AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 25, 1996
REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ACRODYNE COMMUNICATIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 11-3067564
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
516 TOWNSHIP LINE ROAD
BLUE BELL, PENNSYLVANIA 19422
(215) 542-7000
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
A. ROBERT MANCUSO, CHAIRMAN
ACRODYNE COMMUNICATIONS, INC.
516 TOWNSHIP LINE ROAD
BLUE BELL, PENNSYLVANIA 19422
(215) 542-7000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
(continued on following page)
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Proposed Proposed
Maximum Maximum
Aggregate Aggregate Amount of
Title of Each Class of Amount to be Price Per Offering Registration
Securities to be Registered Registered Unit Price Fee
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share............. 262,500(1) $4.00 $1,050,000 $362.07
- ---------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 per share............. 100,000(2) $4.00 $400,000 $137.93
- ---------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 per share............. 225,000(3) $5.00 $1,125,000 $387.93
- ---------------------------------------------------------------------------------------------------------------------------------
Total............................ 587,500 -- $2,575,000 $887.93
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Issuable upon the conversion of outstanding shares of the Company's 8%
Convertible Redeemable Preferred Stock, $1.00 par value per share (the
"8% Preferred Stock"), issued to certain Preferred Stockholders, which,
subject to certain adjustments, are convertible into 25 shares of
Common Stock for each share of 8% Preferred Stock at a conversion price
of $4.00 per share of Common Stock.
(2) Issuable upon exercise of warrants issued by the Registrant to Colin
Winthrop & Co., Inc. which, subject to certain adjustments, are each
exercisable at $4.00 to purchase one share of Common Stock.
(3) Issuable upon exercise of warrants issued by the Registrant to Colin
Winthrop & Co., Inc. which, subject to certain adjustments, are each
exercisable at $5.00 to purchase one share of Common Stock.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
Subject to Completion, Dated June 25, 1996
PROSPECTUS
ACRODYNE COMMUNICATIONS, INC.
262,500 shares of Common Stock to be issued by the Company upon the
conversion of outstanding shares of the Company's
8% Convertible Redeemable Preferred Stock
and 325,000 shares of Common Stock to be issued by the
Company upon exercise of outstanding Warrants
This Prospectus relates to the issuance by the Company of (i) up to
262,500 shares of common stock, par value $.01 per share (the "Common Stock"),
of Acrodyne Communications, Inc., a Delaware corporation (the "Company"), which
shares may be issued to certain holders (the "Preferred Stockholders") of the
Company's 8% Convertible Redeemable Preferred Stock, par value $1.00 per share
(the "8% Preferred Stock"), upon the conversion of up to an aggregate of 10,500
shares of 8% Preferred Stock held by the Preferred Stockholders at a conversion
price, subject to certain adjustments, of $4.00 per share of Common Stock; (ii)
up to 100,000 shares of Common Stock which may be issued to Colin Winthrop &
Co., Inc. ("Colin Winthrop") or its designees upon the exercise of warrants
exercisable, subject to certain adjustments, at $4.00 per warrant (the "$4.00
Winthrop Warrants"); and (iii) up to 225,000 shares of Common Stock which may be
issued to Colin Winthrop or its designees upon the exercise of warrants
exercisable, subject to certain adjustments, at $5.00 per warrant (the "$5.00
Winthrop Warrants" and, collectively with the $4.00 Winthrop Warrants, the
"Warrants").
The Company's Common Stock, publicly-traded warrants and units are
quoted on the Nasdaq Stock Market's Small-Cap Market (the "Nasdaq Stock Market")
under the symbols "ACRO," "ACROW" and "ACROU," respectively. On June 21, 1996,
the closing sales prices, as reported by the Nasdaq Stock Market, of the Common
Stock, public warrants and units were $6-15/16, $3-1/4 and $9-7/8, respectively.
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 3.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is ______________, 1996
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") in Washington, D.C., a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities offered hereby. This
Prospectus, which is a part of the Registration Statement, omits certain
information contained in the Registration Statement. For further information
regarding the Company and the securities offered hereby, reference is made to
the Registration Statement and to the exhibits filed as a part thereof, which
may be inspected at the offices of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 without charge or copied upon request to the Public
Reference Section of the Commission and payment of the prescribed fee.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to herein are not necessarily complete and in each
instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Commission.
Reports and other information filed by the Company with the Commission pursuant
to the informational requirements of the Exchange Act may be inspected and
copied at prescribed rates at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the following Regional Offices of the Commission: Seven World
Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. In addition, such reports
and other information, to the extent filed on or after May 6, 1996, may be
electronically examined at the Commission's Web site on the Internet located at
http://www.sec.gov. The Company's Common Stock, public warrants and units are
included in the Nasdaq Stock Market and reports and other information concerning
the Company can be inspected and copied at the offices of Nasdaq at 1735 K
Street, N.W., Washington, D.C. 20006.
The Company furnishes its stockholders with annual reports containing,
among other information, financial statements audited by its independent
auditors.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed with the Commission are hereby
incorporated by reference into this Prospectus: (a) the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1995; (b) the Company's Quarterly
Report on Form 10-QSB for the fiscal quarter ended March 31, 1996; and (c) the
Proxy Statement for the Company's 1996 Annual Meeting of Stockholders held on
June 4, 1996.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of this offering shall be deemed to be incorporated
by reference in this Prospectus and shall be deemed a part of this Prospectus
from the date of the filing of such documents. Any statement contained in a
document incorporated by reference shall be deemed to be modified or superseded
for all purposes to the extent that a statement contained in this Prospectus or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon written
or oral request of such person, a copy of any or all of the documents
incorporated by reference as a part of the Registration Statement, other than
exhibits to such documents, unless such exhibits are specifically incorporated
by reference into the information that the Prospectus incorporates. Requests
should be directed to Acrodyne Communications, Inc., 516 Township Line Road,
Blue Bell, Pennsylvania 19422, Attention: A. Robert Mancuso, President
(telephone: (215) 542-7000).
<PAGE>
RISK FACTORS
An investment in the securities offered hereby involves a high degree
of risk. Prospective investors, prior to making an investment decision, should
consider carefully, in addition to the other information contained in this
Prospectus, the following factors:
FINANCIAL CONDITION OF COMPANY; NEED FOR ADDITIONAL FINANCING
The Company's balance sheets as of December 31, 1995 and March 31,
1996, reflect working capital of $2,120,934 and $2,233,905, respectively, and
accumulated deficits of $945,289 and $1,064,587, respectively. In addition, the
Company's statements of operations for the year ended December 31, 1995 reflect
net income of $9,667 and for the three months ending March 31, 1996 a net loss
of $119,287. The Company has been experiencing negative cash flow and is
dependent upon the receipt of new customer orders on a timely basis or the
proceeds from the conversion of 8% Preferred Stock or the exercise of the
Warrants or additional financing for the continuation of its business. There can
be no assurance that any of the outstanding shares of 8% Preferred Stock will be
converted or that any of the Warrants will be exercised or that the Company will
be able to obtain additional financing on terms acceptable to the Company, if at
all.
OUTSTANDING DEBT OBLIGATIONS AND RESTRICTIONS ON OPERATIONS
The Company has a $1,200,000 credit facility with a bank for working
capital purposes of which $500,000 is reserved for a stand-by letter of credit
to partially secure the Company's senior indebtedness. At March 31, 1996, there
was $200,000 outstanding under such credit facility, which bore interest at the
rate of 9.25% at such date. The credit facility is secured by substantially all
of the Company's assets and contains certain restrictive covenants.
The agreement for the credit facility provides that the Company must
achieve and maintain certain financial ratios and be subject to certain
covenants and restrictions on operations. There can be no assurance that the
Company will be able to achieve or maintain the prescribed financial ratios or
satisfy the covenants or restrictions. Failure to do so would result in a
default under such credit facility and could lead to the acceleration of the
Company's obligations thereunder, and to the bank's right to enforce its
security interest and take possession of the Company's assets. Restrictions on
the operations of the Company may include, among other things, limitations on
the ability of the Company to incur additional indebtedness, to create, incur or
permit the existence of certain liens, to make certain investments, to make
certain sales of assets, to make capital expenditures and investments, to pay
dividends, to effect changes in its method of doing business and to enter into
certain types of transactions. Compliance with these restrictions may have
adverse effects on the Company such as increasing its borrowing costs,
inhibiting it from resolving liquidity problems, or causing the Company to
forego favorable business opportunities. In addition to such credit facility,
the Company has debt obligations in the outstanding principal amount of
$1,221,203, payable primarily to the Company's former majority shareholder,
Marshall Smith.
