SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Sections 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report (Date of earliest event reported) May 14, 1997
AYDIN CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-7203 23-1686808
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
700 Dresher Road, Horsham, PA 19044
(Address of principal executive offices) (Zip Code)
(215) 657-7510
(Registrant's telephone number, including area code)
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Item 5. OTHER EVENTS
As of May 14, 1997, EA Industries, Inc. ("EA"), beneficial
owner of 596,927 shares of Registrant's Common Stock (the
"Shares"), sold an aggregate of 500,000 Shares in connection with
an option agreement (the EA Option ) wherein EA had granted to
I. Gary Bard (Chairman, President and Chief Executive Officer of
the Registrant) and his assigns, the right to purchase the
596,927 Shares for an exercise price of $10.75 per Share. All
500,000 Shares were purchased by assignees of Mr. Bard.
Therefore, an aggregate of 96,927 Shares remain exercisable under
the EA Option. The EA Option may be exercised for the remaining
Shares at an exercise price of $10.75 per Share (i) by Mr. Bard
or his assigns at any time on or before June 14, 1997 or
(ii) thereafter, until on or before October 1, 1997, by those
assignees who have purchased the initial 500,000 Shares and/or
any remaining Shares pro rata in accordance with the respective
percentage of the number of Shares purchased by such assignee.
Pursuant to a letter agreement dated as of May 6, 1997, as
amended, between Registrant and EA, upon the consummation of the
sale of the initial 500,000 Shares, Irwin L. Gross, Chairman of
EA, resigned as a director of Registrant, and Registrant issued a
warrant (the Warrant) to EA for the purchase of 167,524 shares
(the Warrant Shares) of Registrant's Common Stock, exercisable
for three years, of which 83,762 Warrant Shares are exercisable
at a price of $12.10 per Warrant Share and 83,762 Warrant Shares
are exercisable at $13.20 per Warrant Share. If the remaining
96,927 Shares are sold pursuant to the EA Option, EA will be
issued an additional warrant for the purchase of an aggregate of
32,476 shares, of which 16,238 shares would be exercisable at
$12.10 per share and 16,238 shares would be exercisable at $13.20
per share. Registrant and EA have also entered into a
registration rights agreement relating to the Warrant Shares. In
addition, EA has agreed to serve as a consultant to Registrant
during the three-year term of the Warrant for the purpose of
providing such assistance to Registrant in soliciting customers
internationally and exploring strategic joint ventures as EA and
Registrant mutually deem appropriate in their reasonable
discretion.
Item 7. FINANCIAL STATEMENTS, PRO FORMA
FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
4.1 Warrant, dated May 14, 1997, issued to EA
Industries, Inc. for the purchase of up to
167,524 shares of Registrant's Common Stock.
4.2 Registration Rights Agreement, dated May 14,
1997, between Registrant and EA Industries,
Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
AYDIN CORPORATION
Dated: May 23, 1997 By: /s/ Robert A. Clancy
Robert A. Clancy
Secretary
<PAGE>
Exhibit 4.1
THE SECURITIES ISSUABLE UPON EXERCISE HEREOF (THE
"SECURITIES") WILL BE ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY OTHER
SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
HYPOTHECATED UNTIL SUCH SHARES HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND OTHER APPLICABLE SECURITIES LAWS,
OR IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
WARRANT
For the Purchase of up to
167,524 Shares of Common Stock, 1.00 Par Value,
of
Aydin Corporation
1. Issuance and Exercise of Warrant.
1.1. Issuance of Warrant. For value received, EA
Industries, Inc., a New Jersey corporation, or registered
assigns, (the "Warrant Holder"), is entitled to purchase from
Aydin Corporation, (the "Company"), a Delaware corporation, up
to 167,524 shares (the "Shares") of Common Stock, par value
$1.00 per share, of the Company, upon surrender of this
Warrant to the Company and upon payment of the Exercise Price
(as hereinafter defined), subject to the terms and conditions
set forth herein.
1.2. Exercise of Warrant; Expiration.
(a) Exercisability. This Warrant is exercisable in
whole or in part commencing on and after its date of issuance
and shall expire at 5:00 p.m., Philadelphia Time on May 14,
2000 (the "Expiration Date"); provided, however, that the
initial exercise of this Warrant shall be for the purchase of
at least 100,000 Shares, as such amount may be adjusted from
time to time pursuant to the provisions of Section 2 hereof.
