SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)(1)
AYDIN Corporation
- --------------------------------------------------------------------------------
(Name of issuer)
COMMON STOCK, $1.00 PAR VALUE
- --------------------------------------------------------------------------------
(Title of class of securities)
054681101
- --------------------------------------------------------------------------------
(CUSIP number)
STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
- --------------------------------------------------------------------------------
(Name, address and telephone number of person
authorized to receive notices and communications)
March 1, 1999
- --------------------------------------------------------------------------------
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
/ /.
Note. six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
(Continued on following pages)
(Page 1 of 20 Pages)
Exhibit List on Page 10
- --------
(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 2 of 20 Pages
- ------------------------------- -----------------------
================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
STEEL PARTNERS II, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 492,600
OWNED BY -----------------------------------------------------------------
EACH
REPORTING
PERSON WITH
8 SHARED VOTING POWER
-0-
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
492,600
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
492,600
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 3 of 20 Pages
- ------------------------------- -----------------------
================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
WARREN G. LICHTENSTEIN
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION
USA
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 492,600
OWNED BY -----------------------------------------------------------------
EACH
REPORTING
PERSON WITH
8 SHARED VOTING POWER
- 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
492,600
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
492,600
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 4 of 20 Pages
- ------------------------------- -----------------------
================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
SANDERA PARTNERS, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION
TEXAS
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 125,000
OWNED BY ----------------------------------------------------------------
EACH
REPORTING
PERSON WITH
8 SHARED VOTING POWER
-0-
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
125,000
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
-----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
125,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 5 of 20 Pages
- ------------------------------- -----------------------
================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
NEWCASTLE PARTNERS, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 3,100
OWNED BY ----------------------------------------------------------------
EACH
REPORTING
PERSON WITH
8 SHARED VOTING POWER
-0-
----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
3,100
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
3,100
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.1%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 6 of 20 Pages
- ------------------------------- -----------------------
================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
MARK E. SCHWARZ
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION
USA
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 128,100
OWNED BY ----------------------------------------------------------------
EACH
REPORTING
PERSON WITH
8 SHARED VOTING POWER
- 0 -
----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
128,100
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
128,100
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 7 of 20 Pages
- ------------------------------- -----------------------
The following constitutes Amendment No. 3 to the Schedule 13D filed on
July 30, 1998 (the "Schedule 13D"). Unless otherwise indicated, all defined
terms used herein shall have the same meanings respectively assigned to them in
the Schedule 13D.
Item 6 is amended to add the following:
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
The Issuer entered into an Agreement and Plan of Merger, dated
as of March 1, 1999 (the "Merger Agreement"), with L-3 Communications
Corporation, a Delaware corporation (the "Parent"), and Angel Acquisition
Corporation (the "Purchaser"), a Delaware corporation and a wholly-owned
subsidiary of the Parent pursuant to which the Purchaser has agreed to commence
a tender offer (the "Offer") for all of the issued and outstanding shares of
Common Stock for a cash price of $13.50. The Merger Agreement provides that
following consummation of the Offer and subject to certain other terms and
conditions in the Merger Agreement and in accordance with Delaware law, the
Purchaser will be merged (the "Merger") with and into the Issuer and the shares
of Common Stock that are not acquired in the Merger will be converted into the
right to receive $13.50 per share in cash. The Offer is expected to commence on
or prior to March 5, 1999.
In connection with the execution of the Merger Agreement, Steel
Partners II, L.P., Sandera Partners, L.P. and Newcastle Partners, L.P.
(collectively, the "Tender Parties") entered into a Tender Agreement, dated as
of March 1, 1999 (the "Tender Agreement"), with the Parent. A copy of the Tender
Agreement is attached as Exhibit 8 hereto and is incorporated herein by
reference. The following summary of the Tender Agreement is qualified in its
entirety by reference to the Tender Agreement.
Pursuant to the Tender Agreement, so long as the Merger Agreement has
not been terminated in accordance with its terms, the Tender Parties have agreed
to Tender validly pursuant to the Offer (and not thereafter to withdraw) all
shares of the Common Stock owned by them pursuant to and in accordance with the
terms of the Offer.
