AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 16, 1998
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 Identification Number)
Organization)
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.
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.
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Title of Each Class of Amount to Proposed Proposed
Securities to be Registered be Maximum Maximum Amount of
Registered Aggregate Aggregate Registration
Price Offering Fee
Per Unit Price
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 50,400(1) $3.00 $151,200 $44.60
per share..........................................
- -------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 84,600(2) $3.00 $253,800 $74.87
per share..........................................
- -------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 165,000(3) $3.00 $495,000 $146.03
per share..........................................
- -------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 200,000(4) $3.00 $600,000 $177.00
per share..........................................
- -------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01
per share.......................................... 134,400(5) $2.50 $336,000 $99.12
- -------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01
per share.......................................... 225,600(6) $2.50 $564,000 $166.38
- -------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01
per share.......................................... 440,000(7) $2.50 $1,100,000 $324.50
- -------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01
per share.......................................... 40,000(8) $4.50 $180,000 $53.10
- -------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01
per share.......................................... 20,000(9) $4.50 $90,000 $26.55
- -------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01
per share.......................................... 20,000(10) $4.50 $90,000 $26.55
- -------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01
per share.......................................... 20,000(11) $4.50 $90,000 $26.55
- -------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01
per share.......................................... 40,000(12) $4.50 $180,000 $53.10
- -------------------------------------------------------------------------------------------------------------------------------
Total 1,440,000 -- $4,130,000 $1,218.35
- -------------------------------------------------------------------------------------------------------------------------------
(1) Issuable upon exercise of warrants issued by the Registrant to Newlight
Associates L.P. which, subject to certain adjustments, are each
exercisable at $3.00 to purchase one share of Common Stock.
(2) Issuable upon exercise of warrants issued by the Registrant to
Newlight Associates (B.V.I.) L.P. which, subject to certain
adjustments, are each exercisable at $3.00 to purchase one share of
Common Stock.
(3) Issuable upon exercise of warrants issued by the Registrant to
Scorpion-Acrodyne Investors LLC which, subject to certain adjustments,
are each exercisable at $3.00 to purchase one share of Common Stock.
(4) Issuable upon exercise of warrants issued by the Registrant to S-A
Partners which, subject to certain adjustments, are each exercisable at
$3.00 to purchase one share of Common Stock.
(5) Issued by the Registrant to Newlight Associates L.P. at $2.50 per
share of Common Stock.
(6) Issued by the Registrant to Newlight Associates (B.V.I.) L.P at $2.50
per share of Common Stock.
(7) Issued by the Registrant to Scorpion-Acrodyne Investors LLC at $2.50
per share of Common Stock.
(8) Issuable upon exercise of warrants issued by the Registrant to Colin
Winthrop & Co., Inc., which, subject to certain adjustments, are each
exercisable at $4.50 to purchase one share of Common Stock.
(9) Issuable upon exercise of warrants issued by the Registrant to Eleven
Congers Inc., which, subject to certain adjustments, are each
exercisable at $4.50 to purchase one share of Common Stock.
(10) Issuable upon exercise of warrants issued by the Registrant to TWL
Associates, Inc., which, subject to certain adjustments, are each
exercisable at $4.50 to purchase one share of Common Stock.
(11) Issuable upon exercise of warrants issued by the Registrant to Richard
Serbin, which, subject to certain adjustments, are each exercisable at
$4.50 to purchase one share of Common Stock.
(12) Issuable upon exercise of warrants issued by the Registrant to Allen
Ginesin, which, subject to certain adjustments, are each exercisable at
$4.50 to purchase one share of Common Stock.
(continued on following page)
</TABLE>
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>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
(continued on following page)
<PAGE>
Subject to Completion, Dated April 16, 1998
PRELIMINARY PROSPECTUS
ACRODYNE COMMUNICATIONS, INC.
