Document:

Hybrid Coatings Technologies Inc.: Exhibit 4.2 - Filed by newsfilecorp.com

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE"ACT") OR
APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE
REASONABLY SATISFACTORY TO COUNSEL TO THE BORROWER THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.”

	Original Issue Date: February 21, 2012 
	Conversion Price: US $1.45 

	CONVERTIBLE DEBENTURE 
	DUE FEBRUARY 21, 2015 

     FOR VALUE RECEIVED, HYBRID
COATING TECHNOLOGIES INC., a Nevada Company (hereinafter called the "Borrower"
or “Company”), hereby promises to pay to the order of ________ or its registered
assigns (the "Holder") the sum of $______ US Dollars (_______ USD), on February
21, 2015 (the "Maturity Date"), or such earlier date as this Debenture is
required or permitted to be repaid as provided hereunder, and to pay interest to
the Holder on the aggregate unconverted and then outstanding principal amount of
this Debenture in accordance with the provisions hereof. This Convertible
Debenture (including all Convertible Debentures issued in exchange, transfer or
replacement hereof, this "Debenture") is a duly authorized issue of Debentures
of the Company, designated as its Convertible Debentures due February 21, 2015
(the "Debentures") issued pursuant to a Securities Purchase Agreement entered
into between the Company and the Holder on February 21, 2012 (“Securities
Purchase Agreement”).

Except as otherwise expressly provided
herein, including but not limited to Section 7(c) below, this Debenture may not
be prepaid by the Borrower. All payments due hereunder (to the extent not
converted into Units as defined in Section 2(a)(i) herein, of the Borrower in
accordance with the terms hereof shall be made in lawful money of the United
States and any accrued Interest shall be added to the principal amount of this
Debenture, in which event Interest shall accrue thereon in accordance with the
terms of this Debenture and such additional principal amount shall be
convertible into Common Stock in accordance with the terms of this Debenture.
All payments shall be made at the address of the Holder as designated by the
Holder or at such address as the Holder shall hereafter give to the Borrower by
written notice made in accordance with the provisions of this Debenture.
Whenever any amount expressed to be due by the terms of this Debenture is due on
any day which is not a Business Day (as defined below), the same shall instead
be due on the next succeeding day which is a Business Day.

     This Debenture is subject to the
following additional provisions:

Section 1. Interest. Subject to the terms and conditions
of this Debenture, The Company shall pay interest (“Interest”) to the Holder on
the aggregate unconverted and then outstanding principal amount of this
Debenture at the rate of ten percent (10%) per annum (the “Interest Rate”) from
the Original Issue Date (as defined herein) until the same becomes due and
payable at maturity. Interest shall commence accruing on the Original Issue
Date, shall be computed on the basis of a 365-day year and the actual number of
days elapsed and shall be payable on an annual basis every twelve (12) months,
in accordance with the terms hereof. The Company shall have the option of paying
the Holder the amount of interest due and payable in cash or in Shares of the
Company pursuant to the terms of conversion herein and the price per Share shall
be equal to the average price per Share in the ten trading days preceding the
date on which the Interest becomes due and payable. The amount of interest
payable in respect of the Debenture shall be reduced proportionately in the
event of its partial or full conversion prior to maturity.

Section 2. Conversion.

          (a)
Conversion Right.

              
(i) Conversion Timing and Amount. Subject to the limitations on
Conversion contained herein, the record Holder of this Debenture shall have the
right (a “Conversion Right”) from time to time, and at any time on or after the
Original Issue Date hereof and prior to the Maturity Date, to convert any part
or all of the Debenture into a total of up to ______ (_____________) units
(“Units” and individually each a or "Unit") of the Company at the price of USD
$1.45 (“Conversion Price”) per Unit. Each Unit shall be comprised of the
following: (i) 1 (one) share of the Company’s common stock (“Common Stock”) par
value $0.001 per share (“Share” and collectively “Shares”); and (ii) 1⁄2
(one half) of one stock purchase warrant . Each whole stock purchase warrant
(“Warrant” and collectively “Warrants”) is exercisable at any time prior to the
Maturity Date, at an exercise price of US $2.10 per Share, to purchase 1 (one)
additional Share. Any Shares issuable pursuant to the exercise of the Conversion
Right shall be issued as fully paid and non-assessable shares of Common Stock,
or any shares of capital stock or other securities of the Company into which
such Common Stock shall hereafter be changed or reclassified, at the Conversion
Price determined as provided herein (a "Conversion"). The Conversion Rights set
forth in this Section 2 shall remain in full force and effect immediately from
the Original Issue Date until the Debenture is paid in full.