DEPENDENCE ON SINGLE-SOURCE SUPPLIERS
The Company's main supplier of the tetrode and diacrode tubes (the
"Tubes") it uses in its higher power transmitters is Thomson Components and
Tubes Corp., Totowa, New Jersey ("Thomson Components"). Thomson Components is a
subsidiary of Thomson-CSF-France ("Thomson-CSF"). The Company, if necessary, can
obtain Tubes from other suppliers, except for the 10, 30 and 60 kilowatt models
which are currently only available from Thomson Components. The Company does not
keep its own supply of Tubes, and has relied on Thomson Components to supply the
tubes. The Company normally informs Thomson Components of its Tube requirements
for the next 12 months. Although Thomson Components historically has met the
Company's Tube requirements on a timely basis, no assurance can be given that
this will remain the case. If the Company were forced to source its Tubes other
than from Thomson Components, significant delays in the delivery of such Tubes
would result or the Company might not be able to obtain the Tubes at all. An
inability to obtain such tubes from Thomson Components or an alternate supplier
would have a material adverse effect on the business of the Company.
The Company's primary supplier of the specialized transistors it uses
in its solid state products is Ericsson, Inc. RF Power Products ("Ericsson")
located in Morgan Hill, California. Although Ericsson historically has met the
Company's specialized transistor requirements on a timely basis, no assurance
can be given that this will remain to be the case. If this source were
interrupted, transistors would be available from a number of other sources;
however, significant delays in obtaining transistors with the specifications
required by the Company also might occur. An inability to obtain such
specialized transistors from Ericsson or an alternate supplier would have a
material adverse effect on the business of the Company.
The Company has never entered into any written agreements, other than
customary purchase orders, with either Ericsson or Thomson-CSF, in connection
with its purchases of components in the last 25 years. Both Ericsson and
Thomson-CSF have historically filled the Company's orders on a timely basis, but
no assurance can be given that the Company will be able to obtain sufficient
quantities of these components as needed. Any failure to obtain such components
would have a material adverse effect on the Company.
Two of Thomson-CSF's other divisions, Comark Communications Inc.
("Comark") and Thomson LGT, are competitors of the Company. There can be no
assurances that Thomson Components, due to its relationship with both Comark and
Thomson LGT, will not discontinue its supply of components to the Company.
RISKS ASSOCIATED WITH FOREIGN SALES
For the fiscal year ended December 31, 1995 and the three month period
ending March 31, 1996, approximately 30% and 12% of the Company's sales were
made to foreign customers. The Company's business is subject to risks associated
with its dependence on foreign customers, including foreign regulatory approval
requirements, economic and political conditions prevailing in foreign countries,
shipping delays, fluctuations in exchange rates, and any trade barriers,
including customs duties, export quotas, tariff increases or other import or
export restrictions now existing or which may be imposed in the future. The
future imposition of high customs duties, tariffs, quotas or other import
restrictions or barriers in the countries where the Company sells its products
likely would result in lost revenues to the Company, which would have a material
adverse effect on the Company's business and results of operations.
DEPENDENCE ON SIGNIFICANT CUSTOMERS
The Company's largest recurring customer, the United States Government
Services Administration, accounted for approximately 3% in 1995 and 4% in 1994
of the Company's annual revenues. The Company has no contract with such customer
and the loss of such customer would not have a material adverse effect on the
business of the Company. Additionally, for the fiscal year ended December 31,
1995, four foreign and two domestic customers accounted for 13.5% and 10%,
respectively, of the Company's sales, and for the three months ended March 31,
1996, four foreign and two domestic customers accounted for 9% and 36%,
respectively, of the Company's sales. The Company's business has historically
been dependent upon a relatively small number of significant transactions with
one-time customers. Such a high concentration of sales can lead to potential
volatility in revenues and profits, since there can be no assurance that the
Company will be able to consummate transactions with such types of customers in
the future.
INTENSE COMPETITION; TECHNOLOGICAL CHANGES
The Company sells its products in highly competitive markets in which
competing products are available from approximately 6 nationally and 13
internationally recognized competitors. The majority of such competitors have
greater financial and technical resources than the Company and are
well-established, with reputations for success in the sale and service of their
products. The Company's continued ability to compete rests primarily on its
reputation for product quality, timely deliveries and customer service. The
Company's competitive position also depends upon its periodic introduction of
products with enhanced power performance characteristics required by customers.
The Company's new product design and development requires continuous spending on
research and development. Although historically the technologies used in the
Company's business have evolved slowly and have not been subject to rapid or
radical changes, the advent of digital technology could signal a shift in the
television transmission industry which could result in renewed competition and
the need for research and development expenses substantially greater than those
experienced in the past by the Company. No assurance can be given that the
Company will be able to compete successfully in the future or that competitors
will not develop technologies or products that render the Company's products
obsolete for certain applications or less marketable.
INTENSE COMPETITION IN INTERNATIONAL MARKETS
The international markets in which the Company competes are
characterized by intense competition in both the higher power and lower power
segments. The Company's major competition internationally comes from Thomson-CFS
(France), Nippon Electric Corporation (Japan), GEC-Marconi Communications
Limited (United Kingdom), Pesa Electronica S.A. (Spain) and Rhode & Schwarz
(Germany). The foregoing competitors have a dominant market position within
their home countries. The Company does not expect that it will be able to
compete with such companies in their respective home countries in the near
future. No assurance can be given that the Company will be able to compete in
any other international market in the future.
RELIANCE ON KEY PERSONNEL
The Company's success is dependent to a significant degree upon the
efforts of A. Robert Mancuso, its President, who has one and one-half year's
experience directing a company in the Company's industry, as well as Daniel D.
Traynor and Dr. Timothy P. Hulick, who are presently employed as the Company's
General Manager, Vice President and Director and the Company's Vice President of
Engineering, respectively, and have been with the Company for 26 and 11 years,
respectively. The loss of the services of either Mr. Mancuso, Mr. Traynor or Dr.
Hulick would likely have a material adverse effect on the Company. The Company
has obtained a key man life insurance policy on Mr. Mancuso in the amount of
$1,000,000. Moreover, the successful design, manufacture and marketing of the
Company's products are dependent upon the availability of adequate numbers of
trained and qualified personnel. Although the Company believes it has sufficient
qualified employees to service its business at this time, the Company may not be
successful in attracting qualified personnel in the future, when needed, or in
retaining such persons.
POTENTIAL ADVERSE DEVELOPMENTS IN DOMESTIC REGULATION
As a manufacturer of television transmitters and translators, the
Company is subject to legislation adopted by Congress and certain state
legislatures and to regulation by the Federal Communications Commission ("FCC")
and various state regulatory agencies with respect to the manufacturing and sale
of such transmitters. Although the Company believes that it is currently in
compliance with all such laws, there can be no assurance that the Company will
remain in compliance with such laws or that those regulatory bodies will not
adopt legislation or regulations or take other actions that would have a
material adverse effect on the business of the Company. In addition, any
decrease in the number of construction permits granted to television station
owners could adversely affect the Company.
LIMITED PATENTED TECHNOLOGY
Other than six patents which have been granted, none of the Company's
current products are protected by patents. The Company relies on proprietary
know-how and trade secrets and employs various methods to protect the processes,
concepts, ideas and documentation associated with its proprietary products. The
Company's success depends, in part, on its ability to protect these patents,
maintain trade secret protection and operate without infringing on the
proprietary rights of third parties. There can be no assurance that the
Company's patent rights will provide the Company with competitive advantages or
not be challenged by third parties. Furthermore, there can be no assurance that
others will not independently develop similar or superior technologies,
duplicate any of the Company's processes or design around the Company's patented
processes. In addition, the Company could incur substantial costs in defending
itself in patent infringement suits brought against the Company or in bringing
patent infringement suits against third parties. The Company also protects its
technology and trade secrets by requiring all of its key employees to execute
confidentiality agreements. No assurance can be given that these agreements will
not be breached, that the Company will have adequate remedies for any breach, or
that the Company's trade secrets and proprietary know-how will not otherwise
become known or independently discovered by others.
NO DIVIDENDS
The Company anticipates that all of its earnings available to its
Common Stock in the foreseeable future will be retained to finance the growth of
its business and does not intend to pay cash dividends on its Common Stock in
the foreseeable future.
AUTHORIZATION OF PREFERRED STOCK WITHOUT STOCKHOLDER APPROVAL
The Company's Certificate of Incorporation authorizes the issuance of
1,000,000 shares of preferred stock, $1.00 par value per share, with such
designations, rights and preferences as may be determined from time to time by
the Board of Directors. Accordingly, the Board of Directors is empowered,
without stockholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights which could adversely affect the
voting power or other rights of the holders of the Common Stock. In the event of
issuance, the preferred stock could be used under certain circumstances as a
method of discouraging, delaying or preventing a change in control of the
Company. Although the Company has no present intention to issue any shares of
its preferred stock, other than shares of the 8% Preferred Stock, there can be
no assurance that the Company will not do so in the future.
CURRENT PROSPECTUS AND STATE BLUE SKY REGISTRATION REQUIRED TO CONVERT 8%
PREFERRED STOCK OR TO EXERCISE WARRANTS
The Company will be able to issue shares of its Common Stock upon
conversion of the 8% Preferred Stock or upon exercise of the Warrants only if
there is then a current prospectus relating to such Common Stock, and only if
such Common Stock is qualified for sale or exempt from qualification under
applicable state securities laws of the jurisdictions in which the various
holders of the 8% Preferred Stock or of the Warrants, as the case may be,
reside. Although the Company intends to seek to qualify for sale the shares of
Common Stock underlying the 8% Preferred Stock or Warrants, as the case may be,
in those states in which the securities are to be offered, no assurance can be
given that such qualification will occur. The Warrants may be deprived of any
value and the market for the 8% Preferred Stock or the Warrants may be limited
if a current prospectus covering the Common Stock issuable upon the conversion
of the 8% Preferred Stock or the exercise of the Warrants, as the case may be,
is not kept effective or if such Common Stock is not qualified or exempt from
qualification in the jurisdictions in which the holders of the 8% Preferred
Stock or the Warrants, as the case may be, reside.
