This Warrant and the Common Stock issuable on exercise of this
Warrant (the "Underlying Shares") may be transferred, sold,
assigned or hypothecated, only if registered by the Company
under the Securities Act of 1933 (the "Act") and if registered
or qualified in every applicable state, or if the Company has
received the favorable opinion of counsel to the Holder, which
opinion and counsel shall be satisfactory to counsel to the
Company, to the effect that such registration or qualification
of the Warrant or the Underlying Shares is not necessary in
connection with such transfer, sale, assignment or
hypothecation.
EA INDUSTRIES, INC.
WARRANT
DATED: as of January 6, 1997
Number of Shares: 50,000
Holder: Ace Foundation, Inc.
Address: 0000 00xx Xxxxxx
Xxxxxxxx, XX 00000
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THIS CERTIFIES THAT the Holder is entitled to purchase from EA
INDUSTRIES, INC., a New Jersey corporation (hereinafter called the "Company"),
at $1.50 per share times the number of shares of the Company's common stock set
forth above ("Common Stock"). Notwithstanding the foregoing, this Warrant may
not be exercised prior to the first day on which the Company shall have
sufficient authorized and unreserved Common Stock to permit such exercise.
1. All rights granted under this Warrant shall expire on
January 6, 1999, and no shares of Common Stock may be acquired under this
Warrant from and after such date.
2. This Warrant and the Common Stock issuable on exercise of
this Warrant (the "Underlying Shares") may be transferred, sold, assigned or
hypothecated, only if registered by the Company under the Securities Act of 1933
(the "Act") and registered and qualified in every applicable state or if the
Company has received the favorable opinion of counsel to the Holder, which
opinion and counsel shall be satisfactory to counsel to the Company, to the
effect that registration of the Warrant or the Underlying Shares and
registration and qualification in every applicable state is not necessary in
connection with such transfer, sale, assignment or hypothecation. The Underlying
Shares shall be appropriately legended to reflect this restriction and stop
transfer instructions shall apply. The restrictions on transfer contained in
this Section shall apply to all successive transfers.
3. Any permitted assignment of this Warrant shall be effected
by the Holder by (i) executing an appropriate form of assignment, (ii)
surrendering the Warrant for cancellation at the office of the Company,
accompanied by the opinion of Counsel referred to above; and (iii) unless in
connection with an effective registration statement which covers the sale of
this Warrant and or the Underlying Shares, delivery to the Company of a
statement by the Holder (in a form acceptable to the Company and its counsel)
that such Warrant is being acquired by the Holder for investment and not with a
view to its distribution or resale; whereupon the Company shall issue, in the
name or names specified by the Holder (including the Holder) new Warrants
representing in the aggregate rights to purchase the same number of Shares as
are purchasable under the Warrant surrendered. Such Warrants shall be
exercisable immediately upon any such assignment of the number of Warrants
assigned.
4. The term "Holder" should be deemed to include any
transferee Holder of this Warrant pursuant to a transfer in compliance with the
requirements described herein.
5. The Company covenants and agrees that all shares of Common
Stock which may be issued upon exercise hereof will, upon issuance, be duly and
validly issued, fully paid and non-assessable.
6. This Warrant shall not entitle the Holder to any voting
rights or other rights as a stockholder of the Company.
7. In the event that the outstanding shares of Common Stock of
the Company are at any time increased or decreased or changed into or exchanged
for a different number or kind of share or other security of the Company or of
another corporation through reorganization, merger, consolidation, liquidation,
recapitalization, stock split, combination of shares or stock dividends payable
with respect to such Common Stock, appropriate adjustments in the number and
kind of such securities then subject to this Warrant shall be made effective as
of the date of such occurrence so that the position of the Holder upon exercise
will be the same as it would have been had he owned immediately prior to the
occurrence of such events the Common Stock subject to this Warrant. Such
adjustment shall be made successively whenever any event listed above shall
occur and the Company will notify the Holder of the Warrant of each such
adjustment. Any fraction of a share resulting from any adjustment shall be
eliminated.
8. The rights represented by this Warrant may be exercised at
any time within the period above specified by (i) surrender of this Warrant at
the principal executive office of the Company (or such other office or agency of
the Company as it may designate by notice in writing to the Holder at the
2
address of the Holder appearing on the books of the Company); (ii) payment to
the Company by check or wire transfer of the exercise price for the number of
Shares specified in the above-mentioned purchase form together with applicable
stock transfer taxes, if any and (iii) unless in connection with an effective
registration statement which covers the sale of the shares underlying the
Warrant, the delivery to the Company of a statement by the Holder (in a form
acceptable to the Company and its counsel) that such Shares are being acquired
by the Holder for investment and not with a view to their distribution or
resale. The certificates for the Common Stock so purchased shall be delivered to
the Holder within a reasonable time, not exceeding ten (10) days, after the
rights represented by this Warrant shall have been so exercised, and shall bear
a restrictive legend with respect to any applicable securities laws.
9. If the Company proposes to file a registration statement
under the Act with respect to an offering by the Company for its own account of
its Common Stock (other than a registration statement on Form X-0, X-0 or S-14
or any form substituting therefor) or filed in connection with an exchange offer
or an offering of securities solely to the Company's existing stockholders or
employees) during the period commencing on the date hereof and ending on
expiration of this Warrant, the Company shall in each case give written notice
of such proposed filing to the Holder and such notice shall offer the Holder the
opportunity to register such number of the Shares as the Holder may request in
writing within ten days after receipt of such notice. If such offering is an
underwritten offering, the amount of shares included by Holder may be reduced in
the sole discretion of the managing underwriter. In connection with a piggy-back
registration, the Company will bear all Registration Expenses. The Holder shall
deliver such documents, and provide the Company with such information, as is
necessary or desirable to effectuate such registration
10. This Warrant shall be governed by and construed in
accordance with the internal laws of New Jersey.
IN WITNESS WHEREOF, EA INDUSTRIES, INC. and the Holder have
each caused this Warrant to be signed by its duly authorized officer under its
corporate seal, and to be dated as of the date set forth above.
EA INDUSTRIES, INC.
By:
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ACE FOUNDATION, INC.
By:
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