800,000 shares of Common Stock issued by the Company
and 640,000 shares of Common Stock to be issued by
the Company upon exercise of outstanding warrants
This Prospectus relates to 1,440,000 shares (the "Shares") of common stock,
par value $.01 per share (the "Common Stock") of Acrodyne Communications Inc., a
Delaware corporation (the "Company") which may be offered from time to time by
certain shareholders of the Company (the "Selling Shareholders") directly or
through one or more broker-dealers, in one or more transactions on the Nasdaq
National Market ("Nasdaq"), otherwise in the over-the-counter market in
negotiated transactions or otherwise, or through a combination of such methods,
at fixed prices, which may be changed, at market prices prevailing at the time
of sale, at prices related to such prevailing market prices or at negotiated
prices. See "Selling Shareholders." The Company will not receive any of the
proceeds from the sale of the Shares offered hereby. The Shares consist of the
following: (i) 800,000 shares of Common Stock previously issued in private
placements by the Company, at a purchase price of $2.50 per share, of which (A)
134,400 shares are held by Newlight Associates L.P. ("Newlight"), (B) 225,600
are held by Newlight Associates (B.V.I.) L.P. ("Newlight BVI") and (C) 440,000
are held by Scorpion-Acrodyne Investors LLC ("Scorpion-Acrodyne"); (ii) 50,400
shares of Common Stock which may be issued by the Company to Newlight upon the
exercise of warrants exercisable, subject to certain adjustments, at an exercise
price of $3.00 per warrant share (the "Newlight Warrants"); (iii) 84,600 shares
of Common Stock which may be issued by the Company to Newlight BVI upon the
exercise of warrants exercisable, subject to certain adjustments, at an exercise
price of $3.00 per warrant share (the "Newlight BVI Warrants"); (iv) 165,000
shares of Common Stock which may be issued by the Company to Scorpion-Acrodyne
upon the exercise of warrants exercisable, subject to certain adjustments, at an
exercise price of $3.00 per warrant share (the "Scorpion-Acrodyne Warrants");
(v) 200,000 shares of Common Stock which may be issued by the Company to S-A
Partners ("S-A") upon the exercise of warrants exercisable, subject to certain
adjustments, at an exercise price of $3.00 per warrant share (the "S-A
Warrants"); (vi) 40,000 shares of Common Stock which may be issued by the
Company to Colin Winthrop & Co. Inc. ("Colin Winthrop") upon the exercise of
warrants exercisable, subject to certain adjustments, at an exercise price of
$4.50 per warrant share (the "Winthrop Warrants"); (vii) 20,000 shares of Common
Stock which may be issued by the Company to Eleven Congers Inc. ("ECI") upon the
exercise of warrants exercisable, subject to certain adjustments, at an exercise
price of $4.50 per warrant share (the "ECI Warrants"); (viii) 20,000 shares of
Common Stock which may be issued by the Company to TWL Associates, Inc. ("TWL")
upon the exercise of warrants exercisable, subject to certain adjustments, at an
exercise price of $4.50 per warrant share (the "TWL Warrants"); (ix) 20,000
shares of Common Stock which may be issued by the Company to Richard Serbin
("Serbin") upon the exercise of warrants exercisable, subject to certain
adjustments, at an exercise price of $4.50 per warrant share (the "Serbin
Warrants"); and (x) 40,000 shares of Common Stock which may be issued by the
Company to Allen Ginesin ("Ginesin") upon the exercise of warrants exercisable,
subject to certain adjustments, at an exercise price of $4.50 per warrant share
(the "Ginesin Warrants" and, collectively with the Newlight Warrants, the
Newlight BVI Warrants, the Scorpion-Acrodyne Warrants, the S-A Warrants, the
Winthrop Warrants, the ECI Warrants, the TWL Warrants and the Serbin Warrants,
the "Warrants"). See "Selling Shareholders" and "Plan of Distribution."
The Company's Common Stock is quoted on the NASDAQ Small Cap
over-the-counter market ("NASDAQ") under the symbols "ACRO." On April 14, 1998,
the closing sales price, as reported by NASDAQ, of the Common Stock was $4.50.
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 3.
----------------------------
(continued on following page)
<PAGE>
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 ______________, 1998
<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 material
may be electronically examined at the Commission's Web site on the Internet
located at http://www.sec.gov.
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/A for the year ended December 31, 1997; and (b) the Proxy
Statement for the Company's 1997 Annual Meeting of Stockholders held on June 9,
1997.
All documents 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, Chairman
(telephone: (215) 542-7000).