THE COMPANY
The Company was incorporated in Delaware in May 1991 as a blind pool
for the purpose of acquiring an operating business. The Company consummated its
initial public offering in January 1993, raising net proceeds of approximately
$635,000. On October 24, 1994, the Company consummated the acquisition of
Acrodyne Industries, Inc. ("Acrodyne") and raised approximately $4 million in a
public offering of Units consisting of one share of common stock and one
redeemable common stock purchase warrant (the "October 1994 Offering"). The
proceeds of the October 1994 Offering were used to consummate the acquisition of
Acrodyne and for working capital purposes. Upon the acquisition of Acrodyne,
Acrodyne became a wholly-owned subsidiary of the Company. The Company's initial
change of name from Decision Capital Corp. to Acrodyne Holdings, Inc. was made
in anticipation of the acquisition of Acrodyne. The name of Acrodyne Holdings,
Inc. was changed to the Company's present name by vote of the shareholders at
the Company's 1995 Annual Meeting.
The Company's transfer agent and warrant agent is North American
Transfer Co. and their address is 147 West Merrick Road, Freeport, New York
11520.
USE OF PROCEEDS
The net proceeds to the Company upon the conversion of all outstanding
shares of the 8% Preferred Stock would be approximately $1,050,000. There can be
no assurance that any or all of the outstanding shares of 8% Preferred Stock
will be converted into shares of Common Stock. The net proceeds to the Company
upon the exercise of all of the Warrants would be approximately $1,525,000.
There can be no assurance that any or all of the Warrants will be exercised.
Any net proceeds received by the Company upon the conversion of the
Preferred Stock or the exercise of the Warrants will be used for working capital
and other general corporate purposes. Pending use of the net proceeds, the
Company intends to invest such proceeds in short-term, interest-bearing
obligations.
SELLING SHAREHOLDERS
Set forth below are the names of each Selling Shareholder, the number
of shares of Common Stock owned as of the date of this Prospectus by each
Selling Shareholder, the number of Shares which may be offered by each Selling
Shareholder, the number of shares of Common Stock to be owned by each Selling
Shareholder upon completion of the offering contemplated hereby and the
percentage of total shares of Common Stock outstanding owned by each Selling
Shareholder upon completion of the offering contemplated hereby.
<TABLE>
<CAPTION>
Percent of total
Number of shares shares outstanding
which may be Number of shares owned after
Number of offered pursuant to owned if all shares completion of this
Selling Shareholder shares owned this Prospectus are sold offering
<S> <C> <C> <C> <C>
Furst Associates 130,0000* 130,000* 0 0%
Eagle Partners 67,500* 67,500* 0 0%
FM Partners 52,500* 52,500* 0 0%
Dynamic Value 12,500* 12,500* 0 0%
Partners
Colin Winthrop 325,000** 325,000** 0 0%
& Co., Inc.
</TABLE>
- ----------------------------------------
* Assumes conversion into Common Stock, pursuant to this Prospectus, of all
shares of 8% Preferred Stock held by such Selling Shareholder. See "Plan of
Distribution."
** Assumes exercise for Common Stock, pursuant to this Prospectus, of all
Warrants held by such Selling Shareholder. See "Plan of Distribution."
PLAN OF DISTRIBUTION
Upon conversion of the 8% Preferred Stock held by a Selling Shareholder
into, or the exercise of Warrants held by a Selling Shareholder for, Common
Stock pursuant to this Prospectus, as described below, offers and sales of
shares of Common Stock by such Selling Shareholder may be effected from time to
time in one or more transactions, directly by such Selling Shareholder, or
through agents, dealers, brokers or underwriters to be designated from time to
time. Such offers or sales may be effected on the Nasdaq Stock Market, in
negotiated off-market transactions, in a combination of such methods of sale or
by any other legally available means. The selling price of the shares may be at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, at fixed prices or at negotiated prices.
The 262,500 shares of Common Stock offered hereunder in the aggregate
by Furst Associates, Eagle Partners, FM Partners and Dynamic Value Partners
(collectively, the "8% Preferred Shareholders") are being registered in
connection with the respective Registration Rights Agreements (collectively, the
"8% Preferred Registration Rights Agreements") entered into by the Company with
each such shareholder as follows: (i) with Furst Associates as of March 29, 1996
with respect to the registration of up to 130,000 shares of Common Stock; (ii)
with Eagle Partners as of March 29, 1996 with respect to the registration of up
to 67,500 shares of Common Stock; (iii) with FM Partners as of May 7, 1996 with
respect to the registration of 52,500 shares of Common Stock; and (iv) with
Dynamic Value Partners with respect to the registration of up to 12,500 shares
of Common Stock. Each 8% Preferred Holder will receive the shares of Common
Stock to be offered by such shareholder hereby upon conversion, if any, by such
holder of the shares of 8% Preferred Stock held by such holder. According to the
terms of the 8% Preferred Registration Rights Agreements, the Company must
provide each 8% Preferred Shareholder with up to two (2) demand registrations of
all or part of the shares of Common Stock into which such shareholder's 8%
Preferred Stock may be, or is, converted at the time of such demand, by
preparing and filing a registration statement with the Securities and Exchange
Commission. The Company has also provided the 8% Preferred Shareholders with
piggyback registration rights ("Piggyback Rights") whereby, if the Company
determines to file a registration statement in connection with the proposed
offer and sale of its securities, the Company shall provide written notice to
the 8% Preferred Shareholders, who in turn may request that the Company include
all or part of their shares to be so registered. In both instances, the Company
is required to use its best efforts to cause such registration statement to
become effective within 90 days thereof and is obligated to pay substantially
all of the expenses and in certain circumstances, to indemnify the 8% Preferred
Shareholders against certain liabilities in connection with the filing,
including liabilities which may arise under the Securities Act.
The Company will issue up to an aggregate of 325,000 shares of Common
Stock upon exercise of the Warrants in accordance with their terms. The Company
will issue up to 100,000 shares of Common Stock upon the exercise of the $4.00
Winthrop Warrants. Pursuant to the terms of the $4.00 Winthrop Warrants which
were issued by the Company to Colin Winthrop as of January 1, 1996, Colin
Winthrop is entitled Piggyback Rights to register the Common Stock underlying
its warrants to acquire up to 100,000 shares of Common Stock on a registration
statement to be filed with the Commission. The Colin Winthrop Warrants entitle
the holder to purchase up to 100,000 shares of Common Stock at $4.00 per share
and must be exercised prior to 5:00 p.m., New York time, on December 31, 1998.
The Company is required to use its best efforts to cause such registration
statement to become effective within 180 days of filing and is obligated to pay
substantially all of the expenses and in certain circumstances to indemnify the
holder of the $4.00 Winthrop Warrants against certain liabilities in connection
with the filing, including liabilities which may arise under the Securities Act.
The Company will also issue up to 225,000 shares of Common Stock upon the
exercise of the $5.00 Winthrop Warrants. The terms of the $5.00 Winthrop
Warrants are substantially identical to the terms of the $4.00 Winthrop
Warrants, except that the $5.00 Winthrop Warrants were issued by the Company to
Colin Winthrop as of April 1, 1996, entitle the holder thereof to purchase up to
225,000 shares of Common Stock at $5.00 per share and must be exercised prior to
5:00 p.m., New York time, on March 31, 1999.
In order to comply with the securities laws of certain states, if
applicable, the shares of Common Stock will be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states the shares may not be sold unless the shares have been registered or
qualified for sale in such state or a exemption from registration or
qualification is available and complied with.
LEGAL MATTERS
The validity of the securities offered hereby are being passed upon for
the Company by Stroock & Stroock & Lavan, New York, New York, special counsel to
the Company.
EXPERTS
The financial statements incorporated in this Prospectus by reference
to the Annual Report on Form 10-KSB for the year ended December 31, 1995, have
been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
No dealer, salesman or any other person has been authorized to give any 262,500 shares of Common Stock to be
information or to make any representations not contained in the Prospectus, and, issued by the Company upon conversion
if given or made, such information or representation must not be relied upon as of outstanding shares of the Company's
having been authorized by the Company or any of the Solicitors. This Prospectus 8% Convertible Redeemable Preferred Stock
does not constitute an offer of any securities other than those to which it and 325,000 shares of Common Stock to be
relates or an offer to sell, or a solicitation of an offer to buy, to any person issued by the Company upon exercise of
in any jurisdiction where such an offer or solicitation would be unlawful. outstanding warrants
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that the information contained herein
is correct as of any time subsequent to the date hereof.
