NEITHER THIS NOTE, NOR THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
HEREOF HAVE BEEN OR WILL BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS, EXCEPT AS
EXPRESSLY PROVIDED HEREIN, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL ACCEPTABLE TO COUNSEL FOR THE
ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT THE PROPOSED TRANSFER MAY
BE MADE WITHOUT VIOLATION OF THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAW.
______, 1997
No.1
$500,000
EA INDUSTRIES, INC.
10% SERIES B CONVERTIBLE NOTE
DUE JANUARY 22, 1999
EA INDUSTRIES, INC. (the "Company" or "EA"), a New Jersey corporation, for
value received, and intending to be legally bound, hereby promises to pay to the
order of ___________ her registered assigns, the principal amount of on January
22, 1999 ("Maturity Date"), with interest from April 7, 1997 (computed on the
basis of a 360-day year of twelve 30-day months) payable quarterly on the first
day of each calendar quarter, commencing January 1, 1998, on the unpaid
principal balance at the rate of 10% per annum until such unpaid principal
balance shall become due and payable (whether at maturity or by acceleration or
otherwise). Overdue principal payments and (to the extent permitted by
applicable law) any overdue interest shall accrue interest at eighteen percent
(18%) per annum until paid, which interest shall be payable on demand. This Note
is one of a number of 10% Series B Convertible Notes issued by the Company in a
private placement of 10% Series B Convertible Notes (this Note and such other
10% Series B Convertible Notes are collectively referred to herein as the "10%
Series B Convertible Notes"). The terms and conditions of all 10% Series B
Convertible Notes shall be identical in all respects and all 10% Series B
Convertible Notes shall rank pari passu.
Payments of principal and interest on this Note shall be made in lawful
money of the United States of America by delivery of a check to the address
provided by the payee as shown on the Note Register. The Company may treat the
person in whose name this Note is registered (the "Holder") on the Note Register
kept by the Company as the owner of this Note for the purpose of receiving
payment and for all other purposes, and the Company shall not be affected by any
notice to the contrary. This Note is transferable only (i) in accordance with
the terms hereof and (ii) by surrender thereof at the office of the Company at
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, duly endorsed or accompanied
by a written instrument duly executed by the Holder of this Note or her attorney
duly authorized in writing.
The Company shall have the right, exercisable on not less than 15 days
written notice to the Holder, at any time after the date hereof, to prepay the
unpaid principal balance under this Note in whole or in any part, without
penalty or premium and with the interest due to the date of prepayment,
provided, however, that the Company shall at the same time prepay an equal
unpaid principal amount of all other outstanding 10% Series A Convertible Notes.
Any notice of prepayment shall be delivered to the Holder at its registered
address appearing on the records of the Company and shall state (1) that the
Company is exercising its right to prepay all or a portion of the principal of
this Note, (2) the principal amount to be repaid and (3) the date of prepayment.
Upon the prepayment of less than the entire unpaid principal amount of this
Note, a new Note containing the same date and provisions
1
as this Note shall be issued by the Company to the Holder for the principal
balance of this Note which shall not have been prepaid.
The Company shall have the option to make interest payments to the Holder
in fully paid and non-assessable shares of Common Stock of EA ("EA Shares") or
fully-paid and non-assessable shares of Common Stock of Tanon Manufacturing,
Inc. ("Tanon"), a California Corporation ("Tanon Shares"). The terms EA Shares
and Tanon Shares are sometimes collectively referred to herein as the "Shares."
This option may be exercised on any one or more of the dates interest is payable
under this Note by delivery of written notice to the Holder at least fifteen
(15) days before such payment date. If this option is elected, Tanon or the
Company shall issue and dispatch to the Holder one or more Certificates for the
aggregate number of whole Shares of Common Stock of Tanon or the Company
determined by dividing the Conversion Price (determined pursuant to paragraph 2
as if the Holder was converting a portion of the principal of this Note) into
the total amount of lawful money of the United States of America which the
Holder would have received if the aggregate amount of interest on this Note
which is being paid in EA Shares or Tanon Shares were being paid in such lawful
money. No fractional shares will be issued in payment of interest on this Note.
In lieu thereof, the Holder may be issued a number of Shares which reflects a
rounding up to the next whole number or may be paid in lawful money of the
United States of America.