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 consolidated balance sheets as of December 31, 1996 and
December 31, 1997 reflect working capital of $8,236,112 and $7,241,365,
respectively, and accumulated deficits of $2,648,923 and $5,625,984,
respectively. In addition, the Company's consolidated statement of operations
for the year ended December 31, 1996 reflect a net loss of $1,221,410
($1,703,634 applicable to the holders of Common Stock) and for the year ended
December 31, 1997 a net loss of $2,912,974 ($2,977,061 applicable to the holders
of Common Stock). The Company has been experiencing a negative cash flow from
operations and is dependent upon the receipt of new customer orders on a timely
basis or the proceeds from the exercise of Warrants or additional financing for
the continuation of its business. There can be no assurance that the Company
will receive new customer orders on a timely basis 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
Currently, the Company has a $1,500,000 credit facility with a bank secured
by $1,500,000 of cash or cash equivalents. In addition, the Company is required
to maintain a balance of $500,000 in cash or cash equivalents to secure a
$500,000 irrevocable standby letter of credit to partially secure the Company's
senior indebtedness. As of April 14, 1998, the Company has no outstanding
balance against the credit facility. The credit facility is secured by the
assignment of a certificate of deposit in the amount of $1,500,000.
The terms and conditions of the credit facility require that the Company
must maintain a cash balance equal to the outstanding balance of the credit
facility. There can be no assurance that the Company will be able to achieve or
maintain the prescribed cash balances or satisfy the other covenants of the
credit facility. 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 collateral maintained by the Company as security for the
facility. In addition to such credit facility, the Company has debt obligations
in the outstanding principal amount of $540,000 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 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 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.
For over 25 years, 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. 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 year ended December 31, 1997, international sales accounted for
approximately 30% of the Company's net sales. The Company's business is subject
to risks associated with its dependence on foreign customers, including, without
limitation, 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% of the Company's annual
revenues in 1996 and approximately 17% in 1997. The Company has no contract with
such customer (other than customary sales orders). The Company believes that the
loss of such customer would not have a material adverse effect on the business
of the Company. 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-CSF, Nippon
Electric Corporation (Japan) 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 approximately three and one-half
year's experience directing a company in the Company's industry, Ronald R.
Lanchoney, who has been employed by the Company as its Chief Financial Officer
since March 1998, 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 27 and 12 years, respectively. The loss of the
services of any of Mr. Mancuso, Mr. Lanchoney, Mr. Traynor or Dr. Hulick would
likely have a material adverse effect on the Company. 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.
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. having an address at 147 West Merrick Road, Freeport, New York 11520.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby. However, if any of the Warrants are exercised, the
Company will receive payment for the exercise price of such warrants. The
aggregate net proceeds to the Company upon the exercise of all of the Warrants
would be approximately $2,130,000. There can be no assurance that any or all of
the Warrants will be exercised. Any net proceeds received by the Company upon
the exercise of any Warrants will be used for working capital and other general
corporate purposes. Pending use of such net proceeds, the Company intends to
invest such proceeds in short-term, interest-bearing obligations.
<PAGE>
SELLING SHAREHOLDERS
This Prospectus relates to the offer and sale of up to 1,440,000 shares of
Common Stock by certain shareholders of the Company. 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
Number of shares Number of total shares
which may be shares outstanding
Selling Number of offered owned if all owned after
Shareholder Shares Owned pursuant to shares completion of
This Prospectus are sold this offering
<S> <C> <C> <C> <C>
Newlight Associates L.P. 184,800* 184,800* 0 0%
Newlight Associates 310,200* 310,200* 0 0%
(B.V.I.) L.P.
Scorpion-Acrodyne 605,000* 605,000* 0 0%
Investors LLC
S-A Partners 200,000* 200,000* 0 0%
Colin Winthrop & Co., Inc.** 161,250*++ 40,000* 121,250 2.23%
Eleven Congers Inc. 20,000* 20,000* 0 0%
TWL Associates, Inc.** 20,000* 20,000* 0 0%
Richard Serbin 20,000* 20,000* 0 0%
Allen Ginesin** 176,250*## 40,000* 136,250 2.68%
* Assumes exercise for Common Stock of all Warrants held by such Selling
Shareholder. See "Plan of Distribution."
++ Includes 161,250 shares of Common Stock issuable to Colin Winthrop upon
exercise of warrants exercisable within 60 days after the date of this
Prospectus.
## Includes 176,250 shares of Common Stock issuable to Ginesin upon exercise
of warrants exercisable within 60 days after the date of this Prospectus.
** Colin Winthrop & Co., Inc. is a market-maker in the Company's Common
Stock. Each of TWL Associates, Inc. and Allen Ginesin is a registered
broker that is associated with Colin Winthrop & Co., Inc.
</TABLE>
Robert F. Raucci has been a Director of the Company since January 1998. Mr.
Raucci is also a managing member of the general partner of Newlight Associates
L.P. and of the general partner of Newlight Associates (B.V.I.) L.P. Newlight
Associates L.P. and Newlight Associates (B.V.I.) L.P. are Selling Shareholders.
