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Exhibit 10.1
STOCK AND WARRANT PURCHASE AGREEMENT
STOCK AND WARRANT PURCHASE AGREEMENT (this " Agreement
"), dated as of December , 2008, by
and between StockerYale, Inc., a Massachusetts corporation (the "
Company "), and the investor named on the signature page
hereof (the " Investor ").
W I T N E S S E T H
WHEREAS, the Company is offering for sale (i) up to $1.5
million of its shares (the " Shares ") of Common Stock (as
defined below) at the price per share of Common Stock negotiated
with each purchaser and (ii) warrants (the " Warrants
") to purchase such number of shares of Common Stock of the Company
as is equal to 50% of the number of Shares sold by the Company,
this transaction generally being herein referred to as the "
Private Placement "; and
WHEREAS, the Investor desires to purchase from the Company
shares of Common Stock and Warrants on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and for good and valuable
consideration the receipt of which is hereby acknowledged, the
parties agree as follows:
1. Definitions . The following terms have the meanings
indicated:
" Business Day " shall mean any day except Saturday,
Sunday and any day which shall be in Boston, Massachusetts a legal
holiday or a day on which banking institutions are authorized or
required by law or other government action to close.
" Common Stock " shall mean the Common Stock, par value
$0.001 per share, of the Company.
" Investors " shall mean all of the purchasers of Shares
and Warrants sold in the Private Placement.
" Person " shall mean any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise
or any government or political subdivision or any agency,
department or instrumentality thereof.
" Total Purchase Price " shall mean the aggregate
purchase price for all of the Shares and Warrants sold in the
Private Placement.
2. Purchase of Common Stock and Warrants . Subject and
pursuant to the terms and conditions set forth in this Agreement,
the Company agrees that it will issue and sell to the Investor and
the Investor agrees that it will purchase from the Company,
(a) at $0.25 per share of Common Stock (the "
Per Share Purchase Price "),
[ ]
shares of Common Stock (the " Investor Shares "), and
(b) warrants (the " Investor Warrants ") to purchase an
aggregate of
[ ]
shares of Common Stock, which Investor Warrants shall be
exercisable for a period of five years at an exercise price of
$0.50 per share. The aggregate purchase price for the Investor
Shares and the Investor Warrants shall be
$[ ]
(the " Aggregate Purchase Price ").
3. Deliveries at Closing .
(a) Deliveries by the Investor . At the Closing of the
transactions contemplated hereby, the Investor shall deliver to the
Company the following:
(1) the Aggregate Purchase Price by wire transfer of immediately
available funds to an account designated by the Company as set
forth on Annex V hereto, which funds will be delivered
to the Company in consideration of the Investor Shares and Investor
Warrants issued at the closing of the transaction contemplated
hereby;
(2) an executed Investor Questionnaire in the form attached as
Annex I ;
(3) an executed Managed Account Representation Letter in the
form attached as Annex II , if the Investor is acting
on behalf of a managed account in the purchase of the Investor
Shares and Investor Warrants; and
(4) a completed Registration Statement Questionnaire in the form
attached as Annex III .
(b) Deliveries by the Company . At the Closing of the
transactions contemplated hereby, the Company shall deliver to the
Investor one or more certificates representing the Investor Shares
and the Investor Warrants registered in the name of the Investor or
its nominee(s), as the Investor has specified in writing to the
Company.
4. Representations, Warranties, Covenants and Agreements
.
(a) Investor Representations, Warranties and Covenants .
The Investor represents, warrants and agrees as follows:
(1) The Investor has had access to such financial and other
information and has had the opportunity to ask questions and
receive answers as deemed necessary in respect of the decision to
purchase the Investor Shares and Investor Warrants, and has
consulted with its advisors concerning the proposed investment in
the Company. The Investor is intentionally making the investment in
the Private Placement knowing that there may be material non-public
information regarding the Company of which the Investor is not
aware.
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The Investor is generally aware of the
Company’s business affairs and financial condition and has
acquired sufficient information about the Company, its management,
financial condition, business and operations and substantial risks
associated with the investment in the Private Placement to reach an
informed and knowledgeable decision to acquire the Investor Shares
and Investor Warrants. The Investor understands that an investment
in the Company involves a high degree of risk and the Investor is
knowingly assuming all such risks relating to its
investment.
(2) The Investor has decided to invest in the Investor Shares
and Investor Warrants and, in making the decision to so invest, is
not in any way relying on the fact that any other Person has
decided to invest in the Shares and Warrants.