TABLE OF CONTENTS Page
Available Information..................................................... 2
Documents Incorporated by
Reference............................................................... 2 ACRODYNE
Risk Factors.............................................................. 3 COMMUNICATIONS, INC.
The Company............................................................... 6
Use of Proceeds........................................................... 6
Selling Shareholders...................................................... 7
Plan of Distribution...................................................... 7
Legal Matters............................................................. 8
Experts................................................................... 8
PROSPECTUS
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses expected to be
incurred by the Registrant in connection with the offering described in this
Registration Statement.
<TABLE>
<CAPTION>
<S> <C>
Accounting Fees and Expenses............................................$ 4,000
Legal Fees and Expenses................................................. 10,000
Miscellaneous........................................................... 1,000
Total..........................................................$16,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation
Laws of the State of Delaware ("DGCL") permits a Delaware corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason
of the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
In the case of an action by or in the right of the corporation, Section
145 of the DGCL permits the corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation. No indemnification may be made in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in the preceding two paragraphs, Section
145 requires that he be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
Section 145 provides that expenses (including attorneys' fees) incurred
by an officer or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director, or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in Section 145 of the DGCL.
Article Eight, subsection a of the Registrant's Certificate of
Incorporation eliminates the personal liability of the directors of the
Registrant to the Registrant or its stockholders for monetary damages for breach
of fiduciary duty as directors, with certain exceptions. Article Eight,
subsections f, g and h require indemnification of directors and officers of the
Registrant, and for advancement of litigation expenses to the fullest extent
permitted by Section 145 of the DGCL
ITEM 16. EXHIBITS.
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
4.1 Specimen Share Certificate (Incorporated by reference from Exhibit 4.1
filed with the Company's Registration Statement on Form SB-2 (File No.
33-82910)).
4.2 Form of $4.00 Common Stock Purchase Warrants issued to Colin Winthrop.
4.3 Form of $5.00 Common Stock Purchase Warrants issued to Colin Winthrop.
5 Opinion of Stroock & Stroock & Lavan as to the legality of the shares
issuable upon conversion of the 8% Preferred Stock and upon exercise of
the Warrants.
23.1 Consent of Price Waterhouse LLP, accountants for the Company.
23.2 Consent of Stroock & Stroock & Lavan, special counsel to the Company
(included in Exhibit 5).
24.1 Power of Attorney (see page II-3 of this Registration Statement).
ITEM 17. UNDERTAKINGS.
(a) Rule 415 Offering. The registrant hereby undertakes to: (1) file,
during any period in which it offers or sells securities, a post-effective
amendment to this registration statement to include any additional or changed
information on the plan of distribution; (2) for determining liability under the
Securities Act, treat each post-effective amendment as a new registration
statement of the securities offered, and the offering of the securities at that
time to be the initial bona fide offering; and (3) file a post-effective
amendment to remove from registration any of the securities that remain unsold
at the end of the offering.
(b) Request for Acceleration of Effective Date. Insofar as
indemnification for liabilities arising under the Securities Act of 1993 (the
"Act") may be permitted to directors, officers and controlling persons of the
small business issuer pursuant to the foregoing provisions, or otherwise, the
small business issuer has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification for such liabilities (other than the payment by the small
business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the small business
issuer will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Blue Bell, Commonwealth of Pennsylvania, on June 25,
1996.
ACRODYNE COMMUNICATIONS, INC.
By: /s/ A. Robert Mancuso
A. Robert Mancuso
Chairman of the Board and President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints A.
Robert Mancuso his or her true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution for him or her and in his or her name,
place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) of and supplements to this registration
statement and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto such attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, to all intents and purposes and as fully as they might or could do in
person, hereby ratifying and confirming all that such attorney-in-fact and
agent, or his substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ A. Robert Mancuso Chairman of the Board of Directors, June 25, 1996
- ------------------------------------
A. ROBERT MANCUSO President and Director (Principal Executive
Officer and Chief Financial Officer)
/s/ Martin J. Hermann Secretary and Director June 25, 1996
- -------------------------------------
MARTIN J. HERMANN
/s/ Dr. Elmer Lipsey Director June 25, 1996
- -------------------------------------
DR. ELMER LIPSEY
/s/ Daniel D. Traynor General Manager, Vice President and June 25, 1996
- -------------------------------------
DANIEL D. TRAYNOR Director
</TABLE>
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
4.1 Specimen Share Certificate (Incorporated by reference from Exhibit 4.1
filed with the Company's Registration Statement on Form SB-2 (File No.
33-82910)).
4.2 Form of $4.00 Common Stock Purchase Warrants issued to Colin Winthrop.
4.3 Form of $5.00 Common Stock Purchase Warrants issued to Colin Winthrop.
5 Opinion of Stroock & Stroock & Lavan as to the legality of the shares
issuable upon conversion of the 8% Preferred Stock and upon exercise of
the Warrants.
23.1 Consent of Price Waterhouse LLP, accountants for the Company.
23.2 Consent of Stroock & Stroock & Lavan, special counsel to the Company
(included in Exhibit 5).
24.1 Power of Attorney (see page II-3 of this Registration Statement).
Exhibit 4.2
THE WARRANT REPRESENTED HEREBY AND THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, ASSIGNED OR
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OF 1933 OR APPLICABLE STATE SECURITIES LAWS, UNLESS THE COMPANY HAS RECEIVED THE
WRITTEN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH COUNSEL IS OF
THE OPINION THAT SUCH SALE, ASSIGNMENT OR TRANSFER DOES NOT INVOLVE A
TRANSACTION REQUIRING THE REGISTRATION OF SUCH SECURITY UNDER THE SECURITIES ACT
OF 1933 OR APPLICABLE STATE SECURITIES LAWS.
RIGHT TO PURCHASE 100,000 SHARES OF COMMON STOCK
OF ACRODYNE COMMUNICATIONS, INC.
ACRODYNE COMMUNICATIONS, INC.
COMMON STOCK PURCHASE WARRANT
ACRODYNE COMMUNICATIONS, INC., a Delaware corporation (the "Company")
having its principal executive offices at 516 Township Line Road, Blue Bell,
Pennsylvania 19422, hereby certifies that, for value received, Colin Winthrop &
Co., Inc., having an address at 100 Jericho Quadrangle, Suite 337, Jericho, New
York 11753, or assigns (the "Holder" or "Holders"), is entitled, subject to the
terms set forth below, to purchase from the Company at any time or from time to
time before 5:00 P.M., New York time, on December 31, 1998, One Hundred Thousand
(100,000) fully paid and nonassessable shares of Common Stock of the Company at
an exercise price, subject to adjustment, of Four Dollars ($4.00) per share (the
"Purchase Price").
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Company" shall include Acrodyne Communications,
Inc. and any corporation which shall succeed or assume the obligations
of the Company hereunder.
(b) The term "Common Stock" includes (a) the Company's Common
Stock, $.01 par value per share, as authorized on the date hereof, (b)
any other capital stock of any class or classes (however designated) of
the Company, authorized on or after such date, the holders of which
shall have the right, without limitation as to amount, either to all or
to a share of the balance of current dividends and liquidating
dividends after the payment of dividends and distributions on any
shares entitled to preference, and (c) any other securities into which
or for which any of the securities described in (a) or (b) may be
converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
1. EXERCISE OF WARRANT.
1.1. EXERCISE. Commencing on the date of this Warrant, or from time to
time thereafter prior to the expiration hereof, this Warrant may be exercised in
whole or in part by the holder hereof by surrender of this Warrant, with the
form of subscription at the end hereof duly executed to such holder, to the
Company at its principal office, accompanied by payment, in cash or by certified
or official bank check payable to the order of the Company, in the amount
obtained by multiplying the number of shares of Common Stock for which this
Warrant is then exercisable by the Purchase Price then in effect.
1.2. TRUSTEE FOR WARRANT HOLDERS. In the event that a bank or trust
company shall have been appointed as trustee for the holder of this Warrant
pursuant to Section 3.2, such bank or trust company shall have all the powers
and duties of a warrant agent appointed pursuant to Section 11 and shall accept,
in its own name for the account of the Company or such successor person as may
be entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
10 days thereafter, the Company at its expense (including the payment by it of
any applicable issue taxes) will cause to be issued in the name of and delivered
to the holder hereof, or as such holder (upon payment by the Company of any
applicable transfer taxes) may direct, a certificate or certificates for the
number of fully paid and nonassessable shares of Common Stock to which such
holder shall be entitled on such exercise.
3. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION OR MERGER.
3.1. REORGANIZATION, CONSOLIDATION OR MERGER. In case at any time or
from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, the holder of this Warrant, on the exercise hereof as provided in Section
1 at any time after the consummation of such reorganization, consolidation or
merger or the effective date of such dissolution, as the case may be, shall
receive, in lieu of the Common Stock issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and property
(including cash) to which such holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be, if such
holder had so exercised this Warrant, immediately prior thereto, all subject to
further adjustment thereafter as provided in Section 4.