              
(ii) Limitation On Conversion. Notwithstanding the above, in no
event shall the Holder be entitled to convert any portion of this Debenture in
excess of that portion of this Debenture upon Conversion of which the sum of (1)
the number of shares of Common Stock beneficially owned by the Holder and any
applicable affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unconverted portion of the
Debenture or the unexercised or unconverted portion of the Warrants or of any other security of
the Company subject to a limitation on Conversion or exercise analogous to the
limitations contained herein)(the “Beneficially Owned Shares”) and (2) the
number of shares of Common Stock issuable upon the Conversion of the portion of
the Debenture with respect to which the determination of this proviso is being
made would result in beneficial ownership by the Holder and its affiliates of
more than 4.99% (the “Maximum Percentage”) of the number of shares of the Common
Stock outstanding immediately after giving effect to the issuance of shares of
Common Stock issuable upon conversion of this Debenture held by the Holder (the
“Beneficial Ownership Limitation”). For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined by the
Holder in accordance with Section 13(d) of the Exchange Act and Regulations
13D-G thereunder, except as otherwise provided in clause (1) of such proviso in
the immediately preceding sentence, and provided that the Beneficial Ownership
Limitation shall be conclusively satisfied if the applicable Notice of
Conversion includes a signed representation by the Holder, if requested by the
Company, that the issuance of the shares in such Notice of Conversion will not
violate the Beneficial Ownership Limitation, and the Company shall not be
entitled to require additional documentation of such satisfaction.

         
     (iii) Calculation of Conversion Amount. The
number of Units to be issued upon each Conversion of this Debenture shall be
determined by dividing the Conversion Amount (as defined herein) by the
applicable Conversion Price. The term "Conversion Amount" means, with respect to
any Conversion of the Debenture, the sum of (i) the Principal Amount of the
Debenture to be converted in such Conversion, and (ii) at the Company’s
discretion, any Interest accrued and due.

          (b)
Mechanics of Conversion. In order to convert the Debentures into full
shares of Common Stock and Warrants, the Holder shall deliver a copy of the
fully executed notice of conversion in the form on the rear of the certificate
evidencing the Debenture (‘Notice of Conversion’) to the Company at the office
of the Company which notice shall specify the amount of the Debenture to be
converted (together with a copy of the first page of each Debenture to be
converted) prior to Midnight, Eastern time (the ‘Conversion Notice Deadline’) on
the date of Conversion specified on the Notice of Conversion and (ii) surrender
the original Debenture(s); provided, however, that the Company shall not be
obligated to issue certificates evidencing the shares of Common Stock issuable
upon such conversion and Warrants unless either the original Debentures are
delivered to the Company as provided above, or the Holder notifies the Company
that such Debenture(s) have been lost, stolen or destroyed. In the case of a
dispute as the calculation of the Conversion Price, the Company’s calculation
shall be deemed conclusive absent manifest error.

              
(i) Lost or Stolen Debentures. Upon receipt by the Company of evidence of
the loss, theft, destruction or mutilation of a Debenture, and (in the case of
loss, theft or destruction) indemnity or security reasonably satisfactory to the
Company, and upon surrender and cancellation of the Debenture, if mutilated, the
Company shall execute and deliver new Debenture(s) of like tenor and date.

              
(ii) Delivery of Common Stock and Warrants upon Conversion. The Company
shall issue and use its best efforts to deliver within a reasonable time after
delivery to the Company of a Debenture and Notice of Conversion, or after
provision for security or indemnification required by (i) above, to such Holder
of the Debenture at the address of the Holder on the books of the Company, a
certificate for the number of shares of Common Stock and a number of Warrants to
which the Holder shall be entitled as aforesaid.

              
(iii) No Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of a Debenture. If any conversion of the Debenture would
create a fractional share of Common Stock or a right to acquire a fractional
share of Common Stock, a cash adjustment will be made for the fractional
interest.

             
 (iv) Date of Conversion. The date of which conversion occurs (the
‘Date of Conversion’) shall be deemed to be the date set forth in such Notice of
Conversion, provided that the copy of the Notice of Conversion is delivered or
faxed to the Company before midnight, Pacific time, on the Date of Conversion,
and (ii) that the original Debentures to be converted are surrendered, and
received by the Company within five business days from the Date of Conversion.
The person or persons entitled to receive the shares of common Stock issuable
upon such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on such date. If the original Debentures
to be converted are not received by the Transfer Agent or the Company within
five business days after the Date of Conversion or if the facsimile of the
Notice of Conversion is not received by the Company or its designated transfer
agent prior to the Conversion Notice Deadline, the Notice of Conversion, at the
Company’s option, may be declared null and void.

          (c)
Reservation of Stock Issuable Upon Conversion. The Company shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the conversion of the
Debentures, such number of its shares of Common Stock as shall from time to time
be sufficient to effect the conversion of all then outstanding Debentures; and
if at any time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of all then outstanding
Debentures, the Company will immediately take such corporate action as may be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purpose.

          (d)
Adjustment to Conversion Price.

