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EXHIBIT 10.60
 
Schedule Prepared in Accordance with Instruction 2 to Item 601 of Regulation S-K
 
The warrants to purchase shares of Common Stock are substantially identical in
all material respects except as to the warrantholder and the number of shares.
 
Name
Warrants
Sam Belzberg
16,968
Clyde J. Berg, as trustee of the
Clyde J. Berg Trust utd 4/4/95
13,574
Neal Goldman
33,936
Edward F. Heil
118,778
Iroquois Master Fund Ltd.
10,181
Kuekenhof Equity Fund, L.P.
16,968
Levene Ass. A Partnership
8,484
Susan Moffitt
1,696
Wallace L. Mossop III as trustee of the
Wallace L. Mossop III Trust dtd 2/3/00
8,484
Nite Capital, L.P.
13,574
RAQ, LLC
16,968
Wilson G. & Ellen M. Saville, JTWROS
8,484
Martin Solomon
16,968
TCMP3 Partners
20,100
Thomas Vantine Hart, IRA
1,696.83
Louise B. Sheaffer, IRA
678.73
Elisabeth A. Darlington, Trustee of
the Elizabeth A. Darlington Trust
1,696.83
Foundation Partners I, LLC
8,376.82
Marima Petroula
6,787.33
Lester M. Wheeler, Jr.
203.62
Joy Mease
678.73
Kenneth & Bridget Mullin
678.73
Norbet Stein
6,787.33
Dolphin Direct Equity Partners LP
16,968.33
Kevin and Denise Donohue
339.37
Kim Davis
6,787.33
Marty and Barbara Olsen
3,393.67
M. Robert Carroll, Trustee of
the Carroll Family Trust
3,393.67
Mark Mitchell
6,787.33
Cathrine M. Taylor, SEP IRA
385.85
Barry L. Bennett, SEP IRA
536.20

 

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THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
AND THE COMMON SHARES 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 NESTOR, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.
 
Right to Purchase 16,968 Shares of Common Stock of Nestor, Inc. (subject to
adjustment as provided herein)

COMMON STOCK PURCHASE WARRANT
 
No. 2006-1
Issue Date: January 31, 2006

 
NESTOR, INC., a corporation organized under the laws of the State of Delaware
(the "Company"), hereby certifies that, for value received, Sam Belzberg, or
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., New York time, through January
31, 2009 (three (3) years after the Issue Date) (the “Expiration Date”), up to
16,968 fully paid and nonassessable shares of Common Stock (as hereinafter
defined), $.01 par value per share, of the Company, at the Purchase Price (as
defined below). The number and character of such shares of Common Stock and the
Purchase Price are subject to adjustment as provided herein. Capitalized terms
used but not otherwise defined shall have them in the Securities Purchase
Agreement dated the date hereof by and among the Company and the Investors named
therein, including Holder.

As used herein the following terms, unless the context otherwise requires, have
the following respective meanings:

(a)   The term “Company” shall include Nestor, Inc. and any corporation which
shall succeed or assume the obligations of Nestor, Inc. hereunder.

(b)   The term "Common Stock" includes (a) the Company's Common Stock, $.01 par
value per share, as authorized on the date of the Securities Purchase Agreement
referred to in Section 9 hereof, 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 "Purchase Price" shall mean $4.91.

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 hereof shall be entitled
to receive, upon exercise of this Warrant in whole in accordance with the terms
of subsection 1.2 or upon exercise of this Warrant in part in accordance with
subsection 1.3, shares of Common Stock of the Company, subject to adjustment
pursuant to Section 4.
 
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1.2.   Full Exercise. This Warrant may be exercised in full by the holder hereof
by delivery of an original or fax copy of the form of subscription attached as
Exhibit A hereto (the “Subscription Form") duly executed by such Holder, to the
Company at its principal office or at the office of its warrant agent (as
provided hereinafter), accompanied by payment, in cash, wire transfer, or by
certified or official bank check payable to the order of the Company, in the
amount obtained by multiplying the number of shares of Common Stock for which
this Warrant is then exercisable by the Purchase Price then in effect.

