UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest
Event Reported): November 19, 2014
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PLASTIC2OIL,
Inc. |
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(Exact name of
registrant as specified in its charter) |
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Nevada |
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000-52444 |
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90-0822950 |
(State or other
jurisdiction |
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(Commission |
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(I.R.S.
Employer |
of
incorporation) |
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File Number) |
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Identification
No.) |
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20 Iroquois Street
Niagara Falls, NY
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14303 |
(Address of principal
executive offices) |
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(Zip Code) |
Registrant’s telephone number,
including area code: (716) 278-0015
N/A
Former name or former address, if
changed since last report
Check the appropriate box below if
the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Section 1 – Registrant’s Business
and Operations
Item 1.01 Entry
into a Material Definitive Agreement.
On November 19, 2014, Plastic2Oil,
Inc., a Nevada corporation (the “Company”), entered into a
Subscription Agreement (the “Purchase Agreement”) with Heddle
Marine Service Inc. (the “Purchaser”), a company owned by Mr.
Richard Heddle, the Company’s Chief Executive Officer and a member
of the Company board of directors, pursuant to which, on November
19, 2014, the Company sold to the Purchaser in a private placement
(the “Note Financing”) a $1 million principal amount 12% Secured
Promissory Note due November 19, 2019 (the “Note”), together with a
five-year warrant to purchase up to one million shares of the
Company’s common stock at an exercise price of $0.12 per share (the
“Warrant”). The gross proceeds to the Company were $1 million, of
which approximately $465,000 was used to repay the outstanding
balance of short-term loans made by Mr. Heddle to the Company, as
reported in the Company’s most recent Quarterly Report on Form
10-Q.
In connection with the Note
Financing, the Company and the Purchaser entered into certain
agreements described below. Such agreements, with certain
exceptions, are substantially identical to the transaction
documents executed and delivered in the Company’s sale of like
tenor 12% secured promissory notes to Mr. Heddle, personally, in
the third quarter of 2013, as reported in the Company’s Current
Report on Form 8-K dated August 29, 2013.
Purchase Agreement
The Purchase Agreement contains
customary representations, warranties and covenants in connection
with the sale and issuance of the Notes and Warrants, including
without limitation, representations and warranties of the Purchaser
as to its “accredited investor” status.
12% Secured Promissory
Note
The Note issued by the Company bears
interest at the rate of 12% per annum. All principal and interest
on the Note is due and payable in full by the Company on November
19, 2019, the fifth anniversary of the issuance date. The Note may
be prepaid in full or part at any time without penalty. Events of
default under the Note include, without limitation, the failure to
timely pay principal or interest when due and the commencement of a
bankruptcy, liquidation or similar proceeding against the Company.
The Company’s obligations under the Note are secured by a lien on
substantially all of the assets of the Company and Plastic2Oil of
NY#1, LLC and JBI RE #1, Inc., each a subsidiary of the
Company.
Warrants
TheWarrant issued by the Company has
a five year term, is exercisable immediately, and has an initial
exercise price of $0.12 per share of common stock were granted to
the Purchaser in connection with the shares of common stock
issuance upon exercise of the Warrant.
Security Agreement
In connection with the Note
Financing, the Purchaser was a made a party to that certain
existing Security Agreement (the “Security Agreement”) by and among
the Company, its subsidiaries named above, Mr. Heddle and
Christiana Trust Company, as collateral agent, pursuant to which
the Company and subsidiaries granted a security interest in favor
of the collateral agent and for the benefit of the holders of the
Company’s Notes in substantially all of the assets of such
grantors. Following an event of default (as defined in the Note),
the collateral agent will act with respect to the collateral
securing the Notes at the direction of the holders of a majority of
the aggregate principal amount of the outstanding Notes.
The foregoing summaries of the Note
Financing, the securities to be issued in connection therewith, the
Purchase Agreement, the Note, the Warrant and the Security
Agreement (all of the foregoing are collectively referred to as the
“Transaction Documents”), do not purport to be complete and are
qualified in their entirety by reference to the actual Transaction
Documents. Copies of the Purchase Agreement, the Note and the
Warrant are attached to this Current Report on Form 8-K as Exhibits
10.1, 10.2 and 10.3, respectively, and the Security Agreement is
incorporated herein by reference to Exhibit 10.4 to the Company’s
Current Report on Form 8-K dated August 29, 2013. The Transaction
Documents contain representations and warranties that the parties
made solely for the benefit of each other, in the context of all of
the terms and conditions of the Transaction Documents. Accordingly,
other investors and stockholders of the Company may not rely on
such representations and warranties. Furthermore, such
representations and warranties are made only as of the date of the
applicable Transaction Document. Information concerning the subject
matter of such representations and warranties may change after the
date of such Transaction Document, and any such changes may not be
fully reflected in the Company’s reports or other filings with the
Securities and Exchange Commission.
Section 2 - Financial
Information
Item 2.03 Creation of a Direct
Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The disclosures contained in Item
1.01 of this Report are incorporated herein by
reference.
Section 3 — Securities and Trading
Markets
Item
3.02 Unregistered Sales of Equity
Securities.
In connection with the Note Financing
described in Item 1.01, the Company agreed to issue the Note and
Warrants described therein. Such issuances were made in
reliance on the exemption from registration provided by Section
4(a)(2) of the Securities Act of 1933, as amended (the “Act”), and
Regulation D promulgated thereunder on the basis that the issuances
did not involve a public offering and the Purchaser made
certain representations to the Company in the Purchase Agreements,
including without limitation, that the Purchaser was an “accredited
investor” as defined in Rule 501 under the Act.