              
(i) Adjustment Due to Stock Split, Stock Dividend, Etc. If at any time
when the Debentures are issued and outstanding, the number of outstanding shares
of Common Stock is increased by a stock split, stock dividend, or other similar
event, the Fixed Conversion Price shall be proportionately reduced, or if the
number of outstanding shares of Common Stock is decreased by a combination or
reclassification of shares, or other similar event, the Fixed Conversion Price
share be proportionately increased.

             
 (ii) Adjustment Due to Merger, Consolidation, Etc. If at any time
when the Debentures are issued and outstanding, there shall be any merger,
amalgamation, consolidation, exchange of shares, recapitalization,
reorganization, or other similar event, as a result of which shares of Common
Stock of the Company shall be changed into the same or a different number of
shares of another class or classes of stock or securities of the company or
another entity (“Material Transaction”), then the Holders of the Debentures
shall thereafter have the right to receive upon conversion of the Debentures,
upon the basis and upon the terms and conditions specified herein and in lieu of
the shares of Common Stock immediately theretofore issuable upon conversion,
such stock and/or securities which the Holder would have been entitled to
receive in such transaction had the Debentures been converted immediately prior
to the Material Transaction. 

              
(iii) Anti-Dilution Pursuant to Share Issuances. If at any time, when the
Debentures are issued and outstanding the Company issues Additional Securities
(as defined below) (a “Dilutive Issuance”) the Company shall adjust the
Conversion Price (“Adjusted Conversion Price”) of this Debenture using the
following formula below. 

     “Additional Shares” shall mean
all shares of Common Stock issued by the Company other than (i) shares of Common
Stock and/or options, to employees, officers, or directors of, or consultants or
advisors to, the Company or any subsidiary pursuant to any stock option plans,
that are approved by the Board of Directors of the Company, (“ ESOP Shares
Issuances”)

 

	Where 	X = 	the Adjusted Conversion Price 
	  	Y = 	9,250,000 
	  	A = 	the Conversion Price 
		B = 	the total number of shares of Common Stock
      outstanding of the Company immediately following the Dilutive Issuance
      calculated on a fully diluted basis, excluding any ESOP Shares Issuances.
    

              
(iv) Anti-Dilution Pursuant to Securities Issuances within the context of a
Financing. If at any time, when the Debentures are issued and outstanding
the Company undergoes an offering or financing (“Financing”) which results in
the issuance of Shares, debentures, or other convertible securities at an
exercise or conversion price that is equal to less than the Conversion Price
herein per Share (“Base Financing Price”), then the Conversion Price shall be
reduced and shall be equal to the Base Financing Price minus a twenty-five
percent (25%) discount (the “Percentage Discount”) (“Discounted Conversion Price”). The
Discounted Conversion Price shall be calculated using the following
formula:

 

	Where 	A= 	Discounted Conversion Price 
	  	B= 	the Base Financing Price per Share 
	  	C= 	the Percentage Discount. 

Section 4. No Voting Rights. The Debentures shall not
entitle the Holders thereof to any of the rights of a stockholder of the
Company, including without limitation, the right to vote, to receive dividends
and other distributions, or to receive any notice of, or to attend meetings of
stockholders or any other proceedings of the Company.

Section 5. Rule 144 Hold Period. For purposes of Rule
144, it is intended, understood and acknowledged that the Common Stock issuable
upon Conversion of this Debenture shall be deemed to have been acquired at the
time the Debenture was issued. Moreover, it is intended, understood and
acknowledged that the holding period for the Common Stock issuable upon
Conversion of this Debenture shall be deemed to have commenced on the date this
Debenture was issued.

Section 6. Regulation S Agreement of the
Holder

6.1 The Holder represents and warrants to the Company that the
Holder is not a "U.S. Person" as defined by Regulation S of the Securities Act
and is not acquiring the Shares for the account or benefit of a U.S. Person.

     A "U. S. Person" is defined by
Regulation S of the Securities Act to be any person who is:

Any natural person resident in the United States;

Any partnership or corporation organized or incorporated
under the laws of the United States;

	 	i.	Any estate of which any executor or administrator is a
    U.S. person;
	 	 	 
	 	ii. 	
      Any trust of which any trustee is a U.S.
      person;

	 	 	 	 
	 	iii. 	
      Any agency or branch of a foreign entity located in
      the United States;

	 	 	 	 
		iv. 	
      Any non-discretionary account or similar account
      (other than an estate or trust) held by a dealer or other fiduciary for
      the benefit or account of a U.S. person;

	 	 	 
	 	v. 	
      Any discretionary account or similar account (other
      than an estate or trust) held by a dealer or other fiduciary organized,
      incorporated, or (if an individual) resident in the United States;
      and

	 	 	 	 
	 	vi. 	
      Any partnership or corporation if:

	 	 	 	 
	 			
      A. Organized or incorporated under the laws of any
      foreign jurisdiction; and

	 	 	 	 
	 			
      B. Formed by a U.S. person principally for the purpose
      of investing in securities not registered under the Act, unless it is
      organized or incorporated, and owned, by accredited investors (as defined
      in Rule 501(a)) who are not natural persons, estates or
  trusts.