NOTWITHSTANDING THE FOREGOING, PAYMENT OF INTEREST IN EITHER EA SHARES OR
TANON SHARES IS EXPRESSLY CONDITIONED IN EACH CASE UPON (i) SUFFICIENT
AUTHORIZED, UNISSUED AND UNRESERVED COMMON STOCK OF THE ISSUER OF SUCH SHARES TO
PERMIT SUCH PAYMENT, (ii) IN THE CASE OF PAYMENT IN TANON SHARES, COMPLETION OF
AN INITIAL PUBLIC OFFERING OF THE COMMON STOCK OF THE COMPANY PRIOR TO SUCH
PAYMENT, (iii) OFFICIAL NOTICE OF THE LISTING (THE "LISTING") OF SUCH SHARES ON
THE NEW YORK STOCK EXCHANGE OR THE NASDAQ NATIONAL MARKET SYSTEM, IF APPLICABLE,
PRIOR TO SUCH PAYMENT, AND (iv) COMPLIANCE WITH ALL FEDERAL AND STATE SECURITIES
LAWS AND REGULATIONS. IN THE EVENT (i) THERE IS INSUFFICIENT AUTHORIZED,
UNISSUED AND UNRESERVED COMMON STOCK OF THE ISSUER OF THE SHARES TO BE ACQUIRED
UPON AN INTEREST PAYMENT DATE, (ii) IN THE CASE OF PAYMENT IN TANON SHARES,
TANON HAS NOT COMPLETED AN INITIAL PUBLIC OFFERING OF ITS COMMON STOCK PRIOR TO
AN INTEREST PAYMENT DATE, (iii) SUCH LISTING OF THE SHARES TO BE ACQUIRED UPON
AN INTEREST PAYMENT DATE DOES NOT OCCUR PRIOR TO SUCH DATE, OR (iv) THE ISSUER
OF THE SHARES TO BE ACQUIRED UPON AN INTEREST PAYMENT DATE IS UNABLE TO COMPLY
WITH ALL FEDERAL AND STATE SECURITIES LAWS IN ISSUING SUCH SHARES, SUCH INTEREST
PAYMENT SHALL BE MADE IN U.S. DOLLARS.
1. Restrictions on Transfer of Securities. By accepting this Note, the Holder
hereby acknowledges that, except as expressly set forth herein, neither this
Note nor any Shares issuable in the event of conversion have been, or will be,
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or any state securities laws and represents for herself and her legal
representative that she is acquiring this Note and will acquire any Shares
(hereinafter defined) issued upon conversion hereof, for her own account, for
investment purposes only and not with a view to, or for sale in connection with,
any distribution of such securities, and agrees to reaffirm in writing this
investment representation at the time of exercise of the conversion right set
forth below, subject to the Company's agreement to register the Shares as set
forth in Section 4 below. The Holder shall not transfer this Note or any Shares
(or any interest therein) until (i) it shall have first given written notice to
the Company describing the manner of any such proposed transfer, and (ii) either
(a) the Company has received from ▇▇▇▇▇▇'s counsel an opinion satisfactory to
the Company and its counsel that such transfer may be made without compliance
with the registration provisions of the Securities Act and that the proposed
transfer may be made without violation of the Securities Act and any applicable
state securities law, or (b) a registration statement filed by the Company
covering the Note or Shares to be transferred is in effect under the Securities
Act and there has been compliance with the applicable state securities laws.
2. Conversion of Note. This Note may be converted into shares of Common Stock of
Tanon or the Company as follows:
2
(a) Conversion. Subject to and upon compliance with the provisions of this
section captioned "Conversion of Note", at the option of the Holder, at any time
after the listing on the NYSE of the shares issuable upon conversion has been
effected and prior to the close of business on the Maturity Date, the unpaid
principal balance of the Note may be converted in whole, or from time to time in
part, into EA Shares, at a conversion price per EA Share equal to two dollars
and fifty cents ($2.50) ("EA Conversion Price").
Subject to and upon compliance with the provisions of this section
captioned "Conversion of Note", at the option of the Holder, at any time after
closing of an initial public offering of the Common Stock of Tanon and prior to
the close of business on the Maturity Date, the unpaid principal balance of the
Note may be converted in whole, or from time to time in part, into Tanon Shares
at a conversion price per Tanon Share equal to the quotient of (i) twenty five
million dollars ($25 million), divided by (ii) the number of shares of Common
Stock of Tanon that were issued and outstanding at the close of business on the
day immediately prior to the effective date of the registration statement
covering the shares of Common Stock of Tanon offered in such initial public
offering, without giving effect to the number of shares of Common Stock of Tanon
being offered in such initial public offering.
