Exhibit 4.06
No sale, offer to sell or transfer of the securities represented by this
certificate or any interest therein shall be made unless a registration
statement under the Federal Securities Act of 1933, as amended (the "Act"),
with respect to such transaction is then in effect, or the issuer has received
an opinion of counsel satisfactory to it that such transfer does not require
registration under that Act.
This Warrant will be void after 5:00 p.m. New York time on
______________________, 2001 (i.e. five years from the effective date of the
Registration Statement).
Warrant No. 1
UNIT PURCHASE WARRANT
To Subscribe for and Purchase Units of
EASTCO INDUSTRIAL SAFETY CORP.
(Transferability Restricted as Provided in Paragraph 2 Below)
THIS CERTIFIES THAT, for value received, ROYCE INVESTMENT GROUP,
INC. or registered assigns, is entitled to subscribe for and purchase from
Eastco Industrial Safety Corp., incorporated under the laws of the State of
New York (the "Company"), up to 70,359 fully paid and non-assessable Units
(the "Underwriter's Warrant") consisting of one fully paid and non-assessable
share of Common Stock of the Company and one Class B Common Stock Purchase
Warrant (the "Underwriter's Class B Warrants") of the Company, as hereinafter
defined, at the "Unit Warrant Price" and during the period hereinafter set
forth, subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. This Warrant is one of an issue of the Company's
Underwriter's Warrants identical in all respects except as to the names of the
holders thereof and the number of Units purchasable thereunder, representing
on the original issue thereof rights to purchase up to 70,359 Units.
1. As used herein:
(a) "Common Stock" or "Common Shares" shall initially refer
to the Company's common stock as more fully set forth in Section 5 hereof.
(b) The "Warrant Agreement" shall refer to the Warrant
Agreement dated as of ____________________, 1996 between American Stock
Transfer & Trust Co. and the Company.
(c) Class B Warrants shall refer to the Warrant(s) included
in the Units offered to the public by the Company pursuant to the Rights
Offering and Standby Agreement described in the Registration Statement, File
No. 333-_____, declared effective by the Securities and Exchange Commission
("SEC") on ___________, 1996 and issued or to be issued subject to terms and
conditions of the Standby Agreement and Warrant Agreement.
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(d) "Underwriter's Class B Warrants" shall refer to the
Class B Warrants issuable upon exercise of this Warrant to the holder thereof
and shall be identical in all respects to the Class B Warrants issued pursuant
to the Standby Agreement and Warrant Agreement.
(e) "Units" shall consist of one share of Common Stock and
one Class B Warrant. The Common Stock included in the Units and issuable upon
exercise of this Warrant are subject to adjustment pursuant to Section 4
hereof. The shares of Common Stock issuable upon exercise of the Class B
Warrants included in the Units and issuable upon exercise of this Warrant are
subject to adjustment pursuant to the anti-dilution provisions contained in
the Warrant Agreement.
(f) "Effective Date" shall mean the date that the Securities
and Exchange Commission declares effective form SB-2, File No. 333-_______.
(g) "Unit Warrant Price" shall be $6.00 which is subject to
adjustment pursuant to Section 4 hereof.
(h) "Underwriter" shall refer to ROYCE INVESTMENT GROUP,
INC.
(i) "Standby Agreement" shall refer to the Underwriting
Agreement dated ____________________, 1996 between the Company and the
Underwriter.
(j) "Underwriter's Warrants" shall refer to Warrants to
purchase an aggregate of up to 70,359 Units issued to the Underwriter or its
designees by the Company pursuant to the Standby Agreement (including the
Warrants represented by this Certificate), as such may be adjusted from time
to time pursuant to the terms of Section 4 hereof (and including any Warrants
represented by any certificate issued from time to time in connection with the
transfer, partial exercise, exchange of any Warrants or in connection with a
lost, stolen, mutilated or destroyed Warrant certificate, if any, or to
reflect an adjusted number of Units).
(k) "Underlying Securities" shall refer to and include the
Common Shares and Underwriter's Class B Warrants issuable or issued upon
exercise of the Underwriter's Warrants as well as any Common Shares issued
upon the exercise of the Underwriter's Class B Warrants.
(1) "Holders" shall mean the registered holder of the
Underwriter's Warrants or any issued Underlying Securities.
(m) "Underwriter's Class B Warrant Expiration Date" shall
refer to the expiration date of the Class B Warrants as, and if extended, by
the Board of Directors of the Company.