1.3.   Partial Exercise. This Warrant may be exercised in part (but not for a
fractional share) by surrender of this Warrant in the manner and at the place
provided in subsection 1.2 except that the amount payable by the holder on such
partial exercise shall be the amount obtained by multiplying (a) the number of
shares of Common Stock designated by the holder in the Subscription Form by (b)
the Purchase Price then in effect. On any such partial exercise, the Company, at
its expense, will forthwith issue and deliver to or upon the order of the holder
hereof a new Warrant of like tenor, in the name of the holder hereof or as such
holder (upon payment by such holder of any applicable transfer taxes) may
request, the number of shares of Common Stock for which such Warrant may still
be exercised.

1.4.   Fair Market Value. Fair Market Value of a share of Common Stock as of a
particular date (the "Determination Date") shall mean:

(a)    If the Company's Common Stock is traded on an exchange or is quoted on
the National Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ") National Market System or the NASDAQ SmallCap Market, then the
average closing or last sale price, respectively, reported for the ten business
days immediately preceding the Determination Date.

(b)    If the Company's Common Stock is not traded on an exchange or on the
NASDAQ National Market System or the NASDAQ SmallCap Market but is traded on the
NASD OTC Bulletin Board, then the mean of the average of the closing bid and
asked prices reported for the ten business days immediately preceding the
Determination Date.

(c)    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 standing 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.

1.5.   Company Acknowledgment. The Company will, at the time of the exercise of
the Warrant, upon the request of the holder hereof acknowledge in writing its
continuing obligation to afford to such holder any rights to which such holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such holder any such rights.

1.6.   Trustee for Warrant Holders. In the event that a bank or trust company
shall have been appointed as trustee for the Company pursuant to Subsection 3.2,
such bank or trust company shall have all the powers and duties of a warrant
agent (as hereinafter described) and shall accept, in its own name for the
account of the Company or such successor person as may be entitled thereto, all
amounts otherwise payable to the Company or such successor, as the case may be,
on exercise of this Warrant pursuant to this Section 1.
 
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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 hereof 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 7 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 hereof, 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, 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.   Payment of Purchase Price.

(a)    Payment 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
Purchase 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 Purchase 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 equal to the value (as determined
below) of this Warrant (or the portion thereof being cancelled) by surrender of
this Warrant at the principal office of the Company together with the properly
endorsed Subscription Form 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

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 (at the
date of such calculation)
 
B=    Purchase Price (as adjusted to the date of such calculation)
 
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3.    Adjustment for Reorganization, Consolidation, Merger, etc.

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, upon
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 other securities and property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such holder had so
exercised this Warrant, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 4.

3.2.    Continuation of Terms. Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in this
Section 3, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 4.

4.    Extraordinary Events Regarding Common Stock. In the event that the Company
shall (a) issue additional shares of the Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its outstanding shares
of Common Stock, or (c) combine its outstanding shares of the Common Stock into
a smaller number of shares of the Common Stock, then, in each such event, the
Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 4. The number
of shares of Common Stock that the holder of this Warrant shall thereafter, on
the exercise hereof as provided in Section 1, be entitled to receive shall be
increased or decreased to a number determined by multiplying the number of
shares of Common Stock that would otherwise (but for the provisions of this
Section 4) be issuable on such exercise by a fraction of which (a) the numerator
is the Purchase Price that would otherwise (but for the provisions of this
Section 4) be in effect, and (b) the denominator is the Purchase Price in effect
on the date of such exercise.

5.    Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrant, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Purchase Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the holder of the Warrant and any
Warrant agent of the Company (appointed pursuant to Section 10 hereof).
 
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6.    Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial
Statements. The Company will at all times reserve and keep available, solely for
issuance and delivery on the exercise of the Warrant, all shares of Common Stock
(or Other Securities) from time to time issuable on the exercise of the Warrant.
This Warrant entitles the holder hereof to receive copies of all financial and
other information distributed or required to be distributed to the holders of
the Company's Common Stock.

7.    Assignment; Exchange of Warrant. Subject to compliance with applicable
Securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a "Transferor") with respect to any
or all of the Shares. On the surrender for exchange of this Warrant, with the
Transferor's endorsement in the form of Exhibit B attached hereto (the
“Transferor Endorsement Form") and together with evidence reasonably
satisfactory to the Company demonstrating compliance with applicable Securities
Laws, which shall include, without limitation, a legal opinion from the
Transferor’s counsel that such transfer is exempt from the registration
requirements of federal securities laws, the Company at its expense but with
payment by the Transferor of any applicable transfer taxes) will issue and
deliver to or on the order of the Transferor thereof a new Warrant of like
tenor, in the name of the Transferor and/or the transferee(s) specified in such
Transferor Endorsement Form (each a "Transferee"), calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face or faces of the Warrant so surrendered by the Transferor.

