Exhibit 10.6


 


NEITHER THIS WARRANT, NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF,
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) AND ACCORDINGLY MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION ACCEPTABLE TO
THE COMPANY.


 


COMMON STOCK PURCHASE WARRANT


 


Warrant to
Purchase Shares of Common Stock of


 


Microfluidics International
Corporation


 


This COMMON STOCK
PURCHASE WARRANT (this “Warrant”) certifies that, for value received, Global Strategic Partners, LLC (“GSP”) is entitled to
purchase from Microfluidics International Corporation,
a Delaware corporation (the “Company”), that number of shares (the “Warrant
Shares”) of the Company’s common stock, par value $.01 per share (the “Common
Stock”) that, when combined with the Common Stock issuable upon the conversion
of the entire principal balance of the Debenture (as defined below),
constitutes a total of up to fifty percent (50%) of the total number shares of
the Company’s Common Stock then outstanding on a fully diluted basis, all upon
the terms and subject to the limitations hereinafter set forth.  This Warrant has been issued
contemporaneously with the sale by the Company to GSP of the Company’s 9%
Convertible Debenture (the “Debenture”) in the principal amount of Five Million
Dollars ($5,000,000).


 


1.             Exercise of
Warrant.  This Warrant shall be
exercisable in two tranches hereinafter referred to as the “Tranche One
Exercise” and the “Tranche Two Exercise”.


 


(a)           Tranche One Exercise.  The aggregate number of Warrant Shares that
may be purchased pursuant to one or more Tranche One Exercises of this Warrant
(the “Tranche One Maximum”) shall be that number of whole shares of the Common
Stock calculated to equal (or exceed by no more than one whole share):  (a) forty percent (40%) of the total
number of shares of the Company’s Common Stock then outstanding on a fully
diluted basis, minus (b) that number of shares of the Company’s Common
Stock that GSP is or was entitled to acquire (or has theretofore acquired) upon
exercise of the conversion privilege of the Debenture.  Notwithstanding the previous sentence, if all
or any portion of the principal amount of the Debenture has been prepaid by the
Company prior to the third anniversary of the date of the Debenture, then the
Tranche One Maximum shall also include a number of shares of the Company’s
Common Stock equal


 


1

















 


to (x) the amount of the Debenture’s
principal amount that was so repaid by the third anniversary of the date of the
Debenture divided by (y) 1.25 (the “Prepayment Shares”).


 


Tranche One Exercises of this Warrant may be
made at any time, and from time to time, on or before 5:00 P.M. EST on the
Termination Date (as defined below) by the tender to the Company of:  (i) a Tranche One Notice of Exercise
form annexed hereto as Exhibit A duly executed and (ii) receipt
by the Company of the Tranche One Exercise Price (as hereinafter defined) of
the Warrant Shares thereby purchased in immediately available funds.


 


The Tranche One Exercise Price shall be two
dollars ($2.00) per share, subject to adjustment as described in Sections 8 and
9 hereof.


 


(b)           Tranche Two Exercise.  The aggregate number of Warrant Shares that
may be purchased pursuant to one or more Tranche Two Exercises of this Warrant
(the “Tranche Two Maximum”) shall be that number of whole shares of the Common
Stock calculated to at least equal (or exceed by no more than one whole
share):  (a) fifty percent (50%) of
the total number of shares of the Company’s Common Stock then outstanding on a
fully diluted basis, minus (b) the total number of shares of the Company’s
Common Stock that GSP is or was entitled to acquire (or has theretofore
acquired) upon: (i) exercise of the conversion privilege of the Debenture,
and (ii) the Tranche One Exercise, plus (c) the Prepayment
Shares.  No Tranche Two Exercise may be
made unless and until the full number of shares exercisable pursuant to Tranche
One Exercises have been purchased.


 


Tranche Two Exercises of this Warrant may be
made at any time, and from time to time, on or before 5:00 P.M. EST on the
Termination Date (as defined below) by the tender to the Company of:  (i) a Tranche Two Notice of Exercise
form annexed hereto as Exhibit B duly executed and (ii) receipt
by the Company of the Tranche Two Exercise Price (as hereinafter defined) of
the Warrant Shares thereby purchased in immediately available funds.


 


The Tranche Two Exercise Price shall be three
dollars ($3.00) per share, subject to adjustment as described in Sections 8 and
9 hereof.


 


(c)           Termination Date.  Subject to the other conditions stated
herein, this Warrant shall expire and be of no further force or effect on the
earlier to occur of:  (i) the
seventh (7th)
anniversary of the date hereof, (ii) the third (3rd) anniversary of the date hereof in the
event that the Company has retired the Debenture on or before said third (3rd) anniversary, or (iii) such
time as GSP has acquired fifty percent (50%) of the total number of shares of
the Company’s Common Stock then outstanding on a fully diluted basis.