(n) "Underwriter's Class B Warrant Exercise Price" shall
refer to the exercise price of the Class B Warrants. Initially the
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exercise price shall be $6.25 per share subject to adjustment pursuant to the
Warrant Agreement. In the event the Company should voluntarily lower the
exercise price of the Class B Warrants, the exercise price of the
Underwriter's Class B warrants shall likewise be lowered, since the
Underwriter's Class B Warrant is identical to the Class B Warrant in all
respects.
2. The purchase rights represented by this Warrant may be exercised
by the holder hereof, in whole or in part at any time, and from time to time,
during the period commencing one year after the Effective Date and expiring
on ____________, 2001 (the "Expiration Date"), by the surrender of this
Warrant, with the purchase form attached duly executed, at the Company's
office (or such office or agency of the Company as it may designate in writing
to the Holder hereof by notice pursuant to Section 14 hereof), and upon
payment by the Holder to the Company in cash, or by certified check or bank
draft of the Unit Warrant Price for such Units. The Company agrees that the
Holder hereof shall be deemed the record owner of such Units as of the close
of business on the date on which this Warrant shall have been presented and
payment made for such Units as aforesaid. Certificates for the Units
consisting of shares of Common Stock and Class B Warrants (also referred to
herein as the "Underwriter's Class B Warrants") so purchased shall be
delivered to the Holder hereof within a reasonable time, not exceeding five
(5) days, after the rights represented by this Warrant shall have been so
exercised. If this Warrant shall be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, deliver a new Underwriter's
Warrant evidencing the rights of the Holder hereof to purchase the balance of
the Units which such Holder is entitled to purchase hereunder. Exercise in
full of the rights represented by this Warrant shall not extinguish the rights
granted under Section 9 hereof.
The Underwriter's Class B Warrants shall be exercisable at the
Underwriter's Class B Warrant Exercise Price until the Underwriter's Class B
Warrant Expiration Date. In the event that the Underwriter's Class B Warrants
have expired, this Warrant will entitle the holder to purchase only the shares
of Common Stock included in the Units, subject to adjustment as provided for
herein.
3. Subject to the provisions of Section 8 hereof, (i) this Warrant is
exchangeable at the option of the Holder at the aforesaid office of the
Company for other Underwriter's Warrants of different denominations entitling
the Holder thereof to purchase in the aggregate the same number of Units as
are purchasable, hereunder; and (ii) this Warrant may be divided or combined
with other Underwriter's Warrants which carry the same rights, in either case,
upon presentation hereof at the aforesaid office of the Company together with
a written notice, signed by the Holder hereof, specifying the names and
denominations in which new Underwriter's Warrants are to be issued, and the
payment of any transfer tax due in connection therewith.
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4. The exercise price and number of shares of Common Stock issuable
upon exercise of the Class B Warrants (also referred to herein as the
"Underwriter's Class B Warrants") shall be governed by the anti-dilution
provisions contained in the Warrant Agreement. Subject and pursuant to the
provisions of this Section 4, the Unit Price and number of Common Shares
subject to this Warrant shall be subject to adjustment from time to time
as set forth hereinafter. The number of Class B Warrants included in the Units
shall not change unless the Company shall issue additional Class B Warrants to
the then holders of the Class B Warrants. In such event, the number of Class B
Warrants included in the Units shall be proportionately adjusted on the same
basis as the publicly held Class B Warrant holders.
(A) If the Company shall, at any time, subdivide its
outstanding Common Shares by recapitalization, reclassification, split up
thereof, or other such issuance without additional consideration, the
appropriate Unit Price immediately prior to such subdivision shall be
proportionately decreased, and if the Company shall at any time combine the
outstanding Common Shares by recapitalization, reclassification or combination
thereof, the Unit Price immediately prior to such combination shall be
proportionately increased. Any such adjustment to the Unit Price or the
corresponding adjustment to the Unit Price shall become effective at the close
of business on the record date for such subdivision or combination. No
adjustment to the Unit Price and the number of shares issuable upon exercise
of this Warrant shall be required if such adjustment provides the holders of
this Warrant with disproportionate rights, privileges and economic benefits
which are not provided to the public shareholders.
