AYDIN CORPORATION
700 Dresher Road
P.O. Box 349
Horsham, Pennsylvania 19044
PERSONAL AND CONFIDENTIAL
October 8, 1998
L-3 Communications Corporation
600 Third Avenue
New York, NY 10016
Gentlemen:
1. In connection with your consideration of a possible transaction with Aydin
Corporation (the "Company"), you have requested information concerning the
Company. As a condition to you being furnished such information, you agree to
treat any information (whether written or oral) concerning the Company (whether
prepared by the Company, its advisors or otherwise) which is furnished to you
by or on behalf of the Company or its subsidiaries or by its or their
directors, officers, employees, representatives (including financial advisors,
attorneys or accountants) or agents (collectively, "Representatives") to you
and your Representatives (herein collectively referred to as the "Evaluation
Material") in accordance with the provisions of this letter and to take or
abstain from taking certain other actions herein set forth. As used herein, the
term "your Representatives" means those of your and your subsidiaries'
directors, officers, employees, representatives (including financial advisors,
attorneys and accountants) or agents who are provided or informed of the
contents of Evaluation Material on your behalf or otherwise act on your behalf
in connection with a possible transaction between you and the Company, and, in
the case of your or your subsidiaries' representatives (including financial
advisors, attorneys and accountants) or agents, means solely the individual
directors, partners, officers or employees actually provided or informed of the
contents of Evaluation Material or acting in connection with the possible
transaction. The term "Evaluation Material" does not include information which
(i) is already in your possession (other than information provided to you or
your Representatives by the
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Company or its Representatives) provided that such information is not known by
you to be subject to another confidentiality agreement with or other obligation
of secrecy to the Company or another party, or (ii) becomes generally available
to the public other than as a result of a disclosure by you or your
Representatives (but only with respect to the period after which such
information becomes publicly available), or (iii) becomes available to you on a
non-confidential basis from a source other than the Company or its
Representatives, provided that such source is not known by you, after due
inquiry, to be bound by a confidentiality agreement with or other obligation of
secrecy to the Company or its Representatives.
2. You hereby agree that the Evaluation Material will be used solely for the
purpose of evaluating a possible transaction between the Company and you.
Except as required by law, you agree that such information will be kept
confidential by you and your Representatives, and that you and your
Representatives will not disclose in any manner whatsoever such information or
the fact that you have received such information; provided, however, that (i)
any of such information may be disclosed to your directors, officers and
employees and Representatives who need to know such information for the purpose
of evaluating any such possible transaction between the Company and you (it
being understood that such directors, officers, employees and Representatives
shall be informed by you of the confidential nature of such information and
shall agree to treat such information confidentially), and (ii) any disclosure
of such information may be made to which the Company consents in writing. You
agree that you will be responsible for any breach of this letter by any of your
Representatives, except that you will not be responsible for any such breach
arising from (1) a director, officer or employee of Lehman Brothers Holdings
Inc. or any of its subsidiaries or affiliates conveying information to or
instigating action by Lehman Brothers Holdings Inc. or any of its subsidiaries
or affiliates, (2) a director, officer or employee of Lockheed Martin
Corporation conveying information to or instigating action by Lockheed Martin
Corporation or any of its subsidiaries or affiliates, or (3) any director,
partner, officer or employee of any of your Representatives (including
financial advisors, attorneys or accountants) or agents conveying information
to or instigating action by their employer or their employer's subsidiaries or
affiliates.
3. You hereby acknowledge that you are aware, and that you will advise such
directors, officers, employees and representatives who are informed as to the
matters which are the subject of this letter, that the United States securities
laws prohibit any person who has received from an issuer material, non-public
information concerning the matters which are the subject of this letter from
purchasing or selling securities of such issuer or from communicating such
information to any other person under
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circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities.
4. You hereby agree that at no time shall you or your Representatives contact
any officers or employees of the Company in connection with the possible
transaction with the Company other than the officers and employees of the
Company designated by the Company for that purpose.
5. In addition, without the prior written consent of the Company, except as
required by law, you will not, and will direct your Representatives not to,
disclose to any person either the fact that discussions or negotiations are
taking place concerning a possible transaction between the Company and you or
any of the terms, conditions or other facts with respect to any such possible
transaction, including the status thereof.
6. In the event that you or any of your Representatives are requested or
required (by oral questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand or any informal or formal
investigation by any government or governmental agency or authority) to
disclose any of the Evaluation Material or any of the other information
referred to in this letter, you will notify the Company promptly in writing so
that the Company may seek a protective order or other appropriate remedy or, in
the Company's sole discretion, waive compliance with the terms of this letter.
You agree not to oppose any action by the Company to obtain such protective
order or other remedy. Irrespective of whether such protective order or other
remedy is obtained or the Company waives compliance with the terms of this
letter, you agree that you and your Representatives will furnish only that
portion of the Evaluation Material or other information which you are advised
by counsel is legally required to be furnished.
