporation's
      Canadian offices at 338 Church Street, Oakville, Ontario Canada, L6J 1P1
      or at such other address in Canada as may be notified in writing by the
      Corporation. The date upon which the Corporation receives the Exercise
      Deliveries is referred to as the “Exercise Date”.

	 	 
	(c) 	
      Issuance. Upon exercise of any Warrants, the
      person or persons to whom securities are to be issued shall be deemed to
      have become the holder or holders of record of the securities to which
      they are entitled. The securities issuable upon the exercise of the
      Warrants are referred to as the “Warrant Shares”.

	 	 
	(d) 	
      Share Certificates. As promptly as practicable
      after the Exercise Date, the Corporation shall issue and deliver to the
      Holder:







- 3 - 

	 	(i) 	
      a certificate or certificates for the Warrant Shares,
      registered as called for in the Exercise Notice, and

	 	 	 
	 	(ii) 	
      a new warrant certificate containing the same terms and
      conditions as this Certificate, and representing the unexercised Warrants
      (if any).




	(e) 	
      Fractional Shares. No fractional Warrant Shares
      shall be issued upon exercise of any Warrant. The number of Warrant Shares
      to be issued shall be rounded down to the nearest whole share.

	 	 
	(f) 	
      Expiry. Each unexercised Warrant shall expire and
      all rights to exercise that Warrant shall cease and become null and void
      at the Expiry Time.




	2. 	
      Adjustments




	(a) 	
      Subdivision or Share Dividend. If and whenever the
      Corporation shall




	 	(i) 	
      subdivide or redivide the outstanding Common Shares into
      a greater number of shares; or

	 	 	 
	 	(ii) 	
      issue any Common Shares of the Corporation to the holders
      of all or substantially all of the outstanding Common Shares as a share
      dividend;




		
      the number of Common Shares to be received upon exercise
      of any Warrant after such subdivision or redivision, or on or after the
      record date for the share dividend, as the case may be, shall be increased
      in that proportion which the number of Common Shares outstanding before
      such subdivision, redivision or dividend bears to the number of Common
      Shares outstanding after such subdivision, redivision or dividend. Any
      issue of Common Shares as a share dividend shall be deemed to have been
      made on the record date fixed for that share dividend for the purpose of
      calculating the number of outstanding Common Shares under this
    section.

	 	 	 
		
      This section shall not apply to Common Shares distributed
      to holders of Common Shares in lieu of a cash dividend, if the value at
      which those shares are issued in satisfaction of the cash dividend is not
      less than 90% of the Market Price. The “Market Price” on any date
      means the average of the closing price of the Common Shares on any stock
      exchange on which the Common Shares are listed during the 10 consecutive
      trading days ending on the trading day prior to such date, or if the
      Common Shares are not listed on any exchange, the Market Price on any date
      means the fair value of the Common Shares on that date as determined by
      the directors of the Corporation.

	 	 	 
	(b) 	
      Consolidation of Common Shares. If and whenever
      the Corporation shall reduce, combine or consolidate the outstanding
      Common Shares into a smaller number of shares, the number of Common Shares
      to be received upon exercise of any Warrant after such reduction,
      combination, or consolidation shall be decreased in that proportion which
      the number of Common Shares outstanding before such reduction,
      combination, or consolidation bears to the number of Common Shares
      outstanding after such reduction, combination or consolidation.

	 	 	 
	(c) 	
      Change or Reclassification of Common Shares. If
      and whenever the Corporation shall change or reclassify its outstanding
      Common Shares into a different class of securities, the number and kind of
      securities to be received upon exercise of any Warrants after that change
      or reclassification shall be that number of the successor class of
      securities which a holder of the number of Common Shares subject to each
      such exercised Warrant immediately prior to the change or reclassification
      would have been entitled to by reason of such change or
      reclassification.