(b) Exercise Price. The price for which the Shares
may be purchased upon the exercise of this warrant shall be as
follows: (i) 83,762 of the Shares shall be exercisable for
$12.10 per Share and (ii) 83,762 of the Shares shall be
exercisable for $13.20 per Share (each such price being
hereinafter referred to as the "Exercise Price").
2. Adjustments; Anti-Dilution Provisions.
2.1. Stock Split, Subdivision or Combination. If the
Company, at any time while this Warrant is outstanding, shall
split, subdivide or combine its Common Stock (by
reclassification or otherwise than by payment of a dividend in
the respective class),
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an appropriate and equitable adjustment shall be made as of the
effective date of such action in the number of Shares as to which
this Warrant, or portion thereof then unexercised, shall be
exercisable and in the Exercise Price of such Shares in order to
reflect such stock split, subdivision or combination.
2.2. Asset or Capital Dividend. If the Company, at any
time while this Warrant is outstanding, shall make a
distribution of its assets to the holders of its Common Stock
and/or any class of stock convertible into or exchangeable for
its Common Stock as a dividend in liquidation or partial
liquidation or as a return of capital other than as a dividend
payable out of funds legally available for dividends under the
laws of the Commonwealth of Pennsylvania, the Warrant Holder
shall, upon exercise and payment of the Exercise Price for
each Share purchased hereunder within 14 business days after
notification of such distribution pursuant to Section 12
below, be entitled to receive, in addition to the number of
shares receivable thereupon, and without payment of any
additional consideration thereof, a sum equal to the amount of
such assets as would have been payable to such Warrant Holder
had such Warrant Holder been the holder of record of such
shares on the record date for such distribution; and an
appropriate provision therefor shall be made for the Warrant
Holder to be made a party to any such distribution.
2.3. Adjustments for Consolidation, Merger, Sale of
Assets, Reorganization or Reclassification. In the event the
Company, at any time or from time to time while this Warrant
is outstanding, (a) shall consolidate with or merge into any
other entity and shall not be the continuing or surviving
corporation of such consolidation or merger, or (b) shall
permit any other entity to consolidate with or merge into the
Company and the Company shall be the continuing or surviving
entity but, in connection with such consolidation or merger,
the Common Stock shall be changed into or exchanged for
capital stock or other securities or property of any other
equity, or (c) shall transfer all or substantially all of its
properties and assets to any other entity, or (d) shall effect
a capital reorganization or reclassification of the Common
Stock (other than one deemed to result in the issue of
additional shares of such class), then, and in each such
event, lawful provision shall be made so that the Warrant
Holder shall be entitled to receive upon the exercise hereof
at anytime after the consummation of such consolidation,
merger, transfer, reorganization or reclassification, in lieu
of the Shares issuable upon exercise of this Warrant prior to
such consummation, the capital stock and other securities and
property to which the Warrant Holder would have been entitled
upon such consummation if the Warrant Holder had exercised
this Warrant immediately prior thereto.
2.4. Certificate of Adjustment. The Company shall
promptly furnish or cause to be furnished to the Warrant
Holder a certificate setting forth each adjustment made
pursuant to this Section 2.
<PAGE>
3. No Fractional Shares. No fractional Shares shall be
issued in connection with any exercise hereof, and if the
total number of Shares that remains unexercisable would result
in a fraction, such number of Shares shall be rounded to the
nearest whole Share.
4. No Shareholder Rights. This Warrant shall not
entitle the Warrant Holder to any of the rights of a
stockholder of the Company.
5. Reservation of Shares. The Company covenants that
the Shares issuable upon the exercise of this Warrant have
been duly authorized and reserved and, when issued and paid
for, will be validly issued, fully paid and non-assessable.
The issuance of this Warrant shall constitute full authority
to those officers of the Company who are charged with the duty
of executing stock certificates to execute and issue the
necessary certificates for Shares upon the exercise of this
Warrant.