(3) The Investor represents that the Investor (or, if
applicable, each managed account on whose behalf the Investor
Shares and Investor Warrants are being purchased by such Investor)
is an "accredited investor" as defined in Rule 501 under the
Securities Act of 1933, as amended (the " Securities Act "),
as certified by the Investor in the Investor Questionnaire attached
hereto as Annex I . The Investor further represents that the
Investor (or, if applicable, each managed account on whose behalf
the Investor Shares and Investor Warrants are being purchased) has
such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and numerous substantial
risks of an investment in the Investor Shares and Investor
Warrants, is capable of making an informed investment decision and
can bear the economic risk of loss of the entire investment in the
Investor Shares and Investor Warrants being purchased.
(4) The Investor understands and expressly acknowledges and
agrees that none of the Investor Shares, Investor Warrants or
shares issuable upon exercise of the Investor Warrants
(collectively, " Warrant Shares ") have been, or will be,
registered or qualified under the Securities Act, or under any
applicable securities laws of any State of the United States ("
Applicable State Law ") and therefore may not be offered,
sold, transferred, assigned, pledged, hypothecated or otherwise
disposed of, directly or indirectly, unless subsequently registered
or qualified under the Securities Act and under Applicable State
Law or unless an exemption from the registration requirements of
the Securities Act and Applicable State Law is available, in each
case to the extent permitted by the terms of this Agreement.
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(5) The Investor understands and agrees that the
Investor Warrants and all certificates representing the Investor
Shares and Warrant Shares shall bear a legend which will be
substantially in the form of the following:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE " ACT "), OR ANY
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS (" APPLICABLE
STATE LAW "). THESE SECURITIES MAY NOT BE OFFERED, SOLD,
PLEDGED, TRANSFERRED OR HYPOTHECATED OR OTHERWISE ASSIGNED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM REGISTRATION
UNDER THE ACT OR APPLICABLE STATE LAW RELATING TO DISPOSITION OF
SECURITIES."
(6) The Investor (or, if applicable, each managed account on
whose behalf the Investor Shares and Investor Warrants are being
purchased by the Investor) will acquire the Investor Shares and
Investor Warrants pursuant to this Agreement for its own account
for investment and not with a view to, or in connection with, the
resale or distribution thereof or in any arrangement or
understanding with any other persons regarding the distribution of
such Investor Shares and Investor Warrants. The Investor hereby
covenants and agrees that, during the six month period following
the Closing, the Investor shall execute a lockup agreement,
containing a restriction on the sale of Investor Shares, Investor
Warrants and Warrant Shares for a period terminating on the earlier
of the ninetieth day following closing of a primary offering by the
Company or the six month anniversary of the Closing, and other
standard terms and conditions, with any requesting underwriter
participating in a primary offering (as defined in
Section 5(a)(1) below).
(7) The Investor hereby covenants and agrees with the Company
not to, directly or indirectly, sell, offer, contract or grant any
option to sell (including without limitation any short sale),
pledge, transfer, establish a "put equivalent position" as such
term is defined by Rule 16a-1(h) under the Securities Exchange Act
of 1934, as amended (the " Exchange Act "), or otherwise
dispose of any Investor Shares, Investor Warrants, Warrant Shares,
options or warrants to acquire Investor Shares, or securities
exchangeable or exercisable for or convertible into Investor Shares
owned either of record or beneficially (as defined in Rule 13d-3
under the Exchange Act) by the Investor or publicly announce the
Investor’s intention to do any of the foregoing or enter into
any swap or other arrangement that transfers to another, in whole
or in part, any of the economic benefits or risks of ownership of
the Investor Shares, the Investor Warrants and the Warrants Shares,
prior to the date on which the Registration Statement (as defined
in Section 5(a)(2)) is declared effective (other than in
connection with a sale pursuant to a registration statement
effected under Section 5(a)(1) hereof).
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(8) The Investor hereby covenants and agrees with
the Company not to make any sale of the Investor Shares, the
Investor Warrants or the Warrant Shares without causing the
prospectus delivery requirement under the Securities Act to be
satisfied or otherwise complying with the Securities Act, and the
Investor acknowledges and agrees that the Investor Shares, the
Investor Warrants and the Warrant Shares are not transferable on
the books of the Company unless the certificate submitted to the
transfer agent evidencing the Investor Shares, the Investor
Warrants or the Warrant Shares (as applicable) is accompanied by
(a) a separate certificate (i) in the form of
Annex V hereto, (ii) executed by an officer of, or
other authorized person designated by, the Investor, and
(iii) to the effect that (A) the Investor Shares, the
Investor Warrants or the Warrant Shares have been sold in
accordance with a registration statement pursuant to Section 5
hereof and (B) the requirement of delivering a current
prospectus has been satisfied; or (b) an opinion of counsel
reasonably satisfactory to the Company stating that an exemption
from registration is available under the Securities Act. The
Investor acknowledges and agrees that, notwithstanding anything
else in this Agreement to the contrary, there may be times when the
Company may suspend the use of the prospectus forming a part of a
registration statement (or otherwise render the registration
statement unavailable) in the event that, and during such period
as, pending negotiations relating to, or consummation of, a
transaction, or the occurrence of any other event, would require
additional disclosure of material information by the Company in the
registration statement and the Company determines that disclosing
such information would (x) adversely affect the Company,
(y) make it impractical or inadvisable to cause the
registration statement to be filed or to become effective or to
amend or supplement the registration statement or
(z) otherwise render the Company unable to comply with the
requirements of the Securities and Exchange Commission (the "
Commission "). In such event, subject to the last sentence
of this Section 4(a)(8), the Company may suspend the use of
such prospectus until such time as an amendment to such
registration statement has been filed by the Company and declared
effective by the Commission, or until such time as the Company has
filed an appropriate report with the Commission pursuant to the
Exchange Act. The Investor hereby covenants and agrees that it will
not sell any Investor Shares, Investor Warrants or Warrant Shares
pursuant to said prospectus during the period commencing at the
time at which the Company gives the Investor written notice of the
suspension of the use of said prospectus and ending the date on
which the Company gives the Investor written notice that the
Investor may thereafter effect sales pursuant to said prospectus.