Section 9 - Financial Statements
and Exhibits
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits. The exhibits required
by this item are listed on the Exhibit Index hereto.
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, as amended, the Registrant has
duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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Plastic2Oil,
Inc. |
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November 19,
2014 |
By: |
/S/Rahoul
Banerjea |
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Name: |
Rahoul
Banerjea |
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Title: |
Chief Financial
Officer |
EXHIBIT INDEX
SUBSCRIPTION
AGREEMENT
in connection with
PLASTIC2OIL, INC.
12% Secured Promissory
Notes
(together with Warrants to Purchase
shares of Common Stock)
November 19, 2014
SUBSCRIPTION
AGREEMENT
This Subscription Agreement (the
“Agreement”), is executed by the undersigned (the “Subscriber”) in
connection with the offering (the “Offering”) by Plastic2Oil, Inc.,
a Nevada corporation (the “Company”), of five-year 12% Secured
Promissory Notes (the “Notes”) and Warrants (the “Warrants”) to
purchase shares of Common Stock, par value $.001 per share, of the
Company (the “Shares”) (the Notes and the Warrants are collectively
referred to as the “Offered Securities” and the Offered Securities
and the Shares issuable upon the exercise of the Warrants are
collectively referred to herein as the “Securities”). For every
$100,000 principal amount of Notes purchased, the Subscriber shall
receive Warrants to purchase 100,000 shares of Common Stock. The
Notes shall be substantially in the form attached hereto as
Exhibit A. The Warrants shall be substantially in the form
attached hereto as Exhibit B. The obligations under the Note
will be secured pursuant to a Security Agreement substantially in
the form attached hereto as Exhibit C.
SECTION 1
Section 1.1 |
Subscription. The Subscriber,
intending to be legally bound, hereby irrevocably subscribes for
and agrees to purchase the principal amount of Notes indicated on
Page 10 hereof, on the terms and conditions described
herein. |
Section 1.2 |
Purchase. The Subscriber
understands and acknowledges that the purchase price to be remitted
to the Company in exchange for the Offered Securities shall be
equal to the principal amount of Notes purchased. |
Section 1.3 |
Payment for Purchase. PAYMENT
FOR THE SECURITIES SHALL BE BY WIRE TRANSFER OR CHECK PAYABLE TO:
“PLASTIC2OIL” and delivered to the Company, together with an
original executed copy of this Agreement. Wire transfer
instructions are available upon request from Mr. Rahoul Banerjea at
(716) 278-0015; Extension 257. |
Section 1.4 |
Closings. The Company may
schedule any number of closings to consummate the sale and issuance
of the Notes subscribed for by the Investors in connection with
the Offering (the “Closing”). |
SECTION 2
Section 2.1 Acceptance or
Rejection.
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(a) |
The Subscriber understands and agrees
that the Company reserves the right to reject this subscription for
the Offered Securities in whole or in part in any order, if, in its
reasonable judgment, it deems such action in the best interest of
the Company, notwithstanding prior receipt by the Subscriber of
notice of acceptance of the Subscriber’s subscription. |
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(b) |
In the event of rejection of this subscription,
or in the event the sale of the Offered Securities is not
consummated by the Company for any reason (in which event this
Agreement shall be deemed to be rejected), this Agreement and any
other agreement entered into between the Subscriber and the Company
relating to this subscription shall thereafter have no force or
effect and the Company shall promptly return or cause to be
returned to the Subscriber the purchase price remitted to the
Company by the Subscriber in exchange for the Offered
Securities. |
SECTION 3
Section 3.1 |
Subscriber Representations and
Warranties. The Subscriber hereby acknowledges, represents and
warrants to, and agrees with, the Company and its affiliates as
follows: |
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(a) |
The Subscriber is acquiring the Offered
Securities for the Subscriber’s own account as principal, not as a
nominee or agent, for investment purposes only, and not with a view
to, or for, resale, distribution or fractionalization thereof in
whole or in part and no other person has a direct or indirect
beneficial interest in such Offered Securities. Further, the
Subscriber does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect
to any of the Securities. |
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(b) |
The Subscriber acknowledges the Subscriber’s
understanding that the offering and sale of the Offered Securities
is intended to be exempt from registration under the Securities Act
of 1933, as amended (the “Securities Act”) by virtue of Section
4(a)(2) of the Securities Act, the provisions of Rule 506 of
Regulation D promulgated under the Securities Act (“Regulation D”)
and Regulation S promulgated under the Securities Act (“Regulation
S”). In furtherance thereof, the Subscriber represents and warrants
to and agrees with the Company and its affiliates as
follows: |
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(i) |
The Subscriber realizes that the basis for the
foregoing exemptions may not be present, if, notwithstanding such
representations, the Subscriber has in mind merely acquiring
Securities for a fixed or determinable period in the future, or for
a market rise, or for sale if the market does not rise. The
Subscriber does not have any such intentions; |
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(ii) |
The Subscriber has the financial ability to bear
the economic risk of the Subscriber’s investment, has adequate
means for providing for the Subscriber’s current needs and personal
contingencies and has no need for liquidity with respect to the
Subscriber’s investment in the Company; and |
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(iii) |
The Subscriber has such knowledge and experience
in financial and business matters as to be capable of evaluating
the merits and risks of the prospective investment. If other than
an individual, the Subscriber also represents it has not been
organized for the purpose of acquiring the Offered
Securities. |
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(c) |
The Subscriber represents and warrants to the
Company as follows: |
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(i) |
The Subscriber has been given the opportunity for
a reasonable time prior to the date hereof to ask questions of, and
receive answers from the Company or its representatives concerning
the terms and conditions of the Offering, and other matters
pertaining to this investment, and has been given the opportunity
for a reasonable time prior to the date hereof to obtain such
additional information in connection with the Company in order for
the Subscriber to evaluate the merits and risks of purchase of the
Offered Securities, to the extent the Company possesses such
information or can acquire it without unreasonable effort or
expense; and |
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(ii) |
The Subscriber has not been furnished with any
oral representation or oral information in connection with the