6. Exercise of Warrant.
6.1. Manner of Exercise. To exercise this Warrant,
in whole or in part, the Warrant Holder shall deliver to the
Company, at its address specified in Section 12 below: (a) a
written notice in the form of Annex A hereto of such Warrant
Holder's election to exercise this Warrant, specifying the
number of Shares to be purchased and whether the purchase is
pursuant to clause (i) or clause (ii) of Section 1.2(b),(b) a
wire transfer or a certified or official bank check or checks
payable to the order of the Company in an amount equal to the
product of the applicable Exercise Price per Share and the
number of Shares to be purchased at such time pursuant to the
Warrant and such notice, and (c) the original copy of this
Warrant. Upon receipt of such items, the Company shall, as
promptly as practicable, and in any event within 20 days
thereafter, issue or cause to be issued and delivered to such
Warrant Holder a certificate or, if requested by the Warrant
Holder, multiple certificates representing the aggregate
number of full Shares issuable upon such exercise. This
Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have been
issued, and such Warrant Holder or any other person so
designated to be named therein shall be deemed to have become
a holder of record of such shares for all purposes, as of the
date that said notice, together with said cash or check or
checks and this Warrant, are received by the Company as
aforesaid. If this Warrant shall have been exercised in part,
the Company shall, at the time of delivery of said certificate
or certificates, deliver to such Warrant Holder a new Warrant
evidencing the rights of such Warrant Holder to purchase the
unpurchased Shares, which new Warrant shall in all other
respects be identical to this Warrant.
6.2. Payment of Taxes and Expenses. All Shares
issuable upon the exercise of this Warrant shall be validly
issued, fully paid and non-assessable, and the Company shall
pay all expenses in connection with, and all taxes and other
governmental charges that
<PAGE>
may be imposed in respect of, the issue or delivery thereof,
other than any federal, state or local income tax or other tax
based upon gross or net income, owned by the Warrant Holder on
account of such issuance or delivery. The Company shall not be
required, however, to pay any tax or other charge imposed in
connection with any ransfer involved in the issue of any
certificate for shares in any name other than that of the
registered Warrant Holder, and in such case the Company shall not
be required to issue or deliver any stock certificate until such
tax or other charge has been paid or it has been established to
the Company's reasonable satisfaction that no such tax or other
charge is due.
7. Registration Rights. The Shares issued upon exercise
of this Warrant shall be subject to the Registration Rights
Agreement dated as of May 14, 1997 between the Company and the
Warrant Holder.
8. Agreement to Vote Shares. For as long as the Warrant
Holder and/or any of its affiliates remain the beneficial
owner of the Shares issued upon exercise of the Warrant, at
any meeting of stockholders of the Company at which directors
of the Company are to be elected, the Warrant Holder and each
such affiliate agree to vote any and all such Shares for the
election to the Board of those persons nominated by the
Company's Board of Directors. The Warrant Holder further
agrees that the Shares may not be transferred in a privately
negotiated transaction that has not been registered under the
Securities Act of 1933, unless the transferee shall have
agreed to be bound by the terms of this Section 8. The
Warrant Holder agrees to the placement of a restrictive legend
on the certificate(s) representing the Shares relating to this
restriction.
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, upon surrender and cancellation of
such Warrant, the Company, at the expense of the Warrant
Holder, will execute and deliver, in lieu thereof, a new
Warrant.
10. Transfer of Warrant. This Warrant may be
transferred by the Warrant Holder subject to compliance with
applicable federal and state securities laws; provided,
however, that any transferee of this Warrant shall have agreed
in writing to assume and be bound by the obligations of the
Warrant Holder and/or its affiliates under the terms and
provisions of Section 8 of this Warrant.
11. Miscellaneous. This Warrant shall be governed by
the internal law, but not the law of conflicts, of the State
of Delaware. The headings in this Warrant are for purposes of
convenience and reference only and shall not be deemed to
constitute a part hereof. Neither this Warrant nor any term
hereof may be
<PAGE>
changed, waived, discharged or terminated orally except by an
instrument in writing signed by the Company and the registered
Warrant Holder. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or
enforceability of any other provision.
12 Notice Generally. Any notice, demand or delivery
pursuant to the provisions hereof shall be sufficiently given
or made if sent by registered or certified mail, postage
prepaid, or overnight delivery service, addressed to the
Warrant Holder at such Warrant Holder's last known address
appearing on the books of the Company, or, except as herein
otherwise expressly provided, to the Company at Aydin
Corporation, 700 Dresher Road, P.O. Box 349, Horsham, PA
19044, Attention: President, or such other address as shall
have been furnished to the party giving or making such
notice, demand or delivery.
ISSUED AS OF THIS 14th day of May, 1997.
