Document:

exv10w4

 

EXHIBIT 10.4

THIS WARRANT AND ANY SHARES OF COMMON STOCK FOR WHICH THIS WARRANT MAY BE EXERCISED HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED FOR SALE UNDER ANY STATE
SECURITIES LAWS (COLLECTIVELY, “SECURITIES LAWS”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED UNLESS REGISTERED OR QUALIFIED FOR SALE UNDER ALL APPLICABLE SECURITIES LAWS OR UNLESS,
IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER, IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER, ANY SUCH OFFER, SALE OR OTHER TRANSFER IS EXEMPT FROM THE REGISTRATION OR QUALIFICATION
REQUIREMENTS OF SUCH SECURITIES LAWS.

	 	 	 
	No. _________
	 	_______________, 2005

SAVE THE WORLD AIR, INC.

WARRANT TO PURCHASE COMMON STOCK

VOID AFTER 5:00 P.M. California Time on August 31, 2007

     THIS CERTIFIES that, for the value received, _______________ (the “Holder”) is entitled, upon
the terms and subject to the conditions hereinafter set forth, at any time on or after the date of
this Warrant and on or prior to 5:00 p.m. California time on August 31, 2007 (the “Expiration
Time”), but not thereafter, to subscribe for and purchase, from SAVE THE WORLD AIR, INC., a Nevada
corporation (the “Company”), up to _______________ (_________) shares of the Company’s Common Stock
(the “Shares”) at a purchase price per share equal to $1.00 (the “Exercise Price”).

     1. Exercise of Warrant.

          (a) The purchase rights represented by this Warrant are exercisable by the Holder, in whole or
in part, at any time after the date hereof and before the Expiration Time by the surrender of this
Warrant and the Notice of Warrant Exercise annexed hereto duly executed at the office of the
Company, in Agoura Hills, California (or such other office or agency of the Company as it may
designate by notice in writing to the Holder at the address of the Holder appearing on the books of
the Company), and upon payment of an amount equal to the aggregate Exercise Price for the number of
Shares thereby purchased (by cash or by check or certified bank check payable to the order of the
Company in an amount equal to the purchase price of the shares thereby purchased); whereupon the
Holder shall be entitled to receive a stock certificate representing the number of Shares so
purchased. The Company agrees that if at the time of the surrender of this Warrant and purchase of
the Shares, the Holder shall be entitled to exercise this Warrant, the Shares so purchased shall be
and be deemed to be issued to such holder as the record owner of such Shares as of the close of
business on the date on which this Warrant shall have been exercised as aforesaid.

          (b) Upon partial exercise of this Warrant, the Holder shall be entitled to receive from the
Company a new Warrant in substantially identical form for the purchase of that number of Shares as
to which this Warrant shall not have been exercised. Certificates for Shares purchased hereunder
shall be delivered to the Holder within a reasonable time after the date on which this Warrant
shall have been exercised as aforesaid.

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     2. No Fractional Shares or Scrip.

          No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. If any adjustment to the Exercise Price hereunder should result in an Exercise
Price of less than $0.01, such adjustment shall be rounded to the nearest $0.01..

     3. Charges, Taxes and Expenses. The Holder shall pay all issue and transfer taxes and
other incidental expenses in respect of the issuance of certificates for Shares upon the exercise
of this Warrant, and such certificates shall be issued in the name of the Holder of this Warrant.

     4. No Rights as a Stockholder. This Warrant does not entitle the Holder to any voting
rights or other rights as a stockholder of the Company prior to the exercise hereof.

     5. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and in case of loss, theft or destruction of this Warrant, upon delivery of an indemnity
agreement or security reasonably satisfactory in form and amount to the Company or, in the case of
any such mutilation, upon surrender and cancellation of such Warrant, and upon reimbursement to the
Company of all reasonable expenses incidental thereto, the Company will make and deliver to the
Holder, in lieu thereof, a new Warrant in substantially identical form and dated as of such
cancellation.