Mr. Raucci is also a managing member of Newlight Management LLC, which is a
partner in S-A Partners, a Selling Shareholder.
As of October 24, 1997, the Company entered into a Financial Consulting
Agreement with Scorpion Holdings, Inc. ("Scorpion"). Scorpion is retained to
provide financial management and strategic planning, to arrange private and
public financing and to review and analyze potential acquisition
candidates. An annual consulting fee of $120,000 is paid in 12 monthly
installments of $10,000. The agreement may be terminated by either party at any
time with 60 days prior notice. The shareholders and senior management of
Scorpion hold equity interests in Scorpion-Acrodyne Investors LLC, a Selling
Shareholder, although their interests do not, in the aggregate, represent a
controlling interest in such entity. In addition, the shareholders and senior
management of Scorpion are individual partners of S-A Partners, a Selling
Shareholder, although collectively they hold less than a majority of the
partnership interests in S-A Partners and accordingly they do not have control
over such entity.
PLAN OF DISTRIBUTION
The sale or distribution of all or any portion of the Shares may be
effected from time to time by the Selling Shareholders in one or more
transactions, directly by such Selling Shareholders, or through agents, dealers,
brokers or underwriters to be designated from time to time. Such sales or
distributions may be effected on NASDAQ, 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 Shares offered hereunder by Newlight Associates, Newlight BVI,
Scorpion-Acrodyne and S-A (collectively, the "Scorpion Holders") are hereby
being registered pursuant to the terms and conditions of the subscription
agreement (the "Subscription Agreement"), dated as of November 3, 1997, by and
among the Company and Newlight Associates, Newlight BVI and Scorpion-Acrodyne
and of certain warrants issued as of November 6, 1997, pursuant to the
Subscription Agreement, to the Scorpion Holders. Pursuant to the terms and
conditions of such warrants, the Company will issue up to an aggregate of 50,400
shares of Common Stock upon the exercise of the Newlight Warrants; up to 84,600
shares of Common Stock upon exercise of the Newlight BVI Warrants; up to 165,000
shares of Common Stock upon exercise of the Scorpion-Acrodyne Warrants; and up
to 200,000 shares of Common Stock upon exercise of the S-A Warrants. The terms
and conditions of the Subscription Agreement and such warrants include, among
other things, that (i) the warrants are exercisable at an exercise price,
subject to certain adjustments, of $3.00 per share of Common Stock to be
purchased pursuant to such warrants; (ii) the warrants expire at 5:00 p.m., New
York time, on November 7, 2002; (iii) the Scorpion Holders are entitled to
registration of the Shares offered by them hereby on a registration statement on
Form S-3 filed by the Company; (iv) the Company is required to use its best
efforts to cause such registration statement to become effective promptly after
filing thereof; and (v) the Company is obligated to indemnify the Scorpion
Holders against certain liabilities in connection with the filing, including
liabilities which may arise under the Securities Act.
The Shares offered hereunder by Colin Winthrop, ECI, TWL, Serbin and
Ginesin (collectively, the "Colin Winthrop Holders") are hereby being registered
pursuant to the terms and conditions of certain warrants issued as of November
19, 1996 to each Colin Winthrop Holder. Pursuant to the terms and conditions of
such warrants, the Company will issue up to an aggregate of 40,000 shares of
Common Stock upon exercise of the Winthrop Warrants; up to 20,000 shares of
Common Stock upon exercise of the ECI Warrants; up to 20,000 shares of Common
Stock upon exercise of the TWL Warrants; up to 20,000 shares of Common Stock
upon exercise of the Serbin Warrants; and up to 40,000 shares of Common Stock
upon exercise of the Ginesin Warrants. The terms and conditions of such warrants
include, among other things, that (i) the warrants are exercisable at an
exercise price, subject to certain adjustments, of $4.50 per share of Common
Stock to be purchased pursuant to such warrants; (ii) the warrants expire at
5:00 p.m., New York time, on November 19, 1999; (iii) the Colin Winthrop Holders
are entitled to certain piggy-back registration rights, with respect to the
shares of Common Stock underlying the warrants, on certain registration
statements filed by the Company with the Commission; and (iv) the Company is
obligated to pay substantially all of the expenses and in certain circumstances
to indemnify the holder of such warrants against certain liabilities in
connection with the filing, including liabilities which may arise under the
Securities Act.