 


(d)           Payment for Shares.  The aggregate purchase price for Warrant
Shares being purchased hereunder may be paid either (i) by cash or wire
transfer of immediately available funds, (ii) by surrender of a number of
Warrant Shares which have a fair market value equal to the aggregate purchase
price of the Warrant Shares being purchased (“Net 


 


2

















 


Issuance”) as determined herein, or (iii) any
combination of the foregoing.  If GSP
elects the Net Issuance method of payment, the Company shall issue to GSP upon
exercise a number of shares of Warrant Shares determined in accordance with the
following formula (to the extent that GSP is exercising this Warrant with
respect to Warrant Shares received in connection with both Tranche One and
Tranche Two, the following formula shall be applied separately with respect to
each Tranche):


 


	
   

  	
  X= 

  	
  Y(A-B)

  	
   

  
	
   

  	
  A

  	
   

  



 


where:    X =          the
number of Warrant Shares to be issued to GSP;


 


Y =                              the
number of Warrant Shares with respect to which GSP is exercising its purchase
rights under this Warrant;


 


A =                            the
fair market value of one (1) share of the Warrant Shares on the date of
exercise; and


 


B =                              the
applicable Tranche exercise price.


 


No fractional shares arising out of the above
formula for determining the number of shares to be issued to GSP shall be
issued, and the Company shall in lieu thereof make payment to GSP of cash in
the amount of such fraction multiplied by the fair market value of one (1) share
of the Warrant Shares on the date of exercise. 
For purposes of the above calculation, the fair market value of one (1) share
of the Warrant Shares shall mean (a) if the Common Stock is then traded on
a securities exchange, the average of the closing prices of such Common Stock
on such exchange over the thirty (30) calendar day period (or portion thereof)
ending three (3) days prior to the date of exercise, multiplied by the
number of shares of Common Stock into which each share of the Warrant Shares is
then convertible, (b) if the Common Stock is then regularly traded
over-the-counter, the average of the closing sale prices or secondarily the
closing bid of such Common Stock over the thirty (30) calendar day period (or
portion thereof) ending three (3) days prior to the date of exercise,
multiplied by the number of shares of Common Stock into which each share of the
Warrant Shares is then convertible, or (c) if there is no active public
market for the Common Stock, the fair market value of one share of the Warrant
Shares as determined in good faith by GSP and the Company.


 


(e)           Issuance of Certificates.  Upon completing any Tranche One Exercise or
any Tranche Two Exercise, GSP shall be entitled to receive a certificate for
the number of Warrant Shares so purchased within three (3) trading days
after the date on which this Warrant shall have been exercised as aforesaid.


 


3

















 


2.             Fractional Shares.  This Warrant shall b exercisable for whole
numbers of Warrant Shares, and no fractional shares shall be issued upon the
exercise of this Warrant.


 


3.             Closing of Books.  The Company will not close its stockholder
books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.


 


4.             Rights as
Shareholder.  This Warrant does not
entitle GSP to any voting rights or other rights as a shareholder of the
Company prior to an effective exercise.


 


5.             Loss, Theft,
Destruction or Mutilation of Warrant. 
The Company covenants that upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate relating to the Warrant Shares, and in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not include the
posting of any bond), and upon surrender and cancellation of such Warrant or
stock certificate, if mutilated, the Company will make and deliver a new
Warrant or stock certificate of like tenor in lieu of such Warrant or stock
certificate.


 


6.             Authorization of
Shares.  The Company covenants that
all Warrant Shares that may be issued upon the exercise of the purchase rights
represented by this Warrant will be duly authorized, validly issued, fully paid
and nonassessable and free from all taxes, liens and charges in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).  To
the extent that the Company does not at any time have the number of shares of
its Common Stock authorized for issuance sufficient to satisfy the number of
Warrant Shares exercisable hereunder, the Company shall use its best efforts to
amend its Certificate of Incorporation at its next Annual Meeting of the
Stockholders, which meeting shall be held no later than June 30, 2009, to
increase its duly authorized shares of Common Stock by such number as would be sufficient to permit GSP to
exercise this Warrant in full and exercise its conversion rights in the
Debenture.


 


7.             Saturdays,
Sundays, Holidays, etc.  If the
Termination Date, or any other date for the taking of any action or the
expiration of any right granted herein shall be a Saturday, Sunday or a legal
holiday, then such action may be taken or such right may be exercised on the
next succeeding day not a Saturday, Sunday or legal holiday (a “Business Day”).


