Exhibit 10.18
SUBSCRIPTION AGREEMENT
NOTE: THREE COMPLETED AND EXECUTED COPIES OF THIS SUB-
SUBSCRIPTION AGREEMENT MUST BE RETURNED, AND THE
ENTIRE PURCHASE PRICE FOR THE PREFERRED
STOCK SUBSCRIBED FOR MUST BE PAID AS SET FORTH HEREIN,
TO SUBSCRIBE FOR THIS OFFERING.
Name of Subscriber:
Number of Shares of 8% Convertible Redeemable Preferred Stock,
$1.00 par value, at $100.00 per Share: _________
Aggregate Purchase Price: ______________
FOR RESIDENTS OF PENNSYLVANIA
THE SECURITIES ARE BEING SOLD AS PART OF A TRANSACTION
WHICH IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
PENNSYLVANIA SECURITIES ACT OF 1972, AS AMENDED, PURSUANT TO
SECTION 203(d) THEREOF.
SECTION 207(m) OF THE PENNSYLVANIA SECURITIES ACT OF
1972 ALSO PROVIDES THAT EACH PERSON WHO ACCEPTS AN OFFER TO
PURCHASE SECURITIES EXEMPTED FROM REGISTRATION BY SECTION
203(d), DIRECTLY FROM THE ISSUER OR AFFILIATE OF THE ISSUER
SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE WITHOUT
INCURRING ANY LIABILITY TO THE SELLER, UNDERWRITER (IF ANY) OR
ANY OTHER PERSON WITHIN TWO BUSINESS DAYS FROM THE DATE OF
RECEIPT OF THE ISSUER OF HIS WRITTEN BINDING CONTRACT OF
PURCHASE OR, IN THE CASE OF A TRANSACTION IN WHICH THERE IS NO
BINDING CONTRACT OF PURCHASE, WITHIN TWO BUSINESS DAYS AFTER HE
MAKES THE INITIAL PAYMENT FOR THE SECURITIES BEING OFFERED.
TIMELY NOTICE OF AN INTENTION TO WITHDRAW SHALL BE
DEEMED TO HAVE BEEN GIVEN BY A PROSPECTIVE PURCHASER WITHIN THE
TWO BUSINESS DAY PERIOD, IF, DURING SUCH TWO-DAY PERIOD, SUCH
NOTICE IS IN WRITING: (1) IS ACTUALLY RECEIVED BY THE ISSUER OR
ITS AFFILIATE; (2) IS DELIVERED TO A TELEGRAPH OR OTHER MESSAGE
SERVICE FOR TRANSMITTAL; (3) IS DEPOSITED IN THE UNITED STATES
MAILS, AND IN THE CASE OF (2) ABOVE, ALL TELEGRAPH, POSTAGE OR
OTHER TRANSMITTAL FEES ARE PAID BY THE SENDER AND NOTICE IS
ADDRESSED TO THE PRESIDENT OF ACRODYNE COMMUNICATIONS, INC. (THE
"COMPANY").
PERSONS TO WHOM OFFERS OR SALES ARE MADE IN
PENNSYLVANIA ARE FURTHER ADVISED THAT A PENNSYLVANIA PURCHASER
CANNOT SELL THE SECURITIES FOR A PERIOD OF TWELVE (12) MONTHS
FROM THE DATE OF PURCHASE EXCEPT AS PERMITTED BY THE
PENNSYLVANIA SECURITIES ACT OF 1972.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), MAY BE
PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE
COMPANY, THE COMPANY IS AWARE THAT IN THE OPINION OF THE
SECURITIES AND EXCHANGE COMMISSION SUCH INDEMNIFICATION IS
AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE
UNENFORCEABLE.
___________________
SUBSCRIPTION AGREEMENT, dated as of May 7, 1996, by and
among Acrodyne Communications, Inc., a Delaware corporation (the
"Company"), and certain investors executing counterparts of this
Agreement (collectively, the "Investors," or each individually,
an "Investor").