In order to comply with the securities laws of certain states, if
applicable, the Shares 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 LLP, New York, New York, special counsel to
the Company.
<PAGE>
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THE PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE SOLICITORS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT
RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON
IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL.
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.............................3
DOCUMENTS INCORPORATED BY REFERENCE...............3
RISK FACTORS......................................4
THE COMPANY.......................................7
USE OF PROCEEDS...................................7
SELLING SHAREHOLDERS..............................8
PLAN OF DISTRIBUTION..............................9
LEGAL MATTERS....................................10
1,440,000 SHARES
ACRODYNE
COMMUNICATIONS, INC.
COMMON STOCK
---------------
PROSPECTUS
---------------
_______________, 1998
<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.
Accounting Fees and Expenses...........................................$ 4,000
Legal Fees and Expenses.................................................15,000
Miscellaneous.......................................................... 1,000
Total..................................................................$20,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law 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 the person 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), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person 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 the
person's 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 the person 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
the person in connection with the defense or settlement of such action or suit
if the person acted in good faith and in a manner the person 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 present or former director or officer has been
successful on the merits or otherwise indefense of any action, suit or
proceeding referred to in the preceding two paragraphs, Section 145 requires
that such person be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith. Such
expenses of others may be paid upon such terms and conditions, if any, as the
corporation deems appropriate.
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 such person 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
to Exhibit 4.1 filed with the Company's Registration
Statement on Form SB-2 (File No. 33-82910)).
4.2 Form of $3.00 Common Stock Purchase Warrants issued,
as of November 6, 1997, to each of Newlight
Associates L.P., Newlight Associates (B.V.I.) L.P.,
Scorpion-Acrodyne Investors LLC and S-A Partners.
4.3 Form of $4.50 Common Stock Purchase Warrants issued,
as of November 19, 1996, to each of Colin Winthrop &
Co., Inc., Eleven Congers Inc., TWL Associates, Inc.,
Richard Serbin and Allen Ginesin.
4.4 Form of Subscription Agreement, dated as of November
3, 1997, by and among the Company and Newlight
Associates L.P., Newlight Associates (B.V.I.) L.P. and
Scorpion-Acrodyne Investors LLC (Incorporated by reference to
Exhibit 10.19 filed with the Company's Annual Report of Form
10- KSB/A for its fiscal year ended December 31, 1997 (File
No. 0-24886)).
5.1 Opinion of Stroock & Stroock & Lavan LLP as to the
legality of the shares issued and issuable upon
exercise of the Warrants.
23.1 Consent of Price Waterhouse LLP, accountants for the
Company.
23.2 Consent of Stroock & Stroock & Lavan LLP, special counsel to
the Company (included in Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
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
material 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 1933 (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
against 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.
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 April 15,
1998.
ACRODYNE COMMUNICATIONS, INC.
By: /S/ A. ROBERT MANCUSO
A. Robert Mancuso
Chairman of the Board
and President
<PAGE>
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.
SIGNATURE TITLE DATE
--------- ----- ----
/S/ A. ROBERT MANCUSO Chairman of the Board April 15, 1998
- --------------------- of Directors, President
A. ROBERT MANCUSO and Director (Principal
Executive Officer
/S/ MARTIN J. HERMANN Secretary and Director April 15, 1998
- -----------------------
MARTIN J. HERMANN
/S/ DR. ELMER LIPSEY Director April 15, 1998
- ------------------------
DR. ELMER LIPSEY
/S/ DANIEL D. TRAYNOR General Manager, Vice April 15, 1998
- -------------- President and Director
DANIEL D. TRAYNOR
/S/ RONALD R. LANCHONEY Chief Financial Officer April 15, 1998
- -----------------------
RONALD R. LANCHONEY
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 _________ 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
___________________ 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 November 7, 2002,
____________________________ (_______) fully paid and nonassessable shares of
Common Stock of the Company at an exercise price, subject to adjustment, of
Three Dollars ($3.00) 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 by 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. 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 Holder 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.
6. 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 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.
7. 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.
8. 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.
9. 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.
10. 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 8, and replacing this Warrant pursuant to Section 9, 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.
11. 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.
12. 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.
13. 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.
14. 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.
15. EXPIRATION. The right to exercise this Warrant shall expire at
5:00 P.M., New York time, November 7, 2002.
<PAGE>
Dated: November 6, 1997 ACRODYNE COMMUNICATIONS, INC.
