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 June 10, 1997
Number of Shares: ______
Holder: The Xxxxx Xxxxxxxxx & Xxxxx Xxxxxx Partnership
Address: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
--------------------------------
THIS CERTIFIES THAT the Holder is entitled to purchase from EA INDUSTRIES,
INC., a New Jersey corporation (hereinafter called the "Company"), at $4.125 per
share 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. The obligations
of the Company hereunder are conditioned upon approval of the terms of the
commitment letter agreement dated the date hereof by the Holder and other
related parties to the Company by Xxxxxx Xxxxxxxx LLP and their reissuance of
their opinion on the financial statements of the Company, without a going
concern qualification.
1. All rights granted under this Warrant shall expire on April 14, 2000,
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. The Company shall include the underlying shares in the next registration
statement filed by the Company on Form S-3, or such other Form as the Company
shall select.
4. 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.
5. 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.
6. 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 and no personal liability will attach to
the Holder thereof.
7. This Warrant shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company.
8. 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.
9. 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 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.
10. The Holder currently holds certain convertible notes, convertible
debentures, options and/or warrants (collectively the "Derivative Securities")
enabling it upon exercise or conversion to receive shares of Common Stock, no
par value (the "Common Stock") of EA Industries, Inc. ("EAI"). The Holder
confirms that, without the Company's prior written consent, it will not exercise
options, warrants or conversion rights under debentures, warrants or options
which would result in it becoming the beneficial owner of 5% or more of the
Common Stock. For purposes of this Warrant, beneficial ownership shall be
determined in accordance with Section 13 (d) of the Securities Exchange Act of
1934, as amended, and Regulation 13D-G thereunder.
11. This Warrant shall be governed by and construed in accordance with the
internal laws of New Jersey.
IN WITNESS WHEREOF, EA INDUSTRIES, INC. has 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:________________________________
Xxxxxx X. Xxxxxx, Vice President