The terms EA Share Price and Tanon Share Price are sometimes collectively
referred to herein as the "Conversion Price." The conversion as set forth herein
shall be subject to such adjustment or adjustments, if any, of such Conversion
Price and of the securities or other property issuable upon such conversion as
set forth below, upon delivery of the Note to the offices of the Company,
together with the form of conversion notice attached thereto (the "Conversion
Notice"), duly executed by the Holder thereof. The Conversion Notice shall state
the principal amount thereof to be so converted, the Shares into which such
amount is being converted and shall include or be accompanied by representations
as to the Holder's investment intent substantially similar to those contained in
this Note. Shares issuable upon conversion of the Note shall be issued in the
name of the Holder and shall be transferable only in accordance with all of the
terms and restrictions contained herein and in the Subscription Agreement of
even date hereof to which the original Holder hereof is a party. Upon such
conversion, Company shall pay, in cash, all accrued and unpaid interest through
the conversion date on the Note or such part thereof delivered for conversion.
No fractional Shares shall be issued or delivered upon conversion of the Note.
In case the Note shall be surrendered for the conversion of only a portion of
the principal amount thereof, the Company shall, at the time of issuing the
Shares issuable upon the conversion of such portion, execute and deliver to the
Holder of the Note so surrendered a new note equal in principal amount to the
unconverted portion of the surrendered Note, dated the most recent date to which
interest shall have been paid on the surrendered Note.
NOTWITHSTANDING THE FOREGOING, THE CONVERSION OF THE NOTE INTO EITHER EA
SHARES OR TANON SHARES IS EXPRESSLY CONDITIONED IN EACH CASE UPON (i) SUFFICIENT
AUTHORIZED, UNISSUED AND UNRESERVED COMMON STOCK OF THE ISSUER OF SUCH SHARES TO
PERMIT SUCH CONVERSION, (ii) OFFICIAL NOTICE OF THE LISTING (THE "LISTING") OF
SUCH SHARES ON THE NEW YORK STOCK EXCHANGE OR THE NASDAQ NATIONAL MARKET SYSTEM,
IF APPLICABLE, PRIOR TO SUCH CONVERSION, AND (iii) COMPLIANCE WITH ALL FEDERAL
AND STATE SECURITIES LAWS AND REGULATIONS. IN THE EVENT (i) THERE IS
INSUFFICIENT AUTHORIZED, UNISSUED AND UNRESERVED COMMON STOCK OF THE ISSUER OF
THE SHARES TO BE ACQUIRED UPON CONVERSION, (ii) SUCH LISTING OF THE SHARES TO BE
ACQUIRED UPON CONVERSION DOES NOT OCCUR PRIOR THERETO, OR (iii) THE ISSUER OF
THE SHARES TO BE ACQUIRED UPON CONVERSION IS UNABLE TO COMPLY WITH ALL FEDERAL
AND STATE SECURITIES LAWS AND REGULATIONS IN ISSUING SUCH SHARES, THIS NOTE
SHALL NOT BE CONVERTIBLE INTO SUCH SHARES AS AFORESAID.
(b) Adjustments.
3
(i) Subdivision or Combination. Whenever the Company or Tanon shall
subdivide or combine the outstanding shares of its Common Stock issuable upon
conversion of this Note, including stock dividends and stock splits, the
Conversion Price in effect with respect to such Shares being subdivided or
combined immediately prior to such subdivision or combination shall be
proportionately decreased in the case of subdivision or increased in the case of
combination effective at the time of such subdivision or combination.
(ii) Reclassification or Change. Whenever any reclassification or change of
the outstanding shares of Common Stock of the Company or Tanon shall occur
(other than a change in par value, or from par value to no par, or from no par
to par value, or as a result of a subdivision or combination) effective
provision shall be made whereby the Holder shall have the right, at any time
thereafter, to receive upon conversion of this Note the kind of stock, other
securities or property receivable upon such reclassification or change by a
holder of the number of shares of Common Stock of Tanon or EA, as the case may
be, issuable upon conversion of this Note immediately prior to such
reclassification or change. Thereafter, the rights of the Holder with respect to
the adjustment of the amount of securities or other property obtainable upon
conversion of this Note shall be appropriately continued and preserved, so as to
afford as nearly as may be possible protection of the nature afforded by this
paragraph (c). The provisions of this clause (iii) shall apply to successive
transactions of the nature to which it relates.