offering of the Offered Securities; and |
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(iii) |
The Subscriber has determined that the Offered
Securities are a suitable investment for the Subscriber and that at
this time the Subscriber could bear a complete loss of the
Subscriber’s investment; and |
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(iv) |
The Subscriber is not relying on the Company, or
its affiliates with respect to economic considerations involved in
this investment; and |
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(v) |
The Subscriber realizes that it may not be able
to resell readily any of the Securities purchased hereunder because
(A) there may only be a limited public market for any Securities
and (B) none of the Securities have been registered under the “blue
sky” laws; and |
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(vi) |
The Subscriber understands that the Company has
the absolute right to refuse to consent to the transfer or
assignment of the Securities if such transfer or assignment does
not comply with applicable state and federal securities laws;
and |
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(vii) |
No representations or warranties have been made
to the Subscriber by the Company, or any officer, employee, agent,
affiliate or subsidiary of any of it, other than the
representations of the Company in this Agreement; and |
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(viii) |
Any information which the Subscriber has
heretofore furnished to the Company with respect to the
Subscriber’s financial position and business experience is correct
and complete as of the date of this Agreement and if there should
be any material change in such information the Subscriber will
immediately furnish such revised or corrected information to the
Company; and |
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(ix) |
The Subscriber has received and reviewed the
Company’s Confidential Private Placement Memorandum dated as of
August 9, 2013, as amended, and has had access to the reports of
the Company filed pursuant to the Securities Exchange Act of 1934,
as amended; and |
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(x) |
The foregoing representations, warranties and
agreements shall survive the sale of the Securities and acceptance
by the Company of the Subscriber’s subscription. |
SECTION 4
The Company represents and warrants to the Subscriber as
follows:
Section 4.1 |
Organization, Good Standing and
Qualification. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Nevada and has all requisite corporate power and authority to
carry on its business as now conducted and as proposed to be
conducted. The Company is duly qualified to transact business and
is in good standing in each jurisdiction in which the failure to so
qualify would have a material adverse effect on the business or
properties of the Company and its subsidiaries taken as a
whole. |
Section 4.2 |
Authorization. All corporate
action on the part of the Company, its officers, directors and
shareholders necessary for the authorization, execution and
delivery of this Agreement, the performance of all obligations of
the Company hereunder and the authorization, issuance (or
reservation for issuance) and delivery of the Securities being sold
hereunder have been taken, and this Agreement constitutes a valid
and legally binding obligation of the Company, enforceable in
accordance with its terms. |
Section 4.3 |
Valid Issuance of Securities.
The Securities, when issued, sold and delivered in accordance with
the terms hereof for the consideration expressed herein, will be
validly issued, and, based in part upon the representations of the
Subscriber in this Agreement, will be issued in compliance with all
applicable U.S. federal and state securities laws. |
Section 4.4 |
No Conflicts. The execution
and delivery of this Agreement and the consummation of the issuance
of the Securities and the transactions contemplated by this
Agreement do not and will not conflict with or result in a breach
by the Company of any of the terms or provisions of, or constitute
a default under, the certificate of incorporation or bylaws of the
Company, or any indenture, mortgage, deed of trust or other
material agreement or instrument to which the Company is a party or
by which it or any of its properties or assets are bound, or any
existing applicable decree, judgment or order of any court, Federal
or State regulatory body, administrative agency or other
governmental body having jurisdiction over the Company or any of
its properties or assets. |
Section 4.5 |
Compliance with Laws. As of
the date hereof, the conduct of the business of the Company
complies in all material respects with all material statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees
applicable thereto. The Company shall comply with all applicable
securities laws with respect to the sale of the
Securities. |
SECTION 5 (CANADIAN
SECURITIES REQUIREMENTS)
If the Subscriber is a resident of
Alberta, Ontario or British Columbia, such Subscriber’s
subscription for Offered Securities is subject to the terms and
conditions of this Section 5.
Section 5.1 Offering
Exemption.
If the Subscriber is a resident of
Alberta, Ontario or British Columbia, the sale of the Offered
Securities by the Company to the Subscriber is conditional upon
such sale being exempt from the requirements as to the filing of a
prospectus and as to the preparation of an offering memorandum
contained in any statute, regulation, instrument, rule or policy
applicable to the sale of the Offered Securities or upon the issue
of such orders, consents or approvals as may be required to permit
such sale without the requirement of filing a prospectus or
delivering an offering memorandum.
Section 5.2 Representations and
Warranties.
By the Subscriber’s acceptance of
this Agreement, the Subscriber represents and warrants to the
Company (which representations and warranties shall survive the
Closing) that:
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the Subscriber is a resident of Alberta, Ontario
or British Columbia and the Subscriber complies with one of the
following: |
(i) the Subscriber is purchasing as
principal or is deemed to be purchasing as principal in accordance
with applicable Canadian securities legislation and meets the
definition of “accredited Subscriber” as such term is defined under
NI 45-106 and has completed and signed the Subscriber questionnaire
set forth on Annex B; or
(ii) the Subscriber is purchasing as
principal and has purchased that number of Offered Securities
having an acquisition cost to the Subscriber of not less than
$150,000 to be paid in cash on the date of Closing;
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The Subscriber is not a person created or used
solely to purchase or hold securities in order to comply with an
exemption from the prospectus requirements of applicable Canadian
securities legislation; and |
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The Subscriber and any beneficial purchaser for
whom it is acting is resident in the jurisdiction set out in column
(1) on Schedule I, such address was not created and is not used
solely for the purpose of acquiring the Offered Securities and the
Subscriber was solicited to purchase in such
jurisdiction. |
Section 5.3 Anti-Money
Laundering.