     6. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall be a Saturday or a
Sunday or shall be a legal holiday in the United States or the State of California, then such
action may be taken or such right may be exercised on the next succeeding business day.

     7. Merger, Reclassification, etc.

          (a) If at any time the Company proposes (A) the acquisition of the Company by another entity
by means of any transaction or series of related transactions (including, without limitation, any
reorganization, merger, consolidation or stock issuance) that results in the transfer of fifty
percent (50%) or more of the then outstanding voting power of the Company; or (B) a sale of all or
substantially all of the assets of the Company, then the Company shall give the Holder ten (10)
days notice of the proposed effective date of the transaction. If this Warrant has not been
exercised by the effective date of such transaction, this Warrant shall be exercisable into the
kind and number of shares of stock or other securities or property of the Company or of the entity
resulting from such merger or acquisition to which such Holder would have been entitled if
immediately prior to such acquisition or merger, it had exercised this Warrant. The provisions of
this Section 7(a) shall similarly apply to successive consolidations, mergers, sales or
conveyances.

          (b) If the Company at any time shall, by subdivision, combination or reclassification of
securities or otherwise, change any of the securities to which purchase rights under this Warrant
exist into the same or a different number of securities of any class or classes, this Warrant shall
thereafter be to acquire such number and kind of securities as would have been

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issuable as the result of such change with respect to the securities which were subject to the
purchase rights under this Warrant immediately prior to such subdivision, combination,
reclassification or other change. If the Shares are subdivided or combined into a greater or
smaller number of Shares, the Exercise Price under this Warrant shall be proportionately reduced in
case of subdivision of shares or proportionately increased in the case of combination of shares, in
both cases by the ratio which the total number of Shares to be outstanding immediately after such
event bears to the total number of Shares outstanding immediately prior to such event.

          (c) No adjustment on account of cash dividends or interest on the Shares or other securities
purchasable hereunder will be made to the Exercise Price under this Warrant.

     8. Restrictions on Transfer.

          (a) In no event will the Holder make a disposition of this Warrant or the Shares unless and
until, if requested by the Company, it shall have furnished the Company with an opinion of counsel
satisfactory to the Company and its counsel to the effect that appropriate action necessary for
compliance with the Securities Act of 1933, as amended (the “Act”) relating to sale of an
unregistered security has been taken. Notwithstanding the foregoing, the restrictions imposed upon
the transferability of the Shares shall terminate as to any particular Share when (i) such security
shall have been sold without registration in compliance with Rule 144 under the Act, or (ii) a
letter shall have been issued to the Holder at its request by the staff of the Securities and
Exchange Commission or a ruling shall have been issued to the Holder at its request by such
Commission stating that no action shall be recommended by such staff or taken by such Commission,
as the case may be, if such security is transferred without registration under the Act in
accordance with the conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions on transfer are required, or (iii) such security shall
have been registered under the Act and sold by the Holder thereof in accordance with such
registration.

          (b) Subject to the provisions of Section 8(a) hereof, this Warrant and all rights hereunder
are transferable, in whole or in part, upon surrender of the Warrant with a properly executed
assignment at the principal office of the Company.

          (c) The stock certificates representing the Shares and any securities of the Company issued
with respect thereto shall be imprinted with legends restricting transfer except in compliance with
the terms hereof and with applicable federal and state securities laws.

     9. Miscellaneous.

          (a) Governing Law. This Warrant shall be governed by and construed in accordance with
the laws of the State of California applicable to contracts made and to be performed wholly within
such state.

          (b) Restrictions. The Holder acknowledges that the Shares acquired upon the exercise
of this Warrant may have restrictions upon its resale imposed by state and federal securities laws.

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          (c) Waivers Strictly Construed. With regard to any power, remedy or right provided
herein or otherwise available to any party hereunder (i) no waiver or extension of time shall be
effective unless expressly contained in a writing signed by the waiving party; and (ii) no
alteration, modification or impairment shall be implied by reason of any previous waiver, extension
of time, delay or omission in exercise, or other indulgence.

