As filed with the Securities and Exchange Commission on April 4, 1997.
Registration No. 333-
======================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________________
AYDIN CORPORATION
__________________________________
(Exact name of registrant as specified in its charter)
Delaware 23-2633708
_______________________________ _____________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
700 Dresher Road, Horsham, Pennsylvania 19044; (215) 657-7510
__________________________________________________________________
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
___________________
I. Gary Bard, Chairman of the Board,
President and Chief Executive Officer
Aydin Corporation
700 Dresher Road
P.O. Box 349
Horsham, PA 19044
(215) 657-7510
__________________________________
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
__________________________________
Copy to:
Robert A. Clancy, Esquire
Secretary and Corporate Counsel
Aydin Corporation
700 Dresher Road
P.O. Box 349
Horsham, PA 19044
__________________________________
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 con-
nection with dividend or interest reinvestment plans, check the
following box. _X_
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for
the same offering. ___
If this form is a post-effective amendment filed pursuant to Rule
462(d) 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. ___
__________________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================
Title of each class Amount to be Proposed Proposed
of securities registered maximum offering maximum aggregate Amount of
to be registered price per share offering price registration fee
__________________________________________________________________________________________
<S> <C> <C> <C> <C>
Common Stock,
$1.00 par value 596,927 shares $11.25 (1) $6,715,428 (1) $2,035
==========================================================================================
<FN>
(1) Pursuant to paragraph (c) of Rule 457, the proposed maximum
offering price per share and the proposed maximum aggregate
offering price have been computed on the basis of $11.25 per
share, the average of the high and low sales prices of the
Common Stock of the Company on the New York Stock Exchange on
March 31, 1997.
</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>
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED APRIL 4, 1997
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 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.
PROSPECTUS
596,927 Shares
AYDIN CORPORATION
Common Stock, $1.00 par value
___________________________
This Prospectus relates to 596,927 shares of Common Stock (the
"Shares"), $1.00 par value, of Aydin Corporation (the "Company")
beneficially owned by EA Industries, Inc. (the "Selling
Stockholder"). The Shares represent approximately 11.5% of the
outstanding shares of Common Stock of the Company. The Shares may
be sold pursuant to the exercise of an option (the "EA Option")
that EA has granted to I. Gary Bard, the Chairman, President and
Chief Executive Officer of the Company, or his assigns, pursuant to
which Mr. Bard or his assigns have the right to purchase all of the
Shares for a purchase price of $11 per Share. The latest date on
which the EA Option may be exercised is June 2, 1997 (the
"Expiration Time"), unless it is extended. The Shares may be
offered and sold pursuant to this Prospectus to Mr. Bard or to
assignees of Mr. Bard, such as institutional or other sophisticated
investors, who agree to purchase the EA Shares at the EA Option
exercise price.
If the Shares are not sold to Mr. Bard or his assigns upon exercise
of the EA Option, prior to the expiration date thereof, the Shares
may thereafter be sold from time to time by the Selling
Stockholder, or by pledgees, donees, transferees or other
successors in interest to the Selling Stockholder, at public or
private sale at prevailing market prices, prices related to
prevailing market prices, negotiated prices or fixed prices (and,
in the case of sales through brokers, upon payment of normal
brokerage commissions).
The Common Stock of the Company is traded on the New York
Stock Exchange under the symbol "AYD." The last reported sale
price of the Common Stock on the New York Stock Exchange on
April 2, 1997 was $11.125 per share.
The Company will not receive any of the proceeds from the sale
of the Shares offered hereunder by the Selling Stockholder.
_____________________________
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.
_____________________________
See "Risk Factors" beginning on page 2 for a discussion of
certain factors that should be considered by prospective purchasers
of the securities offered hereby.
_____________________________
This Prospectus does not constitute an offer to sell
securities in any jurisdiction to any person to whom it is unlawful
to make such offer in such jurisdiction.
No person has been authorized by the Company to give any
information or to make any representations, other than as contained
in this Prospectus, and, if given or made, such information or
representations must not be relied upon.
Neither delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since
the date hereof.
The date of this Prospectus is April , 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and in accordance therewith files reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other informa-
tion can be inspected and copied at the offices of the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, as well as at the following regional offices of the
Commission: Seven World Trade Center, Suite 1300, New York, New
York 10048; and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such materials can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates. In addition, the
Commission maintains a Web site that contains such materials at
http://www.sec.gov. The Company's Common Stock is listed on the
New York Stock Exchange, 20 Broad Street, New York, New York 10005,
and such reports, proxy statements and other information concerning
the Company can be inspected at such Exchange.
The Company has filed with the Commission a Registration
Statement (which term shall include all amendments, exhibits and
schedules thereto) on Form S-3 under the Securities Act of 1933
(the "Securities Act") with respect to the Shares offered hereby.
This Prospectus does not contain all the information set forth in
the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and to
which reference is hereby made. Statements made in this Prospectus
as to the contents of any document referred to are not necessarily
complete. With respect to each such document filed as an exhibit
to the Registration Statement, reference is made to the exhibit for
a more complete description of the matter involved, and each such
statement shall be deemed qualified in its entirety by such
reference.
The Company will provide without charge to each person to whom
a Prospectus is delivered, upon the written or oral request of any
such person, a copy of any or all of the documents incorporated by
reference herein, other than exhibits to such documents unless such
exhibits are specifically incorporated by reference herein. Such
requests should be addressed to: Secretary, Aydin Corporation, 700
Dresher Road, P.O. Box 349, Horsham, Pennsylvania 19044; telephone:
(215) 657-7510.
<PAGE>
RISK FACTORS
This Prospectus, including certain documents incorporated by
reference herein, contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995 and the Securities Act of 1933 (the "Securities Act").
Actual results could differ materially from those projected in the
forward-looking statements as a result of certain of the risk
factors set forth below and certain other factors set forth
elsewhere in this Prospectus. In addition to the other information
contained and incorporated by reference in this Prospectus, the
following risk factors should be considered carefully in evaluating
the Company and its business before purchasing the Shares offered
hereby.
Losses for the Most Recent Fiscal Year; Decline in Sales. The
Company incurred a net loss of approximately $14.8 million for the
year ended December 31, 1996. Net sales for 1996 of $117 million
declined by 17% from 1995 sales of $141 million. While the Company
is attempting to broaden its customer base and has sought to
restructure certain parts of the Company's operations, there is no
assurance that the Company will be successful in this effort or
that profitability will return in the near future.
Foreign Operations and Export Sales. The Company's domestic
operations include significant sales derived from customers or
projects located outside of the United States. For the year ended
December 31, 1996, approximately $47.5 million, or 40.7%, of the
Company's sales revenues were from foreign operations and exports.
The Company and its foreign subsidiaries may be adversely affected
by certain risks generally associated with foreign contracts and
operations, including ownership and control limitations, currency
fluctuations, repatriation of profits, enforcement of judgments,
late delivery penalties, potential political or labor instability
and general worldwide economic conditions. The Company has
generally been able to protect itself against foreign credit risks
and currency fluctuations through contract provisions that provide
in most circumstances for payments in U.S. currency, advance
payments, irrevocable letters of credit and price adjustments for
inflation. Furthermore, contract provisions and treaty
arrangements between the United States and certain foreign
governments provide for certain protections with respect to
repatriation of profits and enforcement of judgments. There can be
no assurance, however, that the foregoing steps and protections
will be adequate to prevent future adverse effects associated with
such foreign operations and exports.
Defense Cutbacks and Cancellation of Contracts at the Option
of Governments. For the year ended December 31, 1996, sales to the
U.S. Government (direct and indirect), principally the Department
of Defense, amounted to approximately $38.7 million, or
approximately 33% of the Company's net sales, a decline from
approximately $44.3 million for the year ended December 31, 1995.
The U.S. Government has made cutbacks in military spending in
recent years and may reduce military expenditures further in the
future, which may adversely affect the Company's business. All
contracts with the U.S. Government and some foreign governments are
subject to cancellation at the convenience of such government and
such cancellations may adversely affect the Company's business.
Competition. The market for communications products and
systems is highly competitive and is characterized by continuing
advances in products and technologies. In general, some of the
Company's competitors have greater financial, technical and
marketing resources than the Company. The Company's business,
operating results and financial condition could be materially
adversely affected by such competition.
Working Capital Requirements; Cash Flow. The Company has
financed its operations over the past two years from internal cash
sources because of the limited availability of outside cash
borrowing sources. At December 31, 1996, there was $2.8 million of
short-term cash borrowings outstanding with no current availability
for further cash borrowings. Also, at December 31, 1996, there was
a letter of credit balance of $13.9 million issued against a $49
million advance payment received in 1990 in connection with a
contract from the Government of Turkey. Offsetting the $13.9
million balance was $7.6 million of cash collateral. This letter
of credit is currently being renewed in four-month intervals or
until it reaches zero, whichever comes first. The Company
anticipates that the letter of credit will reach zero during the
second half of 1998. Although there can be no assurance that this
letter of credit will continue to be renewed, management believes
that the letter of credit will be renewed upon its current
expiration and thereafter. The Company is currently seeking new
banking arrangements on terms acceptable to the Company to
supplement internally generated cash flows in meeting future
potential operating requirements. The Company anticipates that its
near-term cash requirements (in addition to renewed short-term
financing requirements) can be financed through internally
generated cash flows. Substantial amounts of cash flows are
expected from certain of the Company's largest current long-term
type contracts on which significant progress toward completion is
expected in 1997. However, if the Company is unable to meet
delivery deadlines or is unable to complete new banking
arrangements on terms acceptable to the Company, cash flow will be
negatively impacted, which could negatively impact the Company's
financial condition and operations.
New Management. Since May 1996, the Company has retained a
new Chairman of the Board, President and Chief Executive Officer, a
new Chief Financial Officer and, later in 1996, a new Vice
President and President of the Aydin Communications Systems Group
and a Vice President of Business Development and International
Sales. Although the new management team has extensive experience,
except for Mr. Bard, it has limited experience with the Company's
products and customers. The Company's future operations will be
substantially dependent on such new management personnel.
THE COMPANY
The Company is a Delaware corporation incorporated in
September 1967. Its principal executive offices are located at 700
Dresher Road, P.O. Box 349, Horsham, Pennsylvania 19044 and its
telephone number is (215) 657-7510.
<PAGE>
SELLING STOCKHOLDER
The Shares of the Company's Common Stock covered by this
Prospectus (the "Shares") are, or may be, offered by the Selling
Stockholder. The Selling Stockholder has been a beneficial owner
of more than 10% of the outstanding shares of the Company's Common
Stock since May 1996, and Irwin L. Gross, Chairman of the Selling
Stockholder, is a director of the Company.
The following table sets forth the Selling Stockholder's name
and address, the number of shares of the Company's Common Stock
owned by the Selling Stockholder prior to the offering made under
this Prospectus, the number of shares to be offered for the account
of the Selling Stockholder and the number of shares and percentage
of the outstanding shares of the Company's Common Stock to be
beneficially owned by the Selling Stockholder upon the sale of the
Shares:
<TABLE>
<CAPTION>
Common Stock
To Be Beneficially
Owned If All Shares
Common Stock That May Be
Beneficially Owned Offered Hereunder
On March 31, 1997 Shares That Are Sold
__________________ May Be Offered ___________________
Name Shares Percent Hereunder Shares Percent
______________ _______ ________ ________________ _______ _______
<S> <C> <C> <C> <C> <C>
EA Industries, Inc.
185 Monmouth Parkway
West Long Branch, NJ 07764 596,927 11.5% 596,927 0 0%
</TABLE>
The EA Option was granted pursuant to a letter agreement
between the Selling Stockholder and the Company dated February 25,
1997 (the "Letter Agreement") in response to the Selling
Stockholder's request that the Company cause the Shares to be to be
registered for sale under the Securities Act pursuant to certain
demand registration rights granted to the Selling Stockholder under
a Registration Rights Agreement dated January 1997 between the
Selling Stockholder and the Company.
Under the Letter Agreement, if Mr. Bard or his assigns
exercise the EA Option in full prior to the Expiration Time, the
Company and the Selling Stockholder have agreed that upon
consummation of the exercise of the Option: (i) the Company will
issue to the Selling Stockholder a warrant (the "Warrant") to
purchase up to 200,000 shares (the "Warrant Shares") of Common
Stock of the Company exercisable for three years, of which 100,000
Warrant Shares would be exercisable at a price of $12.10 per share
and 100,000 Warrant Shares would be exercisable at a price of
$13.20 per share; (ii) the Company will enter into a new
registration rights agreement with the Selling Stockholder with
respect to the Warrant Shares, (iii) the Selling Stockholder will
agree to serve as a consultant to the Company during the three-year
term of the Warrant for the purpose of providing such assistance to
the Company in soliciting customers internationally and exploring
strategic joint ventures as the Selling Stockholder and the Company
mutually deem appropriate in their reasonable discretion; and (iv)
Irwin L. Gross, Chairman of the Selling Stockholder and a director
of the Company, will resign as a director of the Company. If the
EA Option is not exercised in full prior to the Expiration Time,
the foregoing provisions described in this paragraph will become
null and void.
<PAGE>
PLAN OF DISTRIBUTION
The Shares may be sold pursuant to the exercise of the EA
Option, pursuant to which Mr. Bard or his assigns have the right to
purchase all of the Shares for a purchase price of $11 per Share.
The latest date on which the EA Option may be exercised is June 2,
1997, unless it is extended. The Shares may be offered and sold
pursuant to this Prospectus to Mr. Bard or his assigns, such as
institutional or other sophisticated investors, who agree to
purchase the Shares at the $11 exercise price.
The Company has been advised that if the Shares are not sold
pursuant to the EA Option, the distribution of the Shares by the
Selling Stockholder, or pledgees, donees or transferees of or other
successors in interest to the Selling Stockholder, may be effected
from time to time in one or more transactions (which may involve
block transactions) on the New York Stock Exchange or such other
exchange or market on which the Common Stock may from time to time
be traded, in negotiated transactions or in a combination of any
such transactions. Such transactions may be effected by the
Selling Stockholder at market prices prevailing at the time of
sale, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices. The Selling Stockholder may
effect such transactions by selling Shares to or through broker-
dealers, including purchases by a broker-dealer as principal and
resale by such broker-dealer for its account pursuant to this
Prospectus. Such broker-dealers will receive compensation in the
form of discounts or commissions from the Selling Stockholder and
may receive commissions from the purchasers of Shares for whom such
broker-dealers may act as agents (which discounts or commissions
from the Selling Stockholder or such purchasers, if in excess of
those customary for the types of transactions involved, will be
disclosed in a supplemental prospectus).
Any broker-dealer that participates with the Selling
Stockholder in the distribution of Common Stock may be deemed to be
an "underwriter" within the meaning of the Securities Act, and any
commissions or discounts received by such broker-dealer and any
profit on the resale of Shares by such broker-dealer may be deemed
to be underwriting discounts and commissions under the Securities
Act.
The costs and expenses of the registration of the Shares,
except for underwriting or selling discounts or commissions, will
be paid by the Company. The costs and expenses borne by the
Company will include, without limitation, all registration and
filing fees, legal and accounting fees, printing expenses and costs
of special audits incident to or required by the registration of
the Shares.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale
of the Shares offered hereunder by the Selling Stockholder.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Commission
by the Company are incorporated by reference herein:
(a) The Company's Annual Report on Form 10-K for the year
ended December 31, 1996 filed with the Commission on March 31, 1997
by the Company pursuant to Section 13(a) of the Exchange Act.
(b) The Company's definitive proxy statement filed with the
Commission on March 27, 1997 pursuant to Section 14(a) of the
Exchange Act in connection with the Company's 1997 Annual Meeting
of Stockholders to be held on April 25, 1997.
(c) The Company's Registration Statement, File No. 1-7203, as
amended, filed under Section 12(b) of the Exchange Act, containing
a description of the Common Stock of the Company.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to
the termination of the offering of the Shares covered by this
Prospectus shall be deemed to be incorporated by reference into
this Prospectus and to be a part hereof from the date of the filing
of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which is also or is deemed to
be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
The Company will provide without charge to each person to whom
this Prospectus is delivered, upon the request of such person, a
copy of any or all of the documents incorporated herein by
reference, other than exhibits to such documents (unless such
exhibits are specifically incorporated by reference herein). Such
requests should be addressed to: Robert A. Clancy, Secretary and
Corporate Counsel, Aydin Corporation, 700 Dresher Road, P.O. Box
349, Horsham, PA 19044; telephone: (215) 657-7510.
LEGAL MATTERS
The validity of the issuance of the Shares offered hereby has
been passed upon for the Company by Robert A. Clancy, Corporate
Counsel and Secretary of the Company.
EXPERTS
The consolidated financial statements and schedule of the
Company at December 31, 1996 and 1995, and for each of the three
years in the period ended December 31, 1996, appearing in the
Company's Annual Report on Form 10-K for the year ended December
31, 1996, incorporated by reference in this Prospectus have been
audited by Grant Thornton LLP, independent accountants, to the
extent and for the periods set forth in their reports incorporated
herein by reference, and are incorporated herein in reliance on
such reports given upon the authority of such firm as experts in
accounting and auditing.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Registration fee .................$ 2,035
Legal fees and expenses.............6,000*
Accountants' fees and expenses......4,000*
Miscellaneous....................... 500*
________
Total $12,535*
=========
*Estimated.
The Company will bear all of the foregoing expenses.
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of
Delaware empowers a Delaware corporation to indemnify any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) by reason of
the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or
upon plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
In the case of an action or suit by or in the right of the
corporation to procure a judgment in its favor, Section 145
empowers a 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 reason of the fact that he
is or was acting in any of the capacities set forth above against
expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the corporation, except that indemnification is not permitted in
respect of any claim, issue or matter as to which such person is
adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery of the State
<PAGE>
of Delaware or the court in which such action or suit was brought
determines 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 deems
proper.
Section 145 further provides: that a Delaware corporation is
required to indemnify a director, officer, employee or agent
against expenses (including attorneys' fees) actually and
reasonably incurred by him in defense of any action, suit or
proceeding referred to above or in defense of any claim, issue or
matter therein to the extent that such person has been successful
on the merits or otherwise; that the indemnification provided for
by Section 145 shall not be deemed exclusive of any other rights to
which the indemnified party may be entitled; that the
indemnification provided for by Section 145 shall, unless otherwise
provided when authorized or ratified, continue as to a person who
has ceased to be a director, officer, employee or agent and shall
inure to the benefit of such person's heirs, executors and
administrators; and empowers the corporation to purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation against any
liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such
liability under Section 145. A Delaware corporation may provide
indemnification only as authorized in the specific case upon a
determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has met
the applicable standard of conduct. Such determination is to be
made (i) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit
or proceeding, or (ii) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion or (iii) by the
stockholders.
Article VII, Section 7 of the Company's By-Laws provides for
indemnification of directors and officers of the Company to the
fullest extent permitted by the General Corporation Law of the
State of Delaware, as presently or hereafter in effect.
The Company provides liability insurance for each director and
officer for certain losses arising from claims or charges made
against them while acting in their capacities as directors or
officers of the Company up to an aggregate of $5,000,000 inclusive
of defense costs, expenses and charges.
Additionally, Article SIXTH of the Company's Restated
Certificate of Incorporation limits the liability of the Company's
directors to the fullest extent permitted by Section 102(b)(7) of
the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented. Section 102(b)(7) permits the
certificate of incorporation of a Delaware corporation to include a
provision eliminating or limiting the personal liability of a
director of a corporation to the corporation or its stockholders
for monetary damages for breach of his fiduciary duty as a
director; provided, however, that the provision may not eliminate
or limit the liability of a director for (i) any breach of the
director's duty of loyalty to the corporation or its stockholders;
(ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) the
unlawful payment of dividends or unlawful purchase or redemption of
<PAGE>
stock under Section 174 of the General Corporation Law of the State
of Delaware; or (iv) any transaction from which the director
derived an improper personal benefit.
Item 16. Exhibits.
Exhibit No. Exhibit
3.1 Restated Certificate of Incorporation (filed as
Exhibit No. 3(i) to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1994 and
incorporated herein by reference).
3.2 By-Laws (filed as Exhibit No. 3(ii) to Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1996 and incorporated herein by
reference).
4.1 Option Agreement dated as of February 25, 1997
between EA Industries, Inc. and I. Gary Bard and
assigns, and Extension to Option Agreement dated
March 19, 1997.
4.2 Letter Agreement dated February 25, 1997 between EA
Industries, Inc. and Registrant, with appendices.
4.3 Registration Rights Agreement dated January 1997
between Registrant and EA Industries, Inc.
5. Opinion and Consent of Robert A. Clancy, Esquire,
Counsel to the Registrant with respect to the
Securities being registered.
Management Contracts
---------------------
10.1 Employment Agreement, I. Gary Bard (filed as Exhibit
No. 10.1 to Registrant's Quarterly Report on Form
10-Q for the quarter ended September 28, 1996 and
incorporated herein by reference).
10.2 Employment Agreement, Klaus D. Oebel (filed as
Exhibit No. 10.2 to Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 28, 1996
and incorporated herein by reference).
10.3 Employment Agreement, H. Barry Maser (filed as
Exhibit No. 10.3 to Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 28, 1996
and incorporated herein by reference).
<PAGE>
10.4 Employment Agreement, James R. Henderson (filed as
Exhibit No. 10.4 to Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 28, 1996
and incorporated herein by reference).
10.5 The 1995 Incentive Stock Option Plan, as amended,
(filed as Exhibit No. 10.5 to Registrant's Annual
Report on Form 10-K for the year ended December 31,
1996 and incorporated herein by reference).
10.6 The 1996 Equity Incentive Plan, as amended, (filed
as Exhibit No. 10.6 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1996 and
incorporated herein by reference).
10.7 Restricted Stock Agreement, Klaus D. Oebel, dated
October 8, 1996 (filed as Exhibit No. 10.7 to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1996 and incorporated herein by
reference).
10.8 Restricted Stock Agreement, H. Barry Maser, dated
October 8, 1996 (filed as Exhibit No. 10.8 to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1996 and incorporated herein by
reference).
10.9 Consulting Agreement, Ayhan Hakimoglu, dated May 1,
1996 (filed as Exhibit No. 10.9 to Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1996 and incorporated herein by
reference).
10.10 Restrictive Covenant Agreement, Ayhan Hakimoglu,
dated May 1, 1996 (filed as Exhibit No. 10.10 to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1996 and incorporated herein by
reference).
10.11 Resignation Agreement, Donald S. Taylor, dated
September 13, 1996 (filed as Exhibit No. 10.11 to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1996 and incorporated herein by
reference).
21.1 Subsidiaries of Registrant (filed as Exhibit No. 21
to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1996 and incorporated herein
by reference).
23.1 Consent of Company Counsel is contained in his
Opinion filed as Exhibit 5.
23.2 Consent of Independent Auditors, Grant Thornton LLP.
<PAGE>
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(a) to 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:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement, or
the most recent post-effective amendment hereto, which individually
or in the aggregate, represents a fundamental change in the
information set forth in this Registrational Statement; and
(iii) to include any additional or changed material
information on the plan of distribution;
provided, however, that the undertakings set forth in paragraphs
(i) and (ii) above shall not apply if the information required to
be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement;
(b) that, for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment is a new
registration statement of the securities offered, and the offering
of the securities at that time to be deemed the initial bona fide
offering thereof; and
(c) to remove from registration by means of a post-effective
amendment any of the securities which remain unsold at the
termination of the offering.
The undersigned registrant hereby further undertakes that for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated
by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant
of expenses incurred or paid by a director, officer or controlling
person of the
<PAGE>
Registrant 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
Registrant 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 Securities Act
of 1933 and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains
a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Horsham,
Pennsylvania on April 4, 1997.
AYDIN CORPORATION
By: /s/ I. Gary Bard
I. Gary Bard
Chief Executive Officer, President and
Chairman of the Board of Directors
Know all men by these presents, that each person whose
signature appears below constitutes and appoints I. Gary Bard and
Robert A. Clancy, and each or any of them, as his true and lawful
attorneys-in-fact and agents, with full power of substitution, for
him, and in his name, place and stead, in any and all capacities to
sign any or all amendments or post-effective amendments 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 said attorneys-
in-fact and agents 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, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them or their
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/ I. Gary Bard Chief Executive Officer, April 4, 1997
I. Gary Bard President and Chairman of
the Board of Directors
(principal executive officer)
/s/ John F. Vanderslice Executive Vice President April 4, 1997
John F. Vanderslice and Director
/s/ Joames R. Henderson Vice President, Treasurer April 4, 1997
James R. Henderson and Chief Financial Officer
(principal financial officer)
/s/ Herbert Welber Controller and Assistant April 4, 1997
Herbert Welber Treasurer
(principal accounting officer)
/s/ Nev A. Gokcen Director April 4, 1997
Nev A. Gokcen
____________________ Director _____________
Irwin L. Gross
/s/ Gary Mozenter Director April 4, 1997
Gary Mozenter
/s/ Harry D. Train, II Director April 4, 1997
Harry D. Train, II
<PAGE>
EXHIBIT INDEX
(Pursuant to Item 601 of Regulation S-K)
Exhibit No. Exhibit
3.1 Restated Certificate of Incorporation (filed as
Exhibit No. 3(i) to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1994 and
incorporated herein by reference).
3.2 By-Laws (filed as Exhibit No. 3(ii) to Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1996 and incorporated herein by
reference).
4.1 Option Agreement dated as of February 25, 1997
between EA Industries, Inc. and I. Gary Bard and
assigns, and Extension to Option Agreement dated
March 19, 1997.
4.2 Letter Agreement dated February 25, 1997 between EA
Industries, Inc. and Registrant, with appendices.
4.3 Registration Rights Agreement dated January 1997
between Registrant and EA Industries, Inc.
5 Opinion and Consent of Robert A. Clancy, Esquire,
Counsel to the Registrant with respect to the
securities being registered.
Management Contracts
--------------------
10.1 Employment Agreement, I. Gary Bard (filed as Exhibit
No. 10.1 to Registrant's Quarterly Report on Form
10-Q for the quarter ended September 28, 1996 and
incorporated herein by reference).
10.2 Employment Agreement, Klaus D. Oebel (filed as
Exhibit No. 10.2 to Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 28, 1996
and incorporated herein by reference).
10.3 Employment Agreement, H. Barry Maser (filed as
Exhibit No. 10.3 to Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 28, 1996
and incorporated herein by reference).
10.4 Employment Agreement, James R. Henderson (filed as
Exhibit No. 10.4 to Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 28, 1996
and incorporated herein by reference).
<PAGE>
10.5 The 1995 Incentive Stock Option Plan, as amended,
(filed as Exhibit No. 10.5 to Registrant's Annual
Report on Form 10-K for the year ended December 31,
1996 and incorporated herein by reference).
10.6 The 1996 Equity Incentive Plan, as amended, (filed
as Exhibit No. 10.6 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1996 and
incorporated herein by reference).
10.7 Restricted Stock Agreement, Klaus D. Oebel, dated
October 8, 1996 (filed as Exhibit No. 10.7 to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1996 and incorporated herein by
reference).
10.8 Restricted Stock Agreement, H. Barry Maser, dated
October 8, 1996 (filed as Exhibit No. 10.8 to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1996 and incorporated herein by
reference).
10.9 Consulting Agreement, Ayhan Hakimoglu, dated May 1,
1996 (filed as Exhibit No. 10.9 to Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1996 and incorporated herein by
reference).
10.10 Restrictive Covenant Agreement, Ayhan Hakimoglu,
dated May 1, 1996 (filed as Exhibit No. 10.10 to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1996 and incorporated herein by
reference).
10.11 Resignation Agreement, Donald S. Taylor, dated
September 13, 1996 (filed as Exhibit No. 10.11 to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1996 and incorporated herein by
reference).
21.1 Subsidiaries of Registrant (filed as Exhibit No. 21
to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1996 and incorporated herein
by reference).
23.1 Consent of Company Counsel (included with option
filed as Exhibit 5 hereto).
23.2 Consent of Independent Auditors, Grant Thornton LLP.
<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.
STOCK OPTION AGREEMENT
______________________
STOCK OPTION AGREEMENT dated February 25, 1997 executed
by EA INDUSTRIES, INC., a New Jersey corporation ("EA"), for
the benefit of I. GARY BARD and his assigns (collectively, the
"Optionee").
EA and the Optionee wish to set forth the terms and
conditions whereby the Optionee and/or the Optionee's assigns
will have the option to purchase shares of the $1.00 par value
common stock (the "Stock") of Aydin Corporation ("Aydin").
Accordingly, in consideration of the mutual covenants and
agreements contained herein and intending to be legally bound
hereby, EA and the Optionee hereby agree as follows:
1. Grant of the Option. Subject to the terms and
conditions set forth in this Agreement, EA grants to the
Optionee the option (the "Option") to purchase all of 596,927
shares of the Stock (the "Option Shares") for the purchase
price of $11.00 per Option Share.
2. Term of the Option. The Option granted hereunder
shall expire at 5:00 p.m., Eastern Standard Time on March 19,
1997 (the "Expiration Time").
3. Exercise of the Option. The Optionee may exercise
the Option with respect to all of the Option Shares at any
time prior to the Expiration Time by tendering to EA payment
in full of the purchase price for the Option Shares together
with written notice to EA of such exercise that states the
following:
(a) an acknowledgment that the Option Shares are
being purchased for investment and not for distribution or
resale (other than a distribution or resale which, in the
opinion of counsel reasonably satisfactory to Aydin, may be
made without violating the provisions of the Securities Act of
1933, as amended (the "Act"), or any other applicable
securities laws); and
(b) an acknowledgment that the Optionee understands
that the Option Shares are "restricted securities" within the
meaning of Rule 144 promulgated by the Securities and Exchange
Commission, that the Option Shares have not been registered
under the Act or any other applicable securities laws and must
be held indefinitely unless they are subsequently registered
under such Act and applicable laws or an exemption from
registration is available.
EA shall (i) transfer to the Optionee a stock certificate or
certificates representing the Option Shares, free and clear of
all pledges, claims, liens, encumbrances and other security
interests, immediately upon the actual receipt by EA of any
such written notice and payment of the purchase price (ii)
deliver an assignment to the Optionee of EA's rights under the
Registration Rights Agreement between Aydin and EA dated
January , 1997 and (ii) deliver an irrevocable stock power,
which shall be coupled with an interest, to the Optionee
authorizing the Optionee to vote the Option Shares then being
purchased at any meeting of stockholders of the Corporation
for which EA is deemed the record holder with respect to such
Option Shares.
4. Transfer of the Option. This Option and all rights
hereunder are assignable by the Optionee subject to compliance
with applicable federal and state securities laws.
5. Miscellaneous.
(a) Notices. All notices to EA provided for in
this Agreement shall be in writing and shall either be hand
delivered, sent by registered or certified mail, or delivered
by a nationally recognized overnight delivery service to the
following address (or such other address as may be designated
by notice duly given in the manner provided herein):
EA Industries, Inc.
441 North Fifth Street
Philadelphia, PA 19123
Attention: President
Any such notice, including but not limited to notices and
tenders under Section 3 hereof, shall be deemed delivered (i)
when hand delivered or (ii) on the day deposited with the
nationally recognized overnight delivery service or in the
U.S. registered or certified mail, addressed as provided
above.
(b) Integration; Modification. This Agreement
constitutes the entire understanding and agreement between EA
and the Optionee regarding the subject matter hereof and
supersedes all prior negotiations and agreements, whether oral
or written, between EA and the Optionee with respect to the
subject matter of this Agreement. This Agreement may not be
modified except by a written agreement signed by the Optionee
and a duly authorized officer of EA.
(c) Severability. In the event of the invalidity
or unenforceability of any part or provisions of this
Agreement, such invalidity or unenforceability shall not
affect the validity or enforceability of any other part or
provision of this Agreement, and the remainder of this
Agreement shall continue in full force and effect in
accordance with its terms.
(d) Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA.
(e) Headings. The headings of paragraphs have been
included herein for convenience only and shall not be
considered in interpreting this Agreement.
(f) Binding Effect. This Agreement shall be
binding upon EA and shall inure to the benefit of EA and the
Optionee and their respective heirs, legal representatives,
successors and permitted assigns.
IN WITNESS WHEREOF, EA, by its duly authorized officer,
has executed this Agreement as of the date first above
written.
EA INDUSTRIES, INC.
By:/s/ Irwin L. Gross
Irwin L. Gross, President
Accepted and agreed to this
25th day of February, 1997
/s/ I. Gary Bard
I. Gary Bard
<PAGE>
March 19, 1997
Mr. I. Gary Bard
c/o Aydin Corporation
700 Dresher Road
P.O. Box 349
Horsham, PA 19044
Dear Gary:
Pursuant to the Stock Option Agreement (the "Option Agreement")
dated February 25, 1997, EA Industries, Inc. ("EA") granted to you
and your assigns an option (the "Option") to purchase all of
596,927 shares (the "Option Shares") of Common Stock of Aydin
Corporation ("Aydin") owned by EA for the purchase price of $11 per
share, which Option was scheduled to expire at 5:00 p.m., Eastern
Standard Time, on March 19, 1997.
EA hereby extends the Option until the earlier to occur of (i)
the close of business on the fifth business day following the
effective date, as determined by the Securities and Exchange
Commission, of a Form S-3 registration statement (the "Registration
Statement") that Aydin proposes to file under the Securities Act of
1933 with respect to the registration of the Option Shares or (ii)
June 2, 1997.
You agree to use your best efforts to cause Aydin to file its
Annual Report on Form 10-K and the Registration statement for the
registration of the Option Shares with the Securities and Exchange
Commission on or before April 4, 1997 and to cause the Registration
Statement to be declared effective as promptly thereafter as
possible. Notwithstanding the second paragraph hereof, if the
Registration Statement is not filed on or before such date, the
Option shall expire as of the close of business on April 4, 1997.
In such event, you agree to continue to use your best efforts to
cause Aydin to file the Registration Statement and to cause it to
be declared effective by the Securities and Exchange Commission.
All terms and conditions of the Option Agreement shall hereafter
continue in full force and effect in accordance with the terms of
the Option Agreement, as extended hereby.
Sincerely,
EA INDUSTRIES, INC.
By: /s/ Howard P. Kamins
Title: Vice President
Accepted and Agreed as of the
date set forth above:
/s/ I. Gary Bard
I. Gary Bard
<PAGE>
Exhibit 4.2
AYDIN CORPORATION
Telephone 700 Dresher Road
(215) 657-7510 P.O. Box 349
FAX Horsham, PA 19044
(215) 657-3830 U.S.A.
February 25, 1997
Irwin L. Gross, Chairman
EA Industries, Inc.
441 North Fifth Street
Philadelphia, PA 19123
Dear Irv:
The purpose of this letter is to set forth the agreements
we have reached in connection with the October 9, 1996
termination of the merger negotiations between Aydin and EA,
the registration rights agreement entered into between Aydin
and EA dated January __, 1997 (the "Registration Rights
Agreement") and EA's January 27, 1997 request for registration
of 596,927 shares (the "Shares") of Aydin Common Stock
pursuant thereto. As you and I have discussed, Aydin does not
have the financial ability to repurchase the Shares as
permitted by Section 2 of the Registration Rights Agreement
before the expiration of the repurchase right and Aydin
believes that the interests of its stockholders would be best
protected if the Shares were not offered for sale in a non-
underwritten public offering at this time.
Accordingly, Aydin and EA have agreed as follows:
1. EA will grant I. Gary Bard and his assigns, an
option (the "Option") to purchase the Shares as set forth in
the form of Option Agreement attached hereto as Appendix A.
2. Upon the closing of the exercise of the Option,
Aydin will issue EA a warrant to purchase up to 200,000 shares
of Aydin Common Stock (the "Warrant") in the form of Warrant
attached hereto as Appendix B. The shares purchasable upon
exercise of the Warrant will be subject to a registration
rights agreement in the form attached hereto as Appendix C.
EA agrees to serve as a consultant to Aydin during the three-
year term of the Warrant for the purpose of providing such
assistance to Aydin in soliciting customers internationally
and exploring strategic joint ventures as EA and Aydin
mutually deem appropriate in their reasonable discretion.
3. If the Option is exercised in accordance with its
terms for the purchase of all of the Shares, Irwin L. Gross
will thereupon resign as a director of Aydin.
4. In the event that the Option is not exercised in
full, the provisions of paragraphs 2 and 3 hereof shall
terminate and be of no force or effect.
If the foregoing correctly sets forth the agreements
between Aydin and EA, please sign and return the enclosed copy
of this letter to me.
Sincerely,
/s/ I. Gary Bard
I. Gary Bard, President
Accepted and agreed to this
____ day of February, 1997
EA INDUSTRIES, INC.
By:/s/ Irwin L. Gross
Irwin L. Gross, Chairman
<PAGE>
APPENDIX A
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.
STOCK OPTION AGREEMENT
______________________
STOCK OPTION AGREEMENT dated February 25, 1997 executed
by EA INDUSTRIES, INC., a New Jersey corporation ("EA"), for
the benefit of I. GARY BARD and his assigns (collectively, the
"Optionee").
EA and the Optionee wish to set forth the terms and
conditions whereby the Optionee and/or the Optionee's assigns
will have the option to purchase shares of the $1.00 par value
common stock (the "Stock") of Aydin Corporation ("Aydin").
Accordingly, in consideration of the mutual covenants and
agreements contained herein and intending to be legally bound
hereby, EA and the Optionee hereby agree as follows:
1. Grant of the Option. Subject to the terms and
conditions set forth in this Agreement, EA grants to the
Optionee the option (the "Option") to purchase all of 596,927
shares of the Stock (the "Option Shares") for the purchase
price of $11.00 per Option Share.
2. Term of the Option. The Option granted hereunder
shall expire at 5:00 p.m., Eastern Standard Time on March 19,
1997 (the "Expiration Time").
3. Exercise of the Option. The Optionee may exercise
the Option with respect to all of the Option Shares at any
time prior to the Expiration Time by tendering to EA payment
in full of the purchase price for the Option Shares together
with written notice to EA of such exercise that states the
following:
(a) an acknowledgment that the Option Shares are
being purchased for investment and not for distribution or
resale (other than a distribution or resale which, in the
opinion of counsel reasonably satisfactory to Aydin, may be
made without violating the provisions of the Securities Act of
1933, as amended (the "Act"), or any other applicable
securities laws); and
(b) an acknowledgment that the Optionee understands
that the Option Shares are "restricted securities" within the
meaning of Rule 144 promulgated by the Securities and Exchange
Commission, that the Option Shares have not been registered
under the Act or any other applicable securities laws and must
be held indefinitely unless they are subsequently registered
under such Act and applicable laws or an exemption from
registration is available.
EA shall (i) transfer to the Optionee a stock certificate or
certificates representing the Option Shares, free and clear of
all pledges, claims, liens, encumbrances and other security
interests, immediately upon the actual receipt by EA of any
such written notice and payment of the purchase price (ii)
deliver an assignment to the Optionee of EA's rights under the
Registration Rights Agreement between Aydin and EA dated
January , 1997 and (ii) deliver an irrevocable stock power,
which shall be coupled with an interest, to the Optionee
authorizing the Optionee to vote the Option Shares then being
purchased at any meeting of stockholders of the Corporation
for which EA is deemed the record holder with respect to such
Option Shares.
4. Transfer of the Option. This Option and all rights
hereunder are assignable by the Optionee subject to compliance
with applicable federal and state securities laws.
5. Miscellaneous.
(a) Notices. All notices to EA provided for in
this Agreement shall be in writing and shall either be hand
delivered, sent by registered or certified mail, or delivered
by a nationally recognized overnight delivery service to the
following address (or such other address as may be designated
by notice duly given in the manner provided herein):
EA Industries, Inc.
441 North Fifth Street
Philadelphia, PA 19123
Attention: President
Any such notice, including but not limited to notices and
tenders under Section 3 hereof, shall be deemed delivered (i)
when hand delivered or (ii) on the day deposited with the
nationally recognized overnight delivery service or in the
U.S. registered or certified mail, addressed as provided
above.
(b) Integration; Modification. This Agreement
constitutes the entire understanding and agreement between EA
and the Optionee regarding the subject matter hereof and
supersedes all prior negotiations and agreements, whether oral
or written, between EA and the Optionee with respect to the
subject matter of this Agreement. This Agreement may not be
modified except by a written agreement signed by the Optionee
and a duly authorized officer of EA.
(c) Severability. In the event of the invalidity
or unenforceability of any part or provisions of this
Agreement, such invalidity or unenforceability shall not
affect the validity or enforceability of any other part or
provision of this Agreement, and the remainder of this
Agreement shall continue in full force and effect in
accordance with its terms.
(d) Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA.
(e) Headings. The headings of paragraphs have been
included herein for convenience only and shall not be
considered in interpreting this Agreement.
(f) Binding Effect. This Agreement shall be
binding upon EA and shall inure to the benefit of EA and the
Optionee and their respective heirs, legal representatives,
successors and permitted assigns.
IN WITNESS WHEREOF, EA, by its duly authorized officer,
has executed this Agreement as of the date first above
written.
EA INDUSTRIES, INC.
By:
Irwin L. Gross, President
Accepted and agreed to this
____ day of February, 1997
I. Gary Bard
<PAGE>
APPENDIX B
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
200,000 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 200,000 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 [March ,
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) 100,000 of the Shares shall be exercisable for
$12.10 per Share and (ii) 100,000 of the Shares shall be
exercisable for $13.20 per Share (each such price being
hereinafter referred to as the "Exercise Price").
1.3. Adjustments; Anti-Dilution Provisions.
1.4. 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), 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.
1.5. 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.
1.6. 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.
1.7. 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.
2. 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.
3. No Shareholder Rights. This Warrant shall not
entitle the Warrant Holder to any of the rights of a
stockholder of the Company.
4. 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.
5. Exercise of Warrant.
5.1. 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.
5.2. 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 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
transfer 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.
6. Registration Rights. The Shares issued upon exercise
of this Warrant shall be subject to the Registration Rights
Agreement dated , 1997 between the
Company and the Warrant Holder.
7. 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.
8. 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.
9. 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.
10. 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 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.
11. 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 Corpora-
tion, 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.
<PAGE>
ISSUED THIS day of , 1997.
AYDIN CORPORATION
Attest:
_________________________ By:_______________________
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 March __, 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>
APPENDIX C
REGISTRATION RIGHTS AGREEMENT
_____________________________
REGISTRATION RIGHTS AGREEMENT (this "Agreement") made as
of _____________, 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 200,000 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").
"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 Corpo-
ration 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 the opinion of counsel satisfactory to the Cor-
poration 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 registra-
tion 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 reg-
istered 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 Re-
stricted 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 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 reg-
istration 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 neces-
sary 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 prelimi-
nary 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 juris-
dictions 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
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 propor-
tion 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 manag-
ing 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 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 qualifi-
cation 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 liabili-
ties (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 regis-
tration 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 there-
of.
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 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
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, con-
strued 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 con-
flicts, of the State of Delaware.
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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
AYDIN CORPORATION
By:_________________________
I. Gary Bard,
Chairman, President and
Chief Executive Officer
EA INDUSTRIES, INC.
By:_________________________
<PAGE>
Exhibit 4.3
REGISTRATION RIGHTS AGREEMENT
_____________________________
REGISTRATION RIGHTS AGREEMENT (this "Agreement") made as
of January , 1997 between Aydin Corporation, a Delaware cor-
poration (the "Corporation") and EA Industries, Inc., a New
Jersey corporation (the "Stockholder").
RECITALS:
_________
WHEREAS, the Stockholder holds 596,927 shares (the
"Shares") of Common Stock of the Corporation which the
Stockholder purchased in January 1996 in connection with the
Stockholder's intention to propose a business combination
transaction between the Corporation and the Stockholder;
WHEREAS, the Corporation and the Stockholder conducted
negotiations regarding a possible business combination until
October 8, 1996 on which date the Corporation and the
Stockholder terminated their negotiations; and
WHEREAS, the Stockholder has requested certain registration
rights to facilitate its disposition of the Shares in a
registered public offering and the Corporation has agreed to
grant the Stockholder certain registration rights as set forth
in this Agreement in order to facilitate the orderly
distribution of the 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 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 Stockholder 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").
"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 the Stockholder, or any
holder of not less than 250,000 shares of Restricted Common
Stock, to effect the registration under the Securities Act of
not less than an aggregate of 250,000 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
Stockholder, and thereupon the Corporation shall promptly use
its best efforts to effect the registration under the Securi-
ties 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 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 registra-
tion of Restricted Common Stock then owned or obtainable by
them representing in the aggregate not less than 250,000
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 reg-
istered under the Securities Act pursuant to this Section 2 at
the request of the Stockholder, 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 Re-
stricted 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 any, shall be allocated: first, to the
Stockholder, second to the holders of the Restricted Common
Stock in proportion, as nearly as practicable, to the respec-
tive 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 practi-
cable, 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 Corpora-
tion 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 neces-
sary 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 prelimi-
nary 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 juris-
dictions 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 men-
tioned 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 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 prospec-
tus 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 propor-
tion to the respective number of shares of Restricted Common
Stock sold by each of them.
6. Holdback Agreements.
(a) EA 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 con-
vertible 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 regis-
tered 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 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 rea-
sonably 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 Corpora-
tion 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 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
with a copy to:
Duane, Morris & Heckscher
4200 One Liberty Place
Philadelphia, PA 19103-7396
Attention: Frederick W. Dreher, Esq.
To the Stockholder:
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, con-
strued 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 construc-
tion, validity and interpretation of this Agreement shall be
governed by the internal law, and not the law of conflicts, of
the State of Delaware.
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 con-
flicting agreement or instrument or portion thereof.
<PAGE>
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/ Irwin L. Gross
<PAGE>
Exhibit 5
[LOGO] AYDIN
April 4, 1997
Board of Directors
Aydin Corporation
700 Dresher Road
Horsham, PA 19044
Re: Aydin Corporation Form S-3 Registration Statement
Gentlemen:
As Corporate Counsel for Aydin Corporation (the Company ), a
Delaware corporation, I have reviewed the Company s Registration
Statement on Form S-3 (the Registration Statement ) relating to
the offer and sale by EA Industries, Inc. (the Selling
Stockholder ) of up to 596,927 shares (the Shares ) of the
Company s Common Stock, par value $1.00 per share.
I have examined copies of the Company s Restated Certification
of Incorporation and By-laws, as amended to date, the corporate
minutes and other proceedings and records relating to the
authorization, issuance and sale of the Shares, and such other
documents and matters of law as I have deemed necessary or
appropriate in order to render this opinion.
Based upon the foregoing, it is my opinion that each of the
Shares is duly authorized, legally and validly issued and
outstanding, fully paid and nonassessable.
I hereby consent to the use of this opinion in the Registration
Statement.
Sincerely,
/s/ Robert A. Clancy
Robert A. Clancy
Secretary and
Corporate Counsel
__________________________________________________________________
700 Dresher Road, PO Box 349, Horsham, PA 19044 USA
Tel: 215-657-7510 - Fax: 21-657-3830 - Internet: www.aydin.com
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We have issued our reports dated March 7, 1997 accompanying the
consolidated financial statements of Aydin Corporation and
subsidiaries appearing in the 1996 Annual Report of the Company to
its shareholders and accompanying the schedules included in the
Annual Report on Form 10-K for the year ended December 31, 1996
which are incorporated by reference in this Registration Statement.
We consent to the incorporation by reference in the Registration
Statement of the aforementioned reports and to the use of our name
as it appears under the caption "Experts."
/s/ Grant Thornton LLP
Philadelphia, Pennsylvania
April 2, 1997