(iii) Notices of Record Date. In case
(A) the Company or Tanon shall declare a dividend (or make any other
distribution) on its shares of Common Stock payable otherwise than in cash out
of its earned surplus; or
(B) the Company or Tanon shall grant the holders of its Common Stock the
right to subscribe for or purchase any shares of its capital stock of any class;
or
(C) the Company or Tanon shall make any distribution on or in respect of
the Common Stock in connection with the dissolution, liquidation or winding up
of the Company or Tanon; or
(D) there is to be a reclassification or change of the Common Stock of
the Company or Tanon (other than the subdivision or combination of its
outstanding shares of Common Stock), a consolidation or merger to which the
Company or Tanon is a party and in connection with which approval of any class
of stockholders of the Company or Tanon is required, or a sale or conveyance of
the property of the Company or Tanon as an entirety or substantially as an
entirety, then and in each such event, the Company shall mail or cause to be
mailed to the Holder a notice specifying the date on which any record is to be
taken for the purpose of such dividend, distribution or granting of rights, or
the date on which such reclassification, consolidation or merger is expected to
become effective, and the time, if any, as of which the holders of record of
Common Stock shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reorganization or
reclassification. Such notice shall be mailed at least 30 days prior to the
record or effective date therein specified.
(iv) Notice of Adjustment of Conversion Price, etc. If there shall be any
adjustment as provided in (b) hereof, or if securities or property other than
shares of Common Stock of the Company or Tanon shall become issuable or
deliverable in lieu of shares of such Common Stock upon the conversion of this
Note, the Company shall forthwith cause written notice thereof to be sent by
registered or certified mail, postage prepaid, to the Holder, which notice shall
be accompanied by a certificate of the principal financial officer of the
Company setting forth in reasonable detail the facts requiring any such
adjustment and the Conversion Price and number of Shares issuable upon the
conversion of this Note after such adjustment, or the kind and amount of any
such securities or property so issuable or deliverable upon the conversion of
this Note, as the case may be.
3. Default. If any of the following conditions or events ("Events of Default")
shall occur and be continuing:
(a) if the Company shall default in the payment of principal of this Note
when the same becomes due and payable, whether at maturity or by declaration of
acceleration or otherwise;
4
(b) if the Company shall default in the payment of any interest on this
Note and shall fail to cure such default within ten days after receipt of
written notice thereof from the Holder to the Company;
(c) if the Company shall materially default in the performance of or
compliance with any term contained herein and such default shall not have been
remedied within thirty days after receipt of written notice thereof from the
Holder to the Company;
(d) if the Company shall make an assignment for the benefit of creditors,
or shall admit in writing its inability to pay its debts as they become due, or
a voluntary petition for reorganization under Title 11 of the United States Code
("Title 11") shall be filed by the Company or an order shall be entered granting
relief to the Company under Title 11 or a petition shall be filed by the Company
in bankruptcy, or the Company shall be adjudicated a bankrupt or insolvent, or
shall file any petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, or shall file any
answer admitting or not contesting the material allegations of a petition filed
against the Company in any such proceeding, or shall seek or consent to or
acquiesce in the appointment of any trustee, receiver or liquidator of the
Company or of all or any substantial part of the properties of the Company or if
the Company or its directors or majority shareholders shall take any action
looking to the dissolution or liquidation of the Company;
(e) if within 90 days after the commencement of an action against the
Company seeking a reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, such action shall not have been dismissed or nullified or all
orders or proceedings thereunder affecting the operations or the business of the
Company stayed, or if the stay of any such order or proceeding shall thereafter
be set aside, or if, within 90 days after the appointment without the consent or
acquiescence of the Company of any trustee, receiver or liquidator of the
Company or of all or any substantial part of the properties of the Company such
appointment shall not have been vacated; or
(f) if Tanon shall be in default under the Revolving Credit and Security
Agreement between I.B.J. ▇▇▇▇▇▇▇▇ Bank & Trust Company and Tanon Manufacturing,
Inc. and such default shall not be cured within 30 days;
then, and in any such event, Holder may at any time (unless such Event of
Default shall theretofore have been remedied) at its option, by written notice
to the Company, declare the Note to be due and payable, whereupon the Note shall
forthwith mature and become due and payable, together with interest accrued
thereon, and thereafter interest shall be due, at the rate of eighteen percent
(18%) per annum on the entire principal balance until the same is fully paid,
and on any overdue interest (but only to the extent permitted by law), without
presentment, demand, protest or notice, all of which are hereby waived.