6.2 The Holder acknowledges that the Holder was not in the
United States at the time the offer to purchase the Shares was received.

6.3 The Holder acknowledges that the Shares are "restricted
securities" within the meaning of the Securities Act and will be issued to the
Holder in accordance with Regulation S of the Securities Act.

6.4 The Holder agrees not to engage in hedging transactions
with regard to the Shares unless in compliance with the Securities Act.

6.5 The Holder and the Company agree that the Company will
refuse to register any transfer of the Shares not made in accordance with the
provisions of Regulation S of the Securities Act, pursuant to registration under
the Securities Act, pursuant to an available exemption from registration, or
pursuant to this Agreement.

6.6 The Holder agrees to resell the Shares only in accordance
with the provisions of Regulation S of the Securities Act, pursuant to
registration under the Securities Act, or pursuant to an available exemption
from registration pursuant to the Securities Act.

6.7 The Holder acknowledges and agrees that all certificates
representing the Shares will be endorsed with the following legend in accordance
with Regulation S of the Securities Act:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE 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 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE ACT".

Section 8. Transfer to Comply with the Securities Act. This Debenture shall be binding upon the Company and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. This Debenture may be
sold, assigned or transferred only in compliance with applicable federal and state securities laws and regulations.

Section 9. Governing Law. The Debenture shall be governed by and construed in accordance with the laws of the State of Nevada. All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall be
governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the State of Nevada for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Debenture and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
other manner permitted by law. The parties hereby waive all rights to a trial by jury. If either party shall commence an action or proceeding to enforce any provisions of the Debenture, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

Section 10. Business Day Definition. For purposes hereof, the term ‘business day’ shall mean any day on which banks are generally open for business in the State of Nevada and excluding any Saturday and Sunday.

Section 11. Notices. Any notice or other communication
required or permitted to be given hereunder shall be given as provided herein or
delivered against receipt if to (i) the Company at 950 John Daly blvd., Suite
260, Daly City, CA 94015 (ii) the Holder of a Debenture, to such holder at its
last address as shown on the Debenture Register (or to such other address as the
party shall have furnished in writing as its new address to be entered on the
Debenture Register. Any notice or other communication needs to be made by
facsimile and delivery shall be deemed give, except as otherwise required
herein, at the time of transmission of said facsimile. Any notice given on a day
that is not a business day shall be effective upon the next business day.

Section 12. Waiver of any Breach to be in Writing. Any
waiver by the Company or the Holder of a Debenture of a breach of any provision
of the Debenture shall not operate as, or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision of the
Debenture. The failure of the Company or the Holder hereof to insist upon strict
adherence to any term of the Debenture on one or more occasions shall not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of the Debenture. Any waiver
must be in writing.

Section 13. Unenforceable Provisions. If any provision
of a Debenture is invalid, illegal or unenforceable, the balance of the
Debenture shall remain in effect, and if any provision is inapplicable to any
person or circumstance, it shall nevertheless remain applicable to all other
persons and circumstances.

Section 14. . Construction; Headings. This Debenture
shall be deemed to be jointly drafted by the Company and all the Purchasers and
shall not be construed against any person as the drafter hereof. The headings of
this Debenture are for convenience of reference and shall not form part of, or
affect the interpretation of, this Debenture.

     IN WITNESS WHEREOF, Company has
caused the Debenture to be signed in its name by its duly authorized officer
this 21st day of February, 2012.

	 	COMPANY: 
	 	 
	 	HYBRID COATING TECHNOLOGIES INC., 
	 	 
	 	By:   /s/:Joseph
      Kristul 
	 	         Joseph
      Kristul, CEO & Chairman 

EXHIBIT A

NOTICE OF CONVERSION

(To be Executed by the Registered Holder in order to Convert
the Debenture)

The undersigned hereby irrevocably
elects to convert $__________ in principal amount of the Debenture (defined
herein) into Units, of HYBRID COATING TECHNOLOGIES INC., a
Nevada Company (the "Company"), plus:

     -$_________ any Interest owing,
if applicable and at the Company’s sole discretion

all according to the conditions of the Debenture of the Company
dated as of February 21, 2012, (the "Debenture"), as of the date written
below. If securities are to be issued in the name of a Person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates. No fee will be charged to
the Holder for any Conversion, except for transfer taxes, if any. By submitting
this Notice of Conversion, the Holder certifies that the issuance of the number
of shares of Common Stock requested hereby will not result in a violation of the
Beneficial Ownership Limitation.