The Subscriber represents and
warrants that the funds representing the Purchase Price for the
Offered Securities being subscribed for herein which will be
advanced by the Subscriber to the Company hereunder will not
represent proceeds of crime for the purposes of the Proceeds of
Crime (Money Laundering) and Terrorist Financing Act (Canada)(the
“PCMLTFA”) and the Subscriber acknowledges that the Company
may in the future be required by law to disclose the Subscriber’s
name and other information relating to this Agreement and the
Subscriber’s subscription hereunder, on a confidential basis,
pursuant to PCMLTFA. To the best of the Subscriber’s knowledge: (a)
none of the subscription funds to be provided by the Subscriber (i)
have been or will be derived from or related to any activity that
is deemed criminal under the laws of Canada or the United States of
America or any other jurisdiction, or (ii) are being tendered on
behalf of a person or entity who has not been identified to the
Subscriber; and (b) it shall promptly notify the Company if the
Subscriber discovers that any of such representations ceases to be
true, and to provide the Company with appropriate information in
connection therewith.
Section 5.4 Ontario Securities
Commission Disclosure.
If the Subscriber is resident in
Ontario, it acknowledges it has been notified by the Company: (i)
of the delivery to the Ontario Securities Commission (the “OSC”) of
the Subscriber’s personal information; (ii) that the Subscriber’s
personal information is being collected indirectly by the OSC under
the authority granted to it in the securities legislation; (iii)
the Subscriber’s personal information is being collected for the
purposes of the administration and enforcement of the securities
legislation of Ontario; and (iv) the contact information of the
public official in Ontario who can answer questions about the OSC’s
indirect collection of personal information is, Administrative
Assistant to the Director of Corporate Finance, Ontario Securities
Commission, Suite 1903, Box 5520 Queen Street West, Toronto,
Ontario, M5H 3S8, telephone (416) 593-8086, facsimile (416)
593-8252.
Section 5.5 |
Stock Legends. If the
Subscriber is a resident of Alberta, Ontario or British Columbia,
in addition to the securities legends set forth in Section 3.7,
such Subscriber hereby agrees with the Company as follows: the
certificates evidencing the Securities issued to such Subscriber,
and each certificate issued in transfer thereof within the four
month period after issuance of the Securities, will bear the
following or similar legend: |
UNLESS PERMITTED UNDER SECURITIES
LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE
SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER
OF (I) [INSERT THE DISTRIBUTION DATE], AND (II) THE DATE THE ISSUER
BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF
CANADA.
SECTION 6
Section 6.1 |
Additional Representations and
Warranties of Non-U.S. Persons. Each Subscriber that is not a
U.S. Person (as defined under Regulation S), severally and not
jointly, further represents and warrants to the Company as follows:
(i) at the time of (A) the offer by the Company and (B) the
acceptance of the offer by such Person, of the Securities, such
Person was outside the U.S; (ii) no offer to acquire the Securities
or otherwise to participate in the transactions contemplated by
this Agreement was made to such Person or its representatives
inside the U.S.; (iii) such Person is not purchasing the Securities
for the account or benefit of any U.S. Person, or with a view
towards distribution to any U.S. Person, in violation of the
registration requirements of the Securities Act; (iv) such Person
will make all subsequent offers and sales of the Securities either
(A) outside of the U.S. in compliance with Regulation S; (B)
pursuant to a registration under the Securities Act; or (C)
pursuant to an available exemption from registration under the
Securities Act; (v) such Person is acquiring the Securities for
such Person’s own account, for investment and not for distribution
or resale to others; (vi) such Person has no present plan or
intention to sell the Securities in the U.S. or to a U.S. Person at
any predetermined time, has made no predetermined arrangements to
sell the Securities and is not acting as an underwriter or dealer
with respect to such securities or otherwise participating in the
distribution of such securities; (vii) neither such Person, its
Affiliates nor any Person acting on behalf of such Person, has
entered into, has the intention of entering into, or will enter
into any put option, short position or other similar instrument or
position in the U.S. with respect to the Securities at any time
after the date of Closing through the one year anniversary of the
date of Closing except in compliance with the Securities Act;
(viii) such Person consents to the placement of a legend on any
certificate or other document evidencing the Securities as required
under applicable law (ix) such Person is not acquiring the
Securities in a transaction (or an element of a series of
transactions) that is part of any plan or scheme to evade the
registration provisions of the Securities Act. |
Section 6.2 |
Opinion. Such Subscriber will
not transfer any or all of such Subscriber’s Securities pursuant to
Regulation S or absent an effective registration statement under
the Securities Act and applicable state securities law covering the
disposition of such Subscriber’s Securities, without first
providing the Company with an opinion of counsel (which counsel and
opinion are reasonably satisfactory to the Company) to the effect
that such transfer will be made in compliance with Regulation S or
will be exempt from the registration and the prospectus delivery
requirements of the Securities Act and the registration or
qualification requirements of any applicable U.S. state securities
laws. |
SECTION 7
Section 7.1 |
Indemnity. The Subscriber
agrees to indemnify and hold harmless the Company, its officers and
directors, employees and its affiliates and each other person, if
any, who controls any thereof, against any loss, liability, claim,
damage and expense whatsoever (including, but not limited to, any
and all expenses whatsoever reasonably incurred in investigating,
preparing or defending against any litigation commenced or
threatened or any claim whatsoever) arising out of or based upon
any false representation or warranty or breach or failure by the
Subscriber to comply with any covenant or agreement made by the
Subscriber herein or in any other document furnished by the
Subscriber to any of the foregoing in connection with this
transaction. |
Section 7.2 |
Modification. Neither this
Agreement nor any provisions hereof shall be waived, amended,
modified, discharged or terminated except by an instrument in