 


8.             Adjustments of
Exercise Price and Number/Kind of Warrant Shares.  The number and kind of securities purchasable
upon exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following.  In case the Company shall:  (i) pay a dividend in shares of Common
Stock or make a distribution in shares of Common Stock to holders of its
outstanding Common Stock, (ii) subdivide its outstanding shares of Common
Stock into a greater number of shares, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, or (iv) issue
any shares of its capital stock in a reclassification of the Common Stock, then
the number and kind of securities purchasable upon exercise of this Warrant
immediately prior thereto shall be adjusted so that GSP shall be entitled to
receive the number and kind of securities of the Company (the “Adjusted Warrant
Shares”) which it would have owned or have been entitled to receive had this
Warrant been exercised in advance thereof. 
Upon each such adjustment, GSP shall thereafter be entitled to 


 


4

















 


purchase the number of Adjusted
Warrant Shares at the Tranche One Exercise Price or the Tranche Two Exercise
Price per Adjusted Warrant Share obtained by multiplying such exercise price in
effect immediately prior to such adjustment by the number of Warrant Shares
purchasable pursuant hereto immediately prior to such adjustment and dividing
by the number of Adjusted Warrant Shares resulting from such adjustment.  An adjustment made pursuant to this paragraph
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.


 


9.             Reorganization,
Reclassification, Merger, Consolidation or Disposition of Assets.  In case the Company shall reorganize its
capital, reclassify its capital stock, consolidate or merge with or into
another corporation (where the Company is not the surviving corporation or
where there is a change in or distribution with respect to the Common Stock of
the Company), or sell, transfer or otherwise dispose of all or substantially
all its property, assets or business to another corporation and, pursuant to
the terms of such reorganization, reclassification, merger, consolidation or
disposition of assets, shares of common stock of the successor or acquiring
corporation, or any cash, shares of stock or other securities or property of
any nature whatsoever (including warrants or other subscription or purchase
rights) in addition to or in lieu of common stock of the successor or acquiring
corporation (“Other Property”), are to be
received by or distributed to the holders of Common Stock of the Company, then
GSP shall have the right thereafter to receive, at the option of GSP, upon
exercise of this Warrant, the number of shares of Common Stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a GSP of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event.  In case
of any such reorganization, reclassification, merger, consolidation or disposition
of assets, the successor or acquiring corporation (if other than the Company)
shall expressly assume the due and punctual observance and performance of each
and every covenant and condition of this Warrant to be performed and observed
by the Company and all the obligations and liabilities hereunder, subject to
such modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of Warrant Shares for which this Warrant is exercisable which shall
be as nearly equivalent as practicable to the adjustments provided for in this Section 9.  For purposes of this Section 9, “common
stock of the successor or acquiring corporation” shall include stock of such
corporation of any class which is not preferred as to dividends or assets over
any other class of stock of such corporation and which is not subject to
redemption and shall also include any evidences of indebtedness, shares of
stock or other securities which are convertible into or exchangeable for any
such stock, either immediately or upon the arrival of a specified date or the
happening of a specified event and any warrants or other rights to subscribe
for or purchase any such stock.  The
foregoing provisions of this Section 9 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.


 


10.           Notice of Adjustment.  Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted pursuant to Sections 8 or 9
herein, the Company shall give notice thereof to GSP, which notice shall state
the number of Warrant Shares (and other securities or property) purchasable
upon the exercise of this Warrant and the Exercise Price of such Warrant Shares
(and other securities or property) after such adjustment, setting forth a brief
statement of the facts 


 


5

















 


requiring such adjustment and
setting forth the computation by which such adjustment was made.


 


11.           Notice of Corporate
Action.  If at any time:


 


(a)           the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive a
dividend or other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right, or


 


(b)           there shall be any capital reorganization of
the Company, any reclassification or recapitalization of the capital stock of
the Company or any consolidation or merger of the Company with, or any sale,
transfer or other disposition of all or substantially all the property, assets
or business of the Company to, another corporation, or


 


(c)           there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;


 


then, in any one or more of such cases (but not in such cases if the
rights of GSP or holders of Common Stock will not be materially affected
thereby, as for example in the case of a merger to effect a change of
domicile), the Company shall give to GSP (i) at least 20 days’ prior
written notice of the date on which a record date shall be selected for such
dividend, distribution or right or for determining rights to vote in respect of
any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, liquidation or winding up, and (ii) in the case of
any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at least 20 days’
prior written notice of the date when the same shall take place.  Such notice in accordance with the foregoing
clause also shall specify:  (i) the
date on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares or Adjusted Warrant Shares for
securities or other property deliverable upon such disposition, dissolution,
liquidation or winding up.  Each such
written notice shall be sufficiently given if addressed to GSP at the last
address of GSP appearing on the books of the Company and delivered in
accordance with Section 12(c).