In connection with the Tender Agreement, the Tender Parties have made
certain customary representations, warranties and covenants, including with
respect to (i) ownership of their shares of Common Stock, (ii) the Tender
Parties' authority to enter into and perform their respective obligations under
the Tender Agreement, (iii) the ability of the Tender Parties to enter into the
Tender Agreement without violating other agreements to which they are a party,
(iv) the absence of liens and encumbrances on and in respect of the Tender
Parties' shares of Common Stock and (v) certain restrictions on the transfer of
the Tender Parties' shares of Common Stock. The obligations of the Tender
Parties are several and not joint.
Other than as described herein, there are no contracts, arrangements or
understandings among the Reporting Persons, or between the Reporting Persons and
any other Person, with respect to the securities of the Issuer.
Item 7 is hereby amended in its entirety as follows:
Item 7. Material to be Filed as Exhibits.
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 8 of 20 Pages
- ------------------------------- -----------------------
1. Joint Filing Agreement between Steel Partners and
Warren G. Lichtenstein.
2. Joint Filing Agreement between Steel Partners, Warren
Lichtenstein, Robert Frankfurt, Sandera Partners,
L.P., Newcastle Partners, L.P. and Mark E. Schwarz.
3. Preliminary Consent Solicitation Statement.
4. Letter from Warren G. Lichtenstein to I. Gary Bard
dated September 9, 1998.
5. Stockholder list demand letter and written consent.
6. Standstill and Settlement Agreement dated as of
September 18, 1998 by and among Aydin Corporation,
Steel Partners II, L.P., Warren G. Lichtenstein,
Sandera partners, L.P., Newcastle Partners, L.P.,
Mark E. Schwarz and Robert Frankfurt.
7. Joint Press Release dated September 18, 1998.
8. Tender Agreement, dated as of March 1, 1999 among
Steel Partners II, L.P., Sandera Partners, L.P. and
Newcastle Partners, L.P., and L-3 Communications
Corporation.
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 9 of 20 Pages
- ------------------------------- -----------------------
SIGNATURES
After reasonable inquiry and to the best of his knowledge and
belief, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: March 2, 1999 STEEL PARTNERS II, L.P.
By: Steel Partners, L.L.C. General
Partner
By:/s/ Warren G. Lichtenstein
-----------------------------------
Warren G. Lichtenstein
Chief Executive Officer
/s/ Warren G. Lichtenstein
--------------------------------------
WARREN G. LICHTENSTEIN
SANDERA PARTNERS, L.P.
By: Sandera Capital Management L.P.
General Partner
By: Sandera Capital, L.L.C.
General Partner
By: /s/ Mark E. Schwarz
----------------------------------
Mark E. Schwarz
Vice President and Managing
Member
NEWCASTLE PARTNERS, L.P.
By:/s/ Mark E. Schwarz
-----------------------------------
Mark E. Schwarz
General Partner
/s/ Mark E. Schwarz
--------------------------------------
Mark E. Schwarz
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 10 of 20 Pages
- ------------------------------- -----------------------
EXHIBIT INDEX
Exhibit Page
*1. Joint Filing Agreement
*2. Joint Filing and Solicitation Agreement dated
September 3, 1998
*3. Preliminary Consent Solicitation Statement
*4. Letter from Warren G. Lichtenstein to I. Gary
Bard dated September 9, 1998
*5. Stockholder list demand letter and written
consent
*6. Standstill and Settlement Agreement dated as
of September 18, 1998 by and among Aydin
Corporation, Steel Partners II, L.P., Warren
G. Lichtenstein, Sandera Partners, L.P.,
Newcastle Partners, L.P., Mark E. Schwarz and
Robert Frankfurt.
*7. Joint Press Release dated September 18, 1998.
8. Tender Agreement, dated as of March 1, 1999 11
among Steel Partners II, L.P., Sandera
Partners, L.P., Newcastle Partners, L.P. and L-3
Communications Corporation.
- ------------------------
* Previously filed
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 11 of 20 Pages
- ------------------------------- -----------------------
TENDER AGREEMENT
TENDER AGREEMENT (this "Agreement"), dated as of March 1,
1999, among L-3 Communications Corporation, a Delaware corporation ("Parent"),
and the other parties set forth on the signature page hereof (collectively, the
"Stockholders").
RECITALS
Concurrently herewith, Parent, Angel Acquisition Corp., a
Delaware corporation and a direct, wholly owned subsidiary of Parent ("Sub"),
and Aydin Corporation, a Delaware corporation (the "Company"), are entering into
an Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"; capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), pursuant to which Sub agrees to
make an offer (the "Offer") for all outstanding shares of common stock, par
value $1.00 per share (the "Common Stock"), of the Company, at a price of $13.50
per share (the "Offer Price"), net in cash, to be followed by a merger (the
"Merger") of Sub with and into the Company.
As a condition to their willingness to enter into the Merger
Agreement and make the Offer, Parent and Sub have required that the Stockholders
agree, and the Stockholders have agreed, among other things, to tender the
number of shares of Common Stock of each Stockholder set forth on Annex A
hereto, together with any additional shares when and if they are acquired (such
shares, and any additional shares when and if they are acquired, being referred
to herein as the "Shares") pursuant to the Offer and not withdraw any Shares
therefrom on the terms and conditions provided for herein.
The Board of Directors of the Company has exempted this
Agreement, the Merger Agreement and the transactions contemplated hereby and
thereby so as to render inapplicable Section 203 of the Delaware General
Corporation Law ("DGCL") to the transactions contemplated hereby and thereby.
AGREEMENT
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
1. Agreement to Tender. The Stockholders hereby agree to
validly tender (or cause the record owner to validly tender) all of their Shares
pursuant to and in accordance with the terms of the Offer and not withdraw any
Shares therefrom.
2. Voting of Shares. Each Stockholder hereby agrees to (a)
vote the Shares in favor of the approval of the Merger Agreement; (b) vote the
Shares against any action or agreement
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 12 of 20 Pages
- ------------------------------- -----------------------
that would result in a breach in any material respect of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement; and (c) vote the Shares against any action or
agreement (other than the Merger Agreement or the transactions contemplated
thereby) that would impede, interfere with, delay, postpone or attempt to
discourage the Merger or the Offer. Each Stockholder shall not hereafter purport
to vote (or execute a consent with respect to) such Shares (other than in
accordance with the requirements of this Section 2) or grant any other proxy or
power of attorney with respect to any Shares, deposit any Shares into a voting
trust or enter into any agreement (other than this Agreement), arrangement or
understanding with any person, directly or indirectly, to vote, grant any proxy
or give instructions with respect to the voting of such Shares.
3. Representations and Warranties.
3.1 Representations and Warranties of Parent. Parent hereby
represents and warrants to the Stockholders as follows:
(a) Due Authorization. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of Parent, and no
other corporate proceedings on the part of Parent are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by Parent and
constitutes a valid and binding agreement of Parent, enforceable against Parent
in accordance with its terms, except that such enforceability (i) may be limited
by bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally and (ii) is subject to
general principles of equity.
(b) No Conflicts. Except for (i) filings under the
HSR Act, if applicable, (ii) the applicable requirements of the Exchange Act and
the Securities Act, (iii) the applicable requirements of state securities,
takeover or blue sky laws and (iv) such notifications, filings, authorizing
actions, orders and approvals as may be required under other laws, no filing
with, and no permit, authorization, consent or approval of any state, federal,
foreign public body or authority is necessary for the execution of this
Agreement by Parent.
(c) Good Standing. Parent is a corporation duly
organized, validly existing and in good standing under the laws of Delaware and
has all requisite corporate power and authority to execute and deliver this
Agreement.
3.2 Representations and Warranties of Stockholders. Each
Stockholder, individually and solely as to itself hereby represents and warrants
to Parent as follows:
(a) Ownership of Shares. Each Stockholder is the
record or beneficial owner of the Shares set forth opposite its name on Annex A
hereto and has the power to vote and
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 13 of 20 Pages
- ------------------------------- -----------------------
dispose of such Shares. To each Stockholder's knowledge, such Shares are validly
issued, fully paid and nonassessable, with no personal liability attaching to
the ownership thereof. Each Stockholder has good title to the Shares, free and
clear of any agreements, liens, adverse claims or encumbrances whatsoever with
respect to the ownership of or the right to vote such Shares.
(b) Power; Binding Agreement. Each Stockholder has
the legal capacity, power and authority to enter into and perform all of its
obligations under this Agreement. The execution, delivery and performance of
this Agreement by each Stockholder will not violate any other agreement to which
such Stockholder is a party including, without limitation, any voting agreement,
stockholders agreement or voting trust. This Agreement has been duly and validly
authorized, executed and delivered by each Stockholder and constitutes a valid
and binding agreement of each Stockholder, enforceable against each Stockholder
in accordance with its terms, except that such enforceability (i) may be limited
by bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally and (ii) is subject to
general principles of equity.
(c) No Conflicts. Except for (i) filings under the
HSR Act, if applicable, (ii) the applicable requirements of the Exchange Act and
the Securities Act, (iii) the applicable requirements of state securities,
takeover or blue sky laws and (iv) such notifications, filings, authorizing
actions, orders and approvals as may be required under other laws, (A) no filing
with, and no permit, authorization, consent or approval of, any state, federal
or foreign public body or authority is necessary for the execution of this
Agreement by each Stockholder and the consummation by each Stockholder of the
transactions contemplated hereby and (B) neither the execution and delivery of
this Agreement by each Stockholder nor the consummation by each Stockholder of
the transactions contemplated hereby nor compliance by each Stockholder with any
of the provisions hereof shall (1) conflict with or result in any breach of any
provision of the certificate of incorporation, by-laws, trust or charitable
instruments (or similar documents) of such Stockholder, (2) result in a
violation or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to which such Stockholder
is a party or by which they or any of their properties or assets may be bound or
(3) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to such Stockholder or any of his or its properties or assets, except
in the case of (2) or (3) for violations, breaches or defaults which would not
in the aggregate materially impair the ability of such Stockholder to perform
its obligations hereunder.
4. Certain Covenants of Stockholder. Each Stockholder hereby
covenants and agrees, individually and solely, as to itself as follows:
4.1 No Solicitation. No Stockholder nor any employee,
representative or agent of any Stockholder shall, directly or indirectly,
encourage, solicit, participate in or initiate
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 14 of 20 Pages
- ------------------------------- -----------------------
discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than Parent and
Sub, any affiliate or associate of Parent and Sub or any designees of Parent or
Sub) concerning any merger, sale of all or any material portion of the assets,
sale of shares of capital stock or similar transactions (including an exchange
of stock or assets) involving the Company or any subsidiary or division of the
Company. If any Stockholder, or any employee, representative or agent of any
Stockholder, receives an inquiry or proposal with respect to the sale of Shares,
then such Stockholder shall promptly inform Parent of the terms and conditions,
if any, of such inquiry or proposal and the identity of the person making it.
Each Stockholder shall, and shall cause his or its employees, representatives
and agents to, immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing.
4.2 Restriction on Transfer and NonInterference. Each
Stockholder hereby agrees, while this Agreement is in effect, and except as
contemplated hereby, not to (a) sell, transfer, pledge, encumber, assign or
otherwise dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any Shares; provided that any Stockholder
may transfer Shares to any other Stockholder; provided further that as a
condition to such transfer, such other Stockholder agrees in writing on terms
reasonably acceptable to Parent to become a party to, and agrees to be bound by,
to the same extent as the transferring Stockholder, the terms of this Agreement
or (b) take any action that would make any representation or warranty of such
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling such Stockholder from performing or its obligations
under this Agreement.
4.3 Legending of Certificates; Nominees Shares. If requested
by Parent, the Stockholders agree to submit to Parent contemporaneously with or
promptly following execution of this Agreement all certificates representing
their Shares so that Parent may note thereon a legend referring to the rights
granted to it by this Agreement. If any of the Shares beneficially owned by the
Stockholders are held of record by a brokerage firm in "street name" or in the
name of any other nominee (a "Nominee," and, as to such Shares, "Nominee
Shares"), the Stockholders agree that, upon written notice by Parent requesting
it, the Stockholders will within five days of the giving of such notice execute
and deliver to Parent a limited power of attorney in such form as shall be
reasonably satisfactory to Parent solely to enable Parent to require the Nominee
to (i) enter into an agreement to the same effect as Section 2 hereof with
respect to the Nominee Shares held by such Nominee, (ii) tender such Nominee
Shares in the Offer pursuant to Section 1 hereof and (iii) submit to Parent the
certificates representing such Nominee Shares for notation of the
above-referenced legend thereon.
4.4 Stop Transfer Order. In furtherance of this Agreement,
concurrently herewith, the Stockholders shall and hereby do authorize the
Company's counsel to notify the Company's transfer agent that, except as
permitted pursuant to Section 4.2 of this Agreement, there is a stop
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 15 of 20 Pages
- ------------------------------- -----------------------
transfer order with respect to all of the Shares (and that this Agreement places
limits on the transfer of such Shares).
5. Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate the transactions contemplated by this
Agreement.
6. Adjustments to Prevent Dilution. In the event of a stock
dividend or distribution, or any change in the Company's Common Stock by reason
of any stock dividend, split-up, reclassification, recapitalization, combination
or the exchange of shares, the term "Shares" shall be deemed to refer to and
include the Shares as well as all such stock dividends and distributions and any
shares into which or for which any or all of the Shares may be changed or
exchanged. In such event, the definitions of "Set Amount" and "Initial Amount"
shall be proportionally adjusted.
7. Miscellaneous.
7.1 Entire Agreement; Assignment. This Agreement (i)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
Parent may assign its rights and obligations hereunder to any direct or indirect
wholly owned parent company or subsidiary of Parent, but no such assignment
shall relieve Parent of its obligations hereunder if such assignee does not
perform such obligations.
7.2 Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
7.3 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
If to the Stockholders: c/o Steel Partners II, L.P.
150 East 52nd Street
21st Floor
New York, New York 10022
Attention: Warren G. Lichtenstein
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 16 of 20 Pages
- ------------------------------- -----------------------
copy to: Olshan Grundman Frome Rosenzweig & Wolosky, LLP
505 Park Avenue
New York, New York 10022
Attention: Steven Wolosky, Esq.
If to Parent: L-3 Communications Corporation
600 Third Avenue
New York, New York 10016
Attention: Christopher Cambria, Esq.
copy to: Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: William E. Curbow, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
7.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
7.5 Termination. This Agreement shall terminate on the earlier
of (i) the Effective Time or (ii) the termination of the Merger Agreement in
accordance with its terms.
7.6 Waiver of Dissenter's and Appraisal Rights. The
Stockholders agree that they will not exercise any rights to dissent from the
Merger or request appraisal rights of their Shares pursuant to Section 262 of
the DGCL or any other similar provisions of law in connection with the
transactions contemplated hereby.
7.7 Specific Performance. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages for
which it would not have an adequate remedy at law for money damages, and
therefore, each of the parties hereto agrees that in the event of any such
breach the aggrieved party shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other equitable
relief in addition to any other remedy to which it may be entitled, at law or in
equity.
7.8 Counterparts. This Agreement may be executed in any number
of separate counterparts, each of which shall be deemed to be an original, and
all of which shall constitute one and the same agreement.
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 17 of 20 Pages
- ------------------------------- -----------------------
7.9 Descriptive Headings. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
7.10 Severability. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law but if any provision or portion
of 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 will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.
7.11 Duty of Directors. Nothing contained in Section 4.1 shall
limit the right of any officer, director, employee or representative of a
Stockholder who is a director of the Company from exercising his or her
fiduciary responsibility as a director, consistent with the terms of the Merger
Agreement.
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 18 of 20 Pages
- ------------------------------- -----------------------
IN WITNESS WHEREOF, this Agreement has been executed by or on
behalf of each of the parties hereto, all as of the date first above written.
L-3 COMMUNICATIONS CORPORATION
By:/s/ Christopher C. Cambria
--------------------------------------
Name: Christopher C. Cambria
Title: Vice President,
Secretary-General Counsel
STEEL PARTNERS II, L.P.
By: Steel Partners, L.L.C., General Partner
By:/s/ Warren G. Lichtenstein
--------------------------------------
Warren G. Lichtenstein,
Chief Executive Officer
SANDERA PARTNERS, L.P.
By: Sandera Capital Management L.P.,
General Partner
By: Sandera Capital L.L.C.,
General Partner
By: /s/ Mark E. Schwarz
----------------------------------------
Mark E. Schwarz, Vice President and
Managing Member
NEWCASTLE PARTNERS, L.P.
By: /s/ Mark E. Schwarz
-----------------------------------------
Mark E. Schwarz, General Partner
<PAGE>
- ------------------------------- -----------------------
CUSIP No. 054 68 1101 13D Page 19 of 20 Pages
- ------------------------------- -----------------------
ANNEX A
Number of Shares
Name of Common Stock
Steel Partners II, L.P. 492,600
Sandera Partners, L.P. 125,000
Newcastle Partners, L.P. 3,100