     The undersigned hereby requests
that the Company issue a certificate or certificates for the number of shares of
Common Stock set forth above and Warrants for the number set forth above (which
numbers are based on the Holder's calculation attached hereto) in the name(s)
specified immediately below or, if additional space is necessary, on an
attachment hereto:

     Name:
_________________________________________________

     Address:
_______________________________________________

The undersigned represents and warrants that all offers and
sales by the undersigned of the securities issuable to the undersigned upon
Conversion of the Debenture shall be made pursuant to an exemption from
registration under the Securities Act of 1933, as amended (the
"ACT").

(i) Date of
Conversion:_______________________________
Applicable Conversion
Price:________________________
Number of Shares of Common Sock to be Issued
_______________
Number of Warrants
______________________________
Conversion of the
Debenture:_______________________

Signature:
______________________________________________________
Name:
_________________________________________________________

Address:
_______________________________________________________

Upon Conversion of the Debenture in accordance with the terms
thereof, the Holder shall not be required to physically surrender the Debenture
(or evidence of loss, theft or destruction thereof) to the Company unless all of
the Debenture is converted, in which case such Holder shall deliver the
Debenture being converted to the Company promptly following the Conversion Date
at issue. The Company shall issue and deliver shares of Common Stock to an
overnight courier not later than the fifth Business Day following receipt of the
Notice of Conversion with respect to the Debenture(s) to be converted, and shall
make payments pursuant to the Debenture for the number of Business Days such
issuance and delivery is late.Hybrid Coating Technologies Inc.: Exhibit 10.1 - Filed by newsfilecorp.com

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (this "Agreement," “Purchase
Agreement,” or “Securities Purchase Agreement”), dated as of February
21, 2012, by and among Hybrid Coating Technologies Inc., a Nevada
corporation, ("Company"), and ____________ (including its
successors and assigns, the “Buyer”) (individually the “Party” and
collectively the “Parties”).

WHEREAS: 

          A. The
Company and the Buyer are executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Rule 904 under
Regulation S ("Regulation S") as promulgated by the United States Securities and
Exchange Commission (the “Commission” or the "SEC") under the Securities Act of
1933, as amended (the "1933 Act");

          B. Buyer
desires to purchase and the Company desires to issue and sell in a private
offering, upon the terms and conditions set forth in this Agreement, convertible
debentures (“Debenture” or “Debentures”) of the Company. The aggregate
Subscription Amount of this offering of the Debentures to the Buyer shall be
_______ U.S. Dollars (U.S. $_______) (the or “Subscription Amount”)
(collectively, the “Offering”); 

          C. The
outstanding principal amount of a Debenture may be converted at the sole option
of the Buyer, at any time after its issuance and in any event no later than 36
(thirty-six) months from the date of issuance (“Maturity Date”) into ___________
(_________) units of the Company (“Unit” or “Units”), at the price of US $1.45
(“Conversion Price”) per Unit. Each Unit shall be comprised of the following:
(i) 1 (one) share of the Company’s common stock (“Share” or “Shares”); and (ii)
1⁄2 (one half) of one stock purchase warrant. Each whole stock purchase warrant
(“Warrant”) is exercisable at any time prior to the Maturity Date, at an
exercise price of US $2.10 per Share, to purchase 1 (one) additional Share.

          D The
terms of the Debentures, including the terms on which the Debentures may be
converted into Common Stock, are set forth in the Debenture, in the form
attached hereto as Exhibit A;

          E. The
terms of the Warrants including the terms on which the Warrants may be converted
into Common Stock, are set forth in the Form of Warrant, in the form attached
hereto as Exhibit B;

     NOW THEREFORE, the Company and
the Buyer hereby agree as follows:

1

1. PURCHASE AND SALE OF
DEBENTURES AND WARRANTS.

          (a)
Certain Definitions. The Company and the Buyer mutually
agree to the terms of each of the Transaction Documents. For purposes
hereof:

     “1934 Act” shall mean the
Securities Exchange Act of 1934.

     "Business Day" shall mean
any day other than a Saturday, Sunday or a day on which commercial banks in the
State of Nevada are authorized or required by law or executive order to remain
closed.

     “Common Stock” shall have the
meaning set forth in Recital “C” above.

     “Common Stock Equivalents”
means any securities of the Company which would entitle the Buyer thereof to
acquire, directly or indirectly, at any time Common Stock, including without
limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exercisable or exchangeable
for, or otherwise entitles the Buyer thereof to receive, Common Stock.

     “Conversion Shares” shall have
the meaning set forth in Section 2(a) below.

     “Closing” shall occur around
February 21, 2012.

     “Person” shall mean an
individual, a limited liability company, a partnership, a joint venture, an
exempted company, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.

     “Pre-Closing” shall occur upon
the reception of the Purchase Price from the Buyer to the Company.

     “Purchase Price” shall have the
meaning set forth in Section 1(b)(ii) below.

     “Securities” shall have the
meaning set forth in Section 2(a) below.

2

     “Transaction Documents”
shall mean this Securities Purchase Agreement, the Debenture, and any other
agreements, if any, delivered together with this Agreement or in connection
herewith.