3.2. DISSOLUTION. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the stock and other securities and property (including cash, where
applicable) receivable by the holder of the Warrant after the effective date of
such dissolution pursuant to this Section 3 to a bank or trust company, as
trustee for the holder of the Warrant and shall promptly notify each holder of
the Warrants of the occurrence of any events specified in this Section 3.
3.3. CONTINUATION OF TERMS. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to all securities and other property receivable
on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any such
stock or other securities, including, in the case of any such transfer, the
person acquiring all or substantially all of the properties or assets of the
Company, whether or not such person shall have expressly assumed the terms of
this Warrant.
4. ADJUSTMENTS FOR STOCK DIVIDENDS AND STOCK SPLITS. In the event that
the Company shall (i) issue additional shares of the Common Stock as a dividend
or other distribution on outstanding Common Stock, (ii) subdivide its
outstanding shares of Common Stock, or (iii) combine its outstanding shares of
the Common stock into a smaller number of shares of the Common Stock, then, in
each such event, the Purchase Price shall, simultaneously with the happening of
such event, be adjusted by multiplying the then prevailing Purchase Price by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such event and the denominator of which shall
be the number of shares of Common Stock outstanding immediately after such
event, and the product so obtained shall hereafter be the Purchase Price then in
effect. The Purchase Price, as so adjusted, shall be readjusted in the same
manner upon the happening of any successive event or events described herein in
this Section 4. The holder of this Warrant shall thereafter, on the exercise
hereof as provided in Section 1, be entitled to receive that number of shares of
Common Stock determined by multiplying the number of shares of Common Stock
which would otherwise (but for the provisions of this Section 4) be issuable on
such exercise, by a fraction of which (i) the numerator is the Purchase Price
which would otherwise (but for the provisions of this Section 4) be in effect,
and (ii) the denominator is the Purchase Price in effect on the date of such
exercise.
5. REGISTRATION RIGHTS.
5.1. "PIGGYBACK" REGISTRATION. At any time during the period when this
Warrant shall be exercisable, if the Company shall determine to proceed with the
actual preparation and filing of a registration statement under the Securities
Act in connection with the proposed offer and sale of any of its securities by
it or any of its security holders (other than a registration statement on Form
S-4, S-8 or other limited purpose form), the Company will give written notice of
its determination to the Holder. Upon the written request from the Holder within
twenty (20) days after receipt of any such notice from the Company, the Company
will, except as herein provided, cause all shares of Common Stock issuable upon
exercise of this Warrant (the "Registrable Securities") to be included in such
registrations statement, all to the extent requisite to permit the sale or other
disposition of the Securities to be so registered; provided, however, that
nothing herein shall prevent the Company from, at any time, abandoning or
delaying any registration under this Section 5. If the registration pursuant to
this Section 5 shall be underwritten in whole or in part, the Company shall
require that the Registrable Securities requested for inclusion to this Section
5 be included in the underwriting on the same terms and conditions as the
securities otherwise being sold through the underwriters.
Notwithstanding the foregoing, if the managing underwriter determines
and advises in writing that the inclusion of all Registrable Securities proposed
to be included in the underwritten public offering, together with any other
issued and outstanding securities proposed to be included therein by holders of
securities other than the Holder, would interfere with the successful marketing
of such securities, then the number of such Registrable Securities that the
managing underwriter believes may be sold in such underwritten public offering
shall be allocated for inclusion in the registration statement in the following
order of priority: (i) the securities being offered by the Company, and (ii) the
number of Registrable Securities then owned by the Holder and the number of
securities held by holders other than the Holder, on a pro rata basis, based
upon the number of Registrable Securities sought to be registered by the Holder
and the other holders. The Registrable Securities that are excluded from the
underwritten public offering shall be withheld from the market by the Holder for
a period that the managing underwriter determines as necessary in order to
effect the underwritten public offering, but in no even shall such period exceed
180 days. To the extent that Securities requested for inclusion pursuant to this
Section 5 are excluded from a registration statement pursuant to this provision,
the Company shall file a new registration statement covering such excluded
Registrable Securities and shall use its best efforts to cause such registration
statement to become effective upon the expiration of the period not to exceed
180 days, that the excluded Registrable Securities are to be withheld from the
market pursuant to this paragraph.
5.2. REGISTRATION PROCEDURES. If and whenever the Company is required
by the provisions of Section 5 to effect the registration of Registrable
Securities under the Securities Act, the Company will:
(a) prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement with respect to such securities, and use
its best efforts to cause such registration statement to become, and with
respect to Section 5, remain effective for such period as may be reasonably
necessary to effect the sale of such securities, not to exceed nine months (the
"Effective Period");
(b) prepare and file with the Commission such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective for the Effective
Period as may be reasonably necessary to effect the sale of such securities;
(c) furnish to the Holder participating in such registration and to the
underwriters of the securities being registered, such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as the Holder and such underwriters may reasonably
request in order to facilitate the public offering of such securities;
(d) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under such state securities or
blue sky laws of such jurisdictions as the Holder may reasonably request in
writing within twenty (20) days following the original filing of such
registration statement, except that the Company shall not for any purpose be
required to execute a general consent to service of process or to qualify to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified;
(e) notify the Holder participating in such registration, promptly
after it shall receive notice thereof, of the time when such registration
statement has become effective or a supplement to any prospectus forming a part
of such registration statement has been filed;
(f) notify the Holder promptly of any request by the Commission for the
amending or supplementing of such registration statement or prospectus or for
additional information;
(g) prepare and file with the Commission, promptly upon the request of
the Holder, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for the Holder (and concurred in by
counsel for the Company), is required under the Securities Act or the rules and
regulations thereunder in connection with the distribution of Securities by the
Holder;
(h) prepare and promptly file with the Commission and promptly notify
the Holder of the filing of such amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at any time when a prospectus relating to such securities is
required to be delivered under the Securities Act, any event shall have occurred
as the result of which any such prospectus or any other prospectus as then in
effect would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading; and
(i) advise the Holder, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued.
5.3. EXPENSES.
(a) With respect to an inclusion of Securities in a registration
statement pursuant to Section 5 hereof, all fees, costs and expenses of and
incidental to such registration, inclusion and public offering (as specified in
paragraph (b) below) in connection therewith shall be borne by the Company;
provided, however, that the Holder shall bear his pro rata share of the
underwriting discount and commissions and transfer taxes, and such Holder shall
be responsible for the payment of such Holder's legal fees.
(b) The fees, costs and expenses of registration to be borne by the
Company as provided in Section 5.3(a) above shall include, without limitation,
all registration, filing, and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, and all legal fees and
disbursements and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be
registered and qualified (except as provided in Section 5(a) above). Fees and
disbursements of counsel and accountants for the selling Holder not expressly
included above shall be borne by such Holder.
5.4. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless Holder if he is
included in a registration statement pursuant to the provisions of Section 5
hereof, and any underwriter (as defined in the Securities Act) for such Holder
and each person, if any, who controls such Holder or such underwriter within the
meaning of the Securities Act, from and against and will reimburse the Holder
and each such underwriter and controlling person with respect to, any and all
loss, damage, liability, cost and expense to which such Holder or any such
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, damages, liabilities, costs or expenses are
caused by any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, damage, liability, cost and expenses arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by such Holder, such underwriter
or such controlling person in writing specifically for use in the preparation
thereof.
(b) Such Holder of Securities included in a registration pursuant to
the provisions of Section 5 hereof will indemnify and hold harmless the Company,
its directors and officers, any controlling person and any underwriter thereof
from and against, and will reimburse the Company, its directors and officers,
any controlling person and any underwriter thereof with respect to, any and all
loss, damage, liability, cost or expense to which the Company or any controlling
person and/or any underwriter thereof may become subject under the Securities
Act or otherwise, insofar as such losses, damages, liabilities, costs and
expenses are caused by any untrue statement or alleged untrue statement of any
material fact contained in such registration statement, any prospectus contained
therein or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
conformity with written information furnished by or on behalf of such Holder
specifically for use in the preparation thereof.
(c) Promptly after receipt by an indemnified party pursuant to the
provisions of paragraph (a) or (b) of this Section 5.4, of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said paragraph
(a) or (b), promptly notify the indemnifying party of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than
hereunder. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or in addition to
those available to the indemnifying party, or if there is a conflict of interest
which would prevent counsel for the indemnifying party from also representing
the indemnified party, the indemnified party or parties shall have the right to
select separate counsel to participate in the defense of such action on behalf
of such indemnified party or parties. After notice from the indemnifying party
to an indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of said paragraph (a) or (b) for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless (i) the indemnified
party shall have employed counsel in accordance with the provisions of the
preceding sentence, (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after the notice of the commencement of the
action or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party.
6. NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the holders of its Common Stock
(or other securities at the time receivable upon the exercise of the Warrant)
for the purpose of entitling them to receive any dividend (other than a cash
dividend payable out of earned surplus) or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities, or to receive any other right; or
(b) of any capital reorganization of the Company (other than a stock
split or reverse stock split), any reclassification of the capital stock of the
Company, any consolidation or merger of the Company with or into another
corporation (other than a merger for purposes of change of domicile) or any
conveyance of all or substantially all of the assets of the Company to another
corporation; or
(c) of any voluntary or involuntary dissolution, liquidation or
winding-up of the Company; then, and in each such case, the Company shall mail
or cause to be mailed to the Investor at the time outstanding a notice
specifying, as the case may be, (i) the date on which a record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, or (ii) the date on which
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up is to take place, and the time, if any,
is to be fixed, as to which the holders of record of Common Stock (or such other
securities at the time receivable upon the exercise of the Warrant) shall be
entitled to exchange their shares of Common Stock (or such other securities) for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up. Such notice shall be mailed at least twenty (20) days prior to the
date therein specified and this Warrant may be exercised prior to said date
during the term of the Warrant no later than five days prior to said date.
7. NO IMPAIRMENT. The Company will not, by amendment of its Certificate
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the holder of this Warrant. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock
receivable on the exercise of the Warrant above the amount payable therefor on
such exercise, and (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of this Warrant from time to
time outstanding.
8. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of the Warrant, all shares of Common Stock from time to time
issuable on the exercise of the Warrant.
9. EXCHANGE OF WARRANT. On surrender for exchange of this Warrant,
properly endorsed, to the Company, the Company at its expense will issue and
deliver to or on the order of the holder thereof a new Warrant or Warrants of
like tenor, in the name of such holder or as such holder (on payment by such
holder of any applicable transfer taxes) may direct, calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock for which the
Warrant or Warrants may still be exercised.
10. REPLACEMENT OF WARRANT. On receipt of evidence reasonably
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 of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.
11. WARRANT AGENT. The Company may, by written notice to each holder of
a Warrant, appoint an agent for the purpose of issuing the Common Stock on the
exercise of the Warrant pursuant to Section 1, exchanging this Warrant pursuant
to Section 9, and replacing this Warrant pursuant to Section 10, or any of the
foregoing, and thereafter any such issuance, exchange or replacement, as the
case may be, shall be made at such office by such agent.
12. NEGOTIABILITY; RESTRICTIONS ON TRANSFER; WARRANT HOLDER NOT DEEMED
STOCKHOLDER. This Warrant is issued upon the following terms, to all of which
each holder or owner hereof by the taking hereof consents and agrees:
(a) No holder of this Warrant shall, as such, be entitled to vote or to
receive dividends or to be deemed the holder of any class of security that may
at any time be issuable upon exercise of the Warrant for any purpose whatsoever,
nor shall anything contained herein be construed to confer upon such holder, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issue or reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger or conveyance or
otherwise), or to receive notice of meetings, or to receive dividends or
subscription rights, until such holder shall have exercised the Warrant and been
issued shares of Common Stock in accordance with the provisions hereof; and
(b) Neither this Warrant nor any shares of Common Stock purchased
pursuant to this Warrant have been registered under the Securities Act of 1933.
Therefore, the Company may require, as a condition of allowing the transfer or
exchange of this Warrant or such shares, that the holder or transferee of this
Warrant or such shares, as the case may be, furnish to the Company an opinion of
counsel reasonably acceptable to the Company to the effect that such transfer or
exchange may be made without registration under the Securities Act of 1933. The
certificates evidencing the Common Stock issued on the exercise of the Warrant
shall bear a legend to the effect that the certificates have not been registered
under the Securities Act of 1933.
13. FURTHER ASSURANCES. The Company undertakes generally to execute all
such agreements and other instruments and to do all such other acts as are
necessary or appropriate (including, but not limited to, authorizing and issuing
additional shares of stock of the Company) to give full effect to the terms,
conditions and provisions of this Warrant and make it binding on the Company.
14. NOTICES. All notices and other communications between the Company
and the holder of this Warrant shall be mailed by first class mail, postage
prepaid, at such addresses listed above, or as may have been subsequently
furnished to the other party in writing.
15. MISCELLANEOUS. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of New York. The headings in this Warrant are
for purposes of reference only, and shall not limit or otherwise affect any of
the terms hereof. This Warrant is being executed as an instrument under seal.
The invalidity or unenforceability of any provision thereof shall in no way
affect the validity or enforceability of any other provision.
16. EXPIRATION. The right to exercise this Warrant shall expire at 5:00
P.M., New York time, December 31, 1998.
Dated: January 1, 1996 ACRODYNE COMMUNICATIONS, INC.
By:_________________________
Name: A. Robert Mancuso
Title: Chairman and
President
(Corporate Seal)
<PAGE>
FORM OF SUBSCRIPTION
(TO BE SIGNED ONLY ON EXERCISE OF WARRANT)
TO ACRODYNE COMMUNICATIONS, INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder, _____ shares of
Common Stock of ACRODYNE COMMUNICATIONS, INC. and herewith makes payment of
$________ therefor, and requests that the certificates for such shares be issued
in the name of, and delivered to ____________, whose address is
_____________________.
Dated:
_____________________________
(Signature must conform to
name of holder as specified
on the face of the Warrant)
_____________________________
(Address)
<PAGE>
FORM OF ASSIGNMENT
(TO BE SIGNED ONLY ON TRANSFER OF WARRANT)
For value received, the undersigned hereby sells, assigns, and
transfers unto _________ the right represented by the within Warrant to purchase
______ shares of Common Stock of ACRODYNE COMMUNICATIONS, INC. to which the
within Warrant relates, and appoints ____________ Attorney to transfer ACRODYNE
COMMUNICATIONS, INC. such right on the books of ACRODYNE COMMUNICATIONS, INC.
with full power of substitution in the premises.
Dated:
_____________________________
(Signature must conform to
name of holder as specified
on the face of the Warrant)
_____________________________
(Address)
Signed in the presence of:
__________________________
<PAGE>
Exhibit 4.3
THE WARRANT REPRESENTED HEREBY AND THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, ASSIGNED OR
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OF 1933 OR APPLICABLE STATE SECURITIES LAWS, UNLESS THE COMPANY HAS RECEIVED THE
WRITTEN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH COUNSEL IS OF
THE OPINION THAT SUCH SALE, ASSIGNMENT OR TRANSFER DOES NOT INVOLVE A
TRANSACTION REQUIRING THE REGISTRATION OF SUCH SECURITY UNDER THE SECURITIES ACT
OF 1933 OR APPLICABLE STATE SECURITIES LAWS.
RIGHT TO PURCHASE 225,000 SHARES OF COMMON STOCK
OF ACRODYNE COMMUNICATIONS, INC.
ACRODYNE COMMUNICATIONS, INC.
COMMON STOCK PURCHASE WARRANT
ACRODYNE COMMUNICATIONS, INC., a Delaware corporation (the "Company")
having its principal executive offices at 516 Township Line Road, Blue Bell,
Pennsylvania 19422, hereby certifies that, for value received, Colin Winthrop &
Co., Inc., having an address at 100 Jericho Quadrangle, Suite 337, Jericho, New
York 11753, or assigns (the "Holder" or "Holders"), is entitled, subject to the
terms set forth below, to purchase from the Company at any time or from time to
time before 5:00 P.M., New York time, on March 31, 1999, Two Hundred Twenty Five
Thousand (225,000) fully paid and nonassessable shares of Common Stock of the
Company at an exercise price, subject to adjustment, of Five Dollars ($5.00) per
share (the "Purchase Price").
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Company" shall include Acrodyne Communications,
Inc. and any corporation which shall succeed or assume the obligations
of the Company hereunder.
(b) The term "Common Stock" includes (a) the Company's Common
Stock, $.01 par value per share, as authorized on the date hereof, (b)
any other capital stock of any class or classes (however designated) of
the Company, authorized on or after such date, the holders of which
shall have the right, without limitation as to amount, either to all or
to a share of the balance of current dividends and liquidating
dividends after the payment of dividends and distributions on any
shares entitled to preference, and (c) any other securities into which
or for which any of the securities described in (a) or (b) may be
converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
1. EXERCISE OF WARRANT.
1.1. EXERCISE. Commencing on the date of this Warrant, or from time to
time thereafter prior to the expiration hereof, this Warrant may be exercised in
whole or in part by the holder hereof by surrender of this Warrant, with the
form of subscription at the end hereof duly executed to such holder, to the
Company at its principal office, accompanied by payment, in cash or by certified
or official bank check payable to the order of the Company, in the amount
obtained by multiplying the number of shares of Common Stock for which this
Warrant is then exercisable by the Purchase Price then in effect.
1.2. TRUSTEE FOR WARRANT HOLDERS. In the event that a bank or trust
company shall have been appointed as trustee for the holder of this Warrant
pursuant to Section 3.2, such bank or trust company shall have all the powers
and duties of a warrant agent appointed pursuant to Section 11 and shall accept,
in its own name for the account of the Company or such successor person as may
be entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
10 days thereafter, the Company at its expense (including the payment by it of
any applicable issue taxes) will cause to be issued in the name of and delivered
to the holder hereof, or as such holder (upon payment by the Company of any
applicable transfer taxes) may direct, a certificate or certificates for the
number of fully paid and nonassessable shares of Common Stock to which such
holder shall be entitled on such exercise.
3. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION OR MERGER.