In case of a default in the payment of any principal of or interest on the
Note, (whether at maturity or by acceleration) the Company will pay to the
Holder such further amount as shall be sufficient to cover the cost and expenses
of collection, including, without limitation, reasonable attorneys' fees,
expenses and disbursements. No course of dealing and no delay on the part of
Holder in exercising any right shall operate as a waiver thereof or otherwise
prejudice such Holder's rights, powers or remedies. No right, power or remedy
conferred by this Note upon Holder shall be exclusive of any other right, power
or remedy referred to herein or now or hereafter available at law, in equity, by
statute or otherwise.
4. Registration Rights.
(a) Registration.The Company shall use its best efforts to file and cause
to be declared effective on or before January 1, 1998, a Registration Statement
under the Securities Act of 1933, as amended, on Form S-3 covering the shares of
Common Stock of EA underlying in this Note. If the Company or Tanon proposes to
file a registration statement under the Securities Act with respect to an
offering by the Company or Tanon for its own
5
account of its Common Stock (other than a registration statement on Form
S-4, S-8 or S-14 or any form substituting therefor or filed in connection with
an exchange offer or an offering of securities solely to existing stockholders
or employees) during the period commencing on the date hereof and ending on
January 22, 2000, the Company or Tanon 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 Shares as the Holder has acquired or
contemplates acquiring upon conversion and requests 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 pursuant to
this subsection 4(a), the Company or Tanon will bear all registration expenses,
except sales commissions and the fees and expenses of counsel to the Holder
which shall be borne by Holder. The Holder shall deliver such documents, and
provide the Company or Tanon with such information, as is necessary or desirable
to effectuate such registration.
(b) In the event that the Company or Tanon shall take action to permit a
public offering or sale or other distribution of the Shares pursuant to
Subsection 4(a) above, the Company shall:
(i) Supply to the Holder two executed copies of each registration
statement and a reasonable number of copies of the preliminary, final and other
prospectus or offering circular in conformity with requirements of the
Securities Act and the Rules and Regulations promulgated thereunder and such
other documents as the Holder shall reasonably request.
(ii) Cooperate in taking such action as may be necessary to register or
qualify the Shares under such other securities acts or blue sky laws of such
jurisdictions as the Holder shall reasonably request and to do any and all other
acts and things which may be necessary or advisable to enable the Holder of such
Shares to consummate such proposed sale or other disposition of the Shares in
any such jurisdiction; provided, however, that in no event shall the Company be
obligated, in connection therewith, to qualify to do business or to file a
general consent to service of process in any jurisdiction where it shall not
then be qualified.
(iii) Indemnify and hold harmless Holder and each underwriter, within
the meaning of the Act, who may purchase from or sell for Holder, any Shares,
from and against any and all losses, claims, damages, and liabilities
(including, but not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing, defending or settling any claim) arising
from (A) any untrue statement of a material fact contained in a registration
statement furnished pursuant to of this Section 4, or any prospectus or offering
circular included therein, or (B) any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading (unless such untrue statement or omission was based upon information
furnished or required to be furnished in writing to the Company by such Holder
or underwriter expressly for use therein), which indemnification shall include
each person, if any, who controls any such Holder or underwriter, within the
meaning of the Securities Act; provided, however, that the Company shall not be
so obligated to indemnify any such Holder or underwriter or controlling person
unless such Holder and underwriter shall at the same time indemnify the Company,
Tanon, their respective directors, each officer signing any registration
statement or any amendment to any registration statement and each person, if
any, who controls the Company or Tanon within the meaning of the Securities Act,
from and against any and all losses, claims, damages and liabilities (including,
but not limited to, any and all expenses whatsoever reasonably incurred in
investigating, preparing, defending or settling and claim) arising from (C) any
untrue statement of a material fact contained in any registration statement or
any amendment to any registration statement or prospectus or offering circular
furnished pursuant to of this Section 4, or (D) any omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but the indemnity of such Holder, underwriter or
controlling person shall be limited to liability based upon untrue statements of
a material fact or omission to state a material fact required to make such
statements not misleading contained within information furnished in writing to
the Company by such Holder or underwriter or controlling person expressly for
use therein. The indemnity agreement of the Company herein shall not inure to
the benefit of any such underwriter (or to the benefit of any person who
controls such underwriter) on account of any losses, claims, damages,
liabilities (or actions or proceedings in respect thereof) arising from the sale
of any of such Shares by such underwriter to any person if such underwriter
failed to send or give a copy of
6
the prospectus or offering circular furnished pursuant to of this
Section 4, as the same may then be supplemented or amended, to such person with
or prior to the written confirmation of the sale involved.