writing signed by the party against whom any waiver, amendment,
modification, discharge or termination is sought. |
Section 7.3 |
Notices. Any notice, demand or
other communication which any party hereto may be required, or may
elect, to give to anyone interested hereunder shall be in writing
and shall be deemed given when (a) deposited, postage prepaid, in a
United States mail letter box, registered or certified mail, return
receipt requested, addressed to such address as may be given
herein, or (b) delivered personally, to the other party hereto at
their address set forth in this Agreement or such other address as
a party hereto may request by notifying the other party
hereto. |
Section 7.4 |
Counterparts. This Agreement
may be executed through the use of separate signature pages or in
any number of counterparts, and each of such counterparts shall,
for all purposes, constitute one agreement binding on all parties,
notwithstanding that all parties are not signatories to the same
counterpart. |
Section 7.5 |
Binding Effect. Except as
otherwise provided herein, this Agreement shall be binding upon and
inure to the benefit of the parties and their heirs, executors,
administrators, successors, legal representatives and assigns. If
the Subscriber is more than one person, the obligation of the
Subscriber shall be joint and several and the agreements,
representations, warranties and acknowledgments herein contained
shall be deemed to be made by and be binding upon each such person
and his heirs, executors, administrators and
successors. |
Section 7.6 |
Entire Agreement. The Exhibits
attached hereto are hereby incorporated herein by reference. This
Agreement together with the Annex and Exhibits contains the entire
agreement of the parties and there are no representations,
covenants or other agreements except as stated or referred to
herein. |
Section 7.7 |
Assignability. This Agreement
is not transferable or assignable by the Subscriber except as may
be provided herein. |
Section 7.8 |
Applicable Law. This Agreement
shall be governed by and construed in accordance with the laws of
the State of New York. |
Section 7.9 |
Amendments. The provisions of
this Agreement may be amended at any time and from time to time,
and particular provisions of this Agreement may be waived, with and
only with an agreement or consent in writing signed by the Company
and by the Subscribers currently holding fifty percent (50%) of the
aggregate principal amount of the outstanding Notes as of the date
of such amendment or waiver. |
Section 7.10 |
Neutral Gender. The use in
this Agreement of words in the male, female or neutral gender are
for convenience only and shall not affect or control any provisions
of this Agreement. |
Section 7.11 |
Captions. The Section headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. |
[Subscription signature pages
follow]
Principal Amount of Note =
$1,000,000.
B. |
MANNER IN WHICH TITLE IS TO BE HELD
(Please check One): |
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1. |
o |
Individual |
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7. |
o |
Trust/Estate/Pension or Profit
Sharing Plan, and
Date Opened:
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Joint Tenants with Rights of
Survivorship |
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As a Custodian for
___________
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UGMA ____________ (State)
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Community Property |
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4. |
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Tenants in Common |
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Married with Separate Property |
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5. |
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Corporation/Partnership |
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Keogh |
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6. |
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IRA |
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11. |
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Tenants by the Entirety |
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12. |
Other |
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C. |
ACCREDITED INVESTOR
REPRESENTATION: |
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Subscriber must complete and sign the
Accredited Investor Questionnaire attached as Annex A and Annex B
(for Canadian Subscribers only) to this Agreement.
PLEASE GIVE THE EXACT AND COMPLETE
NAME IN WHICH TITLE TO THE SECURITIES ARE TO BE HELD: Heddle
Marine Service Inc.
IN WITNESS WHEREOF, the Subscriber
has executed this Agreement on the 19th day of
November , 2014.
Heddle Marine Service
Inc.
Signature: /S/ Richard Heddle |
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Signature: |
Name:
Richard Heddle |
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Name:
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Title President |
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Address On File with Plastic2Oil,
Inc. |
***DO NOT WRITE BELOW DOTTED
LINE***
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ACCEPTED ON BEHALF OF THE
COMPANY: |
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PLASTIC2OIL, INC. |
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By: /S/ Rahoul
Banerjea
Name: Rahoul Banerjea
Title: Chief Financial
Officer
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Principal Amount of
Notes: |
$1,000,000 |
No. of
Warrants:
1,000,000 |
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THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (“SECURITIES ACT”), OR APPLICABLE STATE SECURITIES
LAWS. THIS NOTE MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR PURSUANT TO AN EXEMPTION
THEREFROM UNDER THE SECURITIES ACT AND SUCH STATE LAWS, SUPPORTED
BY AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
12% SECURED PROMISSORY NOTE
DUE NOVEMBER 19, 2019
No. 2014-1 |
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$1,000,000 |
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November 19, 2014 |
FOR VALUE RECEIVED, PLASTIC2OIL, INC., a Nevada corporation (herein
called the “Company”), for value received hereby promises to pay on
November 19, 2019, to Heddle Marine Service Inc., with an address
at 208 Hillyard St., Hamilton, Ontario, Canada L8L 6B6 (herein
called the “Holder”), the principal sum of One Million Dollars
($1,000,000), together with interest upon the principal hereof at
the rate of 12% per annum. Interest on this Note shall be
compounded annually and shall accrue on the outstanding principal
amount on this Note from the date of issuance until the date of
repayment of the principal and payment of accrued interest in full.