3.1. REORGANIZATION, CONSOLIDATION OR MERGER. In case at any time or
from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, the holder of this Warrant, on the exercise hereof as provided in Section
1 at any time after the consummation of such reorganization, consolidation or
merger or the effective date of such dissolution, as the case may be, shall
receive, in lieu of the Common Stock issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and property
(including cash) to which such holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be, if such
holder had so exercised this Warrant, immediately prior thereto, all subject to
further adjustment thereafter as provided in Section 4.
3.2. DISSOLUTION. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the stock and other securities and property (including cash, where
applicable) receivable by the holder of the Warrant after the effective date of
such dissolution pursuant to this Section 3 to a bank or trust company, as
trustee for the holder of the Warrant and shall promptly notify each holder of
the Warrants of the occurrence of any events specified in this Section 3.
3.3. CONTINUATION OF TERMS. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to all securities and other property receivable
on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any such
stock or other securities, including, in the case of any such transfer, the
person acquiring all or substantially all of the properties or assets of the
Company, whether or not such person shall have expressly assumed the terms of
this Warrant.
4. ADJUSTMENTS FOR STOCK DIVIDENDS AND STOCK SPLITS. In the event that
the Company shall (i) issue additional shares of the Common Stock as a dividend
or other distribution on outstanding Common Stock, (ii) subdivide its
outstanding shares of Common Stock, or (iii) combine its outstanding shares of
the Common stock into a smaller number of shares of the Common Stock, then, in
each such event, the Purchase Price shall, simultaneously with the happening of
such event, be adjusted by multiplying the then prevailing Purchase Price by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such event and the denominator of which shall
be the number of shares of Common Stock outstanding immediately after such
event, and the product so obtained shall hereafter be the Purchase Price then in
effect. The Purchase Price, as so adjusted, shall be readjusted in the same
manner upon the happening of any successive event or events described herein in
this Section 4. The holder of this Warrant shall thereafter, on the exercise
hereof as provided in Section 1, be entitled to receive that number of shares of
Common Stock determined by multiplying the number of shares of Common Stock
which would otherwise (but for the provisions of this Section 4) be issuable on
such exercise, by a fraction of which (i) the numerator is the Purchase Price
which would otherwise (but for the provisions of this Section 4) be in effect,
and (ii) the denominator is the Purchase Price in effect on the date of such
exercise.
5. REGISTRATION RIGHTS.
5.1. "PIGGYBACK" REGISTRATION. At any time during the period when this
Warrant shall be exercisable, if the Company shall determine to proceed with the
actual preparation and filing of a registration statement under the Securities
Act in connection with the proposed offer and sale of any of its securities by
it or any of its security holders (other than a registration statement on Form
S-4, S-8 or other limited purpose form), the Company will give written notice of
its determination to the Holder. Upon the written request from the Holder within
twenty (20) days after receipt of any such notice from the Company, the Company
will, except as herein provided, cause all shares of Common Stock issuable upon
exercise of this Warrant (the "Registrable Securities") to be included in such
registrations statement, all to the extent requisite to permit the sale or other
disposition of the Securities to be so registered; provided, however, that
nothing herein shall prevent the Company from, at any time, abandoning or
delaying any registration under this Section 5. If the registration pursuant to
this Section 5 shall be underwritten in whole or in part, the Company shall
require that the Registrable Securities requested for inclusion to this Section
5 be included in the underwriting on the same terms and conditions as the
securities otherwise being sold through the underwriters.
Notwithstanding the foregoing, if the managing underwriter determines
and advises in writing that the inclusion of all Registrable Securities proposed
to be included in the underwritten public offering, together with any other
issued and outstanding securities proposed to be included therein by holders of
securities other than the Holder, would interfere with the successful marketing
of such securities, then the number of such Registrable Securities that the
managing underwriter believes may be sold in such underwritten public offering
shall be allocated for inclusion in the registration statement in the following
order of priority: (i) the securities being offered by the Company, and (ii) the
number of Registrable Securities then owned by the Holder and the number of
securities held by holders other than the Holder, on a pro rata basis, based
upon the number of Registrable Securities sought to be registered by the Holder
and the other holders. The Registrable Securities that are excluded from the
underwritten public offering shall be withheld from the market by the Holder for
a period that the managing underwriter determines as necessary in order to
effect the underwritten public offering, but in no even shall such period exceed
180 days. To the extent that Securities requested for inclusion pursuant to this
Section 5 are excluded from a registration statement pursuant to this provision,
the Company shall file a new registration statement covering such excluded
Registrable Securities and shall use its best efforts to cause such registration
statement to become effective upon the expiration of the period not to exceed
180 days, that the excluded Registrable Securities are to be withheld from the
market pursuant to this paragraph.
5.2. REGISTRATION PROCEDURES. If and whenever the Company is required
by the provisions of Section 5 to effect the registration of Registrable
Securities under the Securities Act, the Company will:
(a) prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement with respect to such securities, and use
its best efforts to cause such registration statement to become, and with
respect to Section 5, remain effective for such period as may be reasonably
necessary to effect the sale of such securities, not to exceed nine months (the
"Effective Period");
(b) prepare and file with the Commission such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective for the Effective
Period as may be reasonably necessary to effect the sale of such securities;
(c) furnish to the Holder participating in such registration and to the
underwriters of the securities being registered, such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as the Holder and such underwriters may reasonably
request in order to facilitate the public offering of such securities;
(d) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under such state securities or
blue sky laws of such jurisdictions as the Holder may reasonably request in
writing within twenty (20) days following the original filing of such
registration statement, except that the Company shall not for any purpose be
required to execute a general consent to service of process or to qualify to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified;
(e) notify the Holder participating in such registration, promptly
after it shall receive notice thereof, of the time when such registration
statement has become effective or a supplement to any prospectus forming a part
of such registration statement has been filed;
(f) notify the Holder promptly of any request by the Commission for the
amending or supplementing of such registration statement or prospectus or for
additional information;
(g) prepare and file with the Commission, promptly upon the request of
the Holder, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for the Holder (and concurred in by
counsel for the Company), is required under the Securities Act or the rules and
regulations thereunder in connection with the distribution of Securities by the
Holder;
(h) prepare and promptly file with the Commission and promptly notify
the Holder of the filing of such amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at any time when a prospectus relating to such securities is
required to be delivered under the Securities Act, any event shall have occurred
as the result of which any such prospectus or any other prospectus as then in
effect would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading; and
(i) advise the Holder, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued.
5.3. EXPENSES.
(a) With respect to an inclusion of Securities in a registration
statement pursuant to Section 5 hereof, all fees, costs and expenses of and
incidental to such registration, inclusion and public offering (as specified in
paragraph (b) below) in connection therewith shall be borne by the Company;
provided, however, that the Holder shall bear his pro rata share of the
underwriting discount and commissions and transfer taxes, and such Holder shall
be responsible for the payment of such Holder's legal fees.
(b) The fees, costs and expenses of registration to be borne by the
Company as provided in Section 5.3(a) above shall include, without limitation,
all registration, filing, and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, and all legal fees and
disbursements and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be
registered and qualified (except as provided in Section 5(a) above). Fees and
disbursements of counsel and accountants for the selling Holder not expressly
included above shall be borne by such Holder.
5.4. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless Holder if he is
included in a registration statement pursuant to the provisions of Section 5
hereof, and any underwriter (as defined in the Securities Act) for such Holder
and each person, if any, who controls such Holder or such underwriter within the
meaning of the Securities Act, from and against and will reimburse the Holder
and each such underwriter and controlling person with respect to, any and all
loss, damage, liability, cost and expense to which such Holder or any such
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, damages, liabilities, costs or expenses are
caused by any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, damage, liability, cost and expenses arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by such Holder, such underwriter
or such controlling person in writing specifically for use in the preparation
thereof.
(b) Such Holder of Securities included in a registration pursuant to
the provisions of Section 5 hereof will indemnify and hold harmless the Company,
its directors and officers, any controlling person and any underwriter thereof
from and against, and will reimburse the Company, its directors and officers,
any controlling person and any underwriter thereof with respect to, any and all
loss, damage, liability, cost or expense to which the Company or any controlling
person and/or any underwriter thereof may become subject under the Securities
Act or otherwise, insofar as such losses, damages, liabilities, costs and
expenses are caused by any untrue statement or alleged untrue statement of any
material fact contained in such registration statement, any prospectus contained
therein or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
conformity with written information furnished by or on behalf of such Holder
specifically for use in the preparation thereof.
(c) Promptly after receipt by an indemnified party pursuant to the
provisions of paragraph (a) or (b) of this Section 5.4, of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said paragraph
(a) or (b), promptly notify the indemnifying party of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than
hereunder. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or in addition to
those available to the indemnifying party, or if there is a conflict of interest
which would prevent counsel for the indemnifying party from also representing
the indemnified party, the indemnified party or parties shall have the right to
select separate counsel to participate in the defense of such action on behalf
of such indemnified party or parties. After notice from the indemnifying party
to an indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of said paragraph (a) or (b) for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless (i) the indemnified
party shall have employed counsel in accordance with the provisions of the
preceding sentence, (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after the notice of the commencement of the
action or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party.
6. NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the holders of its Common Stock
(or other securities at the time receivable upon the exercise of the Warrant)
for the purpose of entitling them to receive any dividend (other than a cash
dividend payable out of earned surplus) or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities, or to receive any other right; or
(b) of any capital reorganization of the Company (other than a stock
split or reverse stock split), any reclassification of the capital stock of the
Company, any consolidation or merger of the Company with or into another
corporation (other than a merger for purposes of change of domicile) or any
conveyance of all or substantially all of the assets of the Company to another
corporation; or
(c) of any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then, and in each such case, the Company shall mail or cause to be mailed to the
Investor at the time outstanding a notice specifying, as the case may be, (i)
the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is to take place, and the time, if any, is to be fixed, as to which
the holders of record of Common Stock (or such other securities at the time
receivable upon the exercise of the Warrant) shall be entitled to exchange their
shares of Common Stock (or such other securities) for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up. Such notice shall be
mailed at least twenty (20) days prior to the date therein specified and this
Warrant may be exercised prior to said date during the term of the Warrant no
later than five days prior to said date.
7. NO IMPAIRMENT. The Company will not, by amendment of its Certificate
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the holder of this Warrant. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock
receivable on the exercise of the Warrant above the amount payable therefor on
such exercise, and (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of this Warrant from time to
time outstanding.
8. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of the Warrant, all shares of Common Stock from time to time
issuable on the exercise of the Warrant.
9. EXCHANGE OF WARRANT. On surrender for exchange of this Warrant,
properly endorsed, to the Company, the Company at its expense will issue and
deliver to or on the order of the holder thereof a new Warrant or Warrants of
like tenor, in the name of such holder or as such holder (on payment by such
holder of any applicable transfer taxes) may direct, calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock for which the
Warrant or Warrants may still be exercised.
10. REPLACEMENT OF WARRANT. On receipt of evidence reasonably
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 of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.
11. WARRANT AGENT. The Company may, by written notice to each holder of
a Warrant, appoint an agent for the purpose of issuing the Common Stock on the
exercise of the Warrant pursuant to Section 1, exchanging this Warrant pursuant
to Section 9, and replacing this Warrant pursuant to Section 10, or any of the
foregoing, and thereafter any such issuance, exchange or replacement, as the
case may be, shall be made at such office by such agent.
12. NEGOTIABILITY; RESTRICTIONS ON TRANSFER; WARRANT HOLDER NOT DEEMED
STOCKHOLDER. This Warrant is issued upon the following terms, to all of which
each holder or owner hereof by the taking hereof consents and agrees:
(a) No holder of this Warrant shall, as such, be entitled to vote or to
receive dividends or to be deemed the holder of any class of security that may
at any time be issuable upon exercise of the Warrant for any purpose whatsoever,
nor shall anything contained herein be construed to confer upon such holder, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issue or reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger or conveyance or
otherwise), or to receive notice of meetings, or to receive dividends or
subscription rights, until such holder shall have exercised the Warrant and been
issued shares of Common Stock in accordance with the provisions hereof; and
(b) Neither this Warrant nor any shares of Common Stock purchased
pursuant to this Warrant have been registered under the Securities Act of 1933.
Therefore, the Company may require, as a condition of allowing the transfer or
exchange of this Warrant or such shares, that the holder or transferee of this
Warrant or such shares, as the case may be, furnish to the Company an opinion of
counsel reasonably acceptable to the Company to the effect that such transfer or
exchange may be made without registration under the Securities Act of 1933. The
certificates evidencing the Common Stock issued on the exercise of the Warrant
shall bear a legend to the effect that the certificates have not been registered
under the Securities Act of 1933.
13. FURTHER ASSURANCES. The Company undertakes generally to execute all
such agreements and other instruments and to do all such other acts as are
necessary or appropriate (including, but not limited to, authorizing and issuing
additional shares of stock of the Company) to give full effect to the terms,
conditions and provisions of this Warrant and make it binding on the Company.
14. NOTICES. All notices and other communications between the Company
and the holder of this Warrant shall be mailed by first class mail, postage
prepaid, at such addresses listed above, or as may have been subsequently
furnished to the other party in writing.
15. MISCELLANEOUS. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of New York. The headings in this Warrant are
for purposes of reference only, and shall not limit or otherwise affect any of
the terms hereof. This Warrant is being executed as an instrument under seal.
The invalidity or unenforceability of any provision thereof shall in no way
affect the validity or enforceability of any other provision.
16. EXPIRATION. The right to exercise this Warrant shall expire at 5:00
P.M., New York time, March 31, 1999.
Dated: April 1, 1996 ACRODYNE COMMUNICATIONS, INC.
By:____________________________
Name: A. Robert Mancuso
Title: Chairman and
President
(Corporate Seal)
<PAGE>
FORM OF SUBSCRIPTION
(TO BE SIGNED ONLY ON EXERCISE OF WARRANT)
TO ACRODYNE COMMUNICATIONS, INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder, _____ shares of
Common Stock of ACRODYNE COMMUNICATIONS, INC. and herewith makes payment of
$________ therefor, and requests that the certificates for such shares be issued
in the name of, and delivered to ____________, whose address is
_____________________.
Dated:
______________________________
(Signature must conform to
name of holder as specified
on the face of the Warrant)
______________________________
(Address)
<PAGE>
FORM OF ASSIGNMENT
(TO BE SIGNED ONLY ON TRANSFER OF WARRANT)
For value received, the undersigned hereby sells, assigns, and
transfers unto _________ the right represented by the within Warrant to purchase
______ shares of Common Stock of ACRODYNE COMMUNICATIONS, INC. to which the
within Warrant relates, and appoints ____________ Attorney to transfer ACRODYNE
COMMUNICATIONS, INC. such right on the books of ACRODYNE COMMUNICATIONS, INC.
with full power of substitution in the premises.
Dated:
_____________________________
(Signature must conform to
name of holder as specified
on the face of the Warrant)
_____________________________
(Address)
Signed in the presence of:
____________________________
<PAGE>
Exhibit 5
June 25, 1996
Acrodyne Communications, Inc.
516 Township Line Road
Blue Bell, PA 19422
Ladies and Gentlemen:
We have acted as counsel to Acrodyne Communications, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act"), of a Registration Statement on Form S-3
(the "Registration Statement"), relating to the registration of (i) up to
262,500 shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), which shares may be issued to certain holders (the "Preferred
Stockholders") of the Company's 8% Convertible Redeemable Preferred Stock, par
value $1.00 per share (the "8% Preferred Stock"), upon the conversion of up to
an aggregate of 10,500 shares of 8% Preferred Stock held by the Preferred
Stockholders at a conversion price, subject to certain adjustments, of $4.00 per
share of Common Stock; (ii) up to 100,000 shares of Common Stock which may be
issued to Colin Winthrop & Co., Inc. ("Colin Winthrop") or its designees upon
the exercise of warrants exercisable, subject to certain adjustments, at $4.00
per warrant; and (iii) up to 225,000 shares of Common Stock which may be issued
to Colin Winthrop or its designees upon the exercise of warrants exercisable,
subject to certain adjustments, at $5.00 per warrant (such warrants,
collectively with the warrants referred to in clause (ii) above, being referred
to as the "Warrants" and such shares, collectively with the shares referred to
in clauses (i) and (ii) above, being referred to as the "Shares").
As such counsel, we have examined copies of (i) the Certificate of Incorporation
and Bylaws of the Company, each as in effect as of the date hereof, (ii) the
Registration Statement and the exhibits thereto and (iii) the Prospectus which
forms a part of the Registration Statement. We have also examined originals or
copies, certified or otherwise identified to our satisfaction, of such corporate
records of the Company, and such documents, records, agreements, instruments,
certificates of officers and representatives of the Company and others and have
made such examinations of law as we have deemed necessary to form the basis for
the opinion hereinafter expressed. In our examinations, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity to original documents of all copies submitted to
us as copies thereof. As to various questions of fact material to such opinion,
we have relied upon statements and certificates of officers and representatives
of the Company and others.
Attorneys involved in the preparation of this opinion are admitted to practice
law in the State of New York and we do not purport to be experts on, or to
express any opinion herein concerning, any law other than the laws of the State
of New York, the federal laws of the United States of America and the General
Corporation Law of the State of Delaware.
Based upon and subject to the foregoing, we are of the opinion that the Shares
to be issued upon conversion of the 8% Preferred Stock or exercise of the
Warrants will, when so issued (assuming payment of the exercise price of the
Warrants), be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to this firm under the caption
"Legal Matters" in the Prospectus. In giving such consent, we do not admit
hereby that we come within the category of persons whose consent is required
under Section 7 of the Act or the Rules and Regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
/s/ STROOCK & STROOCK & LAVAN
STROOCK & STROOCK & LAVAN
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
March 14, 1996 appearing on page 27 of Acrodyne Communications Inc.'s (formerly
Acrodyne Holdings, Inc.) Annual Report on Form 10-KSB for the year ended
December 31, 1995. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Philadelphia, Pennsylvania
June 25, 1996