(B) In the event that prior to the Expiration Date of this
Warrant, the Company adopts a resolution to merge, consolidate, or sell
percentages in all of its assets, each Warrant holder upon the exercise of
this Warrant will be entitled to receive the same treatment as a holder of any
other share of Common Stock. In the event the Company adopts a resolution for
the liquidation, dissolution, or winding up of the Company's business, the
Company will give written notice of such adoption of a resolution to the
registered holders of the Underwriter's Warrants. Thereupon all liquidation
and dissolution rights under this Warrant will terminate at the end of thirty
(30) days from the date of the notice to the extent not exercised within those
thirty (30) days.
(C) If any capital reorganization or reclassification of
the capital stock of the Company or consolidation or merger of the Company
with another corporation, shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock, securities, cash or assets
with respect to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, the Company
or such successor or purchasing corporation, as the case may be, shall execute
with the Warrant Agent a supplemental Warrant Agreement providing that each
registered holder of a Underwriter's Warrant shall have the right thereafter
and until the expiration date to
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exercise such Warrant for the kind and amount of stock, securities, cash or
assets receivable upon such reorganization, reclassification, consolidation,
merger or sale by a holder of the number of shares of Common Stock for the
purchase of which such Warrant might have been exercised immediately prior to
such reorganization, reclassification, consolidation, merger or sale, subject
to adjustments which shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section 4.
(D) In case at any time the Company shall declare a dividend
or make any other distribution upon any stock of the Company payable in Common
Stock, then such Common Stock issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without
consideration.
(E) Upon any adjustment of the appropriate respective Unit
Price as hereinabove provided, the number of Common Shares issuable upon
exercise of each class of Warrant shall be changed to the number of shares
determined by dividing (i) the aggregate Unit Price payable for the purchase
of all shares issuable upon exercise of that class of Warrant immediately
prior to such adjustment by (ii) the appropriate Unit Price per share in
effect immediately after such adjustment.
(F) No adjustment in the Unit Price shall be required under
Section 4 hereof unless such adjustment would require an increase or decrease
in such price of at least 1% provided, however, that any adjustments which by
reason of the foregoing are not required at the time to be made shall be
carried forward and taken into account and included in determining the amount
of any subsequent adjustment, and provided further, however, that in case the
Company shall at any time subdivide or combine the outstanding Common Shares
as a dividend, said amount of 1% per share shall forthwith be proportionately
increased in the case of a combination or decreased in the case of a
subdivision or stock dividend so as to appropriately reflect the same.
(G) On the effective date of any new Unit Price the number
of shares as to which this Warrant may be exercised shall be increased or
decreased so that the total sum payable to the Company on the exercise of this
Warrant shall remain constant.
(H) The form of Underwriter's Warrant need not be changed
because of any change pursuant to this Article, and Underwriter's Warrants
issued after such change may state the Unit Price and the same number of
shares and Class B Warrants as are stated in the Underwriter's Warrants
initially issued pursuant to this Warrant. However, the Company may at any
time in its sole discretion (which shall be conclusive) make any change in the
form of Underwriter's Warrant that the Company may deem appropriate and that
does not affect the substance thereof, and any Underwriter's Warrant
thereafter issued or countersigned, whether in exchange or substitution for an
outstanding Warrant or otherwise, may be in the form as so changed.
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5. For the purposes of this Warrant, the terms "Common Shares" or
"Common Stock" shall mean (i) the class of stock designated as the common
stock of the Company on the date set forth on the first page hereof or (ii)
any other class of stock resulting from successive changes or
re-classifications of such Common Stock consisting solely of changes in par
value, or from no par value to par value, or from par value to no par value.
If at any time, as a result of an adjustment made pursuant to Section 4, the
securities or other property obtainable upon exercise of this Warrant shall
include shares or other securities of the Company other than Common Shares or
securities of another corporation or other property, thereafter, the number of
such other shares or other securities or property so obtainable shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Shares
contained in Section 4 and all other provisions of this Warrant with respect
to Common Shares shall apply on like terms to any such other shares or other
securities or property. Subject to the foregoing, and unless the context
requires otherwise, all references herein to Common Shares shall, in the event
of an adjustment pursuant to Section 4, be deemed to refer also to any other
securities or property then obtainable as a result of such adjustments.