Anything herein to the contrary notwithstanding, the Company does
not have the right to suspend the use of such prospectus for a
period of more than ninety (90) business days per suspension
and the Company may not exercise this right to suspend the use of
such prospectus more than two times in any twelve month
period.
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(9) The execution and delivery of this Agreement
by the Investor and the performance of this Agreement and the
consummation by the Investor or the Investor’s advisory
clients, as the case may be, of the transactions contemplated
hereby have been duly authorized by all necessary (corporate, in
the case of a corporation) action of the Investor and, if
applicable, the Investor’s advisory clients; and this
Agreement, when duly executed and delivered by the Investor, will
constitute a valid and legally binding instrument, enforceable in
accordance with its terms against the Investor or any of the
Investor’s advisory clients, as the case may be.
(10) The Investor represents that:
(A) If the Investor is a corporation, it is a corporation duly
incorporated, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, with full power and
authority (corporate and other) to perform its obligations under
this Agreement. If the Investor is a limited liability company, it
is a limited liability company duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation, with full power and authority (limited liability
company and other) to perform its obligations under this Agreement.
If the Investor is any other form of business entity, it is duly
organized or formed, validly existing and in good standing under
the laws of its jurisdiction of organization, with full power and
authority to perform its obligations under this Agreement.
(B) If the Investor is a corporation acting in an advisory
capacity, it is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation, with full power and authority (corporate and other)
to act on behalf of its advisory clients under this Agreement. If
the Investor is a limited liability company acting in an advisory
capacity, it is a limited liability company duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation, with full power and authority (corporate and
other) to act on behalf of its advisory clients under this
Agreement.
(C) If the Investor is a trust, the trustee thereunder has been
duly appointed as trustee of such Investor with full power and
authority to act on behalf of such Investor and to perform the
obligations of such Investor under this Agreement. Furthermore, the
trustee under such trust has independently determined that the
purchase of the Investor Shares and Investor Warrants is a suitable
investment for such trust as authorized by the terms thereof and
applicable laws and regulations.
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(D) If the Investor is a limited partnership, it
is a limited partnership duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
organization, with full power and authority to perform its
obligations under this Agreement.
(E) If the Investor is a limited partnership acting in an
advisory capacity, it is a limited partnership duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization, with full power and authority to
act on behalf of its advisory clients under this Agreement.
(F) The execution and delivery of this Agreement and the
performance by the Investor of the transactions contemplated hereby
have been duly authorized by all necessary corporate or other
action of the Investor.
(G) If the Investor is a corporation, limited liability company,
partnership, trust or other form of business entity, the execution
and delivery of this Agreement will not contravene or result in a
default under any provision of existing law or regulations to which
the Investor is subject, the provisions of its trust instrument,
charter, by-laws or other governing documents or any indenture,
mortgage or other agreement or instrument to which it is a party or
by which it is bound and does not require on its part any approval,
authorization, license or filing from or with any foreign, federal,
state or municipal board or agency which has not been obtained or
duly made.
(H) If the Investor is an individual, the Investor has full
power and authority to perform its obligations under this
Agreement.
(11) The Investor agrees to complete and execute and return to
the Company (a) the Investor Questionnaire attached as
Annex I to this Agreement representing that the Investor is
investing in the Investor Shares and Investor Warrants as an
"accredited investor;" (b) if the Investor is acting on behalf
of a managed account in the purchase of any Investor Shares and
Investor Warrants, the Managed Accounts Representation Letter
attached as Annex II to this Agreement; and (c) the
Registration Statement Questionnaire attached as Annex III ,
in each case together with an executed signature page to this
Agreement. The Investor represents and warrants that the answers
thereto are true and correct as of the date hereof and will be true
and correct as of the effective date of the Registration Statement
(as defined in Section 5). If any of the answers provided by
the Investor in the questionnaires change prior to the effective
date of the Registration Statement, the Investor will provide the
Company with prompt written notice of such changes. The Investor
further represents and warrants that it is not purchasing the
Investor Shares and Investor Warrants on behalf of any managed
account other than as listed in the Managed Account Representation
Letter.