          (d) Complete Agreement and Modifications. This Warrant constitutes the Company’s and
Holder’s entire agreement with respect to the subject matter hereof and supersedes all agreements,
representations, warranties, statements, promises and understandings, whether oral or written, with
respect to the subject matter hereof. This Warrant may not be amended, altered or modified except
by a writing signed by the Company and the Holder of this Warrant.

     IN WITNESS WHEREOF, SAVE THE WORLD AIR, INC. has caused this Warrant to be executed by its
duly authorized representative dated as of the date first set forth above.

	 	 	 	 	 
	 	SAVE THE WORLD AIR, INC.

 	 
	 	By:  	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 

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NOTICE OF WARRANT EXERCISE

TO: SAVE THE WORLD AIR, INC.

     (1) The undersigned hereby elects to purchase ____________ shares of Common Stock (the
“Shares”) of Save the World Air, Inc. pursuant to the terms of the attached Warrant, and tenders
herewith payment of the purchase price in full, together with all applicable transfer taxes, if
any.

     (2) Please issue a certificate or certificates representing the Shares in the name of the
undersigned or in such other name as is specified below:

 

(Print Name)

Address:
 
 

 

 

     (3) The undersigned confirms that the Shares are being acquired for the account of the
undersigned for investment only and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of distributing or selling
the Shares.

     (4) The undersigned represents and warrants that he or she is either (you must initial one
choice and fill in the requested information):

_______________FOR U.S. INVESTORS ONLY: an “accredited investor” as defined in Rule 501(a) of
Regulation D, a copy of which definition the investor acknowledges receiving and reviewing,
and resident of the State of __________________; or

_______________FOR NON-U.S. PERSONS ONLY: not a “U.S. person” as defined in Rule 902 of
Regulation S, a copy of which definition the investor acknowledges receiving and reviewing,
and a citizen of the country of __________________ and a resident of the country of
__________________,

and, in either case, makes the following further representation:

I, THE UNDERSIGNED, REPRESENT THAT I HAVE A PRE-EXISTING PERSONAL OR BUSINESS RELATIONSHIP
WITH THE COMPANY, ANY OFFICER, DIRECTOR OR CONTROLLING PERSON THEREOF OR HAVE, THROUGH
MYSELF OR THROUGH MY UNAFFILIATED PROFESSIONAL ADVISER, THE BUSINESS OR FINANCIAL
EXPERIENCE TO PROTECT MY INTERESTS IN CONNECTION WITH MY SUBSCRIPTION HERETO.

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FURTHER, I AM PURCHASING THE SECURITIES OFFERED HEREBY FOR INVESTMENT AND NOT WITH A VIEW
TOWARD DISTRIBUTION THEREOF.

     (5) The undersigned accepts such shares subject to the restrictions on transfer set forth in
the attached Warrant.

	 	 	 	 	 	 
	 	 	 	 
	 	 	 	
 	 
	 	(Date)	 	(Signature) 	 
	 	 	 
	 
	 	 	 	 
	 	 	 	  	 
	 	 	 	(Print Name) 	 
	 	 	 	 
	 

6exv10w1

 

Exhibit
10.1

OPTION GRANT AGREEMENT

This OPTION GRANT AGREEMENT, made as of the 2d day of December, 2004 between TJ Chemical
Holdings LLC (the “Company”) and Steven Demetriou (the “Participant”).

WHEREAS, the Company has adopted and maintains the TJ Chemical Holdings LLC 2004 Option Plan (the
“Plan”) to promote the interests of the Company and the Holders of Membership Units in the Company
by providing key employees, consultants, members and service providers of the Company and its
affiliates with an appropriate incentive to encourage them to continue in the employ or service and
to improve the growth and profitability of the Company and its affiliates;

WHEREAS, the Plan provides for the Grant to Participants of non-qualified Options to purchase
Membership Unit(s) in the Company;

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth,
the parties hereto hereby agree as follows:

1. Grant of Options. Pursuant to, and subject to, the terms and conditions set forth herein and in
the Plan, the Company hereby grants to the Participant a non-qualified option (the “Option”) with
respect to 25,000 Membership Unit(s) in the Company.