6. The Company covenants and agrees that:
(a) During the period within which the rights represented by
this Warrant may be exercised, the Company shall, at all times, reserve and
keep available out of its authorized capital stock, solely for the purposes of
issuance upon exercise of this Warrant, such number of its Common Shares as
shall be issuable upon the exercise of this Warrant and the exercise of the
Underwriter's Class B Warrants and at its expense will obtain the listing
thereof on all national securities exchanges on which the Class B Warrants are
then listed; and if at any time the number of authorized Common Shares shall
not be sufficient to effect the exercise of this Warrant and the exercise
of the Underwriter's Class B Warrants included therein, the Company will take
such corporate action as may be necessary to increase its authorized but
unissued Common Shares to such number of shares as shall be sufficient for
such purpose; the Company shall have analogous obligations with respect to any
other securities or property issuable upon exercise of this Warrant.
(b) All Common Shares which may be issued upon exercise of
the rights represented by this Warrant or upon the exercise of the
Underwriter's Class B Warrants will, upon issuance and payment be validly
issued, fully paid, nonassessable and free from all taxes, liens and charges
with respect to the issuance thereof (except as may be concurrently discharged
by the Company or the Holder); and,
(c) All original issue taxes payable in respect of the
issuance of Common Shares upon the exercise of the rights represented by this
Warrant or the Underwriter's Class B Warrants shall be borne by the Company
but in no event shall the Company be
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responsible or liable for income taxes or transfer taxes upon the transfer of
any Underwriter's Warrants.
7. Until exercised, this Warrant shall not entitle the Holder hereof
to any voting rights or other rights as a shareholder of the Company, except
that the Holder of this Warrant shall be deemed to be a shareholder of this
Company for the purpose of bringing suit on the ground that the issuance of
shares of stock of the Company is improper under the laws of the Company's
state of incorporation.
8. This Warrant shall not be sold, transferred, assigned or
hypothecated for a period of twelve (12) months from the effective date of the
Company's public offering with respect to which this Warrant has been issued,
except to officers of the Underwriter. In no event shall this Warrant be sold,
transferred, assigned or hypothecated except in conformity with the applicable
provisions of the Securities Act of 1933, as then in force (the "Act"), or any
similar Federal statute then in force, and all applicable "Blue Sky" laws.
9. The Holder of this Warrant, by acceptance hereof, agrees that,
prior to the disposition of this Warrant or of any Underlying Securities
theretofore purchased upon the exercise hereof, under circumstances that might
require registration of such securities under the Act, or any similar Federal
statute then in force, such Holder will give written notice to the Company
expressing such Holder's intention of effecting such disposition, and
describing briefly such Holder's intention as to the disposition to be made
of this Warrant and/or the Underlying Securities theretofore issued upon
exercise hereof. Promptly upon receiving such notice, the Company shall
present copies thereof to its counsel and the provisions of the following
subdivisions shall apply:
(a) If, in the opinion of such counsel, the proposed
disposition does not require registration under the Act, or any similar
Federal statute then in force, of this Warrant and/or the securities issuable
or issued upon the exercise of this Warrant, the Company shall, as promptly as
practicable, notify the Holder hereof of such opinion, whereupon such holder
shall be entitled to dispose of this Warrant and/or such Underlying Securities
theretofore issued upon the exercise hereof, all in accordance with the terms
of the notice delivered by such Holder to the Company.
(b) If, in the opinion of such counsel, such proposed
disposition requires such registration or qualification under the Act, or
similar Federal statute then in effect, of this Warrant and/or the Underlying
Securities issuable or issued upon the exercise of this Warrant, the Company
shall promptly give written notice of such opinion to the Holder hereof and to
the then holders of the securities theretofore issued upon the exercise of
this Warrant at the respective addresses thereof shown on the books of the
Company. The second paragraph of Section 2(d) of the Standby Agreement is
incorporated by reference as if set forth herein in its entirety.
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10. Whenever, pursuant to Section 9 hereof, a registration statement
relating to the Underwriter's Warrant or Underlying Securities is filed under
the Act, the Company agrees to indemnify and hold harmless the holder of this
Warrant, or of securities issuable or issued upon the exercise hereof, from
and against any claims and liabilities arising out of or based upon any untrue
statement of a material fact, or omission to state a material fact required to
be stated, in any such registration statement or prospectus, except insofar as
such claims or liabilities are caused by any such untrue statement or omission
based on information furnished in writing to the Company by such holder, or
by any other such holder affiliated with the holder who seeks indemnification,
as to which the holder hereof, by acceptance hereof, agrees to indemnify and
hold harmless the Company, in the same manner as set forth herein.