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(12) The Investor has not entered into any
contracts, arrangements, understandings or relationships (written
or otherwise) with any other Person or Persons (other than the
Company or a limited partner/member or affiliate of Investor, which
in any case shall not violate any securities laws) with respect to
any securities of the Company (including but not limited to
transfer or voting of any of the securities, finder’s fees,
joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving
or withholding of proxies) or the operations, management or control
of the Company; the Investor is not bound together, under common
control with, in a common enterprise with, or otherwise acting in
concert with, any other Person or Persons (other than a limited
partner/member or affiliate of Investor, which in any case shall
not violate any securities laws) in connection with the
transactions contemplated by this Agreement; and the Investor does
not own any securities of the Company which are pledged or
otherwise subject to a contingency the occurrence of which would
give another Person voting power or investment power over such
securities.
(13) Except as otherwise set forth in Annex III , as of
the date hereof, the Investor does not beneficially own any shares
of Common Stock.
(14) No state, federal or foreign regulatory approvals, permits,
licenses or consents or other contractual or legal obligations are
required for the Investor to enter into this Agreement or otherwise
purchase the Investor Shares and the Investor Warrants.
(15) The Investor hereby covenants and agrees not to disclose
any confidential information provided to the Investor by the
Company in connection with the Private Placement with respect to
the Company, except as otherwise required by law.
(b) Company Representations, Warranties and Covenants .
The Company hereby represents, warrants and agrees as follows:
(1) The Company has been duly incorporated and is validly
existing in good standing under the laws of the jurisdiction of its
incorporation, with full power and authority (corporate and other)
to perform its obligations under this Agreement and to consummate
the transactions contemplated hereby.
(2) The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary
action of the Company and the Agreement has been duly executed and
delivered by the
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Company; and this Agreement, when duly executed
and delivered by the Investor, will constitute a valid and legally
binding instrument of the Company enforceable in accordance with
its terms.
(3) The Investor Shares, Investor Warrants and Warrant Shares
have been duly authorized by the Company, and when issued and
delivered by the Company against payment therefor as contemplated
hereby (and, as to the Warrant Shares, as contemplated by the
Investor Warrants), the Investor Shares, Investor Warrants and
Warrant Shares will be validly issued, fully paid and
nonassessable, free of preemptive rights and free from all taxes,
liens, charges and security interests in respect of the issuance
thereof.
(4) The execution and delivery of this Agreement, the
consummation by the Company of the transactions herein contemplated
and the compliance by the Company with the terms hereof do not and
will not (i) violate the Articles of Organization (as amended
to date) of the Company, or the By-Laws (as amended to date) of the
Company, or (ii) result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of their properties or assets
are subject, or any applicable statute or any order, judgment,
decree, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets other than a
breach or violation that would reasonably be expected to have a
material adverse effect on the condition (financial or otherwise),
business, assets or results of operations of the Company (a "
Material Adverse Effect "); and no consent, approval,
authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the valid
authorization, execution, delivery and performance by the Company
of this Agreement, the issue of the Investor Shares, the Investor
Warrants, the Warrant Shares or the consummation by the Company of
the other transactions contemplated by this Agreement, except for
such consents, approvals, authorizations, registrations or
qualifications as may be required under Federal or state securities
or "blue sky" laws or, with respect to requirements applicable to
the Investor and except where the failure to obtain such consents,
approvals, authorizations, registrations or qualifications would
not reasonably be expected to have a Material Adverse Effect.
(5) The balance sheets of the Company for the twelve months
ended December 31, 2007 have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis, are consistent in all material respects with the books and
records of the Company and accurately present in all material
respects the financial position of the Company and its
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subsidiaries as of December 31, 2007. There
has been no material adverse change in the financial condition or
business or results of operations of the Company or its
subsidiaries since December 31, 2007.
(c) Survival of Representations, Warranties and
Agreements . Notwithstanding any investigation made by any
party to this Agreement, all covenants, agreements, representations
and warranties made by the Company and the Investor herein and in
the Investor Warrants and certificates for the Investor Shares and
Warrant Shares delivered pursuant hereto shall survive the
execution of this Agreement, the delivery to the Investor of the
Investor Shares, the Investor Warrants and the Warrant Shares and
the payment therefor.
5. Registration of the Shares; Compliance with the Securities
Act .
(a) Registration Rights; Registration Procedures and
Expenses .
(1) If at any time or times after the date hereof, the Company
shall determine or be required to register any shares of its Common
Stock or other eq
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