Hybrid Coating Technologies Inc. - Exhibit 10.4 - Filed by newsfilecorp.com






Exhibit 10.4

THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“SECURITIES ACT”), AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY REGULATION S
PROMULGATED UNDER THE SECURITIES ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR
SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS
OF REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT,
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS
IN COMPLIANCE WITH THE SECURITIES ACT. 

Date: ___________ 

HYBRID COATING TECHNOLOGIES INC. 

Warrant for the Right to
Purchase                                    
Shares of Common Stock 

No. W- 

      
     For value received, this Warrant is hereby issued
by Hybrid Coating Technologies Inc., a Nevada corporation (the “Company”), to
___________ or any of his assignees (the “Holder”). This Warrant is being issued
pursuant to the conversion of 10% convertible debentures issued by the Company
to the Holder on _________ , 2014 (the "Debentures") issued pursuant to a
Securities Purchase Agreement entered into between the Company and the Holder on
____, 2014.

            Subject
to the provisions of this Warrant, the Company hereby grants to Holder the right
to purchase from the Company __________ shares of Common Stock, at a price per
share calculated as follows (the “Exercise Price”):

           
The Exercise Price shall be equal to the Conversion Price (as defined in the
Debenture)

            The
term “Common Stock” means the Common Stock, par value $0.001 per share, of the
Company as constituted on the date set forth above (the “Base Date”). The number
of shares of Common Stock to be received upon the exercise of this Warrant may
be adjusted from time to time as hereinafter set forth. The shares of Common
Stock deliverable upon such exercise, and as adjusted from time to time, are
hereinafter referred to as “Warrant Stock.” The term “Other Securities” means
any other equity or debt securities that may be issued by the Company in
addition thereto or in substitution for the Warrant Stock. 

            The
Holder agrees with the Company that this Warrant is issued, and all the rights
hereunder shall be held, subject to all of the conditions, limitations and
provisions set forth herein. 

            1.
Exercise of Warrant. Subject to the terms and conditions set forth
herein, this Warrant may be exercised in whole or in part, pursuant to the
procedures provided below, at any time as of the date of this Warrant,
(following appropriate adjustment in the event of any stock dividends, stock
splits, combination or other similar recapitalization affecting such shares).
This Warrant will expire on ___________ 5:00 p.m., Eastern time (the “Expiration
Date”) or, if such day is a day on which banking institutions in New York are
authorized by law to close, then on the next succeeding day that shall not be
such a day. To exercise this Warrant the Holder shall present and surrender this
Warrant to the Company at its principal office, with the Warrant Exercise Form
attached hereto duly executed by the Holder and accompanied by payment (either
in cash or by check, payable to the order of the Company) of the aggregate
Exercise Price for the total aggregate number of shares for which this Warrant
is exercised.




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Upon receipt by the Company of this Warrant, together with the
executed Warrant Exercise Form and payment of the Exercise Price for the shares
to be acquired, in proper form for exercise, and subject to the Holder’s
compliance with all requirements of this Warrant for the exercise hereof, the
Holder shall be deemed to be the holder of record of the shares of Common Stock
(or Other Securities) issuable upon such exercise, notwithstanding that the
stock transfer books of the Company shall then be closed or that certificates
representing such shares of Common Stock shall not then be actually delivered to
the Holder; provided, however, that no exercise of this Warrant
shall be effective, and the Company shall have no obligation to issue any Common
Stock or Other Securities to the Holder upon any attempted exercise of this
Warrant, unless the Holder shall have first delivered to the Company, in form
and substance reasonably satisfactory to the Company, appropriate
representations so as to provide the Company reasonable assurances that the
securities issuable upon exercise may be issued without violation of the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act") and applicable state securities laws, and that the Holder is
familiar with the Company and its business and financial condition and has had
an opportunity to ask questions and receive documents relating thereto to his
reasonable satisfaction. 