2. Grant Date. The Grant Date of the Option hereby granted is December 2, 2004.

3. Vesting Commencement Date. The Vesting Commencement Date of the Option hereby granted is
December 1, 2004.

4. Incorporation of Plan. All terms, conditions and restrictions of the Plan and the LLC Agreement
are incorporated herein and made part hereof as if stated herein. If there is any conflict between
the terms and conditions of the Plan or the LLC Agreement and this Option Grant Agreement, the
terms and conditions of this Option Grant Agreement, as interpreted by the Committee in its sole
discretion, shall govern, unless explicitly provided to the contrary in the Plan or this Option
Grant Agreement. All capitalized terms used herein shall have the meaning given to such terms in
the Plan.

5. Exercise Price. The exercise price per Membership Unit underlying the Option granted hereby is
$1.00.

6. Vesting Date. The Option shall become exercisable as follows: fifty percent (50%) of the
Membership Unit(s) (rounded down to the nearest Membership Unit) underlying the Option shall become
exercisable on each of the first two anniversaries of the Vesting Commencement Date; Provided
that the unvested portion of the Option shall become immediately vested as of the effective
date of a Change in Control.

7. Expiration Date. The Option or such portion thereof that has not yet become exercisable on the
date the Participant’s Services are terminated for any reason shall expire on such date. The Option
or such portion thereof that has become exercisable on or before the date the Participant’s
Services are terminated shall expire on the earlier of ( a) the commencement of business on the
date the Participant’s Services are terminated for Cause; (b) 90 calendar days after the date the
Participant’s Services are terminated for any reason other than Cause, death or Disability; (c) one
year after the date the Participant’s Services are terminated by reason of death or Disability; or
(d) the 10th anniversary of the Grant Date.

 

 

8. Limitations on Transfer of Membership Units; Termination of Employment. The Participant
acknowledges that upon becoming a member of the Company, the Participant will be subject to all the
terms and conditions provided in the LLC Agreement. Notwithstanding anything herein or the LLC
Agreement to the contrary, the Participant shall not sell or transfer any Membership Unit acquired
pursuant to the exercise of an Option, except (i) to the Participant’s beneficiaries or estate upon
the Participant’s death, (ii) upon consent of the Committee, (iii) pursuant to Sections 6.03, 6.04,
6.06 of the LLC Agreement, or (iv) if such sale or transfer occurs following the date set forth in
Section 6.07 of the LLC Agreement.

In the event of a termination of a Participant’s Services, the Company shall have the right to
purchase the Participant’s Membership Units acquired pursuant to the Options in accordance with
Section 6.06 of the LLC Agreement. Any Membership Units acquired pursuant to the exercise of the
Options shall be subject to certain Tag-Along and Drag-Along rights in accordance with Article VI
of the LLC Agreement.

9. Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any
party hereto upon any breach or default of any party under this Option Grant 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
Option Grant Agreement, or any waiver on the part of any party or any provisions or conditions of
this Option Grant Agreement, shall be in writing and shall be effective only to the extent
specifically set forth in such writing.

10. Limitation on Transfer of Options. Except as set forth in this Section 10, the Option shall be
exercisable only by the Participant. The Option shall not be assignable or transferable other than
by will or by the laws of descent and distribution. Notwithstanding the foregoing, the Participant
may request authorization from the Committee to assign the Option granted herein to a trust or
custodianship, the beneficiaries of which may include only the Participant, the Participant’s
spouse or the Participant’s lineal descendants (by blood or adoption), and, if the Committee grants
such authorization, the Participant may assign his rights accordingly. In the event of any such
assignment, such trust or custodianship shall be subject to all the restrictions, obligations, and
responsibilities as apply to the Participant under the Plan and this Option Grant Agreement and
shall be entitled to all the rights of the Participant under the Plan and this Option Grant
Agreement; Provided that notwithstanding such assignment, if the events or dates set forth
in Sections 6 and 7 of the Option Grant Agreement occur with respect to the Participant, the Option
shall not vest or expire at the times set forth in Sections 6 and 7 hereof; Provided further
that upon such assignment in accordance with this Section 10, all references in the Plan and
Option Grant Agreement except for Sections 6 and 7 of the Option Grant Agreement (and any other
provision of Services with the Company or its affiliates (or the termination thereof)) shall be
deemed to be replaced by a reference to the Transferee of the Option.