Interest shall be calculated on the basis of a 365 day year and
shall be payable at maturity. Payments hereunder shall be made at
such place as the holder hereof shall designate to the undersigned,
in writing, in lawful money of the United States of America. Any
payment which becomes due on a Saturday, Sunday or legal holiday
shall be payable on the next business day.
This Note shall, (i) upon declaration by the Holder or (ii)
automatically upon acceleration pursuant to clause (c) below,
become immediately due and payable upon the occurrence of any of
the following specified events of default:
(a) |
If the Company shall default in the due and punctual payment of the
principal amount of this Note when and as the same shall become due
and payable, whether at maturity or by acceleration; or
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(b) |
If the Company shall default in the due and punctual payment of
interest on this Note when the same shall become due and payable;
or
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(c) |
If the Company shall commence a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, or shall consent to any such
relief or to the appointment of or taking of possession by any such
official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of
creditors, or shall take any corporate action to authorize any of
the foregoing; or an involuntary case or other proceeding shall be
commenced against the Company seeking liquidation, reorganization
or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or
other proceeding shall remain undismissed or unstayed for a period
of 60 consecutive days; or |
(d) |
Company defaults in the performance of any covenant or other
provision with respect to this Note or any other agreement between
Company and the Holder or the Collateral Agent (as defined in the
Security Agreement referred to below); or
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(e) |
Company fails to pay when due (whether at the stated maturity, by
acceleration or otherwise) any indebtedness for borrowed money
owing to the Holder (other than under this Note), any third party
or the occurrence of any event which could result in acceleration
of payment of any such indebtedness or the failure to perform any
agreement with any third party; or
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(f) |
any representation or warranty made in this Note, any related
document, any agreement between Company and the Holder or the
Collateral Agent or in any financial statement of Company proves to
have been misleading in any material respect when made; Company
omits to state a material fact necessary to make the statements
made in this Note, any related document, any agreement between
Company and the Holder or the Collateral Agent or any financial
statement of Company not misleading in light of the circumstances
in which they were made; or, if upon the date of execution of this
Note, there shall have been any material adverse change in any of
the facts disclosed in any financial statement, representation or
warranty that was not disclosed in writing to the Holder at or
prior to the time of execution hereof; or
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(g) |
any pension plan of Company fails to comply with applicable law or
has vested unfunded liabilities that, in the opinion of the Holder,
might have a material adverse effect on Company’s ability to repay
its debts; or
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(h) |
if the validity of this Note or any mortgage, pledge agreement,
security agreement or any other collateral agreement, including
without limitation the Security Agreement, shall have been
challenged or disaffirmed by or on behalf of any of such parties
thereto; or if, other than as a direct result of any action or
inaction of the Holder, the liens created or intended to be created
by any such collateral agreements shall at any time cease to be
valid and perfected first priority liens in favor of Holder’s
collateral agent, subject to no equal or prior liens.
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Declaration of this Note being immediately due and payable by the
Holder may only be made by written notice to the Company declaring
the unpaid balance of the principal amount of this Note and accrued
interest thereon to be due. Such declaration shall be deemed given
upon the occurrence of any event specified in clause (c) above. In
the event of a default, all costs of collection, including
reasonable attorneys’ fees, shall be paid by the Company.
This Note may be prepaid by the Company in whole or in part at any
time or from time to time without penalty or premium. This Note is
not assignable by the holder hereof and any such purported
assignment shall be null and void.
The Company for itself and its successors and assigns hereby waives
presentment, demand, notice, protest and all other demands and
notices in connection with the delivery, acceptance, performance or
endorsement of this Note, and agrees that this Note shall be deemed
to have been made under, and shall be interpreted and governed by
reference to, the laws of the State of New York.
Except as expressly agreed in writing by the Holder, no extension
of time for payment of this Note, or any installment hereof, and no
alteration, amendment or waiver of any provision of this Note shall
release, discharge, modify, change or affect the liability of the
Company under this Note.
All of the covenants, stipulations, promises and agreements made by
or contained in this Note on behalf of the undersigned shall bind
its successors, whether so expressed or not.
No failure on the part of the Holder to exercise, and no delay in
exercising, any right under this Note shall operate as a waiver
thereof, nor shall any single or partial exercise of such rights
preclude any other or further exercise thereof or the exercise of
any other right.
It is the intention of the Company and the Holder that all payments
due hereunder will be treated for accounting and tax purposes as
indebtedness of the Company to the Holder. Each of the Company and
the Holder agrees to report such payments due hereunder for the
purposes of all taxes in a manner consistent with such intended
characterization.
If any term or provision of this Note shall be held invalid,
illegal or unenforceable, the validity of all other terms and
provisions herein shall in no way be affected thereby.
The Company’s obligations under this Note shall be secured pursuant
to that certain Security Agreement, dated as of August 29, 2013
(the “Security Agreement”), by the Company and certain of its
subsidiaries, each as grantor, in favor of the Collateral Agent for
the benefit of the purchasers of 12% secured promissory notes of
like tenor issued by the Company, including Mr. Richard Heddle,
personally, as purchaser of 12% secured promissory notes in August
or September of 2013 in an aggregate principal amount of $2 million
(this Note and such other notes are collectively, the “12% Company
Notes”). The Company’s obligations under this Note and the other
12% Company Notes are also secured by each of the following
agreements made in favor of the holders of 12% Company Notes by the
Company (and if requested by the Collateral Agent or the Holder,
one or more of its subsidiaries) (the “Additional Collateral
Documents”):
(a) |
mortgages in the Company’s (or one of its subsidiaries’, as
applicable) real properties located in Niagara Falls, New York;
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(b) |
one or more intellectual property
security agreements covering material intellectual property owned
by the Company (or one of its subsidiaries, as
applicable). |
IN WITNESS WHEREOF, the Company has caused this Note to be signed
in its corporate name by its Chief Financial Officer as of the date
hereinabove set forth.