	 	 	 
	(d) 	
      Corporate Changes. If there shall occur:

	 	 	 
		(i) 	
      any reorganization of the share capital of the
      Corporation not provided for in sections 2(a), 2(b) or 2(c),
  or







- 4 - 

	 	(ii) 	
      any consolidation or merger of the Corporation with
      another corporation, or the sale of all or substantially all of the
      Corporation’s assets to another corporation, shall be effected in such a
      way that holders of Common Shares shall be entitled to receive shares,
      securities or assets with respect to or in exchange for Common
    Shares,




		
      each unexercised Warrant shall be adjusted so as to be
      exercisable for the shares, securities or assets to which the Holder would
      have been entitled by reason of such reorganization, consolidation, merger
      or sale had the Holder exercised the Warrant prior to such reorganization,
      consolidation, merger or sale.

	 	 
	(e) 	
      Notice of Adjustment. Upon any adjustment of the
      number of Common Shares, the Corporation shall give written notice thereof
      to the Holder, which notice (i) shall state the number of Common Shares or
      other shares, securities or assets subject to each unexercised Warrant
      resulting from such adjustment, if any, and (ii) shall set forth in
      reasonable detail the method of calculation and the facts upon which such
      calculation is based.




	3. 	
      Common Shares to be
  Reserved



The Corporation will reserve and keep available a sufficient
number of Warrant Shares for issuance upon the exercise of the Warrants. The
Corporation agrees that all Warrant Shares will, upon issuance, be duly
authorized and issued as fully paid and non-assessable. 

	4. 	
      Issuance Charge



The issuance of certificates for Warrant Shares shall be made
without charge to the Holder. 

	5. 	
      Voting



A Warrant shall not entitle the Holder to any rights as a
shareholder of the Corporation, including voting or dividend rights, until it is
exercised in accordance with the terms herein and the Holder becomes registered
as a shareholder of the Corporation. 

	6. 	
      Limitation on
Transfer



The Warrants are personal to the Holder and may not be
transferred. The Common Shares issued upon exercise of any Warrants will bear a
legend in the form required by applicable securities laws. 

	7. 	
      Replacement



Upon receipt of evidence satisfactory to the Corporation of the
loss, theft, destruction or mutilation of this Certificate, the Corporation will
issue to the Holder a replacement Certificate (containing the same terms and
conditions as this Certificate). 

	8. 	
      Governing Law



The laws of the State of Delaware applicable therein shall
govern this Certificate. 

	9. 	
      Successors



The rights under this Certificate shall enure to the benefit of
and shall be binding upon the Holder and the Corporation and their respective
legal representatives, successors and permitted assigns. 

	10. 	
      No Waiver



No waivers of, or exceptions to, any term, condition or
provision set out in this Certificate, shall be effective unless made in writing
and signed by the Corporation. No such waiver or exception shall be deemed to be, or construed as, a continuing waiver of or
exception, unless agreed to in writing and signed by the Corporation. 




- 5 - 


	11. 	
      Time



Time is of the essence of this Certificate. 

	12. 	
      Currency



Unless otherwise specified, all references to money in this
Certificate are references to the lawful currency of the United States of
America.

IN WITNESS WHEREOF the Corporation has caused this
Certificate to be signed by a duly authorized officer. 

DATED this 
             
•                 
day of
• 2013. 

SECURITY DEVICES INTERNATIONAL INC.


By: _____________________________

         Name:
•

        
Title:
•




SCHEDULE “A” 

ELECTION TO EXERCISE 

TO: SECURITY DEVICES INTERNATIONAL INC. (the
“Corporation”) 

The undersigned holder of the accompanying warrant certificate
hereby exercises _________warrants (the “Warrants”) represented by that
certificate. Full payment of the exercise price for those warrants accompanies
this election. 

The undersigned directs that the securities issued as a result
of the exercise of the Warrants be registered as set out below and mailed to the
address set out below unless otherwise indicated. 

DATED this _________________day of
__________________________. 

	 	Name: 	 
	 	 	 
	 	Signature: 	 
	 	 	 
	 	Registration instructions: 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 


[  ]  Please check box if the securities issued under
this exercise are to be collected from the Corporation’s office, failing which
the securities will be mailed to the subscriber at the address set out above.


If any Warrants represented by the attached certificate are not
being exercised in full, a new certificate will be issued and delivered to the
Holder representing the unexercised Warrants.