            2.
Net Issue Exercise. Notwithstanding any provisions herein to the
contrary, if the Fair Market Value (as defined below) of one share of Common
Stock is greater than the Exercise Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant for cash, the Holder may elect
to receive shares equal to the value (as determined below) of this Warrant (or
the portion thereof being cancelled) by surrender of this Warrant at the
principal office of the Company together with the properly endorsed Warrant
Exercise Form and notice of such election, in which event the Company shall
issue to the Holder a number of shares of Common Stock computed using the
following formula: 

X = Y (A-B)

            A



	 	Where 	
      X = the number of shares of Common Stock to be issued to
      the Holder 

	 	  	
       

	 		
      Y = the number of shares of Common Stock purchasable
      under the Warrant or, if only a portion of the Warrant is being exercised,
      the portion of the Warrant being exercised (at the date of such
      calculation) 

	 	  	
       

	 		
      A = the Fair Market Value (as defined below) of one share
      of the Company’s Common Stock (at the date of such calculation) 

	 	  	
       

	 	  	
      B = Exercise Price (as adjusted to the date of such
      calculation) 



            3.
Reservation of Shares. The Company will at all times reserve for issuance
and delivery upon exercise of this Warrant all shares of Common Stock or other
shares of capital stock of the Company (and Other Securities) from time to time
receivable upon exercise of this Warrant. All such shares (and Other Securities)
shall be duly authorized and, when issued upon such exercise, shall be validly
issued, fully paid and non-assessable and free of all preemptive rights. 

            4.
Fractional Shares. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant, but the Company shall
pay the Holder an amount equal to the Fair Market Value of such fractional share
of Common Stock in lieu of each fraction of a share otherwise called for upon
any exercise of this Warrant. 

            5.
Fair Market Value. For purposes of this Warrant, the Fair Market Value of
a share of Common Stock (or Other Security) shall be determined as of any date
(the “Value Date”) by the Company’s Board of Directors in good faith; provided,
however, that where there exists a public market for the Company’s Common Stock
on the Value Date, the fair market value per share shall be either: 

           
(a)        If the Common Stock is listed on a
national securities exchange or listed for trading on the NASDAQ system, the
Fair Market Value shall be the last reported sale price of the security on such
exchange or system on the last business day prior to the Value Date or if no
such sale is made on such day, the average of the closing bid and asked prices
for such day on such exchange or system; or 




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            (b)       
If the Common Stock is not so listed but is traded in the over-the-counter
market, the Fair Market Value shall be the mean of the last reported bid and
asked prices reported by the over-the-counter market on the last business day
prior to the Value Date. 

            6.       
Assignment or Loss of Warrant. Subject to the transfer restrictions
herein (including Section 9), upon surrender of this Warrant to the Company or
at the office of its stock transfer agent, if any, with the Assignment Form
annexed hereto duly executed and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant in the name of
the assignee named in such instrument of assignment and this Warrant shall
promptly be canceled. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and of reasonably satisfactory indemnification by the Holder, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a replacement Warrant of like tenor and date.

            7.       
Rights of the Holder. The Holder shall not, by virtue hereof, be entitled
to any rights of a stockholder in the Company, either at law or in equity, and
the rights of the Holder are limited to those expressed in this Warrant. 

           
8.        Adjustments. 

                          8.1       
Adjustment for Recapitalization. If the Company shall at any time after
the Base Date subdivide its outstanding shares of Common Stock (or Other
Securities at the time receivable upon the exercise of the Warrant) by
recapitalization, reclassification or split-up thereof, or if the Company shall
declare a stock dividend or distribute shares of Common Stock to its
stockholders, the number of shares of Common Stock (or Other Securities) subject
to this Warrant immediately prior to such subdivision shall be proportionately
increased, and if the Company shall at any time after the Base Date combine the
outstanding shares of Common Stock by recapitalization, reclassification or
combination thereof, the number of shares of Common Stock subject to this
Warrant immediately prior to such combination shall be proportionately
decreased. Any such adjustment and adjustment to the Exercise Price pursuant to
this Section 8.1 shall be effective at the close of business on the effective
date of such subdivision or combination or if any adjustment is the result of a
stock dividend or distribution then the effective date for such adjustment based
thereon shall be the record date therefor. 

Whenever the number of shares of Common Stock purchasable upon
the exercise of this Warrant is adjusted, as provided in this Section 8.1, the
Exercise Price shall be adjusted to the nearest cent by multiplying such
Exercise Price immediately prior to such adjustment by a fraction (x) the
numerator of which shall be the number of shares of Common Stock purchasable
upon the exercise immediately prior to such adjustment, and (y) the denominator
of which shall be the number of shares of Common Stock so purchasable
immediately thereafter. 

                          8.2       
Adjustment for Change of Entity Transaction. Change of Entity Transaction
shall mean a consolidation, merger, exchange of shares, recapitalization,
reorganization, business combination, as a result of which shares of Common
Stock shall be changed into (or the shares of Common Stock become entitled to
receive) the same or a different number of shares of the same or another class
or classes of stock or securities of the Company or another entity (“Share
Exchange”). 

So long as any portion of this Warrant remains outstanding,
should the Company enter into or be party to a Change of Entity Transaction, the
Company shall cause any Person purchasing the Company’s assets or Common Stock,
or any successor entity resulting from such Change of Entity Transaction (in
each case, a “Successor Entity”), to assume in writing all of the obligations of
the Company under this Warrant by delivering to the holder of this Warrant in
exchange for such Warrant a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant,
including, without limitation, having an exercise price equal to the Exercise
Price of this Warrant, having similar exercise rights as this Warrant (including
but not limited to similar exercise price adjustment provisions), and reasonably
satisfactory to the holder of this Warrant. Upon the occurrence of any
Change of Entity Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Change of Entity
Transaction, the provisions of this Warrant referring to the “Company” shall
refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under the Warrant
with the same effect as if such Successor Entity had been named as the Company
herein. Upon consummation of a Change of Entity Transaction, the Successor
Entity shall deliver to the Holder confirmation that there shall be issued upon
exercise or redemption of this Warrant at any time after the consummation of the
Change of Entity Transaction, in lieu of the shares of Common Stock (or other
securities, cash, assets or other property) issuable upon the exercise of this
Warrant prior to such Change of Entity Transaction, such shares of common stock
(or their equivalent) of the Successor Entity, as adjusted in accordance with
the provisions of this Warrant and on the same terms as those of the Share
Exchange applicable to all holders of shares of Common Stock. The provisions of
this Section shall apply similarly and equally to successive Change of Entity
Transactions and shall be applied without regard to any limitations on the
exercise of the Warrant.




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                          8.3       
Certificate as to Adjustments. The adjustments provided in this Section 8
shall be interpreted and applied by the Company in such a fashion so as to
reasonably preserve the applicability and benefits of this Warrant (but not to
increase or diminish the benefits hereunder). In each case of an adjustment in
the number of shares of Common Stock receivable on the exercise of the Warrant,
the Company at its expense will compute such adjustment in accordance with the
terms of the Warrant and prepare a certificate executed by an officer of the
Company setting forth such adjustment and showing in detail the facts upon which
such adjustment is based. The Company will forthwith mail a copy of each such
certificate to each Holder.

                         
8.4        Notices of Record Date,
Etc. In the event that: 

                                                      
the Company shall declare any dividend or other distribution to the holders of
Common Stock, or authorizes the granting to all Common Stock holders of any
right to subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities; or 

                                                      
the Company authorizes any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another corporation or
entity; or 

                                                      
the Company authorizes any voluntary or involuntary dissolution, liquidation or
winding up of the Company, 

then, and in each such case, the Company shall mail or cause to
be mailed to the holder of this Warrant at the time outstanding a notice
specifying, as the case may be, (i) the date on which a record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, or (ii) the date on which
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding up is to take place, and the time, if any is
to be fixed, as to which the holders of record of Common Stock (or such other
securities at the time receivable upon the exercise of the Warrant) shall be
entitled to exchange their shares of Common Stock (or such Other Securities) for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding up. Such notice shall be mailed at least 15 days prior to the date
therein specified. 

                         
8.5        No Impairment. The Company
will not, by any voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Section 8 and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder of this
Warrant against impairment. 