 


12.           Miscellaneous.


 


(a)           Jurisdiction.  This Warrant shall constitute a contract
under the laws of the State of Delaware without regard to its conflict of law,
principles or rules.


 


(b)           Nonwaiver and Expenses.  No course of dealing or any delay or failure
to exercise any right hereunder on the part of GSP shall operate as a waiver of
such right or otherwise prejudice GSP’s rights, powers or remedies,
notwithstanding all rights 


 


6

















 


hereunder
terminate on the Termination Date.  If
the Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to GSP, the Company shall pay to
GSP such amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys’ fees, including those of
appellate proceedings, incurred by GSP in collecting any amounts due pursuant
hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.


 


(c)           Notices.  Any notice, request or other document
required or permitted to be given or delivered by one party to the other shall
be delivered in accordance with the notice provisions of the Debenture.


 


(d)           Limitation of Liability.  No provision hereof, in the absence of any
affirmative action by GSP to exercise this Warrant or purchase Warrant Shares,
and no enumeration herein of the rights or privileges of GSP, shall give rise
to any liability of GSP for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.


 


(e)           Remedies.  GSP, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of the provisions of this Warrant and hereby agrees to waive the defense
in any action for specific performance that a remedy at law would be adequate.


 


(f)            Successors and Assigns.  Subject
to applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the parties hereto; provided, however, that neither party may
assign or transfer its rights or obligations hereunder without the prior
written consent of the other party except to (i) its Affiliates or (ii) an
entity that is the successor to substantially all of the business or assets of
the assigning party relating to the performance of this Agreement.


 


(g)           Amendment.  This Warrant may be modified or amended or
the provisions hereof waived with the written consent of the Company and GSP.


 


(h)           Severability.  Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.


 


(i)            Headings; Dollar Figures.  The headings used in this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.  All figures expressed
in dollars shall be deemed to refer to U.S. dollars.


 


7

















 


IN WITNESS
WHEREOF, the Company has caused this Warrant to be executed by its officer
thereunto duly authorized.


 


Dated:  November 14, 2008


 


	
   

  	
  MICROFLUIDICS INTERNATIONAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Michael C. Ferrara

  
	
   

  	
   

  	
  Michael C. Ferrara, President and Chief Executive Officer

  



 


8

















 


Exhibit A


 


TRANCHE
ONE NOTICE OF EXERCISE


 


To:          Microfluidics International Corporation


 


(1)           The undersigned hereby
elects to exercise to purchase Warrant Shares of Microfluidics International
Corporation issuable pursuant to the Tranche One Exercise provisions of that
certain Common Stock Purchase Warrant to which this notice was attached and
tenders herewith payment of the exercise price, together with all applicable
transfer taxes if any, therefor.


 


(2)           The number of Warrant
Shares to be purchased pursuant to this Notice shall be
                      .  The purchase price for said Warrant Shares
shall be equal to such number of Warrant Shares multiplied by $2.00 per Warrant
Share (subject to adjustment to such price per Warrant Share as provided in
Sections 8 or 9 of the Common Stock Purchase Warrant).  The Purchase Price has been paid, in immediately
available funds, to the Company contemporaneously with the delivery of this
Notice.


 


(3)           Please deliver the
certificate for the Warrant Shares to the following:


 


 


	
   

  	
  GLOBAL STRATEGIC PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  
					



 

















 


Exhibit B


 


TRANCHE
TWO NOTICE OF EXERCISE


 


To:          Microfluidics International Corporation


 


(1)           The undersigned hereby
elects to exercise to purchase Warrant Shares of Microfluidics International
Corporation issuable pursuant to the Tranche Two Exercise provisions of that
certain Common Stock Purchase Warrant to which this notice was attached and
tenders herewith payment of the exercise price, together with all applicable
transfer taxes if any, therefor.


 


(2)           The number of Warrant
Shares to be purchased pursuant to this Notice shall be
                      .  The purchase price for said Warrant Shares
shall be equal to such number of Warrant Shares multiplied by $3.00 per Warrant
Share (subject to adjustment to such price per Warrant Share as provided in
Sections 8 or 9 of the Common Stock Purchase Warrant).  The Purchase Price has been paid, in
immediately available funds, to the Company contemporaneously with the delivery
of this Notice.


 


(3)           Please deliver the
certificate for the Warrant Shares to the following:


 


 


	
   

  	
  GLOBAL STRATEGIC PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: