Acrodyne Communications Announces Strategic Investment from Sinclair Broadcast Group.

BLUE BELL, Pa.--(BUSINESS WIRE)--Nov. 23, 1998--Acrodyne Communications, Inc.

(NASDAQ: ACRO) has executed a definitive agreement with Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), whereby Sinclair will acquire a significant equity interest in Acrodyne and appoint certain members of Acrodyne's Board of Directors and senior management. Sinclair is a diversified broadcasting company that upon completion of all pending transactions will own or program 65 television stations in 42 separate markets and 51 radio stations in 10 separate markets. Sinclair's television group will reach approximately 25.9% of U.S. television households.

Under the Agreement, Sinclair will make a cash infusion of $4.3 million in Acrodyne in consideration for the issuance of 1,431,333 shares of Acrodyne's common stock and the issuance of warrants to purchase up to an aggregate of 8,713,100 shares over a term of seven years at prices ranging from $3.00 to $6.00 per share. Of such warrants, 6,000,000 are exercisable only upon the Company's achievement of increased product sales or sales of products with new technology. Simultaneously with the closing of the transaction, Sinclair will acquire an additional 800,000 shares of common stock currently held by the Scorpion/Newlight investment group. Immediately after the transaction, Sinclair will hold an aggregate of 2,231,333 shares of Acrodyne, representing approximately 31.8% of the then issued common stock, assuming no exercise of any warrants.

From the net proceeds of the transaction, $1.0 million will be used to retire all Series A 8% Redeemable Convertible Preferred Stock issued in September 1998 to the Scorpion/Newlight investment group; $1.0 million will be set aside to fund a new research and development program; and the balance will be used for working capital and general corporate purposes.

At the closing of the transaction, Acrodyne's Board of Directors will be reconstituted to comprise 3 directors nominated by Sinclair, including Nathaniel Ostroff as Chairman, 2 directors nominated by the Company's President and CEO, Robert Mancuso, and 2 independent directors not affiliated with Sinclair or Acrodyne. Mr. Ostroff, who was formerly the President of Comark, a manufacturer of television broadcast equipment which competes with Acrodyne, is Vice President of New Technology of Sinclair. Mr. Ostroff will also chair Acrodyne's management committee, which will include Mr. Mancuso and an operating officer to be appointed.

In connection with this investment, Sinclair, Acrodyne and Mr. Mancuso will enter into an Investment Agreement with respect to Acrodyne's governance and providing for, among other things, the composition of the Board of Directors, restrictions on certain corporate, securities and affiliated party transactions, a standstill agreement and an enhanced role for the Company's independent directors.

The consummation of the transaction with Sinclair is subject to the approval of Acrodyne's stockholders and certain other customary closing conditions. Acrodyne will convene a special meeting of stockholders and circulate a proxy statement as required under the rules of the Securities and Exchange Commission. Acrodyne intends to hold its stockholders meeting in January 1999.

Robert Mancuso, President and CEO of Acrodyne, noted, "We are very excited to have the Sinclair Broadcast Group as our equity/strategic investor, and equally excited to be associated with the Sinclair management group, especially David Smith and Nat Ostroff, both of whom are icons in the broadcast industry."

Acrodyne Industries, Inc., the operating subsidiary of Acrodyne Communications, Inc., is an established and respected manufacturer of television broadcast equipment. In business over 25 years, the Company has developed the leading position as a technologically advanced, high quality low cost producer of transmitters and translators used by television stations to broadcast and retransmit over-the-air signals.

Sinclair Broadcast Group, Inc. is a diversified broadcasting company that currently owns or programs 56 television stations and 51 radio stations. Upon completion of all pending transactions, Sinclair will own or program 65 television stations in 42 separate markets and 51 radio stations in 10 separate markets. Sinclair's television group will reach approximately 25.9% of U.S. television households and includes ABC, CBS, FOX, NBC, WB and UPN affiliates. Sinclair's radio group is one of the top 10 groups in the United States.

This release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the Company's control, which may cause actual results, performance or achievements of the Company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the Company's periodic filings with the Securities and Exchange Commission.