AYDIN CORPORATION
Attest:
_/s/ Robert A. Clancy____ By:__/s/ I. Gary Bard____
Secretary I. Gary Bard, President
<PAGE>
ANNEX A
NOTICE OF EXERCISE
(To be Executed by
the Registered Warrant Holder
in Order to Exercise the Warrant)
The undersigned hereby irrevocably elects to exercise the
right to purchase from Aydin Corporation _________(_______)
Shares covered by the Warrant dated ________, 1997 and issued
to EA Industries, Inc., according to the conditions thereof.
Check one:
___ Such exercise is being made pursuant to clause (i)
of Section 1.2(b), and the undersigned herewith
makes payment of the Exercise Price of such Shares
in full. Such payment is hereby tendered in the
form of $ by wire transfer or by
certified or bank check.
___ Such exercise is made pursuant to clause (ii) of
Section 1.2(b), and the undersigned herewith makes
payment of the Exercise Price of such Shares in
full. Such payment is hereby tendered in the form
of $ by wire transfer or by certified or
bank check.
The undersigned understands that the Shares being issued
hereunder have not been registered under the Securities Act of
1933 (the "Act") or any state securities laws and that such
Shares may not be sold, transferred, or assigned except:
(i) pursuant to an effective registration thereof under the
Act; or (ii) if in the opinion of counsel for the registered
owner thereof, which opinion is reasonably satisfactory to the
Company, the proposed sale, transfer or assignment may be
effected without such registration under the Act and will not
be in violation of applicable state securities laws.
Printed Name
of Registered
Dated: _______ Warrant Holder:________________________
Signature: ________________________
Address: ________________________
<PAGE>
Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
_____________________________
REGISTRATION RIGHTS AGREEMENT (this "Agreement") made as
of May 14, 1997 between Aydin Corporation, a Delaware
corporation (the "Corporation") and EA Industries, Inc., a New
Jersey corporation (the "Warrant Holder").
RECITALS:
_________
WHEREAS, the Warrant Holder holds a warrant to purchase
from the Corporation 167,524 shares (the "Warrant Shares") of
Common Stock, $1.00 par value, of the Corporation; and
WHEREAS, the Warrant Holder has requested certain
registration rights to facilitate its disposition of the
Warrant Shares in a registered public offering and the
Corporation has agreed to grant the Warrant Holder certain
registration rights as set forth in this Agreement in order to
facilitate the orderly distribution of the Warrant Shares;
NOW, THEREFORE, in consideration of the premises and
covenants set forth herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Definitions. As used in this Agreement:
"Commission" shall mean the Securities and Exchange
Commission, or any other federal agency at the time
administering the Securities Act.
"Common Stock" shall mean the Corporation's $1.00
par value Common Stock.
"Person" shall mean and include an individual, a
corporation, a partnership, a trust, an unincorporated
organization and a government or any department, agency or
political subdivision thereof.
"Restricted Common Stock" shall mean shares of
Common Stock constituting Restricted Securities.
"Restricted Securities" shall mean the Warrant
Shares, including any shares of Common Stock or other
securities convertible into or exchangeable for Common Stock
or received as a stock dividend or other distribution in
respect to any of the foregoing, held by the Warrant Holder or
its successors and assigns evidenced by certificates bearing a
restrictive legend prohibiting transfer of such Restricted
Securities unless the transfer of the Restricted Securities
evidenced thereby is registered under the Securities Act or
the transfer complies with an exemption from such registration
(a "Restrictive Legend").
<PAGE>
"Securities Act" shall mean the Securities Act of
1933, as amended, or any similar federal statute, and the
rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
"Transfer" shall include any disposition of any
shares of Restricted Securities or of any interest therein
which would constitute a sale thereof within the meaning of
the Securities Act.
2. Required Registration. If at any time the Corporation
shall be requested in writing by one or more holders of
not less than 100,000 shares of Restricted Common Stock in the
aggregate, to effect the registration under the Securities Act
of not less than an aggregate of 100,000 shares of Restricted
Common Stock, such request shall be deemed an offer (the
"Offer") to sell to the Corporation or its assigns for cash
all of the shares of Restricted Common Stock for which
registration is requested (the "Offered Securities") at a
price equal to the average of the daily "market price" (as
hereinafter defined) per share of the Common Stock for the ten
consecutive trading days immediately preceding the date of
receipt of such request by the Corporation. The "market
price" for each trading day shall be the last reported sale
price regular way of the Common Stock on the Composite Tape of
the New York Stock Exchange on each such trading day upon
which such a sale shall have been effected, or if no sale
takes place on any such day on such exchange, the average of
the closing bid and asked prices on such day as officially
quoted on such exchange. The Offer shall remain open for a
period of ten calendar days immediately following the date of
receipt by the Corporation of the registration request (the
"Offer Period"). To accept the Offer, the Corporation or its
assigns must give written notice (the "Notice of Acceptance")
to the requesting holder prior to the end of the Offer Period
of the Corporation's intention to accept the Offer. The
Corporation shall purchase from the requesting holder(s), and
the requesting holder(s) shall sell to the Corporation, upon
the terms of the Offer, the Offered Securities pursuant to the
Notice of Acceptance within ten business days after the date
that the Notice of Acceptance is received by the requesting
holder(s). If the Corporation does not accept the Offer prior
to the expiration of the Offer Period, the Corporation shall
promptly give written notice of such proposed registration to
all other holders of Restricted Securities, including the
Warrant Holder, and thereupon the Corporation shall promptly
use its best efforts to effect the registration under the
Securities Act of the shares of Restricted Common Stock that
the Corporation has been requested to register by any holder
in any response received by the Corporation within 30 days
after the date of the written notice by the Corporation;
provided, however, that the Corporation shall not be obligated
to effect any registration under the Securities Act except in
accordance with the following provisions:
(a) The Corporation shall not be obligated to file
any registration statement with respect to Restricted Common
Stock if in
<PAGE>
the opinion of counsel satisfactory to the
Corporation and the holder of such securities the proposed
transfer may be effected without registration under the
Securities Act, and any certificate evidencing the shares so
to be transferred need not bear a Restrictive Legend.
(b) The Corporation shall not be obligated to
effect any registration except at the request of the holder or
holders of Restricted Common Stock who shall request
registration of Restricted Common Stock then owned or
obtainable by them representing in the aggregate not less than
100,000 shares of outstanding Restricted Common Stock.
(c) The Corporation shall not be obligated to file
and cause to become effective (i) more than two registration
statements in which shares of Restricted Common Stock are
registered under the Securities Act pursuant to this Section 2,
or (ii) any registration statement within three months after
the effective date of any other registration statement filed
by the Corporation relating to any public offering of
securities of the Corporation for cash for the Corporation's
own account.
3. Incidental Registration. If the Corporation at any
time proposes for any reason to register any of its Common
Stock under the Securities Act in connection with a proposed
offering to the general public, the Corporation shall at such
time promptly give written notice to all holders of Restricted
Common Stock of its intention to do so, and, upon the written
request, received by the Corporation within 30 days after the
date of any such notice, of the holders of any Restricted
Common Stock to register any shares of Restricted Common
Stock, the Corporation shall use its best efforts to cause all
such shares of Restricted Common Stock the holders of which
shall have so requested registration thereof to be registered
under the Securities Act promptly upon receipt of the written
request of such holders for such registration, all to the
extent necessary to permit the sale or other disposition by
the prospective seller or sellers of the shares of Restricted
Common Stock so registered. In the event that the proposed
registration by the Corporation is, in whole or in part, an
underwritten public offering of securities of the Corporation,
any request pursuant to this Section 3 to register shares of
Restricted Common Stock may specify that such shares are to be
included in the underwriting on the same terms and conditions
as the shares of Common Stock, if any, otherwise being sold
through underwriters under such registration; provided,
however, that if the managing underwriter determines and
advises the holders thereof in writing that the inclusion of
all shares of the Restricted Common Stock and other Common
Stock of the Corporation entitled to be included in the
registration ("Other Registrable Stock") originally covered by
a request for registration would interfere with the successful
marketing of such securities, the number of shares of
Restricted Common Stock and Other Registrable Stock that may,
in the sole discretion of the managing underwriter, be included
in the underwritten public offering on behalf of the holders
thereof, if
<PAGE>
any, shall be allocated: first, to the Warrant
Holder, second to the holders of the Restricted Common Stock
in proportion, as nearly as practicable, to the respective
number of shares of Restricted Common Stock which they had
requested to be included in such underwritten public offering
and, thereafter, among the holders of the Other Registrable
Securities in proportion, as nearly as practicable, to the
respective number of shares of Other Registrable Stock which
they had requested to be included in such underwritten public
offering.
4. Preparation and Filing. If and whenever the
Corporation is under an obligation pursuant to the provisions
of this Agreement to use its best efforts to effect the
registration of any shares of Restricted Common Stock, the
Corporation shall, as expeditiously as practicable:
(a) prepare and file with the Commission a
registration statement with respect to such shares (on
Commission Form S-3 to the extent the Corporation is eligible
to use Form S-3) and use its best efforts to cause such
registration statement to become and remain effective;
(b) prepare and file with the Commission such
amendments and supplements to such registration statements and
the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for at
least six months (two years to the extent such registration
statement was prepared and filed on Form S-3) and to comply
with the provisions of the Securities Act with respect to the
sale or other disposition of all shares of Restricted Common
Stock covered by such registration statement;
(c) furnish to each seller such number of copies of
a summary prospectus or other prospectus, including a
preliminary prospectus, in conformity with the requirements of
the Securities Act and such other documents as such seller may
reasonably request in order to facilitate the public sale or
other disposition of such shares of Restricted Common Stock;
(d) use its best efforts to register or qualify the
shares of Restricted Common Stock covered by such registration
statement under the securities or blue sky laws of such
jurisdictions as each such seller shall reasonably request and
do any and all other acts or things that may be necessary or
advisable to enable such seller to consummate the public sale
or other disposition in such jurisdictions of such shares;
(e) notify each seller of shares of Restricted
Common Stock covered by such registration statement, at any
time when a prospectus relating thereto is required to be
delivered under the Securities Act within the appropriate
period mentioned in clause (b) of this Section 4, of the
happening of any event as a result of which the prospectus
included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to
<PAGE>
state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing and, at the request
of any such seller, prepare and furnish to such seller a
reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus
shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing; and
(f) file, on a timely basis, all reports and other
documents required to be filed by it pursuant to the
Securities Exchange Act of 1934.
5. Expenses. The Corporation shall pay all expenses
incurred in complying with Sections 2, 3 and 4 hereof,
including, without limitation, all registration and filing
fees, fees and expenses of complying with securities and blue
sky laws, printing expenses, and fees and disbursements of the
Corporation's counsel; provided, however, that all
underwriting discounts and selling commissions applicable to
the Restricted Common Stock covered by any such registration
shall be borne by the respective sellers thereof, in
proportion to the respective number of shares of Restricted
Common Stock sold by each of them.
6. Holdback Agreements.
(a) The Warrant Holder and each other holder of
Restricted Common Stock agrees not to effect any public sale
or distribution of equity securities of the Corporation, or
any securities convertible into or exchangeable or exercisable
for such securities, during the seven days prior to and during
the 90-day period beginning on the effective date of any
underwritten registration effected by the Corporation (except
as part of such underwritten registration), unless the
managing underwriter otherwise agrees.
(b) The Corporation agrees not to effect any public
sale or distribution of equity securities, or any securities
convertible into or exchangeable or exercisable for such
securities, during the seven days prior to and during the 90-
day period beginning on the effective date of any underwritten
registration pursuant to a registration statement in which any
shares of Restricted Common Stock are included, unless the
managing underwriters otherwise agrees.
7. Cooperation of Holders of Restricted Securities.
Each prospective seller of shares of Restricted Common Stock
registered or to be registered under any registration
hereunder shall furnish to the Corporation such information
and execute such documents regarding the shares held by such
seller and the intended method of disposition thereof as the
Corporation shall reasonably request and as shall be
<PAGE>
required in connection with the registration or qualification
to be made by the Corporation.
8. Indemnification. In the event of any registration
of any shares of Restricted Common Stock under the Securities
Act pursuant to this Agreement or registration or
qualification of any shares of Restricted Common Stock pursuant
to Section 4(d) hereof, the Corporation shall indemnify and hold
harmless the seller of such shares, each underwriter of such
shares, if any, each broker or any other person acting on
behalf of such seller and each other person, if any, who
controls any of the foregoing persons, within the meaning of
the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which any of the foregoing
persons may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a
material fact contained in any registration statement under
which such shares were registered under the Securities Act,
any preliminary prospectus contained therein, or any amendment
or supplement thereto, or any document incident to registration
or qualification of any shares of Restricted Common
Stock pursuant to Section 4(d) hereof, 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 not misleading or, with respect to
any prospectus, necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, or any violation by the Corporation of the
Securities Act or state securities or blue sky laws applicable
to the Corporation and relating to action or inaction required
of the Corporation in connection with such registration or
qualification under such state securities or blue sky laws;
and shall reimburse each person indemnified hereunder for all
legal or other expenses reasonably and as incurred by him or
it in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however,
that the Corporation shall not be liable in any such case to
the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in said
registration statement, said preliminary prospectus or said
prospectus or said amendment or supplement or any document
incident to registration or qualification of any Restricted
Common Stock pursuant to Section 4(d) hereof in reliance upon
and in conformity with written information furnished to the
Corporation through an instrument duly executed by such seller
or underwriter specifically for use in the preparation thereof.
Before shares of Restricted Common Stock held by any
prospective seller shall be included in any registration
pursuant to this Agreement, such prospective seller and any
underwriter acting on its behalf shall have agreed to
indemnify and hold harmless the Corporation, each director of
the Corporation, each officer of the Corporation who shall
sign such registration statement and any person who
<PAGE>
controls the Corporation within the meaning of the Securities
Act with respect to any material statement or omission from such
registration statement, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement
thereto, if such statement or omission was made in reliance
upon and in conformity with written information furnished to
the Corporation through an instrument duly executed by such
seller or underwriter specifically for use in the preparation
of such registration statement, preliminary prospectus, final
prospectus or amendment or supplement.
Promptly after receipt by a person indemnified hereunder
of notice of the commencement of any action involving a claim
referred to in either of the preceding paragraphs of this
Section 8, such indemnified person will, if a claim in respect
thereof is made against any indemnifying person, give written
notice to the latter of the commencement of such action, the
failure of which shall not relieve the indemnifying party of
any liability hereunder unless the failure to give such notice
prejudiced the indemnifying party. In case any such action is
brought against an indemnified person, the indemnifying person
will be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying person similarly
notified to the extent that it may wish, with counsel
reasonably satisfactory to such indemnified person, and after
notice from the indemnifying person to such indemnified person
of its election so to assume the defense thereof, the
indemnifying person shall be responsible for any legal or
other expenses subsequently incurred by the latter in
connection with the defense thereof.
9. Restrictions on Future Agreements to Register
Shares. Without the prior written consent of the holders of
at least 60% of the voting power of the outstanding Restricted
Common Stock, the Corporation agrees not to enter into any
other agreement that grants the holder of any of the
Corporation's securities the right to require the Corporation
to cause such securities to be registered under the Securities
Act.
10. Notices. Any notice provided for in this Agreement
must be in writing and must be mailed by certified mail,
return receipt requested, or sent via overnight delivery
service, to the recipient at the address indicated below:
To the Corporation:
Aydin Corporation
700 Dresher Road
Horsham, PA 19044
Attention: I. Gary Bard, Chairman,
President and Chief Executive Officer
<PAGE>
with a copy to:
Duane, Morris & Heckscher
4200 One Liberty Place
Philadelphia, PA 19103-7396
Attention: Frederick W. Dreher, Esq.
To the Warrant Holder:
EA Industries, Inc.
185 Monmouth Parkway
West Long Branch, NJ 07764
Attention: President
with a copy to:
Mesirov Gelman Jaffe Cramer & Jamieson
1735 Market Street
Philadelphia, PA 19103
Attention: Richard P. Jaffe, Esq.
or to such other address or to the attention of such other
person as the recipient party shall have specified by prior
written notice to the sending party. Any notice under this
Agreement shall be deemed to have been given when received by
the party to whom it is addressed.
11. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule
in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any
other jurisdiction, but this Agreement shall be reformed,
construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained
herein.
12. Counterparts. This Agreement may be executed on
separate counterparts, each of which is deemed to be an
original and all of which taken together shall constitute one
and the same agreement.
13. Successors and Assigns. This Agreement is intended
to bind and inure to the benefit of and be enforceable by each
of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
14. Choice of Law. All questions concerning the
construction, validity and interpretation of this Agreement
shall be governed by the internal law, and not the law of
conflicts, of the State of Delaware.
<PAGE>
15. Supersedes Other Agreements. If this Agreement
shall conflict in any respect with all or any portion of any
other agreement or instrument to which any party hereto is a
party, the provisions of this Agreement shall supersede such
conflicting agreement or instrument or portion thereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
AYDIN CORPORATION
By: /s/ I. Gary Bard
I. Gary Bard,
Chairman, President and
Chief Executive Officer
EA INDUSTRIES, INC.
By: /s/ Howard P. Kamins