W I T N E S S E T H
WHEREAS, the Company desires to sell to the Investors and
the Investors desire to purchase from the Company, an aggregate
of 2,600 shares of the Company's 8% Convertible Redeemable
Preferred Stock, par value $1.00 per share (the "Preferred
Stock"), at a purchase price of $100.00 per share, having the
rights and preferences set forth in the Certificate of
Designation attached hereto as Exhibit A (the "Certificate of
Designation"); and
WHEREAS, the Company is described in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995
(the "Report") as filed with the Securities and Exchange
Commission (the "Commission");
NOW, THEREFORE, the parties hereto agree as follows:
1. Subscription and Payment.
Subject to the terms and conditions herein set forth, the
undersigned (the "Investor") hereby subscribes for the number of
shares of Preferred Stock set forth above.
The investor agrees to deliver to the Company at the
Closing (as defined below) the aggregate purchase price of
$__________, payable in immediately available funds, for the
shares of Preferred Stock subscribed for hereby.
2. Closing.
The closing (the "Closing") of the purchase and sale of the
Preferred Stock (the "Offering") shall occur on May 1, 1996 or
the earliest date thereafter on which the closing conditions
specified in Sections 7 and 8 of this Agreement shall have been
satisfied or waived (any such date, the "Closing Date");
provided, however, that if the Closing has not occurred by
May 15, 1996, then this Agreement shall terminate and the
Closing shall not take place. At the Closing, the Company will
deliver to the Investor one executed copy of this Agreement with
a stock certificate representing the Investor's ownership of the
Preferred Stock subscribed for hereby.
Similar Subscription Agreements (all such agreements and
this Subscription Agreement being collectively referred to as
the "Subscription Agreements") are being executed by each of the
Investors.
3. Termination of Offering. The Investor understands and
agrees that it will not be entitled to exercise the rights of a
shareholder of the Company until an appropriate certificate
representing the Preferred Stock for which it has subscribed has
been issued to it on the day of the Closing. If (a) the Company
shall have reasonably determined that an event has occurred or a
condition exists which could materially and adversely affect the
business or proposed business of the Company and that such
possibility warrants termination of the Offering, (b) the condi-
tions to the Closing of the Offering are not satisfied or (c)
the Company elects to terminate the Offering, the Offering will
be terminated, and the Company will not issue the Preferred
Stock and the Company will not be entitled to payment of the
purchase price for the Preferred Stock.
4. Representations and Warranties by Investor.
The Investor hereby represents and warrants to the Company
that:
(a) it has the requisite knowledge and experience in
financial and business matters to be capable of evaluating
the merits and risks of an investment in the Company;
(b) it understands that the Preferred Stock involves
risk of loss of such Investor's investment;
(c) its financial situation is such that such
Investor is able to bear the economic risks of its
investment made hereby and at the present time and in the
foreseeable future could afford a complete loss of such
investment;
(d) it has received and carefully read the
Confidential Private Placement Memorandum dated May 1, 1996
and the annexes thereto (collectively, the "PPM"), relating
to the Offering, and the Report and has evaluated the risks
of investing in the Company;
(e) it has been given the opportunity to ask
questions of, and receive answers from, the Company
concerning the terms and conditions of the Offering and to
obtain additional information necessary to verify the
accuracy of the information contained in the PPM and Report
or such other information as it desired in order to
evaluate its investment;
(f) in making its decision to purchase the Preferred
Stock herein subscribed for, it has relied solely upon the
PPM, the Report, the representations, warranties,
agreements, undertakings and acknowledgments of the Company
in this Agreement and independent investigations made by
it;
(g) it understands that an investment in the Company
involves certain risks and it has taken full cognizance of
and understands such risks, including those set forth in
the PPM and Report;
(h) it understands that neither the Preferred Stock
nor the shares of Common Stock of the Company, par value
$.01 per share, into which the Preferred Stock is
convertible (the "Common Stock") has been registered under
the Securities Act of 1933, as amended (the "Act"), and
agrees that neither the Preferred Stock nor the Common
Stock may be sold, offered for sale, transferred, pledged,
hypothecated or otherwise disposed of except in compliance
with the Act and subject to the terms of this Subscription
Agreement;
(i) it understands that no federal or state agency
has made any finding or determination as to the fairness
for investment in, or any recommendation or endorsement of,
the Preferred Stock;
(j) the Preferred Stock herein subscribed for is
being acquired by it in good faith solely for its own
account, for investment purposes and not with a view to
subdivision, distribution or resale. It will not sell or
otherwise dispose of any shares of the Preferred Stock or
Common Stock, as the case may be, unless:
i) it shall have advised the Company in writing
that it intends to dispose of such shares of Preferred
Stock or Common Stock, as the case may be, in a manner
to be described in such advice, and counsel reasonably
acceptable to the Company shall have delivered to the
Company an opinion that registration is not required
under the Act or under any applicable securities laws
of any jurisdiction; or
ii) a registration statement on an appropriate
form under the Act, or a post-effective amendment to
such registration statement, covering the proposed
sale or other disposition of such shares of Preferred
Stock or Common Stock, as the case may be, shall be in
effect under the Act and such shares of Preferred
Stock or Common Stock or the proposed sale or other
disposition thereof shall have been registered or
qualified under applicable securities laws of any
jurisdiction.