8.    Replacement of Warrant. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and,
in the case of any such loss, theft or destruction of this Warrant, on delivery
of an indemnity agreement or security reasonably satisfactory in form and amount
to the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

9.    Registration Rights. The Holder of this Warrant has been granted certain
registration rights by the Company. These registration rights are set forth in a
Securities Purchase Agreement entered into by the Company and the Investors,
including the Holder.

10.   Warrant Agent. The Company may, by written notice to the each holder of
the Warrant, appoint an agent for the purpose of issuing Common Stock (or Other
Securities) on the exercise of this Warrant pursuant to Section 1, exchanging
this Warrant pursuant to Section 7, and replacing this Warrant pursuant to
Section 8, or any of the foregoing, and thereafter any such issuance, exchange
or replacement, as the case may be, shall be made at such office by such agent.

11.   Transfer on the Company's Books. Until this Warrant is transferred on the
books of the Company, the Company may treat the registered holder hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

12.   Notices, etc. All notices and other communications from the Company to the
holder of this Warrant shall be mailed by first class registered or certified
mail, postage prepaid, at such address as may have been furnished to the Company
in writing by such holder or, until any such holder furnishes to the Company an
address, then to, and at the address of, the last holder of this Warrant who has
so furnished an address to the Company.
 
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13.   Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be governed by and construed in accordance with the
laws of State of Delaware without regard to principles of conflicts of laws. Any
action brought concerning the transactions contemplated by this Warrant shall be
brought only in the state courts of Delaware or Rhode Island or in the federal
courts located in the State of Delaware or the Sate of Rhode Island. The
individuals executing this Warrant on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury. The prevailing party
shall be entitled to recover from the other party its reasonable attorney’s fees
and costs. In the event that any provision of this Warrant is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this Warrant.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision. The Company acknowledges that legal
counsel participated in the preparation of this Warrant and, therefore,
stipulates that the rule of construction that ambiguities are to be resolved
against the drafting party shall not be applied in the interpretation of this
Warrant to favor any party against the other party.
 

[THIS SPACE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the Company has executed this Warrant under seal as of the
date first written above.

 
NESTOR, INC.
 
 
By:
/s/ William B. Danzell
   
William B. Danzell
Chief Executive Officer and President

 

Witness:
     
/s/ Mary Ann Branin
 

 
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Exhibit A
to Warrant

FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)

TO: Nestor, Inc.

The undersigned, pursuant to the provisions set forth in the attached Warrant
(No.________), hereby irrevocably elects to purchase (check applicable box):
 

     
shares of the Common Stock covered by such Warrant; or
           
the maximum number of shares of Common Stock covered by such Warrant pursuant to
the cashless exercise procedure set forth in Section 2.

 
The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is
$_______________. Such payment takes the form of (check applicable box or
boxes):

   
$
in lawful money of the United States; and/or

   
the cancellation of such portion of the attached Warrant as is exercisable for a
total of ___________shares of Common Stock (using a Fair Market Value of $______
per share for purposes of this calculation); and/or

   
the cancellation of such number of shares of Common Stock as is necessary, in
accordance with the formula set forth in Section 2, to exercise this Warrant
with respect to the maximum number of shares of Common Stock purchaseable
pursuant to the cashless exercise procedure set forth in Section 2.

The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to
 
whose address is
 

 

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The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act") or pursuant to an exemption from
registration under the Securities Act.

Dated:
           
(Signature must conform to name of holder as specified on the face of the
Warrant
                     
(Address)

 
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Exhibit B
to Warrant

FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto
the person(s) named below under the heading "Transferees" the right represented
by the within Warrant to purchase the percentage and number of shares of Common
Stock of Nestor, Inc. to which the within Warrant relates specified under the
headings "Percentage Transferred" and "Number Transferred," respectively,
opposite the name(s) of such person(s) and appoints each such person Attorney to
transfer its respective right on the books of Nestor, Inc. with full power of
substitution in the premises.
 
Transferees
 
Percentage Transferred
Number Transferred
                 

 
Dated:
               
(Signature must conform to name of holder as specified on the face of the
warrant)

 

Signed in the presence of:
                     
(Name)
 
(address)

 

ACCEPTED AND AGREED:
 
[TRANSFEREE]
                 
(Name)
   

 
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