EXHIBIT 10.6
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Issue Date:
December 15, 2005
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150,000 Shares of Common
Stock (subject to adjustment
as provided herein)
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THIS WARRANT AND THE SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT AND THE
COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
STOCKERYALE, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.
COMMON STOCK PURCHASE
WARRANT
STOCKERYALE, INC., a corporation organized under
the laws of the Commonwealth of Massachusetts (the
“Company”), hereby certifies that, for value received,
Eureka Interactive Fund Limited, or its assigns (the
“Holder”), is entitled, subject to the terms set forth
below, to purchase from the Company from and after the issue date
of this Warrant and at any time or from time to time before 5:00
p.m., Boston time, through five (5) years after such date (the
“Expiration Date”), up to 150,000 fully paid and
nonassessable shares of Common Stock (as hereinafter defined),
$.001 par value per share, of the Company, at the Exercise Price
(as defined below). The number and character of such shares of
Common Stock and the Exercise Price are subject to adjustment as
provided herein.
As used herein the following terms, unless the
context otherwise requires, have the following respective
meanings:
(a) The term “Company” shall include
StockerYale, Inc. and any corporation which shall succeed or assume
the obligations of StockerYale, Inc. hereunder.
(b) The term “Common Stock” includes
(a) the Company’s Common Stock, par value $.001 per
share, and (b) any other securities into which or for which
any of the securities described in (a) may be converted or
exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.
(c) The term “Other Securities”
refers to any stock (other than Common Stock) and other securities
of the Company or any other person (corporate or otherwise) which
the holder of the Warrant at any time shall be entitled to receive,
or shall have received, on the exercise of the Warrant, in lieu of
or in addition to Common Stock, or which at any time shall be
issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to
Section 4 or otherwise.
(d) The term “Exercise Price” shall
be mean $.90 per share.
1. Exercise of Warrant.
1.1 Number of Shares Issuable upon Exercise.
From and after the date hereof through and including the Expiration
Date, the Holder shall be entitled to receive, upon exercise of
this Warrant in whole or in part, by delivery of an original or fax
copy of the exercise notice attached hereto as Exhibit A (the
“Exercise Notice”), an aggregate of 150,000 shares of
Common Stock of the Company, subject to adjustment pursuant to
Section 4.
1.2 Fair Market Value. Fair Market Value of a
share of Common Stock as of a particular date (the
“Determination Date”) shall be determined as
follows:
(a) If the Company’s Common Stock is
traded on an exchange or is quoted on the National or Capital
Market of The Nasdaq Stock Market, Inc. (“Nasdaq”),
then the closing or last sale price, respectively, reported for the
last business day immediately preceding the Determination
Date.
(b) If the Company’s Common Stock is not
traded on an exchange or on the Nasdaq but is traded on the NASD
OTC Bulletin Board or BBX Exchange, then the mean of the average of
the closing bid and asked prices reported for the last business day
immediately preceding the Determination Date.
(c) Except as provided in clause (d) below,
if the Company’s Common Stock is not publicly traded, then as
the Holder and the Company agree or in the absence of agreement by
arbitration in accordance with the rules then in effect of the
American Arbitration Association, before a single arbitrator to be
chosen from a panel of persons qualified by education and training
to pass on the matter to be decided.
(d) If the Determination Date is the date of a
liquidation, dissolution or winding up, or any event deemed to be a
liquidation, dissolution or winding up pursuant to the
Company’s charter, then all amounts to be payable per share
to holders of the Common Stock pursuant to the charter in the event
of such liquidation, dissolution or winding up, plus all other
amounts to be payable per share in respect of the Common Stock in
liquidation under the charter, assuming for the purposes of this
clause (d) that all of the shares of Common Stock then
issuable upon exercise of the Warrant are outstanding at the
Determination Date.
2. Procedure for Exercise.
2.1 Delivery of Stock Certificates, etc. on
Exercise. The Company agrees that the shares of Common Stock
purchased upon exercise of this Warrant shall be deemed to be
issued to the Holder as the record owner of such shares as of the
close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid. As soon
as practicable after the exercise of this Warrant in full or in
part, and
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in any event within 3 business days thereafter,
the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder, or as such Holder (upon payment by such
holder of any applicable transfer taxes) may direct in compliance
with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable
shares of Common Stock (or Other Securities) to which such Holder
shall be entitled on such exercise, plus, in lieu of any fractional
share to which such holder would otherwise be entitled, cash equal
to such fraction multiplied by the then Fair Market Value of one
full share of Common Stock, together with any other stock or other
securities and property (including cash, where applicable) to which
such Holder is entitled upon such exercise pursuant to
Section 1 or otherwise.
2.2 Exercise.
(a) Payment for the shares of Common Stock
subject to this Warrant may be made either in (i) cash or by
certified or official bank check payable to the order of the
Company equal to the applicable aggregate Exercise Price,
(ii) by delivery of the Warrant, Common Stock and/or Common
Stock receivable upon exercise of the Warrant in accordance with
Section (b) below, or (iii) by a combination of any of
the foregoing methods, for the number of Common Shares specified in
such form (as such exercise number shall be adjusted to reflect any
adjustment in the total number of shares of Common Stock issuable
to the Holder per the terms of this Warrant) and the Holder shall
thereupon be entitled to receive the number of duly authorized,
validly issued, fully-paid and non-assessable shares of Common
Stock (or Other Securities) determined as provided
herein.
(b) Notwithstanding any provisions herein to the
contrary, if the Fair Market Value of one share of Common Stock is
greater than the Exercise Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant for cash, the
Holder may elect to receive shares of Common Stock equal to the
value (as determined below) of this Warrant (or the portion thereof
being exercised) by surrender of this Warrant at the principal
office of the Company together with the properly endorsed Exercise
Notice in which event the Company shall issue to the Holder a
number of shares of Common Stock computed using the following
formula:
X=Y(A-B)/A
Where:
X = the number of shares
of