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PLASTIC2OIL,
INC. |
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By: |
/S/Rahoul Banerjea |
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Name:
Rahoul Banerjea |
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Title: Chief Financial Officer |
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED
FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR IN ACCORDANCE WITH AN EXEMPTION FROM
REGISTRATION UNDER THAT ACT, SUPPORTED BY AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK OF
PLASTIC2OIL, INC.
This certifies that Richard Heddle or any party to whom this
Warrant is assigned in accordance with its terms is entitled to
subscribe for and purchase 1,000,000 shares of the Common Stock of
Plastic2Oil, Inc., a Nevada corporation, on the terms and
conditions of this Warrant.
1. Definitions. As used in this Warrant, the
term:
1.1 “Business Day” means any day other than a Saturday, Sunday, or
a day on which banking institutions in the State of New York are
authorized or obligated to be closed by law or by executive
order.
1.2 “Common Stock” means the Common Stock, par value $.001 per
share, of the Corporation.
1.3 “Corporation” means Plastic2Oil, Inc. a Nevada corporation, or
its successor.
1.4 “Expiration Date” means November 19, 2019.
1.5 “Holder” means Heddle Marine Service Inc. or any party to whom
this Warrant is assigned in accordance with its terms.
1.6 “1933 Act” means the Securities Act of 1933, as amended.
1.7 “Warrant” means this Warrant and any warrants delivered in
substitution or exchange for this Warrant in accordance with the
provisions of this Warrant.
1.8 “Warrant Price” means $0.12 per share of Common Stock, as
such amount may be adjusted pursuant to Section 4 hereof.
2. Exercise of Warrant. At any time before the Expiration
Date, the Holder may exercise the purchase rights represented by
this Warrant, in whole or in part, by surrendering this Warrant
(with a duly executed subscription in the form attached) at the
Corporation’s principal corporate office (located on the date
hereof in Niagara Falls, New York) and by paying the Corporation,
by certified or cashier’s check, the aggregate Warrant Price for
the shares of Common Stock being purchased.
2.1 Delivery of Certificates. Within thirty (30) days after each
exercise of the purchase rights represented by this Warrant, the
Corporation shall deliver a certificate for the shares of Common
Stock so purchased to the Holder and, unless this Warrant has been
fully exercised or expired, a new Warrant representing the balance
of the shares of Common Stock subject to this Warrant.
2.2 Effect of Exercise. The person entitled to receive the shares
of Common Stock issuable upon any exercise of the purchase rights
represented by this Warrant shall be treated for all purposes as
the holder of such shares of record as of the close of business on
the date of exercise.
3. Stock Fully Paid; Reservation of Shares. The Corporation
covenants and agrees that all securities that it may issue upon the
exercise of the rights represented by this Warrant will, upon
issuance, be fully paid and nonassessable and free from all taxes,
liens and charges. The Corporation further covenants and agrees
that, during the period within which the Holder may exercise the
rights represented by this Warrant, the Corporation shall at all
times have authorized and reserved for issuance enough shares of
its Common Stock or other securities for the full exercise of the
rights represented by this Warrant. The Corporation shall not, by
an amendment to its Articles of Incorporation or through
reorganization, consolidation, merger, dissolution, issue or sale
of securities, sale of assets or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms
of this Warrant.
4. Adjustments. The Warrant Price and the number of shares
of Common Stock that the Corporation must issue upon exercise of
this Warrant shall be subject to adjustment in accordance with
Sections 4.1 through 4.3.
4.1 Adjustment to Warrant Price for Combinations or Subdivisions of
Common Stock. If the Corporation at any time or from time to time
after the date hereof (1) declares or pays, without consideration,
any dividend on the Common Stock payable in Common Stock; (2)
creates any right to acquire Common Stock for no consideration; (3)
subdivides the outstanding shares of Common Stock (by stock split,
reclassification or otherwise); or (4) combines or consolidates the
outstanding shares of Common Stock, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the
Corporation shall proportionately increase or decrease the Warrant
Price, as appropriate.
4.2 Adjustments for Reclassification and Reorganization. If the
Common Stock issuable upon exercise of this Warrant changes into
shares of any other class or classes of security or into any other
property for any reason other than a subdivision or combination of
shares provided for in Section 4.1, including without limitation
any reorganization, reclassification, merger or consolidation, the
Corporation shall take all steps necessary to give the Holder the
right, by exercising this Warrant, to purchase the kind and amount
of securities or other property receivable upon any such change by
the owner of the number of shares of Common Stock subject to this
Warrant immediately before the change.
4.3 Spin Offs. If the Corporation spins off any subsidiary by
distributing to the Corporation’s shareholders as a dividend or
otherwise any stock or other securities of the subsidiary, the
Corporation shall reserve until the Expiration Date enough of such
shares or other securities for delivery to the Holders upon any
exercise of the rights represented by this Warrant to the same
extent as if the Holders owned of record all Common Stock or other
securities subject to this Warrant on the record date for the
distribution of the subsidiary’s shares or other securities.
4.4 Certificates as to Adjustments. Upon each adjustment or
readjustment required by this Section 4, the Corporation at its
expense shall promptly compute such adjustment or readjustment in
accordance with this Section, cause independent public accountants
selected by the Corporation to verify such computation and prepare
and furnish to the Holder a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon
which such adjustment or readjustment is based.
5. Fractional Shares. The Corporation shall not issue any
fractional shares in connection with any exercise of this
Warrant.