11. Indemnification. The Participant agrees, to the fullest extent permitted by law, to indemnify
and hold harmless the Company and any director, officer, or employee thereof against any and all
losses, liabilities, claims, damages, and expenses of any nature whatsoever (including attorneys’
fees and disbursements, judgments, fines and amounts paid in
settlement) (collectively, “Losses”) arising out of or based upon any breach or failure by the Participant to
comply with his obligations made herein. This Section 11 shall survive any termination or execution
of this Option Grant Agreement.

 

 

12. Representations.

     12.1 Participant Representations. In addition to any representations made by the Participant
in the LLC Agreement, the Participant hereby represents and warrants to the Company that: (a) the
Participant is an “accredited investor” as defined in Rule 501(a) under the Securities Act;
~provided that the Company may, in its discretion and subject to compliance with all
applicable securities laws, waive the foregoing representation with respect to a limited number of
Participants; (b) the Participant, alone or together with his representatives, possesses such
expertise, knowledge, and sophistication in financial and business matters generally, and in the
type of transactions in which the Company proposes to engage in particular; (c) the Participant is
aware that the LLC Agreement provides significant restrictions on the ability of a Participant to
sell, transfer, assign, mortgage, hypothecate, or otherwise encumber the Membership Units; (d) the
Participant has duly executed and delivered this Option Grant Agreement; and (e) the Participant’s
authorization, execution, delivery, and performance of this Option Grant Agreement do not conflict
with any other agreement or arrangement to which the Participant is a party or by which it is
bound.

     12.2 Truth of Representations and Warranties. The Participant represents and warrants that all
of his representations set forth in Section 12.1 of this Option Grant Agreement are true and
correct as of the date hereof and will be true and correct on any Exercise Date.

13. Integration. This Option Grant Agreement, and the other documents referred to herein or
delivered pursuant hereto (including, without limitation, the LLC Agreement) which form a part
hereof contain the entire understanding of the parties with respect to its subject matter and there
are no restrictions, agreements, promises, representations, warranties, covenants or undertakings
with respect to the subject matter hereof other than those expressly set forth in such documents.
This Option Grant Agreement, the Plan and the LLC Agreement supersede all prior agreements and
understandings between the parties with respect to its subject matter.

14. Counterparts. This Option Grant Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the same instrument.

15.
Governing Law. This Option Grant Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without regard to the provisions
thereof governing conflict of laws.

16. Participant Acknowledgment. The Participant hereby acknowledges receipt of a copy of the Plan
and the LLC Agreement. The Participant hereby acknowledges that all decisions, determinations and
interpretations of the Committee in respect of the Plan, this Option Grant Agreement and the Option
shall be final and conclusive.

[Remainder of page intentionally left blank]

 

 

     IN WITNESS WHEREOF, the Company has caused this Option Grant Agreement to be duly executed by its
duly authorized officer and said Participant has hereunto signed this Option Grant Agreement on his
own behalf, thereby representing that he has carefully read and understands this Option Grant
Agreement, the Plan, and the LLC Agreement as of the day and year first written above.

	 	 	 
	 

	 	TJ CHEMICAL HOLDINGS LLC
	 
	 
	 	/s/ Richard A. Ekleberry
	 

	 	 
	 

	 	By: Richard A. Ekleberry
	 

	 	Title: Vice President
	 
	 	 
	 

	 	STEVEN DEMETRIOU
	 
	 
	 	/s/ Steven Demetriou

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