By: /s/ A. Robert Mancuso
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:
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 _______ 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, [name of warrant
holder], having an address at ______________, or assigns (the "Holder" or
"Holders"), 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
August 19, 1999, [number of shares] fully paid and nonassessable shares of
Common Stock of the Company at an exercise price, subject to adjustment, of four
dollars and fifty cents ($4.50) 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
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 by 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 of the 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 thereafter 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 registration 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 shall be
underwritten in whole or in part, the Company shall require that the Registrable
Securities requested for inclusion pursuant to this Section 5 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 event 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 jurisdiction 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 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 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 or expense 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 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
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 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 parities 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 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 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, August 19, 1999.
Dated: August 20, 1996 ACRODYNE COMMUNICATIONS INC.
By: /S/ A. ROBERT MANCUSO
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:
- ---------------------------
EXHIBIT 5.1
April 16, 1998
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 1,440,000 shares
(the "Shares") of the Company's common stock, par value $.01 per share (the
"Common Stock") which may be offered from time to time by certain shareholders
(the "Selling Shareholders") of the Company. The Shares consist of the
following: (i) 800,000 shares of Common Stock previously issued in private
placements by the Company, at a purchase price of $2.50 per share, of which (A)
134,400 shares are held by Newlight Associates L.P. ("Newlight"), (B) 225,600
are held by Newlight Associates (B.V.I.) L.P. ("Newlight BVI") and (C) 440,000
are held by Scorpion-Acrodyne Investors LLC ("Scorpion-Acrodyne"); (ii) 50,400
shares of Common Stock which may be issued by the Company to Newlight upon the
exercise of warrants exercisable, subject to certain adjustments, at an exercise
price of $3.00 per warrant share (the "Newlight Warrants"); (iii) 84,600 shares
of Common Stock which may be issued by the Company to Newlight BVI upon the
exercise of warrants exercisable, subject to certain adjustments, at an exercise
price of $3.00 per warrant share (the "Newlight BVI Warrants"); (iv) 165,000
shares of Common Stock which may be issued by the Company to Scorpion-Acrodyne
upon the exercise of warrants exercisable, subject to certain adjustments, at an
exercise price of $3.00 per warrant share (the "Scorpion-Acrodyne Warrants");
(v) 200,000 shares of Common Stock which may be issued by the Company to S-A
Partners ("S-A") upon the exercise of warrants exercisable, subject to certain
adjustments, at an exercise price of $3.00 per warrant share (the "S-A
Warrants"); (vi) 40,000 shares of Common Stock which may be issued by the
Company to Colin Winthrop & Co. Inc. upon the exercise of warrants exercisable,
subject to certain adjustments, at an exercise price of $4.50 per warrant share
(the "Winthrop Warrants"); (vii) 20,000 shares of Common Stock which may be
issued by the Company to Eleven Congers Inc. upon the exercise of warrants
exercisable, subject to certain adjustments, at an exercise price of $4.50 per
warrant share (the "ECI Warrants"); (viii) 20,000 shares of Common Stock which
may be issued by the Company to TWL Associates, Inc. upon the exercise of
warrants exercisable, subject to certain adjustments, at an exercise price of
$4.50 per warrant share (the "TWL Warrants"); (ix) 20,000 shares of Common Stock
which may be issued by the Company to Richard Serbin upon the exercise of
warrants exercisable, subject to certain adjustments, at an exercise price of
$4.50 per warrant share (the "Serbin Warrants"); and (x) 40,000 shares of Common
Stock which may be issued by the Company to Allen Ginesin upon the exercise of
warrants exercisable, subject to certain adjustments, at an exercise price of
$4.50 per warrant share (the "Ginesin Warrants") and, collectively with the
Newlight Warrants, the Newlight BVI Warrants, the Scorpion-Acrodyne Warrants,
the S-A Warrants, the Winthrop Warrants, the ECI Warrants, the TWL Warrants and
the Serbin Warrants, (the "Warrants").
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 Preliminary
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 (i) the
Shares issued prior to the date hereof have been validly issued and are fully
paid and non-assessable and (ii) the Shares to be issued upon exercise of the
Warrants (assuming payment of the exercise price of the Warrants) when issued
will 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,
STROOCK & STROOCK & LAVAN LLP
EXHIBIT 23.1
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement of Form S-3 of our report dated
March 18, 1998, which appears on page 32 of the Annual Report on Form 10-KSB/A
of Acrodyne Communications, Inc., for the year ended December 31, 1997.
PRICE WATERHOUSE LLP
Philadelphia, PA
April 9, 1998
