EXHIBIT 10.12
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.
Issue Date: August 16,
2005
156,250 Shares of Common Stock
(subject to adjustment as provided
herein)
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,
Van Wagoner Crossover Fund, 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 156,250 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 $1.17 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 156,250 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
SmallCap 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 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 Common
Stock to be issued to the Holder.
2
Y = the number of shares of Common
Stock purchasable under the Warrant or, if only a portion of the
Warrant is being exercised, the portion of the Warrant being
exercised (at the date of such calculation).
A = the Fair Market Value of one
share of the Company’s Common Stock (as of the date of such
calculation).
B = Exercise Price (as adjusted to
the date of such calculation).
3. Effect of Reorganization,
etc.; Adjustment of Exercise Price .
3.1 Reorganization,
Consolidation, Merger, etc . In case at any time or from time
to time, the Company shall (a) effect a reorganization,
(b) consolidate with or merge into any other person, or
(c) transfer all or substantially all of its properties or
assets to any other person under any plan or arrangement
contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction,
proper and adequate provision shall be made by the Company whereby
the Holder of this Warrant, on the exercise hereof as provided in
Section 1 at any time after the consummation of such
reorganization, consolidation or merger or the effective date of
such dissolution, as the case may be, shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior
to such consummation or such effective date, the stock
and