6. Dissolution or Liquidation. If the Corporation dissolves,
liquidates or winds up its business before the exercise or
expiration of this Warrant, the Holder shall be entitled, upon
exercising this Warrant, to receive in lieu of the shares of Common
Stock or any other securities receivable upon such exercise, the
same kind and amount of assets as would have been issued,
distributed or paid to it upon any such dissolution, liquidation or
winding up with respect to such shares of Common Stock or other
securities, had the Holder been the holder of record on the record
date for the determination of those entitled to receive any such
liquidating distribution or, if no record is taken, upon the date
of such liquidating distribution. If any such dissolution,
liquidation or winding up results in a cash distribution or
distribution of property which the Corporation’s Board of Directors
determines in good faith to have a cash value in excess of the
Warrant Price provided by this Warrant, then the Holder may, at its
option, exercise this Warrant without paying the aggregate Warrant
Price and, in such case, the Corporation shall, in making
settlement to Holder, deduct from the amount payable to Holder an
amount equal to such aggregate Warrant Price.
7. Transfer and Exchange.
7.1 Transfer. Subject to Section 7.3, the Holder may transfer all
or part of this Warrant at any time on the books of the Corporation
at its principal office upon surrender of this Warrant, properly
endorsed. Upon such surrender, the Corporation shall issue and
deliver to the transferee a new Warrant or Warrants representing
the Warrants so transferred. Upon any partial transfer, the
Corporation shall issue and deliver to the Holder a new Warrant or
Warrants with respect to the Warrants not so transferred.
7.2 Exchange. The Holder may exchange this Warrant at any time at
the principal office of the Corporation for Warrants in such
denominations as the Holder may designate in writing. No such
exchanges will increase the total number of shares of Common Stock
or other securities that are subject to this Warrant.
7.3 Securities Act of 1933. By accepting this Warrant, the Holder
agrees that this Warrant and the shares of the Common Stock
issuable upon exercise of this Warrant may not be offered or sold
except in compliance with the 1933 Act, and then only with the
recipient’s agreement to comply with this Section 7 with respect to
any resale or other disposition of such securities. The Corporation
may make a notation on its records in order to implement such
restriction on transferability.
8. Loss or Mutilation. Upon the Corporation’s receipt of
reasonably satisfactory evidence of the ownership and the loss,
theft, destruction or mutilation of this Warrant and (in the case
of loss, theft or destruction) of a reasonably satisfactory
indemnity or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Corporation shall execute and
deliver a new Warrant to the Holder.
9. Successors. All the covenants and provisions of this
Warrant shall bind and inure to the benefit of the Holder and the
Corporation and their respective successors and assigns.
10. Notices. All notices and other communications given
pursuant to this Warrant shall be in writing and shall be deemed to
have been given when personally delivered or when mailed by prepaid
registered, certified or express mail, return receipt requested.
Notices should be addressed as follows:
(a) If to Holder, then
to:
Heddle Marine Service
Inc.
208 Hillyard Street
Hamilton
Ontario, Canada
L8L6B6
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(b) If to the
Corporation, then to:
Plastic2Oil, Inc.
20 Iroquois Street
Niagara Falls, NY
14303
Attention: Chief
Financial Officer
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Such addresses for notices may be changed by any party by notice to
the other party pursuant to this Section 10.
11. Amendment. This Warrant may be amended only by an
instrument in writing signed by the Corporation and the Holder.
12. Construction of Warrant. This Warrant shall be construed
as a whole and in accordance with its fair meaning. A reference in
this Warrant to any section shall be deemed to include a reference
to every section the number of which begins with the number of the
section to which reference is made. This Warrant has been
negotiated by both parties and its language shall not be construed
for or against any party.
13. Law Governing. This Warrant is executed, delivered and
to be performed in the State of New York and shall be construed and
enforced in accordance with and governed by the New York law
without regard to any conflicts of law or choice of forum
provisions.
Dated as of November 19, 2014
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By: |
/S/ Rahoul
Banerjea__ |
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Name: Rahoul Banerjea |
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Title: Chief Financial Officer |
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant and agrees to purchase _______ shares of
Common Stock of Plastic2Oil, Inc., all at the price and on the
terms and conditions specified in this Warrant.
The undersigned acknowledges that, by issuing shares of Common
Stock to the undersigned upon exercise of the Warrant, the Company
is relying on an exemption from the registration of such shares
under the Securities Act of 1933, as amended, or other applicable
law. In accordance therewith, the undersigned represents and
warrants that the representations and warranties of the undersigned
contained in the Subscription Agreement between the Company and the
undersigned, pursuant to which the undersigned purchased the
Warrant, along with the undersigned’s answers to the applicable
investor questionnaires annexed thereto, are true and correct in
all material respects as of the date hereof.
Dated: __________________
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(Signature of Registered Holder) |
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(Street Address) |
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(City) (State) (Zip) |
ISSUE OF A NEW WARRANT
(To be executed only upon partial exercise,
exchange, or partial transfer of Warrant)
Please issue ______ Warrants, each representing the right to
purchase ________ shares of Common Stock of Plastic2Oil, Inc. to
the registered holder.
Dated: ________________
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(Signature of Registered Holder) |
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered Holder of this
Warrant sells, assigns and transfers unto the Assignee named below
all of the rights of the undersigned under the Warrant, with
respect to the number of shares of Common Stock set forth below
(the “Transfer”):
Name of Assignee |
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The undersigned irrevocably constitutes and appoints _______ as the
undersigned’s attorney-in-fact, with full power of substitution, to
make the transfer on the books of Plastic2Oil, Inc.
Dated: ________________
Plastic2Oil (PK) (USOTC:PTOI)
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