     “Underlying Shares” means
the shares of Common Stock issuable upon conversion or redemption of the
Debentures, and issuable upon exercise of the Warrants to be issued upon
conversion or redemption of the Debentures and issuable in lieu of the cash
payment of interest on the Debentures in accordance with their terms.

     “Warrants” shall have the
meaning set forth in Recital “C” above.

     “Warrant Amount” shall mean the
Warrant Amount.

     “Warrant Shares” shall have the
meaning set forth in Section 2(a) below.

          (b)
Purchase of Debentures. Upon the signing of this
Agreement, the Company shall sell to the Buyer and the Buyer agrees to purchase
from the Company Debentures in the aggregate principal amount equal to the
Subscription Amount. The Buyer acknowledges that at Pre-Closing the Company
shall immediately have the right to make full use of the Subscription Amount and
that the delivery of the Debentures by the Company to Buyer shall occur at
Closing.

              
(i) Form of Debenture. The Debenture shall be in the form attached hereto
as Exhibit A.

              
(ii) Form of Payment. The aggregate purchase price for the Debentures
shall be equal to the Subscription Amount (“Purchase Price”). The Purchase Price
shall be deposited in the Company’s Account pursuant to Section 1(c) below).

              
(iii) Pre-Closing Date. The Pre-Closing shall be defined as the date of
reception of the Purchase Price by the Company from Buyer.

              
(iv) Closing Deliveries. The Closing deliveries required hereunder and
in Sections 4 and 5 below, shall be made as follows:

              
On the Closing Date, the Company will deliver or cause to be delivered to the
Buyer (the “Company Documents”): 

3

                   
(A) this Securities Purchase Agreement duly executed by the Company,

                   
(B) duly executed Debentures with a principal amount equal to the Subscription
Amount issued in the name of the Buyer,

          On the
Pre-Closing Date, the Buyer shall deliver or cause to be delivered to the
Company the following (the “Buyer Documents”):

                   
(A) this Securities Purchase Agreement duly executed by the Buyer,

                   
(B) the Buyer’s Subscription Amount by wire transfer or cheque in accordance
with Sub-section (c) below.

                   
(C) The Buyer shall wire the subscription amount to the following:

2. BUYER’S
REPRESENTATIONS AND WARRANTIES. The Buyer represents and warrants
to the Company that:

          (a)
As of the date hereof, the Buyer is purchasing the Debenture and the shares
of Common Stock and Warrants issuable upon conversion of the Debenture or
otherwise pursuant to the Debenture and the other Transaction Documents (such
shares of Common Stock being collectively referred to herein as the
“Conversion Shares") and the Warrants and the shares of Common Stock
issuable upon exercise thereof (the "Warrant Shares" and, collectively
with the Debenture, Warrants and Conversion Shares, the "Securities") for
its own account. 

          (b)
The Buyer is an "accredited investor" as defined in Regulation D of the 1933
Act and as further evidenced by the Accredited Investor Declaration, in the form
attached hereto as Exhibit D. The Buyer further represents and
warrants to the Company that the Buyer is not a "U.S. Person" as defined by
Regulation S of the Securities Act and is not acquiring the Shares for the
account or benefit of a U.S. Person.

4

     A "U. S. Person" is defined by
Regulation S of the Securities Act to be any person who is:

Any natural person resident in the United States;

Any partnership or corporation organized or incorporated
under the laws of the United States;

		i. 	
      Any estate of which any executor or administrator is a
      U.S. person;

				
		ii. 	
      Any trust of which any trustee is a U.S.
      person;

				
		iii. 	
      Any agency or branch of a foreign entity located in
      the United States;

				
		iv. 	
      Any non-discretionary account or similar account
      (other than an estate or trust) held by a dealer or other fiduciary for
      the benefit or account of a U.S. person;

				
		v. 	
      Any discretionary account or similar account (other
      than an estate or trust) held by a dealer or other fiduciary organized,
      incorporated, or (if an individual) resident in the United States;
      and

				
		vi. 	
      Any partnership or corporation if:

				
			A. 	
      Organized or incorporated under the laws of any
      foreign jurisdiction; and

				
	 		B. 	
      Formed by a U.S. person principally for the purpose of
      investing in securities not registered under the Act, unless it is
      organized or incorporated, and owned, by accredited investors (as defined
      in Rule 501(a)) who are not natural persons, estates or
  trusts.

          (c)
The Buyer acknowledges that the Buyer was not in the United States at the
time the offer to purchase the Securities was received.

          (d)
The Buyer acknowledges that the Underlying Shares are "restricted
securities" within the meaning of the Securities Act and will be issued to the
Buyer in accordance with Regulation S of the Securities Act.

5

          (e)
The Buyer and the Company agree that if applicable, the Company will refuse
to register any transfer of the Underlying Shares not made in accordance with
the provisions of Regulation S of the Securities Act, pursuant to registration
under the Securities Act, pursuant to an available exemption from registration,
or pursuant to this Agreement.