(iv) Keep effective for a period of not less than three (3) months
nor more than (9) months after the initial effectiveness thereof all
such registrations under the Securities Act.
(d) The Company's obligation under Subsection (a) shall be conditioned
upon a timely receipt by the Company in writing of:
(i) Information as to the terms of such public offering furnished by
or on behalf of Holder intending to make a public distribution of her
Shares; and
(ii) Such other information as the Company may reasonably require
from Holder or any underwriter for inclusion in such registration
statement or post-effective amendment.
Notwithstanding any provision contained in this Note to the contrary, the
Company's liability for payment of interest shall not exceed the limits imposed
by applicable usury law. If any provision hereof requires interest payments in
excess of the then legally permitted maximum rate, such provision shall
automatically be deemed to require such payment at the then legally-permitted
maximum rate.
5. Miscellaneous
(a) Notices. All notices required or permitted to be given under this Note
shall be in writing (delivered by hand or sent certified or registered mail,
return receipt requested) addressed to the following addresses:
If to Holder: At its address on the Note
Register of the Company
If to Company ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
or EA: West Long Branch, NJ 07764-9989
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Mesirov ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
All notices shall be deemed given upon personal delivery or upon deposit of such
notice in the United States mails, with all postage affixed.
(b) Failure or Indulgence Not Waiver. No failure or delay on the part of
Holder hereof in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any right, power or privilege. All rights and remedies existing hereunder are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
7
(c) Assignability. Subject to Section 1 hereof, this Note shall be binding
upon Company, its successors and assigns, and shall inure to the benefit of
▇▇▇▇▇▇ and ▇▇▇▇▇▇'s successors, assigns, legal representatives, heirs and
guardians.
(d) Governing Law. This Note shall be governed by the laws of the State of
New Jersey without regard to the conflict of law provisions thereof.
IN WITNESS WHEREOF, the Company has caused this Note to be signed in its
name by its duly authorized officer this 30th day of July, 1997.
EA INDUSTRIES, INC.
By:
-----------------------------
The undersigned, intending to be legally bound, hereby acknowledges the
foregoing Note and agrees to be bound by Sections 2 and 4 thereof.
TANON MANUFACTURING, INC.
By:
-----------------------------
8
CONVERSION NOTICE
TO: [TANON MANUFACTURING, INC.]
[EA IINDUSTRIES, INC.]
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
The undersigned Holder of this Note hereby confirms that it irrevocably
exercises her right to convert [all] [or $___________] of this Note into
___________ shares of Common Stock of [EA INDUSTRIES, INC.] [TANON
MANUFACTURING, INC.] at the Conversion Price of $_________________ per share in
accordance with the terms of this Note, and directs that the Shares issuable and
deliverable upon such conversion be registered in the name of the undersigned
and delivered to the undersigned, together with a Note for the balance of the
principal amount of this Note, if any.
The undersigned hereby acknowledges that the Shares (i) have not been and
will not be at the time of acquisition by the undersigned registered under the
Securities Act of 1933, as amended, or under any state securities laws, except
as set forth in this Note, and hereby represents and warrants to the Company
that she is acquiring the Shares for her own account, for investment, and not
with a view to, or for sale in connection with, any distribution of such Shares;
and (ii) are transferable only in accordance with all the terms and restrictions
contained in the Note and in the Subscription Agreement pursuant to which the
Holder purchased this Note and to which the Holder is, or hereby agrees to
become, a party.
Dated:_____________________ 19__
-------------------------------- -----------------------------
Witness Signature of Holder
-----------------------------
(Print Name of Holder)
Social Security Number or
Taxpayer ID Number:__________
-----------------------------
-----------------------------
-----------------------------
Address
9