7. You hereby acknowledge that the Evaluation Material is being furnished to
you in consideration of the agreement that prior to the earlier of (i) the
second anniversary of the date of this letter and (ii) the execution by you and
the Company of a definitive and binding agreement relating to a possible
transaction (the "Period"), neither you nor any of your Representatives,
without the prior written consent of the Company, will, in any manner, whether
publicly or otherwise, directly or indirectly (nor will you or any of your
Representatives in any way assist, finance, influence or encourage any other
person or entity, whether publicly or otherwise, directly or indirectly to),
initiate, make, effect, cause or seek, offer or propose to initiate or
participate in or take a position with respect to: (i) any acquisition of any
securities or assets of the Company or any of its affiliates or beneficial
ownership (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as
amended (the "1934 Act")) thereof; (ii) any tender or exchange offer, merger or
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other business combination involving the Company or any of its affiliates;
(iii) any sale of assets, recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to the Company or
any of its affiliates; (iv) any "solicitation" of "proxies" (as such terms are
used in the rules of the Securities and Exchange Commission) or consents which
relates in any way to any shares of Common Stock or other securities of the
Company, whether before or after the formal commencement of any such
solicitation; (v) advising or influencing any person or entity with respect to
the voting of, or the giving or withholding of any consents with respect to,
any shares of Common Stock or other securities of the Company; (vi) calling, or
seeking to call, a meeting of the Company's shareholders or executing any
written consent or initiating or continuing any shareholder proposal for action
by shareholders of the Company; (vii) otherwise acting, alone or in concert
with others, to seek to acquire control of the Company or influence the Board,
management or policies of the Company; (viii) bringing any action or otherwise
acting to contest the validity of this letter or seeking a release of the
restrictions contained herein; (ix) any formation of a "group" within the
meaning of Section 13(d)(3) or Section 14(d)(2) of, or Rule 13d-5 under, the
1934 Act, with respect to securities of the Company or its affiliates; (x) any
action which would at any time require the Company or any of its affiliates to
make a public announcement regarding any of the foregoing; (xi) any disclosure
of any intention, plan or arrangement inconsistent with any of the foregoing or
(xii) any discussions, arrangements, understandings, agreements or proposals
with any person or entity with respect to any of the foregoing. You also agree
that, during the Period, neither you nor any of your Representatives will
request the Company or any of its Representatives, directly or indirectly, to
amend or waive any provision of this paragraph (including this sentence). If at
the time of this letter you are engaged in any of the foregoing, you agree to
promptly cease or withdraw from any such action.
8. You also agree that the Company shall be entitled to specific performance or
other equitable relief, including injunction, in the event of any breach or
threatened breach of the provisions of this letter and that you shall not
oppose the granting of such relief. Such remedy shall not be deemed to be the
exclusive remedy for a breach of this letter but shall be in addition to all
other remedies at law or in equity.
9. You understand that (a) the Company shall be free to conduct the process
relating to the consideration of a possible transaction (including, without
limitation, by negotiation with any prospective buyer and entering into a
definitive agreement relating to a possible transaction without prior notice to
you or any other person) and (b) any procedures established with respect to
such possible transaction may be changed at any time without notice to you or
any other person and you agree to be bound by
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such procedures.
10. Although the Company has endeavored to include in the Evaluation Material
information known to it which it believes to be relevant for the purpose of
your investigation, you understand that neither the Company nor any of its
Representatives has made or makes any representation or warranty as to the
accuracy or completeness of the Evaluation Material. You agree that neither the
Company nor its Representatives shall have any liability to you or any of your
Representatives resulting from the use of the Evaluation Material.
11. Immediately upon the Company's request, you shall promptly redeliver to the
Company all written Evaluation Material and any other written material
containing or reflecting any information in the Evaluation Material, including
any summaries, analyses or extracts thereof (whether prepared by the Company,
its advisors or otherwise), and will not retain any copies, extracts or other
reproductions in whole or in part of such written material. All documents,
memoranda, notes and other writings whatsoever prepared by you or your
Representatives based on the information in the Evaluation Material shall be
destroyed, and such destruction shall be certified in writing to the Company by
your authorized officer supervising such destruction. All information contained
in any documents returned to the Company or destroyed, and any oral information
provided to you or your Representatives hereunder, will continue to be subject
to this letter.
12. You agree that unless and until a definitive agreement between the Company
and you with respect to any transaction referred to in the first paragraph of
this letter has been executed and delivered, neither the Company nor you will
be under any legal obligation of any kind whatsoever with respect to such a
transaction by virtue of this or any written or oral expression with respect to
such a transaction by the Company or any of its Representatives except, in the
case of this letter, for the matters specifically agreed to herein.
13. Unless the term of an obligation is otherwise specifically stated herein,
all of the obligations hereunder shall terminate two years following the date
first set forth above.
14. This letter shall be governed by, and construed in accordance with, the
laws of the Commonwealth of Pennsylvania, City of Philadelphia, without regard
to the principles of conflicts of laws thereof. It is further agreed that any
suit, action or proceeding arising under or relating to this letter shall be
brought either in the United States District Court located in, or a state court
located in, the State of Delaware and you hereby (a) consent to the
jurisdiction of any such court, (b) agree to service of process in any such
suit and agree that service of any process, summons, notice or document by U.S.
registered or
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certified mail to the address set forth above shall be effective service of
process for any suit, action or proceeding brought against you in such court,
and (c) agree that any such court will be the proper and convenient forum for
any such suit, action or proceeding.
15. No modifications of this letter or waiver of the terms and conditions
hereof will be binding upon you or the Company, unless executed in writing by
each of you and the Company.
This letter shall inure to the benefit of and be binding upon our respective
successors and assigns; provided, however, that neither this letter nor any of
the rights, interests or obligations hereunder shall be assigned by either you
or the Company without the prior written consent of the other party.
Very truly yours,
Aydin Corporation
By: /s/ I. Gary Bard
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Name: I. Gary Bard
Title: Chief Executive Officer
Confirmed and Agreed to:
L-3 Communications Corporation
By: /s/ Christopher C. Cambria
---------------------------------
Name:Christopher C. Cambria
Title:Vice President, Secretary and
General Counsel
Date: 10/9/98
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