          (f)
The Buyer agrees to resell the Underlying Shares only in accordance with the
provisions of Regulation S of the Securities Act, pursuant to registration under
the Securities Act, or pursuant to an available exemption from registration
pursuant to the Securities Act.

          (g)
The Buyer acknowledges and agrees that all certificates representing the
Underlying Shares will be endorsed with the following legend in accordance with
Regulation S of the Securities Act:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND HAVE BEEN
ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE 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 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT.
HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE ACT".

          (h)
Reliance On Exemptions. The Buyer understands that the
Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and the
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Securities.

          (i)
Information. The Buyer and its advisors, if any, have
been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Securities which have been requested by the Buyer or its advisors. The Buyer and
its advisors, if any, have been afforded the opportunity to ask questions of the
Company. Neither such inquiries nor any other due diligence investigation
conducted by Buyer or any of its advisors or representatives shall modify, amend
or affect Buyer's right to rely on the Company's representations and warranties
contained in Section 3 below. The Buyer understands that its investment in the
Securities involves a significant degree of risk.

6

          (j)
Residency. The Buyer resides at the following address:

             
_______________________________________________

              _______________________________________________

          (k)
Knowledge And Experience. Buyer has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the investment in the Securities.

          (l)
Independent Investment Decision. The Buyer has independently
evaluated the merits of its decision to purchase the Securities pursuant to the
Transaction Documents, and the Buyer confirms that it has not relied on the
advice of the Company and/or its legal counsel, consultants or representatives
in making such decision. 

3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to the Buyer as follows:

          (a)
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation. The Company has the
power and the authority to own and operate its assets and carry on the Business
as is now being conducted.

          (b)
The Company has all requisite corporate power and authority to execute and
deliver this Agreement and all other agreements to be entered into in connection
with the transactions contemplated herein and to which it is a party, and to
perform its obligations hereunder and thereunder. 

          (c)
The representations and warranties of the Company contained in this
Agreement, shall be true and correct in all material respects as of the date
when made and as of the date of Pre-Closing, date and of the Closing date
(collectively referred to as the “Closing Date”) as though made at such time
(except for representations and warranties that speak as of a specific date,
which representations and warranties shall be true and correct as of such date)
and the Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or prior
to the Closing Date. 

7

          (d)
Upon issuance of any Underlying Shares upon conversion of the Debenture and
upon exercise of the Warrants and in accordance with their respective terms, and
receipt of the exercise price therefor, the Conversion Shares and Warrant
Shares, along with any other shares issued pursuant to the terms of the
Transaction Documents, will be validly issued, fully paid and non-assessable,
and free from all taxes, liens, claims and encumbrances and shall not be subject
to preemptive rights or other similar rights of stockholders of the Company and
will not impose personal liability upon the Buyer thereof. 

          (e)
To the best knowledge of the Company, there is no action, suit, claim,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the best
knowledge of the Company, threatened against or affecting the Company, or their
officers or directors in their capacity as such. The Company is unaware of any
facts or circumstances which might give rise to any of the foregoing.

          (f)
Neither the Company, nor any of its Affiliates, nor any Person acting on its
or their behalf, has directly or indirectly made any offers or sales of any
securities or solicited any offers to buy any securities under circumstances
that would require registration under the 1933 Act of the issuance of the
Securities to the Buyer. 

          (g)
The Company has taken no action which would give rise to any claim by any
person for brokerage commissions, finder's fees or similar payments relating to
this Agreement or the transactions contemplated hereby. The Company shall
indemnify and hold harmless the Buyer, its employees, officers, directors,
agents, and partners, and their respective Affiliates, from and against all
claims, losses, damages, costs (including the costs of preparation and
attorney's fees) and expenses suffered in respect of any such claimed or
existing fees.

4. CONDITIONS TO THE
COMPANY'S OBLIGATION TO SELL. The obligation of the Company
hereunder to issue and sell the Debentures to the Buyer at the Closing is
subject to the satisfaction of each of the following conditions thereto at
Pre-Closing, provided that these conditions are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion:

          (a) The
Buyer shall have executed the Transaction Documents requiring Buyer’s signature,
and delivered the same to the Buyer.

          (b) The
Buyer shall have delivered the applicable Purchase Price in accordance with
Section 1(b) and 1 (c ) above.

8

          (c) The
representations and warranties of the Buyer shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
specific date, which representations and warranties shall be true and correct as
of such date), and the Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Buyer at or prior
to the Closing Date.

          (d) No
litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or in
any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
herein which prohibits the consummation of any of the transactions contemplated
by this Agreement.

5. CONDITIONS TO
BUYER'S OBLIGATION TO PURCHASE. The obligation of the Buyer
hereunder to purchase the Debenture at Pre-Closing is subject to the
satisfaction, of the following conditions: 

          (a) The
Company shall have executed this Agreement and delivered the same to the
Buyer.