11. If this Warrant, or any of the securities issuable pursuant
hereto, require qualification or registration with, or approval of, any
governmental official or authority (other than registration under the Act, or
any similar Federal statute at the time in force), before such shares may be
issued on the exercise hereof, the Company, at its expense, will take all
requisite action in connection with such qualification, and will use its best
efforts to cause such securities and/or this Warrant to be duly registered or
approved, as may be required.
12. This Warrant is exchangeable, upon its surrender by the
registered holder at such office or agency of the Company as may be designated
by the Company, for new Underwriter's Warrants of like tenor, representing, in
the aggregate, the right to subscribe for and purchase the number of Units or
Common Shares as the case may be that may be subscribed for and purchased
hereunder, each of such new Underwriter's Warrants to represent the right to
subscribe for and purchase such number of Units or Common Shares as the case
may be as shall be designated by the registered holder at the time of such
surrender. Upon receipt of evidence 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, upon delivery of a bond of indemnity satisfactory
to the Company, or in the case of such mutilation, upon surrender or
cancellation of this Warrant, the Company will issue to the registered holder
a new Underwriter's Warrant of like tenor, in lieu of this Warrant,
representing the right to subscribe for and purchase the number of Units or
Common Shares as the case may be that may be subscribed for and purchased
hereunder. Nothing herein is intended to authorize the transfer of this
Warrant except as permitted under Section 8.
13. Every holder hereof, by accepting the same, agrees with any
subsequent holder hereof and with the Company that this Warrant and all rights
hereunder are issued and shall be held subject to all of the terms,
conditions, limitations and provisions set forth in this Warrant, and further
agrees that the Company and its transfer agent may deem and treat the
registered holder of this
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Warrant as the absolute owner hereof for all purposes and shall not be affected
by any notice to the contrary.
14. All notices required hereunder shall be given by first-class
mail, postage prepaid; if given by the holder hereof, addressed to the Company
at 130 West 10th Street, Huntington Station, New York 11746; or such other
address as the Company may designate in writing to the holder hereof; and if
given by the Company, addressed to the holder at the address of the holder
shown on the books of the Company.
15. The Company will not merge or consolidate with or into any other
corporation, or sell or otherwise transfer its property assets and business
substantially as an entirety to another corporation, unless the corporation
resulting from such merger or consolidation (if not the Company), or such
transferee corporation, as the case may be, shall expressly assume, by
supplemental agreement satisfactory in form to the Underwriter, the due and
punctual performance and observance of each and every covenant and condition
of this Warrant to be performed and observed by the Company.
16. The validity, construction and enforcement of this Warrant shall
be governed by the laws of the State of New York without giving effect to the
conflict of laws provisions thereof and jurisdiction is hereby vested in the
Courts of said State in the event of the institution of any legal action under
this Warrant.
IN WITNESS WHEREOF, EASTCO INDUSTRIAL SAFETY CORP. has caused this
Warrant to be signed by its duly authorized officers under its corporate seal,
to be dated _________________, 1996.
EASTCO INDUSTRIAL SAFETY CORP.
By:_________________________________
Attest:
_____________________________
(Corporate Seal)
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PURCHASE FORM
To Be Executed
Upon Exercise of Warrant
The undersigned hereby exercises the right to purchase ____________ Common
Shares and _________________ Underwriter's Class B Warrants evidenced by the
within Warrant, according to the terms and conditions thereof, and herewith
makes payment of the purchase price in full. The undersigned requests that
certificates for such shares and warrants shall be issued in the name set
forth below.
Dated: , 19 __________________________________
Signature
__________________________________
Print Name of Signatory
__________________________________
Name to whom certificates are to
be issued if different from above
Address:__________________________
__________________________
Social Security No.________________
or other identifying number
If said number of shares and warrants shall not be all the shares and
warrants purchasable under the within Warrant, the undersigned requests that a
new Warrant for the unexercised portion shall be registered in the name of:
__________________________________
(Please Print)
Address:__________________________
__________________________________
Social Security No._______________
or other identifying number
__________________________________
Signature
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FORM OF ASSIGNMENT
FOR VALUE RECEIVED , hereby sells assigns and transfers
to , Soc. Sec. No. [ ] the within Warrant, together
with all rights, title and interest therein, and does hereby irrevocably
constitute and appoint attorney to transfer such
Warrant on the register of the within named company, with full power of
substitution.
__________________________________
Signature
Dated: , 19
Signature Guaranteed:
________________________________