The Investor undertakes to notify the Company as soon as
practicable of any material change in any representation,
warranty or other information relating to the Investor set forth
herein which occurs prior to the Closing in order to insure
compliance of the Investor with the terms of this Agreement.
The Investor acknowledges and agrees that the certificates
representing the Preferred Stock and the Common Stock shall bear
the following legend (unless not required under the Act):
"The securities represented by this certificate
have not been registered under the Securities Act of
1933 and may not be sold, exchanged, hypothecated or
transferred in any manner except in compliance with
that certain Subscription Agreement dated as of May 7,
1996 among the Corporation and various stockholders of
the Corporation."
The Investor also acknowledges that the Company may place a
stop transfer order against transfer of the Preferred Stock and
the Common Stock, if necessary in the Company's reasonable
judgment in order to assure compliance by the Investor with the
terms of this Agreement.
Each Investor located in the Commonwealth of Pennsylvania
further acknowledges and agrees that such Investor cannot sell
the Preferred Stock for a period of twelve (12) months from the
date of purchase thereof except as permitted by the Pennsylvania
Securities Act of 1972.
If the Investor is a partnership, corporation, trust or
other entity, the Investor represents and warrants that (i) the
individual executing this Agreement has appropriate authority to
act on behalf of the Investor and (ii) the Investor was not
specifically formed to acquire the Preferred Stock subscribed
for hereby. If the Investor is a partnership, the Investor
further represents that the funds to make this investment were
not derived from additional capital contributions of the
partners of such partnership made solely for the purpose of
enabling such partnership to purchase the Preferred Stock and
that such partnership was not formed solely for the purpose of
enabling such partnership to purchase the Preferred Stock.
The foregoing representations, warranties, agreements,
undertakings and acknowledgments are made by the Investor with
the intent that they be relied upon in determining its suitabil-
ity as a purchaser of Preferred Stock.
5. Representations and Warranties of the Company. The
Company represents and warrants to the Investor that:
(a) The Company has duly filed with the Commission
all reports required by the Securities Exchange Act of ▇▇▇▇
(▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇"). The Company has furnished to the
Investor a true and correct copy of the Report. The Report
does not, as of the date on which it was signed, contain
any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in light of the circumstances under which they
were made, not misleading.
(b) The financial statements (including the related
notes) of the Company included in the Report present fairly
the financial position of the Company as of the dates
indicated and its results of operations for the periods
specified therein. All such financial statements have been
prepared in accordance with generally accepted accounting
principles on a basis consistently applied.
(c) Except as disclosed in the Report, the Company
does not have any subsidiaries. The Company has been duly
organized and validly existing as a corporation in good
standing under the laws of its jurisdiction of
organization, with full power and authority (corporate and
other) to own its properties and conduct its business as
described in the Report, and is duly qualified to do
business as a foreign corporation and is in good standing
in each jurisdiction in which the character of the business
conducted by it or the location of the properties owned or
leased by it makes such licenses, certificates and permits
from governmental authorities necessary for the conduct of
its business as described in the Report.
(d) The authorized capital stock of the Company
consists of (i) 1,000,000 shares of Preferred Stock, par
value $1.00 per share, of which 7,900 shares are issued and
outstanding, and (ii) 10,000,000 shares of Common Stock,
par value $.01 per share, of which 2,635,530 shares are
issued and outstanding at May 1, 1996. At February 27,
1996, there are outstanding options and warrants
exercisable for a total of 2,441,120 shares of Common
Stock. In addition, the Company has agreements with
certain investors to issue, under certain circumstances,
additional warrants for up to 400,000 shares of Common
Stock. The Company has all requisite power and authority
to issue, sell and deliver the Preferred Stock in
accordance with and upon the terms and conditions set forth
in this Agreement and the Common Stock issuable upon
conversion of the Preferred Stock; and all corporate action
required to be taken by the Company for the due and proper
authorization, issuance, sale and delivery of the Preferred
Stock and Common Stock has been validly and sufficiently
taken. The outstanding shares of Common Stock are, and the
shares of Common Stock issuable upon conversion of the
Preferred Stock in accordance with its terms will be, when
issued, duly authorized, validly issued, fully paid and
nonassessable.
(e) Except as set forth in this Agreement, or as
described in the Report, subsequent to the respective dates
as of which information is given in the Report, the Company
has not incurred any material liability or obligation,
direct or contingent, or entered into any material
transaction, whether or not in the ordinary course of
business, and there has not been any material change on a
consolidated basis in the capital stock, or any material
increase in the short-term debt or long-term debt, or any
material adverse change in the condition (financial or
other), business, key personnel, properties or results of
operations of the Company.
(f) The Company is not in violation of its
Certificate of Incorporation or Bylaws or in default in the
performance of any material obligation contained in any
material agreement, indenture or other instrument. The
performance by the Company of its obligations under this
Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach
of the Certificate of Incorporation or Bylaws of the
Company, or any material agreement, indenture or other
instrument to which the Company is a party or by which it
is bound, or any law, rule, administrative regulation or
decree of any court or governmental authority having
jurisdiction over the Company or its properties, or result
in the creation or imposition of any material lien, charge,
claim or encumbrance upon any property or asset of the
Company. Except as required by the Act and applicable
state securities or blue sky laws, no consent, approval,
authorization or order of any court or governmental
authority is required in connection with the consummation
of the transactions contemplated by this Agreement. The
rights granted to the Investors hereunder do not in any way
conflict with and are not inconsistent with any rights
granted to the holders of the Company's securities or debt
instruments.
(g) The Common Stock issuable upon conversion of the
Preferred Stock, upon such issuance, will conform to the
description thereof contained in the Report. Except as
described in the Report or as set forth in this Agreement,
there are no preemptive rights or other rights to subscribe
for or to purchase, or any restriction upon the voting or
transfer of, any shares of Common Stock pursuant to the
Company's Certificate or Incorporation or Bylaws or any
agreement or other instrument to which the Company is a
party. Neither the Offering nor the sale of the Preferred
Stock as contemplated in this Agreement gives rise to any
rights, other than those which have been waived, for or
relating to the registration of any shares of Common Stock
(other than such registration rights as are granted to the
Investors).
(h) The Company has full right, power and authority
to enter into this Agreement and this Agreement has been
duly authorized, executed and delivered by the Company and
constitutes the legal, valid and binding agreement of the
Company enforceable against the Company in accordance with
its terms.
(i) Except as otherwise stated in the Report, (A) the
Company has good and marketable title (in fee simple, in
the case of real property), free and clear of all liens and
encumbrances, to all of the material real and personal
property described in the Report as being owned by it,
except for any liens and encumbrances which are not
material in the aggregate and do not materially interfere
with the conduct of the business of the Company, and (B)
has valid leases to the material real property described in
the Report as under lease to it with such exceptions as do
not materially interfere with the conduct of the business
of the Company.
(j) Except as set forth in the Report, there are no
actions, suits or proceedings pending before or by any
court or governmental agency or authority, or any
arbitrator, which seek to restrain or prohibit the
consummation of the transactions contemplated hereby or
which might reasonably be expected to result in any
material adverse change in the condition (financial or
other), business or results of operations of the Company
and, to the best of the Company's knowledge, no such
action, suit or proceeding has been threatened.
(k) The Company is not in violation of any law,
ordinance, governmental rule or regulation or court degree
to which it may be subject and the Company has not failed
to obtain any license, permit, franchise or other
governmental authorization necessary to the ownership of
its property or to the conduct of its business, which
violation or failure to obtain is likely to have a material
adverse effect on the condition (financial or other),
business or results of operations of the Company.
(l) Neither the Company nor any of its officers,
employees or other persons directly or indirectly
affiliated with it has, either directly or through an
agent, sold or offered for sale or solicited offers to
subscribe for or buy, or approached potential investors for
or otherwise negotiated in respect of the Preferred Stock,
other than with the Investors, with ▇▇▇▇▇ Associates and
Eagle Partners with respect to their respective purchases,
as of March 29, 1996, of an aggregate of 7,900 shares of
Preferred Stock (such purchases, the "Prior Placement"),
and, preliminarily, with one other accredited investor and
neither the Company nor any of its employees or other
persons directly or indirectly affiliated with it has,
either directly or through an agent, participated in the
organization or management of any entity or has engaged or
proposes during any time after the Closing to engage in any
other activity, in a manner or under circumstances that
would jeopardize the status of the Offering as an exempted
transaction under the Act or under the laws of any state in
which it is represented by the Company that the Offering
may be made.
(m) No person is entitled to receive any commission,
fee or compensation from the Company for services rendered
as placement agent or lender in connection with the offer
or sale of the Preferred Stock pursuant to the Offering.
6. Covenants of the Company.
The Company covenants with the Investor that:
(a) The Company will apply the net proceeds from the
sale of the Preferred Stock for general corporate purposes.
(b) The Company will, so long as the Investor shall
be the holder of Preferred Stock or Common Stock, furnish
to the Investor, as soon as practicable after the end of
each fiscal year, an annual report with respect to such
year (including financial statements audited by independent
public accountants) and, as soon as practicable after the
end of each quarterly period (other than the last quarterly
period) of each fiscal year, a statement (which need not be
audited) of the results of operations of the Company for
such period, and, to the extent not otherwise furnished,
promptly upon the filing thereof, copies of all reports
filed by the Company with the Commission pursuant to the
Exchange Act.
(c) So long as the Investor shall be the holder of
Preferred Stock or Common Stock, the Company will permit
any person designated by the Investor in writing, at the
sole expense of the Investor, to visit and inspect any of
the properties and books of account of the Company and to
discuss its affairs, finances and accounts with the
principal officers of the Company, all at such reasonable
times and at such reasonable intervals as the Investor may
reasonably request; provided, that the Company shall not be
required to reveal trade secrets or information not
reasonably pertinent to an evaluation of the credit of the
Company or compliance with this Agreement.
(d) The Company shall at all times keep in reserve
the number of shares of its Common Stock issuable from time
to time upon the conversion of all the outstanding
Preferred Stock.
(e) So long as the Investor shall be the holder of
Preferred Stock or Common Stock, the Company shall use its
best efforts to continue its existence, pay all applicable
taxes and comply with all applicable laws.
(f) The Company undertakes to notify each Investor as
soon as practical of any material change in any
representation, warranty or other information relating to
the Company set forth herein which occurs prior to the
Closing.
(g) Neither the Company nor any of its employees or
other persons directly or indirectly affiliated with it
will engage in any activity that would jeopardize the
status of the Offering as an exempt transaction under the
Act or under the laws of any state in which the Offering is
made.
(h) The Company acknowledges that the
representations, warranties, agreements, undertakings and
acknowledgments are made by the Company with the intent
that they be relied upon by each Investor in determining
whether to invest in the Preferred Stock.
7. Conditions of Investor Obligations.
The Investor's obligations under this Agreement are subject
to the accuracy of the representations and warranties of the
Company made in Section 5 hereof in all material respects, to
the performance by the Company of its other obligations under
this Agreement to be performed at or prior to the Closing and to
the following further conditions:
(a) At the Closing, the Investor shall have received
the favorable opinion of counsel to the Company, dated the
Closing Date and in form and substance satisfactory to the
Investor, to the effect that:
i) The Company has been duly organized and is
validly existing as a corporation in good standing
under the laws of its jurisdiction of organization,
with full power and authority to own its properties
and conduct its business as described in the Report,
and is duly qualified to do business as a foreign
corporation and is in good standing in each
jurisdiction in which the location of the properties
owned or leased by it, as known by such counsel, makes
such qualification necessary.
ii) The authorized capital stock of the Company
consists of 1,000,000 shares of preferred stock, par
value $1.00 per share, and 10,000,000 shares of Common
Stock, par value $.01 per share. The Company has all
requisite power and authority to issue, sell and
deliver the Preferred Stock in accordance with and
upon the terms and conditions set forth in this
Agreement; and all corporate action required to be
taken by the Company for the due and proper
authorization, issuance, sale and delivery of the
Preferred Stock has been validly and sufficiently
taken. Upon payment by the Investor at the Closing of
the purchase price for the shares of Preferred Stock
subscribed for hereby, the Preferred Stock will be,
and the Common Stock issuable upon conversion thereof,
upon issuance and delivery in the manner described in
the Certificate of Designation attached hereto, will
be duly authorized, validly issued, fully paid and
nonassessable. The Certificate of Designation, in the
form attached hereto, has been duly filed with the
Secretary of State of the State of Delaware and the
resolutions contained therein have been duly adopted
by the Board of Directors of the Company. There are
no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the voting or
transfer of, any shares of Common Stock pursuant to
the Company's Certificate of Incorporation, By-laws or
any agreement or other instrument known to such
counsel to which the Company is a party except as
described in the Report.
iii) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby do not result in a violation of,
or constitute a default under, the Certificate of
Incorporation or Bylaws of the Company, or any
material agreement, indenture or other instrument
known to such counsel to which the Company is a party
or by which it may be bound, or to which any property
of the Company is subject, nor will the performance by
the Company of its obligations hereunder violate any
law, rule, administrative regulation or decree known
to such counsel of any court, or any governmental
agency or authority having jurisdiction over the
Company or its properties, or, to the knowledge of
such counsel, result in the creation or imposition of
any material lien, charge, claim or encumbrance upon
any property or asset of the Company. No consent,
approval, authorization or other order of any court,
governmental agency or authority is required in
connection with the consummation of the transactions
contemplated by this Agreement, except such as have
been obtained or as are contemplated hereunder.
iv) The Company has full legal right, power and
authority to enter into this Agreement. This
Agreement has been validly authorized, executed and
delivered by the Company and constitutes a legal,
valid and binding agreement of the Company,
enforceable in accordance with its terms, subject to
the effect of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and similar laws
relating to or affecting creditors' rights generally
and court decisions with respect thereto (provided
that no opinion need be expressed with respect to the
application of equitable principles in any proceeding,
whether at law or in equity).
In expressing such opinion, such counsel may state (i)
that, as to questions of fact not independently established
by such counsel, such counsel has relied on certificates of
the Company or its officers and of public officials, (ii)
that such opinion is limited to the General Corporation Law
of the State of Delaware, the laws of the United States and
the laws of the state in which such counsel maintains its
principal office, and that, in the event such principal
office is located outside of Pennsylvania, such counsel has
assumed that the laws of the Commonwealth of Pennsylvania
are the same as the laws of the state in which such
principal office is located, and (iii) that, when reference
is made in such opinion to "knowledge" or to what is
"known" to such counsel, such reference means the actual
knowledge of only those attorneys who have given
substantive attention to the representation of the Company
and the preparation and negotiation of this Agreement and
the Certificate of Designation attached hereto.
(b) At the Closing the Investor shall have received a
certificate, dated the date thereof and signed by the
Chairman of the Board and President of the Company to the
effect that:
i) The representations and warranties of the
Company in this Agreement are true and correct in all
material respects, as if made at and as of the Closing
Date, and the Company has complied with all the
agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the
Closing Date; and
ii) The signer of said certificate has carefully
examined the Report and after giving effect to all
amendments or supplements thereto, on the Closing
Date, such Report does not include any untrue state-
ment of a material fact or omit to state any material
fact necessary to make the statements therein not
misleading.
(c) The Certificates of Designation for the Preferred
Stock shall have been duly filed with the Secretary of
State of the State of Delaware.
If any of the conditions specified in this Section 7 have
not been fulfilled in all material respects when and as required
by this Agreement to be fulfilled, the Investor may cancel this
Agreement and all its obligations under this Agreement by
notifying the Company of such cancellation in writing or by
telegram or by facsimile at any time at or before the Closing
and any such cancellation will be without liability or
obligation of any party to any other party (except in the case
of willful breach).
8. Conditions of Obligations of the Company.
The obligations of the Company under this Agreement are
subject to the accuracy of the representations and warranties of
the Investor made in Section 4 hereof in all material respects,
to the performance by the Investor of its other obligations
under this Agreement to be performed at or prior to the Closing
and to the further condition that all other Investors shall
concurrently make the Investments contemplated to be made in
connection with this Offering.
If any of the conditions specified in this Section 8 have
not been fulfilled in all material respects when and as required
by this Agreement to be fulfilled, the Company may cancel this
Agreement and all its obligations under this Agreement by
notifying the Investor of such cancellation in writing or by
telegram at any time at or before the Closing and any such
cancellation will be without liability or obligation of any
party to any other party (except in the case of willful breach).
9. Rule 144.
The Company covenants that it will file the reports
required to be filed by it under the Act and the Exchange Act
and the rules and regulations adopted by the Commission
thereunder (or, if it ceases to be required to file such
reports, it will, upon the request of the Investor, make pub-
licly available other information), and it will take such
further action as the Investor may reasonably request, all to
the extent required from time to time to enable the Investor to
sell the Common Stock without registration under the Act within
the limitation of the exemptions provided by (a) Rule 144 under
the Act, as such Rule may be amended from time to time, or (b)
any similar rule or regulation hereafter adopted by the
Commission. Upon the request of the Investor, the Company will
deliver to it a written statement as to whether the Company has
complied with such information disclosure and other
requirements.
10. Automatic Conversion.
The Investors agree that if, at any time, 75% of the then
outstanding shares of Preferred Stock have been surrendered for
conversion into Common Stock in accordance with the Certificate
of Designation, the remaining 25% of the outstanding Preferred
Stock shall also be surrendered for conversion.
11. Expenses.
The reasonable legal expenses of the Investors incurred in
connection with this Offering (aggregating, together with the
expenses of ▇▇▇▇▇ Associates and Eagle Partners in connection
the Prior Placement, up to a total of $6,500) shall be borne by
the Company. Subject to the preceding sentence, each party
hereto shall bear its own legal and other expenses incurred in
connection with this Offering.
12. Notices.
(a) Any notice required to be given or delivered to
the Investor shall be mailed first class, postage prepaid,
return receipt requested, to such Investor's address shown
on the signature page hereof.
(b) Any notice required to be given or delivered to
the Company shall be mailed first class, postage prepaid,
return receipt requested, to:
Acrodyne Communications, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
with a copy to:
Stroock & Stroock & ▇▇▇▇▇
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
13. Survival of Representations and Warranties. All
representations and warranties and agreements hereunder shall
survive execution of this Agreement and delivery of the
Preferred Stock.
14. Governing Law. This Agreement and the rights and
obligations of the parties shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania
applicable to contracts made and to be performed wholly within
that State.
IN WITNESS WHEREOF, the undersigned has executed this
Subscription Agreement as of the date first above written.
_______________________________
Name of Subscriber
By:____________________________
Title:
Address:
________________________________
________________________________
________________________________
Tax Identification Number:________
The terms of the foregoing
including the subscription
described therein are agreed
to and accepted on this
May 7, 1996:
ACRODYNE COMMUNICATIONS, INC.
By:
Title: President
Exhibit A
(Intentionally Omitted)