Xxxxx X. Xxxxx
Page 1
February 25, 1997
[on Aydin letterhead]
February 25, 1997
Xxxxx X. Xxxxx, Chairman
EA Industries, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Dear Xxx:
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, Xxxxx 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 Xxxxx 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, Xxxxx and EA have agreed as follows:
1. EA will xxxxx X. Xxxx Xxxx 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, Xxxxx 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 Xxxxx 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, Xxxxx X. Xxxxx will thereupon resign as a
director of Xxxxx.
Xxxxx X. Xxxxx
Page 2
February 25, 1997
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,
-------------------------------
I. Xxxx Xxxx, President
Accepted and agreed to this
____ day of February, 1997
EA INDUSTRIES, INC.
By:
-----------------------------
Xxxxx X. Xxxxx, Chairman