          (b) No
litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or in
any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
herein which prohibits the consummation of any of the transactions contemplated
by this Agreement.

          (c) The
Company shall have received funds from the Buyer representing the Purchase Price
in an amount equal to the Subscription Amount.

     6. GOVERNING LAW;
MISCELLANEOUS.

          (a)
Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Nevada and shall be
enforceable exclusively in the courts thereof.

          (b)
Counterparts; Signatures By Facsimile. This Agreement
may be executed in one or more counterparts, all of which shall be considered
one and the same agreement and shall become effective when counterparts have
been signed by each Party and delivered to the other Party. This Agreement, once
executed by a Party, may be delivered to the other Party hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the Party so
delivering this Agreement.

9

          (c)
Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

          (d)
Severability. If any provision of this Agreement shall
be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.

          (e)
Entire Agreement; Amendments. This Agreement and the
instruments referenced herein contain the entire understanding of the Parties
with respect to the matters covered herein and therein and supersede all
previous communication, representation, or Agreements whether oral or written,
between the parties with respect to the matters covered herein. Except as
specifically set forth herein or therein, neither the Company nor the Buyer
makes any representation, warranty, covenant or undertaking with respect to such
matters. The Agreement may only be modified in writing by both Parties. The
Parties waive the right to rely on any oral representations made by the other
Party, whether in the past or in the future, regarding the subject matter of the
Agreement, the instruments referenced herein or any other dealings between the
Parties related to investments or potential investments into the Company or any
securities transactions or potential securities transactions with the
Company.

     
     (f) Notices. Any notices
required or permitted to be given under the terms of this Agreement shall be
sent by certified or registered mail (return receipt requested) or delivered
personally or by courier (including a recognized overnight delivery service) or
by facsimile and shall be effective five (5) days after being placed in the
mail, if mailed by regular United States mail, or upon receipt, if delivered
personally or by courier (including a recognized overnight delivery service) or
by facsimile, in each case addressed to a party. The addresses for such
communications shall be:

	If to the Company, to: 
	 
	Attn: Joseph Kristul CEO, President and CEO 
	 
	             950 John
      Daly blvd., Suite 260, 
	             Daly City,
      CA 94015 

10

If to the Buyer: 

	ATTN: 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

Each Party shall provide notice to the other Party of any
change in address.

          (g)
Successors And Assigns. This Agreement shall be binding
upon and inure to the benefit of the Parties and their successors and assigns.
Neither the Company nor the Buyer shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.
Notwithstanding the foregoing and subject to Section 2(e), Buyer may assign its
rights hereunder to any person that purchases Securities in a private
transaction from the Buyer or to any of its "Affiliates," as that term is
defined under the 1934 Act, without the consent of the Company.

          (h)
Third Party Beneficiaries. This Agreement is intended
for the benefit of the Parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.

     The undersigned acknowledges that
this Agreement and the subscription represented hereby shall not be effective
unless accepted by the Company as indicated below.

[INTENTIONALLY LEFT BLANK]

 

 

 

 

11

          IN
WITNESS WHEREOF, the undersigned Buyer does represent and certify under penalty
of perjury that the foregoing statements are true and correct and that the Buyer
by the following signature executed this Agreement.

	Dated this _______day of _________,2012. 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Your Signature 	 	 	 
		 	 PRINT EXACT NAME IN WHICH YOU WANT 	 
		 	 THE SECURITIES TO BE REGISTERED 	 

Buyer’s Subscription Amount: US$________

Principal Amount of Debentures Subscribed for:
US$_________
(Subscription Amount)

	Buyer’s Entity Type and Residency: 	 	  	 
	 	 	 	 
	  	 	DELIVERY INSTRUCTIONS: 	 
	Name: Please Print 	 	Please type or print address where your
      security is to be delivered 	 
	 	 	 	 
	  	 	ATTN.:___________________________________________ 	 
	Title/Representative Capacity (if applicable)
    	 	  	 
	  	 	  	 
	 	 	 	 
	Name of Company You Represent (if applicable)
    	 	           
             Street Address 	 
	 	 	 	 
	 	 	 	 
	Place of Execution of this Agreement 	 	           
             City, State or Province, Country, Offshore
      Postal Code 	 
	 	 	 	 
	 	 	 	 
	           
             Phone Number (For Federal Express) and Fax
      Number (re: Notice) 	 

12

THIS AGREEMENT IS ACCEPTED BY THE COMPANY IN THE AMOUNT OF

$_______USD (“SUBSCRIPTION AMOUNT”) ON THIS _____DAY OF FEBRUARY 2012

	 	Hybrid Coating Technologies Inc. 
	 	  
	 	  
	 	By: /s/:Joseph Kristul 
	 	Print Name :Joseph Kristul_ 
	 	Title: President and CEO

13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00199-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00199-of-00352.parquet"}]]