                          
9.          Transfer to Comply
with the Securities Act. This Warrant and any Warrant Stock or Other
Securities may only be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of, as follows: (a) to a person who, in the opinion of
counsel to the Company, is a person to whom this Warrant or the Warrant Stock or
Other Securities may legally be transferred without registration and without the
delivery of a current prospectus under the Securities Act with respect thereto
and then only against receipt of an agreement of such person to comply with
the provisions of this Section 9 with respect to any resale or other disposition
of such securities; or (b) to any person upon delivery of a prospectus then
meeting the requirements of the Securities Act relating to such securities and
the offering thereof for such sale or disposition, and thereafter to all
successive assignees.




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                          10.       
Legend. Unless the shares of Warrant Stock or Other Securities have been
registered under the Securities Act, upon exercise of this Warrant and the
issuance of any of the shares of Warrant Stock, all certificates representing
shares shall bear on the face thereof substantially the following legend: 


  
    
      
        
          
            
              The securities represented by this certificate have not been
                registered under the Securities Act of 1933, as amended, and may not be sold,
                offered for sale, assigned, transferred or otherwise disposed of, unless
                registered pursuant to the provisions of that Act or unless an opinion of
                counsel to the Corporation is obtained stating that such disposition is in
                compliance with an available exemption from such registration. 

            

          

        

      

    

  



            11.       
Notices. All notices required hereunder shall be in writing and
shall be deemed given when sent via facsimile or e-mail, with a confirmation of
the delivery thereof, and then only if followed up with a duplicate copy sent
via regular mail, delivered personally or within two days after mailing when
mailed by certified or registered mail, return receipt requested, to the Company
or the Holder, as the case may be, for whom such notice is intended, if to the
Holder, at the address of such party shown on the books of the Company, or if to
the Company, at the address set forth on the signature page hereof, Attn: Chief
Financial Officer, or at such other address of which the Company or the Holder
has been advised by notice hereunder. 

            12.       
Applicable Law. The Warrant is issued under and shall for all purposes be
governed by and construed in accordance with the laws of the State of Nevada,
without regard to the conflict of laws provisions of such State. 

            IN
WITNESS WHEREOF, the Company has caused this Warrant to be signed on its behalf,
in its corporate name, by its duly authorized officer, all as of the day and
year first above written. 

HYBRID COATING TECHNOLOGIES INC. 

 

By:       
________________________________

             
Joseph Kristul, Chief Executive Officer 
Address: 
950 John Daly blvd.,
Suite 260 
Daly City, CA 94015 





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WARRANT EXERCISE FORM 

           
The undersigned hereby irrevocably elects to (please check box): 

           
________ (i) exercise the within Warrant to purchase __________ shares of the
Common Stock of Hybrid Coating Technologies Inc., a Nevada corporation, pursuant
to the provisions of Section 1 of the attached Warrant, and hereby makes payment
of $__________in payment therefor, or

            ________(ii)
exercise the within Warrant to purchase that number of shares of Common Stock
purchasable pursuant to the net issue exercise procedure set forth in Section 2
of the attached Warrant.

           
The undersigned’s execution of this form constitutes the undersigned’s agreement
to all the terms of the Warrant and to comply therewith. 

	 	 
	 	Signature 
	 	Print Name: 
	 	  
	 	 
	 	 
	 	Signature, if jointly held 
	 	 
	 	Print Name: 
	 	 
	 	 
	 	  
	 	Date 






- 7 - 

ASSIGNMENT FORM 

FOR VALUE RECEIVED _____________________________ (“Assignor”)
hereby sells, assigns and transfers unto _______________________________
(“Assignee”) all of Assignor’s right, title and interest in, to and under
Warrant No. W-____ issued by ____________________________, dated ______________.


DATED: ______________________

	 	ASSIGNOR: 
	 	  
	 	  
	 	  
	 	  
	 	Signature 
	 	Print Name: 
	 	  
	 	  
	 	  
	 	Signature, if jointly held 
	 	Print Name: 


The undersigned agrees to all of the terms of the Warrant and
to comply therewith. 

	 	ASSIGNEE: 
	 	  
	 	  
	 	  
	 	  
	 	Signature 
	 	Print Name: 
	 	  
	 	  
	 	  
	 	Signature, if jointly held 
	 	Print Name: