S-4

As filed with the Securities and Exchange Commission on February 2, 2005

Registration Statement No. 333-          

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

L-3 COMMUNICATIONS CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware

(State or Other Jurisdiction of Incorporation or Organization)

13-3937436

(I.R.S. Employer Identification Number)

600 Third Avenue
New York, New York 10016
(212) 697-1111

(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)

SEE TABLE OF ADDITIONAL REGISTRANTS

Christopher C. Cambria, Esq.
600 Third Avenue
New York, NY 10016
(212) 697-1111

(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)

Copy to:

Vincent Pagano, Esq.
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017-3954
(212) 455-2000

Approximate date of commencement of proposed sale to the public:    As soon as practicable after this Registration Statement becomes effective.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.                                        

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.                                        

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.                                        

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered				Amount to be Registered				Proposed Maximum Offering Price Per Unit				Proposed Maximum Aggregate Offering Price(1)				Amount of Registration Fee
5 7/8% Series B Senior Subordinated Notes due 2015				$650,000,000					100	%		$	650,000,000			$	76,505.00
Guarantees of 5 7/8% Series B Senior Subordinated Notes due 2015				(2)				(2)				(2)				None(2)

(1)	Estimated solely for purposes of calculating the registration fee.

(2)	No separate consideration will be received for the guarantees. Pursuant to Rule 457(n) of the Securities Act of 1933, as amended, there is no filing fee with respect to the guarantees.

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

TABLE OF ADDITIONAL REGISTRANTS

Exact Name of Registrant as Specified in Its Charter

State Or Other Jurisdiction Of Incorporation Or Organization

IRS Employer Identification Number

Address, Including Zip Code, and Telephone Number, including Area Code, of Registrant's Principal Executive Offices

Apcom, Inc.

Maryland

52-1291447

600 Third Avenue New York, NY 10016 (212) 697-1111

Broadcast Sports Inc.

Delaware

52-1977327

600 Third Avenue New York, NY 10016 (212) 697-1111

D.P. Associates Inc.

Virginia

54-1389520

600 Third Avenue New York, NY 10016 (212) 697-1111

Electrodynamics, Inc.

Arizona

36-3140903

600 Third Avenue New York, NY 10016 (212) 697-1111

Henschel, Inc.

Delaware

23-2554418

600 Third Avenue New York, NY 10016 (212) 697-1111

Hygienetics Environmental Services, Inc.

Delaware

13-3992505

600 Third Avenue New York, NY 10016 (212) 697-1111

Interstate Electronics Corporation

California

95-1912832

600 Third Avenue New York, NY 10016 (212) 697-1111

KDI Precision Products, Inc.

Delaware

31-0740721

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications Aeromet, Inc.

Oregon

73-1291165

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications AIS GP Corporation

Delaware

13-4137187

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications Avionics Systems, Inc.

Delaware

38-1865601

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications Avysis Corporation

Texas

74-2616165

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications Aydin Corporation

Delaware

23-1686808

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications CE Holdings, Inc.

Delaware

54-1098648

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications Cincinnati Electronics Corporation

Ohio

31-0826926

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications CSI, Inc.

California

77-0365380

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications ESSCO, Inc.

Delaware

04-2281486

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications Flight International Aviation LLC

Delaware

02-0654591

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications Flight Capital LLC

Delaware

75-3089735

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications Government Services, Inc.

Virginia

54-1349668

600 Third Avenue New York, NY 10016 (212) 697-1111

Exact Name of Registrant as Specified in Its Charter

State Or Other Jurisdiction Of Incorporation Or Organization

IRS Employer Identification Number

Address, Including Zip Code, and Telephone Number, including Area Code, of Registrant's Principal Executive Offices

L-3 Communications ILEX Systems, Inc.

Delaware

13-3992952

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications Integrated Systems L.P.

Delaware

03-0391841

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications Investments Inc.

Delaware

51-0260723

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications Klein Associates, Inc.

Delaware

02-0277515

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications MAS (US) Corporation

Delaware

55-0765280

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications Security and Detection Systems, Inc.

Delaware

04-3054475

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications Storm Control Systems, Inc.

California

77-0268547

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communicatons Vector International Aviation LLC

Delaware

42-1569647

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications Vertex Aerospace LLC

Delaware

64-0941176

600 Third Avenue New York, NY 10016 (212) 697-1111

L-3 Communications Westwood Corporation

Nevada

87-0430944

600 Third Avenue New York, NY 10016 (212) 697-1111

MCTI Acquisition Corporation

Maryland

13-4109777

600 Third Avenue New York, NY 10016 (212) 697-1111

Microdyne Communications Technologies Incorporated

Maryland

59-3500774

600 Third Avenue New York, NY 10016 (212) 697-1111

Microdyne Corporation

Maryland

52-0856493

600 Third Avenue New York, NY 10016 (212) 697-1111

Microdyne Outsourcing Incorporated

Maryland

33-0797639

600 Third Avenue New York, NY 10016 (212) 697-1111

MPRI, Inc.

Delaware

54-1439937

600 Third Avenue New York, NY 10016 (212) 697-1111

Pac Ord Inc.

Delaware

23-2523436

600 Third Avenue New York, NY 10016 (212) 697-1111

Power Paragon, Inc.

Delaware

33-0638510

600 Third Avenue New York, NY 10016 (212) 697-1111

Ship Analytics, Inc.

Connecticut

06-0966471

600 Third Avenue New York, NY 10016 (212) 697-1111

Ship Analytics International, Inc.

Delaware

06-1336772

600 Third Avenue New York, NY 10016 (212) 697-1111

Ship Analytics USA, Inc.

Connecticut

06-1364417

600 Third Avenue New York, NY 10016 (212) 697-1111

Exact Name of Registrant as Specified in Its Charter

State Or Other Jurisdiction Of Incorporation Or Organization

IRS Employer Identification Number

Address, Including Zip Code, and Telephone Number, including Area Code, of Registrant's Principal Executive Offices

SPD Electrical Systems, Inc.

Delaware

23-2457758

600 Third Avenue New York, NY 10016 (212) 697-1111

SPD Switchgear, Inc.

Delaware

23-2510039

600 Third Avenue New York, NY 10016 (212) 697-1111

SYColeman Corporation

Florida

59-2039476

600 Third Avenue New York, NY 10016 (212) 697-1111

Troll Technology Corporation

California

95-4552257

600 Third Avenue New York, NY 10016 (212) 697-1111

Wescam Air Ops Inc.

Delaware

52-2304424

600 Third Avenue New York, NY 10016 (212) 697-1111

Wescam Air Ops LLC

Delaware

52-2295476

600 Third Avenue New York, NY 10016 (212) 697-1111

Wescam Holdings (US) Inc.

Delaware

51-0376332

600 Third Avenue New York, NY 10016 (212) 697-1111

Wescam Incorporated

Florida

59-3316817

600 Third Avenue New York, NY 10016 (212) 697-1111

Wescam LLC

Delaware

91-2077866

600 Third Avenue New York, NY 10016 (212) 697-1111

Wescam Sonoma Inc.

California

95-2942016

600 Third Avenue New York, NY 10016 (212) 697-1111

Wolf Coach, Inc.

Massachusetts

04-2482502

600 Third Avenue New York, NY 10016 (212) 697-1111

Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.

Subject to Completion, Dated February 2, 2005

PROSPECTUS

$650,000,000

L-3 Communications Corporation

Offer to Exchange All Outstanding 5 7/8% Senior Subordinated Notes due 2015 for an equal amount of 5 7/8% Series B Senior Subordinated Notes due 2015, which have been registered under the Securities Act of 1933.

The Exchange Offer

• We will exchange all outstanding notes that are validly tendered and not validly withdrawn for an equal principal amount of exchange notes that are freely tradeable.

• You may withdraw tenders of outstanding notes at any time prior to the expiration of the exchange offer.

• The exchange offer expires at 5:00 p.m., New York City time, on             , 2005, unless extended. We do not currently intend to extend the expiration date.

• The exchange of outstanding notes for exchange notes in the exchange offer will not be a taxable event for U.S. federal income tax purposes.

• We will not receive any proceeds from the exchange offer.

The Exchange Notes

•	The exchange notes are being offered in order to satisfy certain of our obligations under the registration rights agreement entered into in connection with the private offering of the outstanding notes.

•	The terms of the exchange notes to be issued in the exchange offer are substantially identical to the outstanding notes, except that the exchange notes will be freely tradeable.

Resales of Exchange Notes

•	The exchange notes may be sold in the over-the-counter market, in negotiated transactions or through a combination of such methods. We do not plan to list the exchange notes on a national market.

If you are a broker-dealer and you receive exchange notes for your own account, you must acknowledge that you will deliver a prospectus in connection with any resale of such exchange notes. By making such acknowledgment, you will not be deemed to admit that you are an "underwriter" under the Securities Act of 1933. Broker-dealers may use this prospectus in connection with any resale of exchange notes received in exchange for outstanding notes where such outstanding notes were acquired by the broker-dealer as a result of market-making activities or trading activities. We have agreed that, for a period of 180 days after the expiration of the exchange offer or until any broker-dealer has sold all registered notes held by it, we will make this prospectus available to such broker-dealer for use in connection with any such resale. A broker-dealer may not participate in the exchange offer with respect to outstanding notes acquired other than as a result of market-making activities or trading activities. See "Plan of Distribution."

If you are an affiliate of L-3 Communications Corporation or are engaged in, or intend to engage in, or have an agreement or understanding to participate in, a distribution of the exchange notes, you cannot rely on the applicable interpretations of the Securities and Exchange Commission and you must comply with the registration requirements of the Securities Act of 1933 in connection with any resale transaction.

You should consider carefully the risk factors beginning on page 25 of this prospectus before participating in the exchange offer.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is                 , 2005

TABLE OF CONTENTS

				Page
Where You Can Find More Information					i
Prospectus Summary					1
Risk Factors					25
Forward-Looking Statements					34
Use of Proceeds					36
Capitalization					37
Selected Financial Data					38
Management's Discussion and Analysis of Results of Operations and Financial Condition					39
Business					80
Certain Relationships and Related Transactions					105
Management					106
Ownership of Capital Stock					114
Description of Other Indebtedness					116
The Exchange Offer					125
Description of the Notes					135
United States Federal Tax Consequences of the Exchange Offer					174
Plan of Distribution					174
Legal Matters					175
Experts					175
Index to Financial Statements					F-1

WHERE YOU CAN FIND MORE INFORMATION

We are subject to the informational requirements of the Securities Exchange Act of 1934 and, in accordance therewith, file reports and other information with the SEC. Such reports and other information can be inspected and copied at the Public Reference Section of the SEC located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549 and at a regional public reference facility maintained by the SEC located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained from the Public Reference Section of the SEC at prescribed rates. Such material may also be accessed electronically by means of the SEC's home page on the Internet (http://www.sec.gov). Information about the operation of the Public Reference Section of the SEC may be obtained by calling the SEC at 1-800-SEC-0330.

So long as we are subject to the periodic reporting requirements of the Securities Exchange Act, we are required to furnish the information required to be filed with the SEC to the trustee and the holders of the exchange notes. We have agreed that, even if we are not required under the Securities Exchange Act to furnish such information to the SEC, we will nonetheless continue to furnish information that would be required to be furnished by us by Section 13 of the Securities Exchange Act to the trustee and the holders of the exchange notes as if we were subject to such periodic reporting requirements.

ABOUT THIS PROSPECTUS

As used in this prospectus, (1) "L-3 Holdings" refers to L-3 Communications Holdings, Inc., (2) "L-3 Communications" refers to L-3 Communications Corporation, a wholly-owned operating subsidiary of L-3 Holdings and the issuer of the outstanding notes and the exchange notes, and (3) "Guarantors" refers to the current and future domestic restricted subsidiaries, that are or will be guaranteeing the obligations of L-3 Communications under the outstanding notes and the exchange notes. The obligations of the Guarantors are referred to herein as the "guarantees." "L-3," the "Company," "we," "us" and "our" refer to L-3 Communications and its subsidiaries. "Senior credit facilities" refers to our 364-day revolving credit facility together with our five-year revolving credit facility. Unless the context otherwise requires, "notes" refers to the outstanding notes and the exchange notes.

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PROSPECTUS SUMMARY

This summary highlights selected information contained elsewhere in this prospectus and does not contain all of the information you need to consider in making your investment decision. You should read carefully this entire prospectus.

L-3

We are a leading supplier of a broad range of products used in a substantial number of aerospace and defense platforms. We also are a major supplier of subsystems on many platforms, including those for secure communication networks, mobile satellite communications, information security systems, shipboard communications, naval power systems, fuzes and safety and arming devices for missiles and munitions, microwave assemblies for radars and missiles, telemetry and instrumentation and airport security systems. We also are a prime system contractor for aircraft modernization and operations & maintenance (O&M), Intelligence, Surveillance and Reconnaissance (ISR) collection platforms, training and simulation, and government systems support services. Our customers include the U.S. Department of Defense and its prime contractors, the U.S. Department of Homeland Security, certain U.S. Government intelligence agencies, major aerospace and defense contractors, foreign government ministries of defense, commercial customers and certain other U.S. federal, state and local government agencies. For the year ended December 31, 2003, direct and indirect sales to the U.S. Department of Defense provided 69.3% of our sales, and sales to commercial customers, foreign governments and U.S. federal, state and local government agencies, other than the U.S. Department of Defense provided 30.7% of our sales. For the year ended December 31, 2003, we had sales of $5,061.6 million, of which U.S. customers accounted for 83.1% and foreign customers accounted for 16.9%, net cash from operating activities of $456.1 million and operating income of $581.0 million. For the nine months ended September 30, 2004, we had sales of $4,985.8 million, net cash from operating activities of $408.0 million and operating income of $529.1 million.

For the twelve months ended September 30, 2004, we had sales of $6,466.9 million, net cash from operating activities of $537.0 million and operating income of $720.1 million.

We have four reportable segments: (1) Secure Communications & ISR; (2) Training, Simulation & Government Services; (3) Aircraft Modernization, O&M and Products (formerly known as Aviation Products & Aircraft Modernization); and (4) Specialized Products.

Secure Communications & ISR

Our businesses in this segment provide products and services for the global ISR market, specializing in signals intelligence (SIGINT) and communications intelligence (COMINT) systems. These products and services provide the warfighter in real-time the unique ability to collect and analyze unknown electronic signals from command centers, communication nodes and air defense systems for real-time situation awareness and response. The businesses in this segment also provide secure, high data rate communications systems for military and other U.S. Government and foreign government reconnaissance and surveillance applications. We believe our systems and products are critical elements for a substantial number of major communication, command and control, intelligence gathering and space systems. Our systems and products are used to connect a variety of airborne, space, ground and sea-based communication systems and are used in the transmission, processing, recording, monitoring and dissemination functions of these communication systems. Our major secure communication programs and systems include:

•	secure data links that enable networked communications for airborne, satellite, ground and sea-based remote platforms, both manned and unmanned, for real-time information collection and dissemination to users;

•	highly specialized fleet management and support, including procurement, systems integration, sensor development, modifications and maintenance for signals intelligence and ISR special mission aircraft and airborne surveillance systems;

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•	strategic and tactical signals intelligence systems that detect, collect, identify, analyze and disseminate information;

•	secure terminal and communication network equipment and encryption management; and

•	communication systems for surface and undersea vessels and manned space flights.

Training, Simulation & Government Services.

Our businesses in this segment provide a full range of training, simulation and support services, including:

•	services designed to meet customer training requirements for aircrews, navigators, mission operators, gunners and maintenance technicians for virtually any platform, including military fixed and rotary wing aircraft, air vehicles and various ground vehicles, and computer-based training systems;

•	communication software support, information technology services and a wide range of engineering development services and integration support;

•

high-end engineering and information support services used for command, control, communications and ISR architectures, as well as for air warfare modeling and simulation tools for applications used by the U.S. Department of Defense, Department of Homeland Security and U.S. Government intelligence agencies, including missile and space systems, Unmanned Aerial Vehicles (UAVs) and military aircraft; and

•	developing and managing extensive programs in the United States and internationally that focus on teaching, training and education, logistics, strategic planning, organizational design, democracy transition and leadership development.

Aircraft Modernization, Operations and Maintenance (O&M) and Products.

Our businesses in this segment provide aircraft modernization and operations & maintenance services, and aviation products, including:

•	engineering, modification, maintenance, logistics and upgrades for aircraft, vehicles and personnel equipment;

•	turnkey aviation life cycle management services that integrate custom developed and commercial off-the-shelf products for various military fixed and rotary wing aircraft, including heavy maintenance and structural modifications and interior modifications and constructions;

•	aerospace and other technical services related to large fleet support, such as aircraft and vehicle modernization, maintenance, repair and overhaul, logistics support, and supply chain management, primarily for military training, tactical, cargo and utility aircraft, anti-missile defense systems and tanks;

•	advanced cockpit avionics products and specialized avionics repair and overhaul services for various segments of the aviation market;

•	airborne traffic and collision avoidance systems (TCAS) and terrain awareness warning systems for commercial and military applications;

•	commercial, solid-state, crash-protected cockpit voice recorders, flight data recorders and cruise ship hardened voyage recorders; and

•	ruggedized custom displays for military and high-end commercial applications.

Specialized Products.

Our businesses in this segment supply products, including components, subsystems and systems, to military and commercial customers in several niche markets. These products include:

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•	naval warfare products, including acoustic undersea warfare products for mine hunting, dipping and anti-submarine sonars and naval power distribution, conditioning, switching and protection equipment for surface and undersea platforms;

•	ruggedization and integration of commercial off-the-shelf technology for displays, computers and electronic systems for military and commercial applications;

•	security systems for aviation and port applications, including those for detection of explosives, concealed weapons, contraband and illegal narcotics, and to inspect agricultural products and to examine cargo;

•	telemetry, instrumentation, space and navigation products, including products for tracking and flight termination;

•	premium fuzing products and safety and arming devices for missiles and munitions;

•	microwave components used in radar communication satellites, wireless communication equipment, electronic surveillance, communication and electronic warfare applications and countermeasure systems;

•	high performance antennas and ground based radomes;

•	training devices and motion simulators which produce advanced virtual reality simulation and high-fidelity representations of cockpits and mission stations for fixed and rotary wing aircraft and land vehicles; and

•	precision stabilized electro-optic surveillance systems, including high magnification lowlight, daylight and forward looking infrared sensors, laser range finders, illuminators and designators, and digital and wireless communication systems.

Our Strategy

We intend to grow our sales, improve our profitability and build on our position as a leading supplier of systems, products and services to the major contractors in the aerospace and defense industry, as well as the U.S. Government, with our focus continuing to be on our defense businesses. Our strategy to achieve our objectives includes:

Expanding Supplier Relationships.    As an independent supplier, we anticipate that our growth will be driven by expanding our share of existing programs and by participating in new programs. We identify opportunities where we are able to use our strong relationships to increase our business presence and allow customers to reduce their costs. We also expect to benefit from continued outsourcing of subsystems, components and products by prime contractors, which positions us to be a supplier to multiple bidders on prime contract bids.

Supporting Customer Requirements.    We intend to continue to align our research and development, manufacturing and new business efforts to complement our customers' requirements and provide state-of-the-art products.

Improving Operating Margins.    We intend to continue to improve our operating performance by continuing to reduce overhead expenses, consolidating certain of our businesses and business processes and increasing the productivity of our businesses.

Leveraging Technical and Market Leadership Positions.    We are applying our technical expertise and capabilities to expand our core defense businesses and apply them to certain closely aligned defense markets and applications, such as homeland security.

Maintaining Diversified Business Mix.    We have a diverse and broad business mix with limited reliance on any single program, a favorable balance of cost-reimbursable and fixed-price contracts, a significant follow-on business and an attractive customer profile.

Capitalizing on Strategic Acquisition Opportunities.    We intend to enhance our existing product base through internal research and development efforts and selective acquisitions of businesses that

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will add new products in areas that complement our present technologies. Since January 1, 2004, we used cash of $423.7 million to acquire 11 businesses and, as discussed below, entered into agreements to purchase an additional three businesses for approximately $500 million in the aggregate. We regularly evaluate opportunities to acquire businesses. See "Risk Factors — Risks Related to L-3 — Our acquisition strategy involves risks, and we may not successfully implement our strategy."

Recent Developments

Acquisition of D.P. Associates Inc.    On October 8, 2004, we acquired all of the outstanding stock of D.P. Associates Inc. (DPA). With headquarters in Arlington, VA, DPA is a technical services business that focuses on leading edge training systems, including courseware analysis, design, development and implementation. DPA develops electronic classrooms and interactive multimedia training systems for key military applications, including the U.S. Navy's Naval Air Systems Command (NAVAIR) Training Systems Division, based in Orlando, FL.

Acquisition of the Marine Controls Division of CAE.    On November 1, 2004, we announced that we had entered into an agreement to acquire the Marine Controls division of CAE for approximately $225 million, payable in cash. The acquisition is subject to regulatory approval and is expected to be completed by March 31, 2005. Headquartered in Montreal, Canada, and with business operations in Canada, the United States, the United Kingdom (UK), Norway, Italy, India and Malaysia, Marine Controls is a leading global supplier of integrated marine control systems and products for warships, submarines and high-end ocean-going commercial vessels worldwide. Marine Controls has been a pioneer in the integration of military shipboard control systems and its systems are installed on approximately 600 active ships for eighteen navies around the world. Marine Controls' systems are also installed in over 450 commercial vessels, including the new Queen Mary 2 luxury liner, and the company has also established itself as a leader in power plant simulators to the energy sector.

Acquisition of Raytheon Commercial Infrared.     On November 9, 2004, we acquired the assets of the Commercial Infrared business of Raytheon Company for approximately $44 million in cash. The business was renamed L-3 Communications Infrared Products ("L-3 Infrared Products"). Located in Dallas, TX, L-3 Infrared Products is a leading producer of uncooled thermal imaging products for the public safety, fire and rescue, security, transportation and industrial markets. L-3 Infrared Products has been a pioneer in developing the commercial market for thermal imaging products and is a market leader in the production of uncooled thermal infrared detectors and imaging systems. The company's customer base includes both government and industrial customers in North America as well as Europe and Asia. L-3 Infrared Products currently provides handheld, stationary and vehicle-mounted camera systems for a variety of public safety, transportation and first responder and rescue services. These systems are used for law enforcement, search and rescues, natural resource protection, continual surveillance, and infrastructure protection.

Acquisition of Boeing Electron Dynamic Devices Business.    On November 22, 2004, we announced that we had entered into an agreement to acquire the Electron Dynamic Devices (EDD) business of The Boeing Company. The acquisition is subject to regulatory approval, and is expected to be completed by March 31, 2005. Headquartered in Torrance, CA, EDD is a recognized market supplier in the design, manufacture and sale of space-qualified high technology components and subsystems used in satellites. EDD designs and produces space qualified passive microwave devices, Traveling Wave Tubes, amplifiers and electric propulsion and radio frequency products that are utilized in communication satellites, manned space programs and key commercial and defense systems. The company serves the worldwide satellite and satellite equipment market, including deep-space exploration spacecraft, with a broad commercial and military customer base that includes the U.S. Army, U.S. Navy, U.S. Air Force, prime contractors and original equipment manufacturers.

Acquisition of General Dynamics Propulsion Systems Business.    On November 30, 2004, we announced that we had entered into an agreement to acquire the Propulsion Systems business unit of General Dynamics for a purchase price of approximately $185 million, payable in cash. The

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acquisition is subject to regulatory approval, and is expected to be completed by March 31, 2005. Headquartered in Muskegon, MI, Propulsion Systems is a market leader in the engineering, design and manufacture of engines, transmissions, suspension and turret drive systems for combat vehicles, including both tracked and wheeled vehicles. The business is also a production center for certain components of the Abrams tank. Propulsion Systems supports both domestic and international vehicle customers, including programs for Singapore and South Korea.

Acquisition of Cincinnati Electronics.    On December 9, 2004, we acquired all the outstanding stock of Cincinnati Electronics for a purchase price of approximately $176 million in cash. With locations in Mason, Ohio and Pasadena, California, Cincinnati Electronics infrared (IR) and space sub-systems operations are among the world-class leaders in military IR imaging sensors and sub-systems and space launch electronic sub-systems electronics for the U.S. Army, U.S. Air Force, U.S. Navy and U.S. Marine Corps, as well as for top U.S. and international prime contractors. In addition, these operations provide IR components, electronics, and systems reconnaissance, navigation and missile seekers for a number of U.S. launch vehicles and spacecraft electronics niche markets.

Acquisition of Canadian Navigation Systems and Space Sensors System business from Northrop Grumman.    On December 30, 2004, we acquired the assets of the Canadian Navigation Systems and Space Sensors System business from Northrop Grumman for a purchase price of approximately $65 million, in cash. The business was renamed L-3 Electronics Systems (LES). With facilities in Toronto and Halifax, LES is a leader in the design, development and integration of electronic products and systems for aviation and ground vehicles, primarily in Canada and the United States. LES specializes in aircraft navigation systems and products, military grade displays, vehicle electronics and systems support services for a variety of defense electronics and weapons programs.

Redemption of 4% Senior Subordinated Convertible Contingent Debt Securities (CODES) due 2011.     On October 5, 2004, L-3 Holdings initiated a full redemption of all its $420 million of 4.00% Senior Subordinated Convertible Contingent Debt Securities (CODES) due 2011 (the "CODES"). On October 21, 2004, holders of $419.8 million of the principal amount of CODES exercised their conversion rights and converted such CODES into 7.8 million shares of L-3 Holdings common stock. The remaining $0.2 million of CODES were redeemed for cash on October 25, 2004, at a redemption price of 102% of the principal amount, plus accrued and unpaid interest (including contingent interest) to October 25, 2004. As a result of the conversion and redemption of the CODES that occurred in October 2004, the carrying amount of long-term debt decreased by $418.2 million and shareholders' equity increased by $429.8 million.

Redemption of 8% Senior Subordinated Notes due 2008.    On November 12, 2004, we initiated a full redemption of all of our outstanding $200.0 million aggregate principal amount of 8% Senior Subordinated Notes due 2008. Such notes were redeemed by us at a redemption price of 102.667% of the principal amount thereof, plus accrued and unpaid interest. We completed this redemption on December 13, 2004.

Retirement of Robert V. LaPenta.    On December 27, 2004, we announced that Robert V. LaPenta has decided to retire as L-3's president and chief financial officer effective April 1, 2005. Mr. LaPenta will also be leaving L-3's Board of Directors. Upon his departure, Frank C. Lanza, L-3's chairman and chief executive officer, will assume the responsibilities of president of the company during an interim period, and Michael T. Strianese will succeed Mr. LaPenta as chief financial officer.

Recently Released Financial Results.    On February 1, 2005, we reported our unaudited results of operations for the three months ended December 31, 2004, including sales of $1,911.2 million, operating income of $219.5 million, diluted earnings per share of $1.01 and net cash from operating activities of $212.7 million.

For the 2004 fourth quarter, sales increased by 29.0% to $1,911.2 million from sales of $1,481.1 million for the 2003 fourth quarter. The increase in sales from acquired businesses was 15.0%, or $222.4 million. Consolidated organic sales growth was 14.0%, or $207.7 million. Organic sales growth

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for our defense businesses was 16.3%, or $208.0 million, driven by continued strong demand for secure communications and intelligence, surveillance and reconnaissance (ISR) systems, aircraft modernization, training and government services, training devices and naval power equipment services. Organic sales for our commercial and other non-military businesses declined by 0.1%, or $0.3 million, primarily due to volume declines for security products, which were largely offset by increased volume for commercial aviation products. We define "organic sales growth," as the increase or decrease in sales for the current period compared to the prior period, excluding the increase in sales attributable to acquired businesses to the extent the acquired businesses were not included in our results of operations for the prior period, determined on a monthly basis.

Consolidated operating income for the 2004 fourth quarter increased by 14.9% to $219.5 million from $191.0 million for the 2003 fourth quarter. Consolidated operating income as a percentage of sales (operating margin) decreased to 11.5% for the 2004 fourth quarter, compared to 12.9% for the 2003 fourth quarter. This decrease was principally due to lower margins for the Vertex Aerospace business, which was acquired on December 1, 2003, and changes in product sales mix for certain businesses within the specialized products segment. The changes in operating margin are discussed below together with our discussion of our segment results.

Net income for the 2004 fourth quarter increased by 21.2% to $119.3 million, compared to net income of $98.4 million for the 2003 fourth quarter. Diluted earnings per share (EPS) increased by 12.2% to $1.01, compared to $0.90 for the 2003 fourth quarter. Net income for the 2004 fourth quarter includes an after-tax charge of $3.2 million, or $0.03 per diluted share, relating to the retirement of $200 million of 8% senior subordinated notes.

For the 2004 fourth quarter, funded orders increased by 41.9% to $2,098.6 million, compared to funded orders of $1,478.9 million for the 2003 fourth quarter. At December 31, 2004, funded backlog was $4,757.9 million, an increase of 22.2%, compared to funded backlog of $3,893.3 million at December 31, 2003.

Net cash from operating activities for the 2004 fourth quarter increased by 64.9% to $212.7 million from $129.0 million for the 2003 fourth quarter.

For the year ended December 31, 2004, sales increased by 36.3% to $6,897.0 million from sales of $5,061.6 million for the year ended December 31, 2003. The increase in sales from acquired businesses was 21.2%, or $1,071.9 million. Consolidated organic sales growth was 15.1%, or $763.5 million. Organic sales growth for the company's defense businesses was 16.3%, or $721.6 million, driven by continued strong demand for secure communications and ISR systems, aircraft modernization, aviation products, training and government services, training devices, sensors and imaging products and naval power equipment and services. Organic sales growth for the company's commercial and other non-military businesses was 6.6%, or $41.9 million, primarily due to increased volume for commercial aviation products.

Operating income for the year ended December 31, 2004 increased by 28.8% to $748.6 million from $581.0 million for the year ended December 31, 2003. Consolidated operating margin decreased to 10.9% for the year ended December 31, 2004, compared to 11.5% for the year ended December 31, 2003. The decrease in operating margin was primarily due to expected lower margins from the Vertex Aerospace acquired business.

Net income for the year ended December 31, 2004 increased by 37.6% to $381.9 million, compared to net income of $277.6 million for the year ended December 31, 2003. Diluted EPS increased by 27.1% to $3.33, compared to $2.62 for the year ended December 31, 2003. Net income for the year ended December 31, 2004 includes an after-tax debt retirement charge of $3.2 million, or $0.03 per diluted share. Net income for the year ended December 31, 2003 includes an after-tax debt retirement charge of $7.2 million, or $0.06 per diluted share, for the early retirement of L-3's $180 million of 8½% senior subordinated notes.

For the year ended December 31, 2004, funded orders increased by 38.1% to $7,563.7 million, compared to funded orders of $5,477.4 million for the year ended December 31, 2003.

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Net cash from operating activities for the year ended December 31, 2004 increased by 36.1% to $620.7 million from $456.1 million for the year ended December 31, 2003.

L-3's cash and cash equivalents increased by $518.5 million to $653.4 million at December 31, 2004, compared to $134.9 million at December 31, 2003. This increase was primarily due to our free cash flow and sale of senior subordinated notes, partially offset by amounts spent on business acquisitions and debt retirement.

Total debt was reduced by $267.5 million to $2,189.8 million at December 31, 2004, compared to $2,457.3 million at December 31, 2003. The decrease was due to the conversion into L-3 Holdings' common stock and redemption of the company's 5.25% senior subordinated convertible notes in January 2004 and 4.00% senior subordinated convertible contingent debt securities (CODES) in October 2004, and the redemption of L-3's 8% senior subordinated notes in December 2004. These decreases were partially offset by the issuance of $650 million of 5 7/8% senior subordinated notes in November 2004.

Shareholders' equity increased by $1,218.0 million to $3,792.5 million at December 31, 2004, compared to $2,574.5 million at December 31, 2003. This increase was primarily due to our net income, and the conversion of the 5.25% senior subordinated notes and the CODES into L-3 Holdings' common stock, partially offset by cash dividends of $43.4 million paid during 2004.

Total debt as a percentage of book capitalization (total debt plus minority interests plus shareholders' equity) decreased to 36.1% at December 31, 2004, compared to 48.1% at December 31, 2003. Available borrowings under our revolving credit facilities were $677.5 million at December 31, 2004.

SEGMENT RESULTS

Secure Communications & ISR

Secure Communications & ISR (SC&ISR) 2004 fourth quarter sales increased by 10.4% to $423.3 million from $383.5 million for the 2003 fourth quarter. Organic sales growth was $32.6 million, or 8.5%, reflecting continued strong demand from the U.S. Department of Defense (DoD) and other U.S. Government agencies for the company's secure network communications, ISR systems and communication products. The increase in sales from acquired businesses was $7.2 million, or 1.9%. The acquired businesses include Cincinnati Electronics, which was acquired on December 9, 2004, and certain defense and aerospace assets of IPICOM, Inc., which were acquired on December 10, 2003. SC&ISR generated operating income of $61.4 million for the 2004 fourth quarter, compared with $52.9 million for the 2003 fourth quarter. Operating margin increased to 14.5% from 13.8%, primarily due to the growth in sales and related improvement in margin.

For the year ended December 31, 2004, sales increased by 15.6% to $1,663.6 million from $1,439.4 million for the year ended December 31, 2003. Organic sales growth was $190.3 million, or 13.2%. The increase in sales from acquired businesses was $33.9 million, or 2.4%. The acquired businesses include Cincinnati Electronics, Aeromet and certain defense and aerospace assets of IPICOM, Inc. Operating income was $218.0 million for the year ended December 31, 2004, compared to $172.9 million for the year ended December 31, 2003. Operating margin increased to 13.1% from 12.0%. The annual sales growth and increase in operating margin for the segment were driven by trends similar to those affecting the 2004 fourth quarter (previously discussed).

Training, Simulation and Government Services

Training, Simulation and Government Services (TS&GS) sales for the 2004 fourth quarter increased by 34.6% to $348.2 million from $258.7 million for the 2003 fourth quarter. Organic sales growth was $73.2 million, or 28.3%, driven by increased volume in both training and government services. The increase in sales from acquired businesses was $16.3 million, or 6.3%. The acquired businesses include Beamhit LLC and the General Electric Driver Development (GEDD) business,

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which were acquired during the 2004 second quarter, and D.P. Associates Inc, which was acquired on October 8, 2004. Operating income was $48.3 million for the 2004 fourth quarter, compared to $29.9 million for the 2003 fourth quarter. Operating margin increased to 13.9% from 11.6% due to the growth in sales and related improvement in margin.

For the year ended December 31, 2004, sales increased by 24.8% to $1,259.6 million from $1,009.3 million for the year ended December 31, 2003. Organic sales growth for the segment was $227.3 million, or 22.5%, and was driven by trends similar to those affecting the 2004 fourth quarter (previously discussed). The increase in sales from acquired businesses was $23.0 million, or 2.3%. The acquired businesses include Beamhit LLC, GEDD and D.P. Associates Inc. Operating income was $149.2 million for the year ended December 31, 2004, compared to $115.5 million for the year ended December 31, 2003. Operating margin increased to 11.8% from 11.4%, due primarily to higher sales volume.

    Aircraft Modernization, O&M and Products (formerly Aviation Products & Aircraft     Modernization)

Aircraft Modernization, O&M and Products (formerly Aviation Products & Aircraft Modernization) 2004 fourth quarter sales increased by 79.9% to $642.4 million from $357.0 million in the 2003 fourth quarter. The increase in sales from acquired businesses was $178.7 million, or 50.0%. The acquired businesses include Vertex Aerospace and Military Aviation Services (MAS) businesses, which were acquired during 2003, and AVISYS, Inc., which was acquired on June 16, 2004. Organic sales growth was $106.7 million, or 29.9%, driven by sales from the U.S. Army Aviation and Missile Command (AMCOM) contract for maintenance and logistics support of rotary-wing training aircraft at Fort Rucker, Alabama, aircraft modernization, operations and maintenance, and an increase in volume for commercial aviation products. Operating income was $65.7 million for the 2004 fourth quarter, compared with $55.1 million for the 2003 fourth quarter. Operating margin decreased to 10.2% from 15.4%, primarily because of the expected lower margins for the Vertex Aerospace acquired business, higher sales volume of lower margin aircraft modification and logistics support under cost-reimbursable-type contracts, and unfavorable changes in foreign currency exchange rates related to certain contracts with foreign customers. These decreases in operating margin were partially offset by higher margins for commercial aviation products due to higher sales volume.

For the year ended December 31, 2004, sales increased by 124.6% to $2,289.8 million from $1,019.6 million for the year ended December 31, 2003. The increase in sales from acquired businesses was $967.6 million, or 94.9%. The acquired businesses include Avionics Systems, Vertex Aerospace, MAS and Flight Systems Engineering, which were acquired during 2003, and AVISYS, Inc., which was acquired in 2004. Organic sales growth was $302.6 million, or 29.7%, driven by higher sales for aircraft modernization, operations and maintenance, including the AMCOM contract, and commercial and military aviation products. Operating income was $249.6 million for the year ended December 31, 2004, compared to $147.8 million for the year ended December 31, 2003. Operating margin decreased to 10.9% from 14.5%, primarily because of trends similar to those affecting the 2004 fourth quarter (previously discussed).

Specialized Products

Specialized Products 2004 fourth quarter sales increased by 3.2% to $497.3 million from $481.9 million in the 2003 fourth quarter. Organic sales declined by $4.8 million, or 1.0%, due to lower sales volume for explosives detection systems (EDS), caused primarily by a later-than-expected receipt of an order from the U.S. Transportation and Security Administration, and a reduction in sales for navigation products due to contracts nearing completion. These decreases to sales were partially offset by higher volume for training devices, naval power equipment services and maintenance of security systems. The increase in sales from acquired businesses was $20.2 million, or 4.2%. The acquired businesses include Bay Metals, Brashear, LP and Infrared Products, which were acquired during 2004. Operating income was $44.1 million for the 2004 fourth quarter, compared with $53.1 million for the 2003 fourth quarter. Operating margin decreased to 8.9% from 11.0%, primarily because of changes in

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product sales mix for security products, including lower sales of higher margin EDS systems and telemetry products. These decreases to operating margin were partially offset by higher margins on undersea warfare products, primarily due to higher volume for spares and lower product reliability costs.

For the year ended December 31, 2004, sales increased by 5.7% to $1,684.0 million from $1,593.3 million for the year ended December 31, 2003. The increase in sales from acquired businesses was $47.4 million, or 3.0%. The acquired businesses include Klein Associates, which was acquired in 2003, and Bay Metals, Brashear, LP and Infrared Products, which were acquired in 2004. Organic sales growth was $43.3 million, or 2.7%, driven by increased sales of training devices, imaging products, naval power equipment and services, partially offset by volume declines for EDS, undersea warfare products and ruggedized computers and displays. Operating income was $131.8 million for the year ended December 31, 2004, compared to $144.8 million for the year ended December 31, 2003. Operating margin decreased to 7.8% from 9.1%, primarily because of changes in product sales mix for security products, including lower sales of higher margin EDS systems and telemetry products, and a $4.5 million gain related to the settlement of a claim recorded in September, 2003. These decreases were partially offset by operating income for the naval power equipment businesses in 2004, as compared to operating losses in 2003.

GOVERNMENT AND COMMERCIAL BUSINESSES RESULTS

For the 2004 fourth quarter, sales from our government businesses increased by 33.4% to $1,693.6 million from $1,269.8 million for the 2003 fourth quarter. Operating income from our government businesses for the 2004 fourth quarter increased by 15.0% to $194.6 million from $169.2 million for the 2003 fourth quarter. Operating margin declined to 11.5% from 13.3%, primarily due to margins from the Vertex Aerospace acquired business.

For the 2004 fourth quarter, sales from our commercial businesses increased by 3.0% to $217.6 million, compared to $211.3 million for the 2003 fourth quarter. Operating income from our commercial businesses for the 2004 fourth quarter increased by 14.2% to $24.9 million, compared to operating income of $21.8 million for the 2003 fourth quarter. Operating margin increased to 11.4% from 10.3%, primarily due to higher sales volume for commercial aviation products.

For the year ended December 31, 2004, sales from our government businesses increased by 39.8% to $6,155.6 million from $4,401.7 million for the year ended December 31, 2003. Operating income from our government businesses for the year ended December 31, 2004 increased by 26.2% to $678.8 million from $537.9 million for the year ended December 31, 2003. Operating margin declined to 11.0% from 12.2%, primarily due to trends similar to those affecting the 2004 fourth quarter.

For the year ended December 31, 2004, sales from our commercial businesses increased by 12.4% to $741.4 million from $659.9 million for the year ended December 31, 2003. Operating income from our commercial businesses for the year ended December 31, 2004 increased by 61.9% to $69.8 million from $43.1 million for the year ended December 31, 2003. Operating margin increased to 9.4% from 6.5%, primarily due to trends similar to those affecting the 2004 fourth quarter.

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME DATA
(In millions, except per share data)

				Three Months Ended December 31,								Year Ended December 31,
				2004				2003				2004				2003
Sales:
Contracts, primarily U.S. Government(a)				$	1,693.6			$	1,269.8			$	6,155.6			$	4,401.7
Commercial, primarily products(a)					217.6				211.3				741.4				659.9
Consolidated sales				$	1,911.2			$	1,481.1			$	6,897.0			$	5,061.6
Costs and expenses:
Contracts, primarily U.S. Government				$	1,499.0			$	1,100.6			$	5,476.8			$	3,863.8
Commercial, primarily products:
Cost of sales					138.1				138.5				459.0				417.0
Selling, general and administrative expenses					33.9				32.1				141.4				140.6
Research and development expenses					20.7				18.9				71.2				59.2
Consolidated costs and expenses				$	1,691.7			$	1,290.1			$	6,148.4			$	4,480.6
Operating income(a)					219.5				191.0				748.6				581.0
Interest and other (income) expense					(9.0	)			1.9				(7.3	)			(0.2	)
Interest expense					38.5				34.4				145.3				132.7
Minority interests in net income of consolidated subsidiaries					1.8				0.9				8.9				3.5
Loss on retirement of debt					5.0				—				5.0				11.2
Income before income taxes					183.2				153.8				596.7				433.8
Provision for income taxes					63.9				55.4				214.8				156.2
Net income				$	119.3			$	98.4			$	381.9			$	277.6
Earnings per share:
Basic				$	1.05			$	1.02			$	3.54			$	2.89
Diluted(b)				$	1.01			$	0.90	(c)		$	3.33	(c)		$	2.62	(c)
Weighted average common shares outstanding:
Basic					113.7				96.8				107.8				96.0
Diluted					118.6				114.7	(c)			117.4				113.9	(c)

(a)

Effective January 2004, we combined the explosives detection systems (EDS) business into L-3 Security and Detection Systems, the IMC business into L-3 Government Services, Inc., the EMP business into our ESSCO business and the Apcom business into our Communication System-East business (2004 Business Realignments). As a result of the 2004 Business Realignments, reclassifications between "Contracts, primarily U.S. Government" and "Commercial, primarily products" have been made to the prior period sales and operating income amounts. Specifically, for the three months ended December 31, 2003, $46.4 million of sales and $14.5 million of operating income was reclassified from "Contracts, primarily U.S. Government" to "Commercial, primarily products," and $5.6 million of sales and $1.7 million of operating income was reclassified from "Commercial, primarily products" to "Contracts, primarily U.S. Government." For the twelve months ended December 31, 2003, $96.5 million of sales and $26.3 million of operating income was reclassified from "Contracts, primarily U.S. Government" to "Commercial, primarily products," and $30.6 million of sales and $2.1 million of operating income was reclassified from

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	"Commercial primarily products" to "Contracts, primarily U.S. Government." These 2004 Business Realignments and related reclassifications did not result in any changes to consolidated results of operations, financial position or cash flow.

(b)

In order to calculate diluted earnings per share for the three and twelve months ended December 31, 2004 and 2003, the after-tax interest expense savings on the assumed conversions of Convertible Notes and our CODES must be added to net income and then divided by the weighted average number of shares outstanding. The amount to add to net income is $0.8 million for the three months ended December 31, 2004, $4.5 million for the three months ended December 31, 2003, $9.1 million for the twelve months ended December 31, 2004 and $20.8 million for the twelve months ended December 31, 2003.

(c)	Previously reported diluted EPS amounts have been restated in accordance with EITF 04-8. Diluted weighted average common shares outstanding increased by 7.8 million shares, which resulted in non-cash reductions to diluted EPS of $0.04 for the three months ended December 31, 2003, and $0.09 for the twelve months ended December 31, 2004 and 2003.

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UNAUDITED SELECTED FINANCIAL DATA
(In millions)

				Three Months Ended December 31,								Year Ended December 31,
				2004				2003				2004				2003
Funded Orders				$	2,098.6			$	1,478.9			$	7,563.7			$	5,477.4
Reportable Segment Operating Data:
Sales:
Secure Communications & ISR				$	423.3			$	383.5			$	1,663.6			$	1,439.4
Training, Simulation & Govt. Svs.(d)					348.2				258.7				1,259.6				1,009.3
Aircraft Modernization, O&M and Products					642.4				357.0				2,289.8				1,019.6
Specialized Products(d)					497.3				481.9				1,684.0				1,593.3
Consolidated				$	1,911.2			$	1,481.1			$	6,897.0			$	5,061.6
Operating income:
Secure Communications & ISR				$	61.4			$	52.9			$	218.0			$	172.9
Training, Simulation & Govt. Svs.(d)					48.3				29.9				149.2				115.5
Aircraft Modernization, O&M and Products					65.7				55.1				249.6				147.8
Specialized Products(d)					44.1				53.1				131.8				144.8
Consolidated				$	219.5			$	191.0			$	748.6			$	581.0
Operating margin:
Secure Communications & ISR					14.5	%			13.8	%			13.1	%			12.0	%
Training, Simulation & Govt. Svs.(d)					13.9	%			11.6	%			11.8	%			11.4	%
Aircraft Modernization, O&M and Products					10.2	%			15.4	%			10.9	%			14.5	%
Specialized Products(d)					8.9	%			11.0	%			7.8	%			9.1	%
Consolidated					11.5	%			12.9	%			10.9	%			11.5	%
Depreciation and amortization:
Secure Communications & ISR				$	7.7			$	7.9			$	32.3			$	29.2
Training, Simulation & Gov't Svs.					2.1				2.1				7.6				8.0
Aircraft Modernization, O&M and Products					7.5				5.4				32.3				18.7
Specialized Products					12.2				8.8				46.8				39.5
Consolidated				$	29.5			$	24.2			$	119.0			$	95.4
Cash flow data:
Net cash from operating activities				$	212.7			$	129.0			$	620.7			$	456.1
Net cash used in investing activities					(371.6	)			(771.3	)			(555.5	)			(1,088.1	)
Net cash from financing activities					444.9				399.9				453.3				632.0
Net increase (decrease) in cash				$	286.0			$	(242.4	)		$	518.5			$	—

				December 31, 2004				December 31, 2003
Period end data:
Funded Backlog				$	4,757.9			$	3,893.3
Cash & cash equivalents				$	653.4			$	134.9
Total debt				$	2,189.8			$	2,457.3
Minority interests				$	77.5			$	76.2
Shareholders' equity				$	3,792.5			$	2,574.5

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(d)

Effective January 1, 2004, we combined the IMC business into L-3 Government Services, Inc. As a result of this realignment of management responsibilities, $5.6 million of sales and $1.7 million of operating income was reclassified from the Specialized Products segment to the Training, Simulation & Government Services segment for the three months ended December 31, 2003. For the twelve months ended December 31, 2003, $29.1 million of sales and $3.9 million of operating income was reclassified from the Specialized Products segment to the Training, Simulation & Government Services segment.

We are incorporated in Delaware, and the address of our principal executive offices is 600 Third Avenue, New York, New York 10016. Our telephone number is (212) 697-1111.

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Summary of Terms of the Exchange Offer

On November 12, 2004, we completed the private offering of the outstanding notes. References to the "notes" in this prospectus are references to both the outstanding notes and the exchange notes. This prospectus is part of a registration statement covering the exchange of the outstanding notes for the exchange notes.

We and the guarantors entered into a registration rights agreement with the initial purchasers in the private offering in which we and the guarantors agreed to deliver to you this prospectus as part of the exchange offer and we agreed to complete the exchange offer within 210 days after the date of original issuance of the outstanding notes. You are entitled to exchange in the exchange offer your outstanding notes for exchange notes which are identical in all material respects to the outstanding notes except:

•	the exchange notes will be registered under the Securities Act;

•	the exchange notes are not entitled to certain registration rights which are applicable to the outstanding notes under the registration rights agreement; and

•	certain additional interest rate provisions will no longer be applicable.

The Exchange Offer		We are offering to exchange up to $650,000,000 aggregate principal amount of our 5 7/8% Series B Senior Subordinated Notes due 2015, which we refer to in this prospectus as the exchange notes, for up to $650,000,000 million aggregate principal amount of our 5 7/8% Senior Subordinated Notes due 2015, which we refer to in this prospectus as the outstanding notes. Outstanding notes may be exchanged only in integral multiples of $1,000.

Resale		Based on an interpretation by the staff of the SEC set forth in no-action letters issued to third parties, we believe that the exchange notes issued pursuant to the exchange offer in exchange for outstanding notes may be offered for resale, resold and otherwise transferred by you (unless you are an "affiliate" of L-3 Communications Corporation, within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that you are acquiring the exchange notes in the ordinary course of your business and that you have not engaged in, do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of the exchange notes.

		Each participating broker-dealer that receives exchange notes for its own account pursuant to the exchange offer in exchange for outstanding notes that were acquired as a result of market-making or other trading activity must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. See "Plan of Distribution."

		Any holder of outstanding notes who:

	•	is an affiliate of L-3 Communications Corporation;

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	•	does not acquire exchange notes in the ordinary course of its business; or

	•	tenders in the exchange offer with the intention to participate, or for the purpose of participating, in a distribution of exchange notes;

		cannot rely on the position of the staff of the SEC enunciated in Exxon Capital Holdings Corporation, Morgan Stanley & Co. Incorporated or similar no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with the resale of the exchange notes.

Expiration Date; Withdrawal of     Tender		The exchange offer will expire at 5:00 p.m., New York City time, on                 , 2005, or such later date and time to which we extend it (the "expiration date"). We do not currently intend to extend the expiration date. A tender of outstanding notes pursuant to the exchange offer may be withdrawn at any time prior to the expiration date. Any outstanding notes not accepted for exchange for any reason will be returned without expense to the tendering holder promptly after the expiration or termination of the exchange offer.

Certain Conditions to the Exchange     Offer		The exchange offer is subject to customary conditions, which we may waive. Please read the section captioned "The Exchange Offer — Certain Conditions to the Exchange Offer" of this prospectus for more information regarding the conditions to the exchange offer.

Procedures for Tendering Outstanding     Notes		If you wish to accept the exchange offer, you must complete, sign and date the accompanying letter of transmittal, or a facsimile of the letter of transmittal according to the instructions contained in this prospectus and the letter of transmittal. You must also mail or otherwise deliver the letter of transmittal, or a facsimile of the letter of transmittal, together with the outstanding notes and any other required documents, to the exchange agent at the address set forth on the cover page of the letter of transmittal. If you hold outstanding notes through The Depository Trust Company, or DTC, and wish to participate in the exchange offer, you must comply with the Automated Tender Offer Program procedures of DTC, by which you will agree to be bound by the letter of transmittal. By signing, or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things:

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		•	any exchange notes that you receive will be acquired in the ordinary course of your business;

		•	you have no arrangement or understanding with any person or entity to participate in a distribution of the exchange notes;

		•	if you are a broker-dealer that will receive exchange notes for your own account in exchange for outstanding notes that were acquired as a result of market-making activities, that you will deliver a prospectus, as required by law, in connection with any resale of such exchange notes; and

		•	you are not an "affiliate," as defined in Rule 405 of the Securities Act, of L-3 or, if you are an affiliate, you will comply with any applicable registration and prospectus delivery requirements of the Securities Act.

Special Procedures for Beneficial     Owners		If you are a beneficial owner of outstanding notes which are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, and you wish to tender such outstanding notes in the exchange offer, you should contact such registered holder promptly and instruct such registered holder to tender on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your outstanding notes, either make appropriate arrangements to register ownership of the outstanding notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date.

Guaranteed Delivery Procedures		If you wish to tender your outstanding notes and your outstanding notes are not immediately available or you cannot deliver your outstanding notes, the letter of transmittal or any other documents required by the letter of transmittal or comply with the applicable procedures under DTC's Automated Tender Offer Program prior to the expiration date, you must tender your outstanding notes according to the guaranteed delivery procedures set forth in this prospectus under "The Exchange Offer — Guaranteed Delivery Procedures."

Effect on Holders of Outstanding     Notes		As a result of the making of, and upon acceptance for exchange of all validly tendered outstanding notes pursuant to the terms of the exchange offer, we will have fulfilled a covenant contained in the registration rights agreement and, accordingly, there will be no increase in the interest rate on the outstanding notes under the circumstances

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		described in the registration rights agreement. If you are a holder of outstanding notes and you do not tender your outstanding notes in the exchange offer, you will continue to hold such outstanding notes and you will be entitled to all the rights and limitations applicable to the outstanding notes in the indenture, except for any rights under the registration rights agreement that by their terms terminate upon the consummation of the exchange offer.

		To the extent that outstanding notes are tendered and accepted in the exchange offer, the trading market for outstanding notes could be adversely affected.

Consequences of Failure to     Exchange		All untendered outstanding notes will continue to be subject to the restrictions on transfer provided for in the outstanding notes and in the indenture. In general, the outstanding notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with the exchange offer, we do not currently anticipate that we will register the outstanding notes under the Securities Act.

Certain Income Tax Considerations		The exchange of outstanding notes for exchange notes in the exchange offer will not be a taxable event for United States federal income tax purposes. See "United States Federal Tax Consequences of the Exchange Offer."

Use of Proceeds		We will not receive any cash proceeds from the issuance of exchange notes pursuant to the exchange offer.

Exchange Agent		The Bank of New York is the exchange agent for the exchange offer. The address and telephone number of the exchange agent are set forth in the section captioned "The Exchange Offer — Exchange Agent" of this prospectus.

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Summary of Terms of the Exchange Notes

Issuer		L-3 Communications Corporation

Securities Offered		$650,000,000 in aggregate principal amount of 5 7/8% Series B Senior Subordinated Notes due 2015

Maturity		January 15, 2015

Interest Payment Dates		January 15 and July 15, beginning January 15, 2005. The initial interest payment will include accrued interest from November 12, 2004.

Interest Rate		5 7/8% per year

Ranking		The outstanding notes are, and the exchange notes will be, unsecured senior subordinated obligations of L-3 Communications Corporation. They rank behind all of our and the guarantors' current and future indebtedness (other than trade payables), except indebtedness that expressly provides that it is on parity with or subordinated in right of payment to these notes and the guarantees. As of September 30, 2004, on a pro forma basis giving effect to (1) the application of the net proceeds of the private offering of the outstanding notes as intended (including the redemption of our 8% Senior Subordinated Notes due 2008) and (2) the conversion and redemption of the CODES, the exchange notes and the related guarantees would:

	•	not have been subordinated to any senior debt (excluding $78.5 million of outstanding letters of credit); and

	•	have ranked equally with $1,550.0 million of other senior subordinated debt.

		As of September 30, 2004, L-3 Communications Corporation had the ability to borrow up to $671.5 million (after reductions for outstanding letters of credit of $78.5 million) under its senior credit facilities, all of which if borrowed or drawn upon would be senior debt. See "Description of the Notes — Subordination."

Subsidiary Guarantees		The outstanding notes are, and the exchange notes will be, jointly and severally guaranteed on a senior subordinated basis by certain of our current and future domestic restricted subsidiaries as described under "Description of the Notes — Subsidiary Guarantees."

		The guarantees of the outstanding notes are, and the guarantees of the exchange notes will be, subordinated in right of payment to all existing and future senior debt of the guarantors. The guarantees of the outstanding notes

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		are, and the guarantees of the exchange notes will be, pari passu with other senior subordinated indebtedness of the guarantors, which includes the 7 5/8% Senior Subordinated Notes due 2012, the 6 1/8% Senior Subordinated Notes due 2013 and the 6 1/8% Senior Subordinated Notes due 2014, in each case issued by L-3 Communications Corporation and guaranteed by the guarantors. Information regarding the guarantors is included in the notes to the financial statements included elsewhere herein.

		As of September 30, 2004, on a pro forma basis giving effect to (1) the application of the net proceeds of the private offering of the outstanding notes as intended (including the redemption of our 8% Senior Subordinated Notes due 2008) and (2) the conversion and redemption of the CODES, we had $2,200.0 million of indebtedness outstanding, none of which was senior debt. In addition, as of September 30, 2004, we had the ability to borrow up to $671.5 million (after reductions for outstanding letters of credit of $78.5 million) under our senior credit facilities, all of which if borrowed or drawn upon would be senior debt and would be guaranteed on a senior basis by the guarantors.

		See "Description of the Notes — Subsidiary Guarantees" and "— Subordination."

Sinking Fund		None

Optional Redemption		On or after January 15, 2010, we may redeem some or all of the notes at the redemption prices set forth under "Description of the Notes — Optional Redemption."

		Before January 15, 2008, we may redeem up to 35% of the outstanding notes and the exchange notes with the proceeds of certain equity offerings by L-3 Communications Corporation or L-3 Communications Holdings at the redemption prices set forth under "Description of the Notes — Optional Redemption."

Mandatory Offer to Repurchase		If we experience specific kinds of changes in control, we must offer to repurchase the outstanding notes and the exchange notes at the prices set forth under "Description of the Notes — Repurchase at Option of Holders."

Use of Proceeds		There will be no cash proceeds to us from the exchange offer.

Basic Covenants of Indenture		The indenture governing the outstanding notes and the exchange notes, among other things, restricts our ability and the ability of our restricted subsidiaries to:

	•	borrow money;

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	•	pay dividends on or purchase our stock or our restricted subsidiaries' stock;

	•	make investments;

	•	use assets as security in other transactions;

	•	sell certain assets or merge with or into other companies; and

	•	enter into transactions with affiliates.

		Certain of our subsidiaries are not subject to the covenants in the indenture. In the event that the notes are assigned a rating of Baa3 or better by Moody's and BBB– or better by S&P and no event of default has occurred and is continuing, certain convenants in the indenture will be suspended. If the ratings should subsequently decline to below Baa3 or BBB–, the suspended covenants will be reinstituted. For more details, see the section "Description of the Notes — Certain Covenants."

Absence of a Public Market for the     Exchange Notes		The exchange notes generally will be freely transferable but will also be new securities for which there will not initially be a market. Accordingly, we cannot assure you whether a market for the exchange notes will develop or as to the liquidity of any market. We do not intend to apply for a listing of the exchange notes on any securities exchange or automated dealer quotation system. The initial purchasers in the private offering of the outstanding notes have advised us that they currently intend to make a market in the exchange notes. However, they are not obligated to do so, and any market making with respect to the exchange notes may be discontinued without notice.

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Summary Financial Data

We derived the summary financial data presented below from our financial statements. The statement of operations and other data presented below for the years ended December 31, 2003, 2002 and 2001 and the balance sheet data presented below at December 31, 2003 and 2002, are derived from our audited consolidated financial statements included elsewhere in this prospectus. We derived the balance sheet data presented below at December 31, 2001 from our audited consolidated financial statements not included elsewhere in this prospectus. We derived the statement of operations and other data presented below for the nine months ended September 30, 2004 and September 30, 2003 and the balance sheet data presented below at September 30, 2004 from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. We derived the balance sheet data presented below at September 30, 2003 from our unaudited condensed consolidated financial statements not included elsewhere in this prospectus. Our unaudited condensed consolidated financial statements for the nine months ended September 30, 2004 and September 30, 2003 include, in our opinion, all adjustments consisting of normal recurring adjustments, necessary for a fair presentation of the results for the period. The results of interim periods are not indicative of our results for the full year. Our results of operations are impacted significantly by our acquisitions, some of which are described herein.

				Twelve Months Ended September 30, 2004(1)				Historical
								Nine Months Ended September 30,								Year Ended December 31,
								2004				2003				2003				2002				2001
				(in millions)
Statement of Operations Data:
Sales				$	6,466.9			$	4,985.8			$	3,580.5			$	5,061.6			$	4,011.2			$	2,347.4
Operating income					720.1				529.1				390.0				581.0				454.0				275.3
Interest expense					141.2				106.8				98.3				132.7				122.5				86.4
Other expense (income), net					3.6				1.7				(2.1	)			(0.2	)			(5.0	)			(1.8	)
Minority interests in net income of consolidated subsidiaries					8.0				7.1				2.6				3.5				6.2				4.4
Loss on retirement of debt					—				—				11.2				11.2				16.2				—
Provision for income taxes					206.3				150.9				100.8				156.2				111.6				70.8
Income before cumulative effect of a change in accounting principle					361.0				262.6				179.2				277.6				202.5				115.5
Income before cumulative effect of a change in accounting principle, as adjusted(2)					361.0				262.6				179.2				277.6				202.5				149.4
Balance Sheet Data (at period end):
Cash and cash equivalents				$	367.3			$	367.3			$	377.3			$	134.9			$	134.9			$	361.0
Working capital					1,311.5				1,311.5				1,196.8				1,013.5				929.4				717.8
Total assets					7,003.2				7,003.2				5,823.3				6,492.9				5,242.3				3,339.2
Total debt					2,157.5				2,157.5				2,066.2				2,457.3				1,847.8				1,315.3
Minority interests					79.1				79.1				74.3				76.2				73.2				69.9
Shareholders' equity					3,204.5				3,204.5				2,443.7				2,574.5				2,202.2				1,213.9
Other Data:
Net cash from operating activities				$	537.0			$	408.0			$	327.1			$	456.1			$	318.5			$	173.0
Net cash used in investing activities					(955.2	)			(183.9	)			(316.8	)			(1,088.1	)			(1,810.5	)			(424.9	)
Net cash from financing activities					408.3				8.4				232.1				632.0				1,265.9				580.3
Credit Facility EBITDA(3)					825.5				611.2				460.2				674.5				529.2				357.9
Depreciation					87.9				68.3				57.7				77.3				66.2				40.4
Goodwill amortization					—				—				—				—				—				42.4
Amortization of intangibles and other assets					25.8				21.2				13.5				18.1				9.7				4.2
Amortization of deferred debt issue costs (included in interest expense)					7.5				5.5				6.0				8.0				7.4				6.4
Capital expenditures					82.4				53.5				54.0				82.9				62.1				48.1
Balance Sheet Data, as adjusted (at period end):(4)
Cash and cash equivalents				$	800.8
Total debt					2,189.3

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(1)

The financial data for the twelve months ended September 30, 2004 are calculated using our audited financial information for the year ended December 31, 2003 plus our unaudited financial information for the nine-month period ended September 30, 2004 less our unaudited financial information for the nine-month period ended September 30, 2003. We present this information because many of our financial covenants are based on our results of operations for the latest twelve months.

(2)	Income before cumulative effect of a change in accounting principle, as adjusted, excludes goodwill amortization expense, net of any income tax effects, recognized for the year ended December 31, 2001.

(3)

Credit Facility EBITDA is defined as consolidated net income (excluding impairment losses incurred on goodwill and identifiable intangible assets or debt and equity investments, gains or losses incurred on the retirement of debt, extraordinary gains and losses and gains and losses in connection with asset dispositions and discontinued operations) for the most recent four quarters, plus consolidated interest expense (including consolidated interest expense of L-3 Holdings for permitted convertible securities guaranteed by L-3 Communications Corporation or its subsidiaries), income taxes, depreciation and amortization minus depreciation and amortization related to minority interests. We believe that the most directly comparable GAAP financial measure to Credit Facility EBITDA is net cash from operating activities. The table below presents a reconciliation of net cash from operating activities to Credit Facility EBITDA.

				Twelve Months Ended September 30, 2004				Nine Months Ended September 30,								Year Ended December 31,
								2004				2003				2003				2002				2001
				(in millions)
Net cash from operating activities				$	537.0			$	408.0			$	327.1			$	456.1			$	318.5			$	173.0
Less: Adjustments to reconcile net income to net cash from operating activities(a)					(176.0	)			(145.4	)			(147.9	)			(178.5	)			(140.4	)			(57.5	)
Net income					361.0				262.6				179.2				277.6				178.1				115.5
Add: Cumulative effect of a change in accounting principle, net of income taxes					—				—				—				—				24.4				—
Income before cumulative effect of a change in accounting principle					361.0				262.6				179.2				277.6				202.5				115.5
Less: Depreciation and amortization related to minority interest					(1.3	)			(1.0	)			(0.5	)			(0.8	)			(0.5	)			(1.1	)
Add: Provision for income taxes					206.3				150.9				100.8				156.2				111.6				70.8
Loss on retirement of debt					—				—				11.2				11.2				16.2				—
Interest expense					141.2				106.8				98.3				132.7				122.5				86.4
Depreciation and amortization					113.7				89.5				71.2				95.4				75.9				87.0
Other					4.6				2.4				—				2.2				1.0				(0.7	)
Credit Facility EBITDA				$	825.5			$	611.2			$	460.2			$	674.5			$	529.2			$	357.9

	(a)	The aggregate adjustments reconciling net income to net cash from operating activities are detailed in our statement of cash flows.

Other than our amount of debt and interest expense, Credit Facility EBITDA is the major component in the calculation of the debt ratio, the senior debt ratio and the interest coverage ratio, which are part of the financial covenants for our debt under our senior credit facilities. The debt ratio is defined as the ratio of consolidated total debt (as defined in our senior credit facilities) to Credit Facility EBITDA. The senior debt ratio is defined as the ratio of consolidated total debt other than subordinated debt to Credit Facility EBITDA. The interest coverage ratio is equal to the ratio of Credit Facility EBITDA to consolidated cash interest expense (as defined in our senior credit facilities). The higher our Credit Facility EBITDA is on a relative basis to our outstanding debt, the lower our debt ratio will be, and the higher our Credit Facility EBITDA is on a relative basis to our outstanding senior debt, the lower our senior debt ratio will be. A lower debt ratio and senior debt ratio indicate a higher borrowing capacity. Similarly, an increase in our Credit Facility EBITDA on a relative basis to consolidated cash interest expense results in a higher interest coverage ratio, which indicates a greater capacity to service debt.

Credit Facility EBITDA is presented as additional information because it is one measure used to determine financial covenant compliance under our senior credit facilities and we believe it to be a useful indicator of our debt capacity and our ability to service our debt. Credit Facility EBITDA is not a substitute for operating income, net income or net cash from operating activities as determined in accordance with generally accepted accounting principles in the United States of America. Credit Facility EBITDA is not a complete net cash flow measure because Credit Facility EBITDA is a financial measure that does not include reductions for cash payments for our obligation to service our debt, fund our working capital and capital expenditures and pay our income taxes. Rather, Credit Facility EBITDA is one potential indicator of our ability to fund these cash requirements. Credit Facility EBITDA is also not a complete measure of our profitability because it does not include costs and expenses for depreciation and amortization, interest and income taxes.

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(4)	The as adjusted balance sheet data reflect the offering of the outstanding notes and the application of the proceeds as intended and the conversion and redemption of the CODES, and do not reflect our subsequent expenditures of cash in connection with business acquisitions completed after September 30, 2004. See "— Recent Developments."

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Ratio of Earnings to Fixed Charges

The ratio of earnings to fixed charges presented below should be read together with our consolidated financial statements and related notes and "Management's Discussion and Analysis of Results of Operations and Financial Condition" included elsewhere herein. In calculating the ratio of earnings to fixed charges, earnings consist of income before income taxes and cumulative effect of a change in accounting principle plus fixed charges. Fixed charges consist of interest on indebtedness plus the amortization of deferred debt issuance costs and that portion of lease rental expense representative of the interest element.

Nine Months Ended September 30, 2004

Year Ended December 31,

2003

2002

2001

2000

1999

Ratio of Earnings to Fixed Charges:

4.3x

3.8x

3.2x

2.8x

2.3x

2.4x

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RISK FACTORS

You should carefully consider the following factors and other information contained in this prospectus before deciding to tender outstanding notes in the exchange offer. The risk factors set forth below are generally applicable to the outstanding notes as well as the exchange notes. Any of these risks could materially adversely affect our business, financial condition and results of operations, which could in turn materially adversely affect the price of the notes.

Risks Related to the Exchange Offer

If you choose not to exchange your outstanding notes, the present transfer restrictions will remain in force and the market price of your outstanding notes could decline.

If you do not exchange your outstanding notes for exchange notes under the exchange offer, then you will continue to be subject to the transfer restrictions on the outstanding notes as set forth in the offering memorandum distributed in connection with the private offering of the outstanding notes. In general, the outstanding notes may not be offered or sold unless they are registered or exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act. You should refer to "Prospectus Summary — Summary of Terms of the Exchange Offer" and "The Exchange Offer" for information about how to tender your outstanding notes.

The tender of outstanding notes under the exchange offer will reduce the principal amount of the outstanding notes outstanding, which may have an adverse effect upon, and increase the volatility of, the market price of the outstanding notes due to reduction in liquidity.

Risks Related to L-3

Our significant level of debt may adversely affect our financial and operating activity.

We have incurred substantial indebtedness to finance our acquisitions. At September 30, 2004, we had $2,170.0 million in aggregate principal amount of outstanding debt, excluding outstanding letters of credit (which aggregated approximately $78.5 million) under our 364-day and five-year revolving credit facilities. In addition, available borrowings under our senior credit facilities, after reductions for outstanding letters of credit, were $671.5 million at September 30, 2004. In the future we may borrow more money, subject to limitations imposed on us by our debt agreements.

Our ability to make scheduled payments of principal and interest on our indebtedness and to refinance our indebtedness depends on our future performance. We do not have complete control over our future performance because it is subject to economic, political, financial, competitive, regulatory and other factors affecting the aerospace and defense industry. It is possible that in the future our business may not generate sufficient cash flow from operations to allow us to service our debt and make necessary capital expenditures. If this situation occurs, we may have to sell assets, restructure debt or obtain additional equity capital. We may not be able to do so or do so without additional expense.

Our level of indebtedness has important consequences to you and your investment in the notes. These consequences may include:

	•	requiring a substantial portion of our net cash flow from operations to be used to pay interest and principal on our debt and therefore be unavailable for other purposes, including capital expenditures, research and development and other investments;

	•	limiting our ability to obtain additional financing for acquisitions or working capital to make investments or other expenditures, which may limit our ability to carry out our acquisition strategy;

	•	higher interest expenses due to increases in interest rates on our borrowings that have variable interest rates;

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	•	heightening our vulnerability to downturns in our business or in the general economy and restricting us from making acquisitions, introducing new technologies and products or exploiting business opportunities; and

	•	covenants that limit our ability to borrow additional funds, dispose of assets or pay cash dividends. Failure to comply with such covenants could result in an event of default which, if not cured or waived, could result in the acceleration of our outstanding indebtedness.

Additionally, on December 31, 2003, we had $3,788.7 million of contractual obligations, including outstanding indebtedness. These contractual obligations and contingent commitments are described elsewhere herein.

Our acquisition strategy involves risks, and we may not successfully implement our strategy.

We seek to acquire companies that complement our businesses. We may not be able to continue to identify acquisition candidates on commercially reasonable terms or at all. If we make additional acquisitions, we may not realize the benefits anticipated from the acquisitions. Likewise, we may not be able to obtain additional financing for acquisitions. Such additional financing could be restricted by the terms of our debt agreements.

The process of integrating acquired operations, including our recent acquisitions, into our existing operations may result in unforeseen operating difficulties and may require significant financial and managerial resources that would otherwise be available for the ongoing development or expansion of our existing operations. Possible future acquisitions could result in the incurrence of additional debt and related interest expense and contingent liabilities, each of which could result in an increase to our already significant level of outstanding debt. Additionally, based on the terms of a particular business acquisition, we have in the past assumed, and in the future, we may continue to assume, pre-acquisition contingencies, including those related to litigation involving the acquired business, such as the litigation with Kalitta Air that we acquired in connection with our acquisition of L-3 Integrated Systems. See "Business — Legal Proceedings." We consider and execute strategic acquisitions on an ongoing basis and may be evaluating acquisitions or engaged in acquisition negotiations at any given time. We regularly evaluate potential acquisitions and joint venture transactions, and, except as disclosed herein, we have not entered into any agreements with respect to any material transactions.

We rely on sales to U.S. Government entities, and the loss of such contracts would have a material adverse effect on our results of operations and cash flows.

Our sales are predominantly derived from contracts with agencies of, and prime contractors to, the U.S. Government. Approximately 76.3%, or $3,862.7 million, of our sales for the year ended December 31, 2003, were made directly or indirectly to U.S. Government agencies, including the Department of Defense. At December 31, 2003, we had approximately 1,000 contracts with a value exceeding $1.0 million. Our largest program, a cost reimbursable contract for U.S. Special Operations Forces Logistics Support, represented 4.4% of our sales for the year ended December 31, 2003. No other program represented more than 2.9% of sales for the year ended December 31, 2003. For the year ended December 31, 2003, sales from our five largest programs amounted to $719.8 million, or 14.2% of our sales. The loss of all or a substantial portion of our sales to the U.S. Government would have a material adverse effect on our results of operations and cash flows.

Our results of operations and cash flows, as well as our valuation of contracts in process are substantially affected by our fixed-price type and cost reimbursable type contracts.

The substantial majority of our sales require us to design, develop, manufacture, modify, upgrade, test and integrate aerospace and electronic equipment, and to provide related engineering and technical services according to the buyer's specifications. These sales are transacted using written contractual arrangements, or contracts, which are generally either fixed-price, cost-reimbursable or time and material. Most of these contracts are within the scope of the American Institute of Certified Public Accountants Statement of Position 81-1, Accounting for Performance of Construction-Type and

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Certain Production-Type Contracts (SOP 81-1) and Accounting Research Bulletin No. 45, Long-term Construction-Type Contracts (ARB 45). In addition, our cost-reimbursable contracts are covered by Accounting Research Bulletin No. 43, Chapter 11, Section A, Government Contracts, Cost-Plus-Fixed Fee Contracts (ARB 43). Additionally, certain fixed price contracts require us to perform services that are not related to production of tangible assets, which are not covered by SOP 81-1, and these sales are recognized in accordance with SAB 104, Revenue Recognition. For the year ended December 31, 2003, approximately 63.1% of our sales were generated from fixed-price contracts and approximately 36.9% of our sales were generated from cost-reimbursable contracts and time and material type contracts. Substantially all of our cost-reimbursable and time and material contracts are with the U.S. Government, primarily with the Department of Defense. Substantially all of our sales to commercial customers are transacted under fixed-price sales arrangements, and are included in our fixed-price contract sales.

On a fixed-price contract, we agree to perform the scope of work required by the contract for a predetermined contract price. Although a fixed-price contract generally permits us to retain profits if the total actual contract costs are less than the estimated contract costs, we bear the risk that increased or unexpected costs may reduce our profit or cause us to sustain losses on the contract. Accounting for the sales and profit on a fixed-price contract requires estimates of (1) the total contract revenue, (2) the total costs at completion, which is equal to the sum of the actual incurred costs to date on the contract and the estimated costs to complete the contract's statement of work, and (3) the measurement of progress towards completion. Adjustments to original estimates for a contract's revenue, estimated costs at completion and estimated total profit or loss are often required as work progresses under a contract, as experience is gained and as more information is obtained, even though the scope of work required under the contract may not change, or if contract modifications occur.

On a cost-reimbursable contract we are paid our allowable incurred costs plus a profit which can be fixed or variable depending on the contract's fee arrangement up to predetermined funding levels determined by our customers. Therefore, on a cost-reimbursable contract we do not bear the risks of unexpected cost overruns, provided that we do not incur costs that exceed the predetermined funded amounts.

The impact of revisions in profit estimates for all types of contracts are recognized on a cumulative catch-up basis in the period in which the revisions are made. Provisions for anticipated losses on contracts are recorded in the period in which they become evident. Amounts representing contract change orders or claims are included in sales only when they can be reliably estimated and their realization is reasonably assured. The revisions in contract estimates, if significant, can materially affect our results of operations and cash flows, as well as our valuations of contracts in process.

Our government contracts entail certain risks.

•	Government contracts are dependent upon the U.S. defense budget.

The U.S. Department of Defense (DoD) budget has increased for each fiscal year from fiscal year 1997 to the recently approved budget for fiscal year 2005, and, based on the Bush Administration's current Future Year Defense Plan (FYDP), the DoD budget is expected to continue to increase through fiscal 2009. However, the future DoD budgets after fiscal year 2005 could be negatively impacted by several factors, including, but not limited to, the U.S. Government's budget deficits and spending priorities and the costs of sustaining the U.S. military presence and rebuilding operations in Iraq and Afghanistan, which could cause the DoD budget to remain unchanged or to decline. A significant decline in U.S. military expenditures in the future could result in a material decrease to our sales, earnings and cash flow. The loss or significant reduction in government funding of a large program in which we participate could also result in a material decrease to our future sales, earnings and cash flows and thus limit our ability to satisfy our financial obligations, including those relating to the notes. U.S. Government contracts are also conditioned upon the continuing approval by Congress of the amount of necessary spending. Congress usually appropriates funds for a given program each fiscal year even though contract periods of performance may exceed one year. Consequently, at the

27

beginning of a major program, the contract is usually partially funded, and additional monies are normally committed to the contract only if appropriations are made by Congress for future fiscal years.

	•	Government contracts contain unfavorable termination provisions and are subject to audit and modification.

Companies engaged primarily in supplying defense-related equipment and services to U.S. Government agencies are subject to certain business risks peculiar to the defense industry. These risks include the ability of the U.S. Government to unilaterally:

	•	suspend us from receiving new contracts pending resolution of alleged violations of procurement laws or regulations;

	•	terminate existing contracts;

	•	reduce the value of existing contracts;

	•	audit our contract-related costs and fees, including allocated indirect costs; and

	•	control and potentially prohibit the export of our products.

All of our U.S. Government contracts can be terminated by the U.S. Government either for its convenience or if we default by failing to perform under the contract. Termination for convenience provisions provide only for our recovery of costs incurred or committed, settlement expenses and profit on the work completed prior to termination. Termination for default provisions provide for the contractor to be liable for excess costs incurred by the U.S. Government in procuring undelivered items from another source. Our contracts with foreign governments generally contain similar provisions relating to termination at the convenience of the customer.

The U.S. Government may review our costs and performance on their contracts, as well as our accounting and general business practices. Based on the results of such audits, the U.S. Government may adjust our contract-related costs and fees, including allocated indirect costs. In addition, under U.S. Government purchasing regulations, some of our costs, including most financing costs, amortization of goodwill, portions of research and development costs, and certain marketing expenses may not be reimbursable under U.S. Government contracts. Further, as a U.S. Government contractor, we are subject to investigation, legal action and/or liability that would not apply to a commercial company.

	•	Government contracts are subject to competitive bidding and we are required to obtain licenses for non-U.S. sales.

We obtain many of our U.S. Government contracts through a competitive bidding process. We may not be able to continue to win competitively awarded contracts. In addition, awarded contracts may not generate sales sufficient to result in our profitability. We are also subject to risks associated with the following:

	•	the frequent need to bid on programs in advance of the completion of their design, which may result in unforeseen technological difficulties and/or cost overruns;

	•	the substantial time and effort including the relatively unproductive design and development required to prepare bids and proposals for competitively awarded contracts that may not be awarded to us;

	•	design complexity and rapid technological obsolescence; and

	•	the constant need for design improvement.

In addition to these U.S. Government contract risks, we are required to obtain licenses from U.S. Government agencies to export many of our products and systems. Additionally, we are not permitted to export some of our products. Failure to receive required licenses would eliminate our ability to sell our products outside the United States.

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Our operations involve rapidly evolving products and technological change.

The rapid change of technology is a key feature of all of the markets in which our businesses operate, including commercial communications in particular. To succeed in the future, we will need to continue to design, develop, manufacture, assemble, test, market and support new products and enhancements on a timely and cost-effective basis. Historically, our technology has been developed through customer-funded and internally funded research and development and through certain business acquisitions. We may not be able to continue to maintain comparable levels of research and development or successfully complete such acquisitions. In the past we have allocated substantial funds to capital expenditures, programs and other investments. This practice will continue to be required in the future. Even so, we may not be able to successfully identify new opportunities and may not have the needed financial resources to develop new products in a timely or cost-effective manner. At the same time, products and technologies developed by others may render our products and systems obsolete or non-competitive.

Consolidation and intense competition in the industries in which our businesses operate could limit our ability to attract and retain customers.

The defense industry and the other industries in which our businesses operate, and the market for defense applications, is highly competitive. We expect that the U.S. Department of Defense's increased use of commercial off-the-shelf products and components in military equipment will continue to encourage new competitors to enter the market. We also expect that competition for original equipment manufacturing business will increase due to the continued emergence of merchant suppliers. Our ability to compete for defense contracts largely depends on the following factors:

	•	the effectiveness and innovation of our technologies and research and development programs;

	•	our ability to offer better program performance than our competitors at a lower cost; and

	•	the capabilities of our facilities, equipment and personnel to undertake the programs for which we compete.

We are the incumbent supplier or have been the sole provider for many years for certain programs. We refer to such contracts as "sole-source" contracts. In such cases, there may be other suppliers who have the capability to compete for the programs involved, but they can only enter or reenter the market if the customer chooses to reopen or recompete the particular program to competition. The majority of our sales are derived from contracts with the U.S. Government and its prime contractors, which are principally awarded on the basis of negotiations or competitive bids. Additionally, many of our competitors are larger than us and have substantially greater financial and other resources than we have.

Our debt agreements restrict our ability to finance our future operations and, if we are unable to meet our financial ratios, could cause our existing debt to be accelerated.

Our debt agreements contain a number of significant provisions that, among other things, restrict our ability to:

	•	sell assets;

	•	incur more indebtedness;

	•	repay certain indebtedness;

	•	pay dividends on the common stock of L-3 Holdings;

	•	make certain investments or business acquisitions;

	•	repurchase or redeem capital stock;

	•	engage in business mergers or consolidations; and

	•	engage in certain transactions with subsidiaries and affiliates.

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These restrictions could hurt our ability to finance our future operations or capital needs or engage in other business activities that may be in our interest. In addition, some of our debt agreements also require us to maintain compliance with certain financial ratios, including total consolidated earnings before interest, taxes, depreciation and amortization to total consolidated cash interest expense and total consolidated debt to total consolidated earnings before interest, taxes, depreciation and amortization, and to limit our capital expenditures. Our ability to comply with these ratios and limits may be affected by events beyond our control. A breach of any of these agreements or our inability to comply with the required financial ratios or limits could result in a default under those debt agreements. In the event of any such default, the lenders under those debt agreements could elect to:

	•	declare all outstanding debt, accrued interest and fees to be due and immediately payable;

	•	require us to apply all of our available cash to repay our outstanding senior debt; and

	•	prevent us from making debt service payments on our other debt.

If we were unable to repay any of these borrowings when due, the lenders under our senior credit facilities could proceed against their collateral, which consists of a first priority security interest in our outstanding shares of common stock and the capital stock of our material subsidiaries. If the indebtedness under the existing debt agreements were to be accelerated, our assets may not be sufficient to repay such indebtedness in full.

If we are unable to attract and retain key management and personnel, we may become unable to operate our business effectively.

Our future success depends to a significant degree upon the continued contributions of our management and our ability to attract and retain other highly qualified management and technical personnel. We do not maintain any key person life insurance policies for members of our management. We have an employment agreement with Mr. Lanza (Chairman and Chief Executive Officer). We face competition for management and technical personnel from other companies and organizations. Failure to attract and retain such personnel would damage our prospects.

Environmental laws and regulation may subject us to significant liability.

Our operations are subject to various U.S. federal, state and local as well as certain foreign environmental laws and regulations within the countries in which we operate relating to the discharge, storage, treatment, handling, disposal and remediation of certain materials, substances and wastes used in our operations.

New laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the imposition of new clean-up requirements may require us to incur a significant amount of additional costs in the future and could decrease the amount of free cash flow available to us for other purposes, including capital expenditures, research and development and other investments.

Termination of our backlog of orders could negatively impact our results of operations and cash flows.

We currently have a backlog of orders, primarily under contracts with the U.S. Government. Our total funded backlog was $4,406.4 million at September 30, 2004. The U.S. Government may unilaterally modify or terminate its contracts. Accordingly, most of our backlog could be modified or terminated by the U.S. Government, which would negatively impact our results of operations and cash flows.

Risks Related to the Notes

We cannot assure you that an active trading market will develop for the exchange notes, which may reduce their market price.

We are offering the exchange notes to the holders of the outstanding notes. The outstanding notes were offered and sold in November 2004 to a small number of institutional investors and are eligible for trading in the Private Offerings, Resale and Trading through Automatic Linkages (PORTAL) Market.

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We do not intend to apply for a listing of the exchange notes on a securities exchange or on any automated dealer quotation system. There is currently no established market for the exchange notes and we cannot assure you as to the liquidity of markets that may develop for the exchange notes, your ability to sell the exchange notes or the price at which you would be able to sell the exchange notes. If such markets were to exist, the exchange notes could trade at prices that may be lower than their principal amount or purchase price depending on many factors, including prevailing interest rates and the markets for similar securities. The initial purchasers have advised us that they currently intend to make a market with respect to the exchange notes. However, the initial purchasers are not obligated to do so, and any market making with respect to the exchange notes may be discontinued at any time without notice. In addition, such market making activity may be limited during the pendency of the exchange offer or the effectiveness of a shelf registration statement in lieu thereof.

The liquidity of, and trading market for, the exchange notes also may be adversely affected by general declines in the market for similar securities. Such a decline may adversely affect such liquidity and trading markets independent of our financial performance and prospects.

The notes are subordinated to all our existing and future senior indebtedness, which may inhibit our
ability to repay you.

The notes are contractually subordinated in right of payment to our existing and future senior indebtedness. At September 30, 2004, we had no outstanding senior debt, and had the ability to borrow up to $671.5 million (after reductions for outstanding letters of credit of $78.5 million) under our senior credit facilities, all of which, if borrowed or drawn upon, would be senior debt.

Any incurrence of additional indebtedness may materially adversely impact our ability to service our debt, including the notes. Due to the subordination provisions of our senior subordinated indebtedness, including the notes, in the event of our insolvency, funds that would otherwise be used to pay the holders of the notes and other senior subordinated indebtedness will be used to pay the holders of senior indebtedness to the extent necessary to pay the senior indebtedness in full. As a result of these payments, general creditors may recover less, ratably, than the holders of senior indebtedness and the general creditors may recover more, ratably, than the holders of the notes or other subordinated indebtedness. In addition, the holders of senior indebtedness may, under certain circumstances, restrict or prohibit us from making payments on the notes.

The terms of our indebtedness could restrict our flexibility and limit our ability to satisfy obligations under the notes.

We are subject to operational and financial covenants and other restrictions contained in the bank loan documents evidencing our senior indebtedness and the indentures evidencing our senior subordinated notes. These covenants could limit our operational flexibility and restrict our ability to borrow additional funds, if necessary, to finance operations and to make principal and interest payments on the notes. Additionally, failure to comply with these operational and financial covenants could result in an event of default under the terms of this indebtedness which, if not cured or waived, could result in this indebtedness becoming due and payable. The effect of these covenants, or our failure to comply with them, could have a material adverse effect on our business, financial condition and results of operations.

Our ability to repurchase notes with cash upon a change of control may be limited.

In specific circumstances involving a change of control, you may require us to repurchase some or all of your notes. We may not have sufficient financial resources at such time or be able to arrange financing to pay the repurchase price of the notes in cash. Our ability to repurchase the notes in such event may be limited by law, by our indentures, by the terms of other agreements relating to our senior indebtedness and by such indebtedness and agreements as may be entered into, replaced, supplemented or amended from time to time. We may be required to refinance our senior indebtedness in order to make such payments. We may not have the financial ability to repurchase the notes in cash if payment for our senior indebtedness is accelerated.

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The guarantees may be unenforceable due to fraudulent conveyance statutes, and accordingly, you could have no claim against the guarantors.

Although laws differ among various jurisdictions, a court could, under fraudulent conveyance laws, further subordinate or avoid the guarantees if it found that the guarantees were incurred with actual intent to hinder, delay or defraud creditors, or the guarantor did not receive fair consideration or reasonably equivalent value for the guarantees and that the guarantor was any of the following:

	•	insolvent or rendered insolvent because of the guarantees;

	•	engaged in a business or transaction for which its remaining assets constituted unreasonably small capital; or

	•	intended to incur, or believed that it would incur, debts beyond its ability to pay at maturity.

If a court voided a guaranty by one or more of our subsidiaries as the result of a fraudulent conveyance, or held it unenforceable for any other reason, holders of the notes would cease to have a claim against the subsidiary based on the guaranty and would solely be creditors of L-3 Communications Corporation and any guarantor whose guarantee was not similarly held unenforceable.

Not all of our subsidiaries are guarantors, and your claims will be subordinated to all of the creditors of the non-guarantor subsidiaries.

Many, but not all, of our direct and indirect subsidiaries will guarantee the notes. In the event of a bankruptcy, liquidation or reorganization of any of the non-guarantor subsidiaries, holders of their indebtedness and their trade creditors will generally be entitled to payment of their claims from the assets of those non-guarantor subsidiaries before any assets of the non-guarantor subsidiaries are made available for distribution to us. Assuming the sale of the outstanding notes and the exchange of the outstanding notes for the exchange notes was completed on September 30, 2004, the exchange notes would have been effectively junior to $186.7 million of indebtedness and other liabilities (including trade payables) of these non-guarantor subsidiaries. The non-guarantor subsidiaries generated 12.0% of our sales, generated earnings of $34.5 million and generated cash from operating activities of $54.7 million for the nine months ended September 30, 2004. The non-guarantor subsidiaries held 11.7% of our consolidated assets at September 30, 2004.

The guarantees will be subordinated to the senior debt of the guarantors.

The guarantees are subordinated to all existing and future senior debt of the guarantors, which shall consist of all of the indebtedness and other liabilities of the guarantors designated as senior, including guarantees of borrowings under the senior credit facilities. The guarantees issued in connection with the offering of the outstanding notes and the exchange of the exchange notes will be pari passu with the guarantees of the senior subordinated notes sold by L-3 Communications Corporation in June 2002, May 2003, and December 2003. At September 30, 2004, we had no senior debt outstanding under our senior credit facilities, but any future amounts outstanding under those facilities would be guaranteed by our subsidiaries on a senior basis. At September 30, 2004, L-3 Communications Corporation had availability of $671.5 million (after reduction for outstanding letters of credit of $78.5 million) under its senior credit facilities, all of which, if borrowed or drawn upon, would be senior debt. Any right of L-3 Communications Corporation to receive the assets of any of its subsidiaries upon their liquidation or reorganization (and the consequent right of the holders of the notes to participate in those assets) will be subject to the claims of that subsidiary's creditors, including trade creditors. To the extent that L-3 Communications Corporation is recognized as a creditor of that subsidiary, L-3 Communications Corporation may have such claim, but it would still be subordinate to any security interests in the assets of that subsidiary and any indebtedness and other liabilities of that subsidiary senior to that held by L-3 Communications Corporation.

This prospectus contains forward looking statements, which may not be correct.

Certain of the matters discussed concerning our operations, economic performance and financial condition, including in particular, the likelihood of our success in developing and expanding our

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business and the realization of sales from backlog, include forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates" and similar expressions are forward-looking statements. Although we believe that these statements are based upon reasonable assumptions, we can give no assurance that their goals will be achieved.

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FORWARD-LOOKING STATEMENTS

Our disclosure and analysis in this prospectus contain some forward-looking statements. Certain of the matters discussed concerning our operations, cash flows, financial position, economic performance, and financial condition, including in particular, the likelihood of our success in developing and expanding our business and the realization of sales from backlog, include forward-looking statements within the meaning of section 27A of the Securities Act and Section 21E of the Exchange Act.

Statements that are predictive in nature, that depend upon or refer to events or conditions or that include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates" and similar expressions are forward-looking statements. Although we believe that these statements are based upon reasonable assumptions, including projections of orders, sales, operating margins, earnings, cash flow, research and development costs, working capital, capital expenditures and other projections, they are subject to several risks and uncertainties, and therefore, we can give no assurance that these statements will be achieved. Such statements will also be influenced by factors such as:

	•	our dependence on the defense industry and the business risks peculiar to that industry, including changing priorities or reductions in the U.S. Government defense budget;

	•	our reliance on contracts with a limited number of agencies of, or contractors to, the U.S. Government and the possibility of termination of government contracts by unilateral government action or for failure to perform;

	•	our ability to obtain future government contracts on a timely basis;

	•	the availability of government funding and changes in customer requirements for our products and services;

	•	our significant amount of debt and the restrictions contained in our debt agreements;

•	our ability to continue to retain and train our existing employees and to recruit and hire new qualified and skilled employees;

	•	our collective bargaining agreements and our ability to favorably resolve labor disputes should they arise;

	•	the business and economic conditions in the markets in which we operate, including those for the commercial avation and communications markets;

	•	economic conditions, competitive environment, international business and political conditions and timing of international awards and contracts;

	•	our extensive use of fixed-price type contracts as compared to cost-reimbursable type and time-and-material type contracts;

	•	our ability to identify future acquisition candidates or to integrate acquired operations;

	•	the rapid change of technology and high level of competition in the communication equipment industry;

	•	our introduction of new products into commercial markets or our investments in commercial products or companies;

	•	pension, environmental or legal matters or proceedings and various other market, competition and industry factors, many of which are beyond our control; and

	•	the fair values of our assets, including identifiable intangible assets and the estimated fair value of the goodwill balances for our reporting units which can be impaired or reduced by the other factors discussed above.

Readers of this prospectus are cautioned that our forward-looking statements are not guarantees of future performance and the actual results or developments may differ materially from the expectations expressed in the forward-looking statements.

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As for the forward-looking statements that relate to future financial results and other projections, actual results will be different due to the inherent uncertainties of estimates, forecasts and projections and may be better or worse than projected and such differences could be material. Given these uncertainties, you should not place any reliance on these forward-looking statements. These forward-looking statements also represent our estimates and assumptions only as of the date that they were made. We expressly disclaim a duty to provide updates to these forward-looking statements, and the estimates and assumptions associated with them, after the date of this prospectus to reflect events or changes or circumstances or changes in expectations or the occurrence of anticipated events.

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USE OF PROCEEDS

We will not receive any cash proceeds from the issuance of the exchange notes. In consideration for issuing the exchange notes as contemplated in this prospectus, we will receive in exchange a like principal amount of outstanding notes, the terms of which are identical in all material respects to the exchange notes. The outstanding notes surrendered in exchange for the exchange notes will be retired and canceled and cannot be reissued. Accordingly, issuance of the exchange notes will not result in any change in our capitalization.

We received net proceeds of approximately $639.0 million from the offering of the outstanding notes, after deducting the discounts, commissions and estimated expenses payable by us.

The net proceeds from the offering of the outstanding notes was used to increase our cash and cash equivalents, which will be used for general corporate purposes, including payments for business acquisitions (including those businesses that we have agreed to acquire, which are described under "Prospectus Summary—Recent Developments"). In addition, we used a portion of the net proceeds from the offering of the outstanding notes to redeem all of our outstanding $200.0 million aggregate principal amount of 8% Senior Subordinated Notes due 2008. Such notes were redeemed by us on December 13, 2004 at a redemption price of 102.667% of the principal amount thereof, plus accrued and unpaid interest.

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CAPITALIZATION

The following table sets forth our capitalization: (1) on an actual basis at September 30, 2004 and
(2) as adjusted for the offering of the outstanding notes and the application of the proceeds therefrom as intended, including to redeem our outstanding $200 million 8% Senior Subordinated Notes due 2008, and the conversion and redemption of the CODES due 2011, that occurred in October 2004.

				At September 30, 2004
				Actual				As Adjusted(1)
				(in millions)
Cash and cash equivalents				$	367.3			$	800.8
Long-term debt:
Senior credit facilities(2)				$	—			$	—
8% Senior Subordinated Notes due 2008(3)					200.0				—
7 5/8% Senior Subordinated Notes due 2012					750.0				750.0
6 1/8% Senior Subordinated Notes due 2013					400.0				400.0
6 1/8% Senior Subordinated Notes due 2014					400.0				400.0
5 7/8% Senior Subordinated Notes due 2015					—				650.0
4% Senior Subordinated Convertible Contingent Debt Securities due 2011(4)					420.0				—
Principal amount of long-term debt					2,170.0				2,200.0
Less: Unamortized discounts					(10.2	)			(8.4	)
Fair value of interest rate swap agreements					(2.3	)			(2.3	)
Carrying amount of long-term debt				$	2,157.5			$	2,189.3
Minority interests					79.1				79.1
Shareholders' equity:
Common stock(4)					2,294.5				2,724.3
Retained earnings					988.2				984.8
Unearned compensation					(5.1	)			(5.1	)
Accumulated other comprehensive loss					(73.1	)			(73.1	)
Total shareholders' equity					3,204.5				3,630.9
Total capitalization				$	5,441.1			$	5,899.3

(1)	The as adjusted data does not reflect our subsequent expenditures of cash in connection with business acquisitions completed after September 30, 2004. See "Prospectus Summary — Recent Developments."

(2)	At September 30, 2004, our availability under the senior credit facilities at any given time was $750.0 million (subject to compliance with covenants), less the amount of outstanding borrowings and outstanding letters of credit (which amounted to zero for outstanding borrowings and $78.5 million for outstanding letters of credit at September 30, 2004).

(3)	On November 12, 2004, we initiated a full redemption of all of our outstanding $200.0 million aggregate principal amount of 8% Senior Subordinated Notes due 2008. Such notes were redeemed by us at a redemption price of 102.667% of the principal amount, plus accrued and unpaid interest to December 13, 2004.

(4)

On October 5, 2004, L-3 Holdings initiated a full redemption of all its $420 million of 4.00% Senior Subordinated Convertible Contingent Debt Securities (CODES) due 2011. On October 21, 2004, holders of $419.8 million of the principal amount of CODES exercised their conversion rights and converted such CODES into 7.8 million shares of L-3 Holdings common stock. The remaining $0.2 million of CODES were redeemed for cash on October 25, 2004 at a redemption price of 102% of the principal amount, plus accrued and unpaid interest (including contingent interest) to October 25, 2004.

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SELECTED FINANCIAL DATA

We derived the selected financial data presented below at December 31, 2003 and 2002 and for each of the three years in the period ended December 31, 2003 from our audited consolidated financial statements included elsewhere herein. We derived the selected financial data presented below for the years ended December 31, 2000 and 1999 and at December 31, 2001, 2000 and 1999 from our audited consolidated financial statements not included elsewhere herein. We derived the selected financial data presented below at September 30, 2004 and for the nine months ended September 30, 2004 and 2003 from our unaudited condensed consolidated financial statements included elsewhere herein. We derived the selected financial data presented below at September 30, 2003 from our unaudited condensed consolidated financial statements not included elsewhere herein. You should read the selected financial data together with our "Management's Discussion and Analysis of Results of Operations and Financial Condition" and our audited consolidated financial statements. The results of operations are impacted significantly by our acquisitions, some of which are described elsewhere herein.

				Nine Months Ended September 30,								Year Ended December 31,
				2004				2003				2003				2002				2001				2000				1999
				(in millions)
Statement of Operations Data:
Sales				$	4,985.8			$	3,580.5			$	5,061.6			$	4,011.2			$	2,347.4			$	1,910.1			$	1,405.5
Operating income					529.1				390.0				581.0				454.0				275.3	(1)			222.7	(1)			150.5	(1)
Interest expense					106.8				98.3				132.7				122.5				86.4				93.0				60.6
Other expense (income), net					1.7				(2.1	)			(0.2	)			(5.0	)			(1.8	)			(4.4	)			(5.5	)
Minority interests in net income of consolidated subsidiaries					7.1				2.6				3.5				6.2				4.4				—				—
Loss on retirement of debt					—				11.2				11.2				16.2				—				—				—
Provision for income taxes					150.9				100.8				156.2				111.6				70.8				51.4				36.7
Income before cumulative effect of a change in accounting principle					262.6				179.2				277.6				202.5				115.5				82.7				58.7
Cumulative effect of a change in accounting principle					—				—				—				(24.4	)			—				—				—
Net income				$	262.6			$	179.2			$	277.6			$	178.1			$	115.5	(2)		$	82.7	(2)		$	58.7	(2)
Balance Sheet Data (at period end):
Working capital				$	1,311.5			$	1,196.8			$	1,013.5			$	929.4			$	717.8			$	360.9			$	255.5
Total assets					7,003.2				5,823.3				6,492.9				5,242.3				3,339.2				2,463.5				1,628.7
Total debt					2,157.5				2,066.2				2,457.3				1,847.8				1,315.3				1,095.0				605.0
Minority interests					79.1				74.3				76.2				73.2				69.9				—				—
Shareholders' equity					3,204.5				2,443.7				2,574.5				2,202.2				1,213.9				692.6				583.2

(1)	Effective January 1, 2002, we ceased amortizing goodwill. Goodwill amortization expense recorded in years prior to 2002 was $42.3 million in 2001, $35.0 million in 2000 and $20.6 million in 1999.

(2)	Net income, as adjusted to exclude goodwill amortization expense, net of income tax expense, was $149.4 million in 2001, $112.3 million in 2000 and $76.2 million in 1999.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Overview

We are a leading supplier of a broad range of products used in a substantial number of aerospace and defense platforms. We also are a major supplier of subsystems on many platforms, including those for secure communication networks and communication products, mobile satellite communications, information security systems, shipboard communications, naval power systems, fuzes and safety and arming devices for missiles and munitions, microwave assemblies for radars and missiles, telemetry and instrumentation, and airport security systems. We also are a prime system contractor for aircraft modernization and operations & maintenance (O&M), Intelligence, Surveillance and Reconnaissance (ISR) collection platforms, simulation and training, and government systems support services. The substantial majority of our sales are generated using written revenue arrangements, or contracts. Most of these contracts require us to design, develop, manufacture, modify, upgrade, test and integrate complex aerospace and electronic equipment, and to provide related engineering and technical services according to the buyer's specifications. Our primary customer is the U.S. Department of Defense (DoD). Our other customers include the U.S. Department of Homeland Security (DHS), certain U.S. Government intelligence agencies, major aerospace and defense contractors, foreign government ministries of defense, commercial customers and certain other U.S. federal, state and local government agencies.

We have four reportable segments: (1) Secure Communications & ISR; (2) Training, Simulation & Government Services; (3) Aircraft Modernization, O&M and Products (formerly known as Aviation Products & Aircraft Modernization); and (4) Specialized Products.

Our Secure Communications & ISR segment provides products and services for the global ISR market as well as secure, high data rate communications systems and equipment primarily for military and other U.S. Government and foreign government reconnaissance and surveillance applications. We believe our systems and products are critical elements for a substantial number of major communication, command and control, intelligence gathering and space systems. Our systems and products are used to connect a variety of airborne, space, ground and sea-based communication systems and are used in the transmission, processing, recording, monitoring and dissemination functions of these communication systems. Our Training, Simulation & Government Services segment produces training systems and related support services, and provides a wide range of engineering development services and integration support, and a full range of teaching, training, logistics and communication software support services. Our Aircraft Modernization, O&M and Products segment provides our TCAS products, cockpit voice, flight data and cruise ship hardened voyage recorders, advanced cockpit avionics products, ruggedized custom cockpit displays and specialized aircraft modernization, upgrade and maintenance services. Our Specialized Products segment provides naval warfare products, telemetry, instrumentation, space and navigation products, premium fuzing products, security systems, training devices and motion simulators, ruggedized commercial off-the-shelf technology and microwave components.

In recent years, domestic and geo-political developments have significantly affected the markets for defense systems, products and services. The events of September 11, 2001 created uncertainty and exposed vulnerabilities in the security and the overall defense of the U.S. homeland. In the conclusions of the most recent U.S. Quadrennial Defense Review (QDR), completed during 2001, there was a fundamental and philosophical shift in focus from a "threat-based" model to one that emphasizes the capabilities needed to defeat a full spectrum of adversaries. Transforming the nation's defense posture to a capabilities-based approach involves creating the ability for a more flexible response, with greater force mobility, stronger space capabilities, missile defense, improved and network-centric communications and information systems security and an increased emphasis on homeland defense. The Afghanistan and Iraq wars have confirmed several of the conclusions reached in the QDR and have also resulted in increased DoD spending, primarily for war operations.

The fiscal year 2004 (fiscal year beginning October 1, 2003, or FY 2004) DoD budget, excluding the Iraq and Afghanistan war supplemental appropriations, was $375.2 billion, an increase of 2.9%

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over the fiscal year 2003 (FY 2003) DoD budget. On February 2, 2004, the Bush Administration released its current Future Year Defense Plan (FYDP) for the fiscal year 2005 (FY 2005) to fiscal year 2009 (FY 2009), and its DoD budget request for FY 2005 of $401.7 billion. The FY 2005 budget request indicates an increase of 7.1% over the FY 2004 budget. We believe the DoD investment account, which is comprised of the procurement and research, development, test and evaluation (RDT&E) components of the DoD budget, is a better indicator of DoD spending applicable to defense contractors than the total DoD budget because it generally represents the amounts that are expended for military hardware, services and technology. The investment account increased 10.1% in FY 2004 over FY 2003, and the current FYDP indicates a compounded annual growth rate of 5.8% from FY 2004 to FY 2009. However, the DoD investment account is not the only indicator of revenue growth potential for the defense industry, because (1) the DoD budget and DoD spending for all defense weapons platforms and programs do not grow or decline at the same rate, (2) there are timing differences between DoD budget authority and actual DoD spending, (3) an individual defense contractor's revenue growth potential will be affected by its participation on the various weapons platforms and programs, including its individual performance on specific programs, and (4) changing military needs and program performance can affect whether specific programs receive continued funding or whether they are cancelled. Additionally, the operations and maintenance (O&M) account of the DoD budget, which is $127.6 billion for FY 2004, represents another source of funding applicable to defense contractors. We estimate that $20 billion to $25 billion of the O&M account is expended annually as awards to defense contractors. The table below presents a summary of the current FYDP for the total DoD budget and investment account, including actual amounts for FY 2003 and for FY 2004.

				FY03				FY04				FY05				FY06				FY07				FY08				FY09				FY04-FY09 CAGR
				($ in billions)
Total DoD budget(1)				$	364.6			$	375.2			$	401.7			$	422.6			$	443.8			$	465.6			$	487.6				5.4	%
DoD Investment account(1)				$	126.8			$	139.6			$	143.8			$	151.4			$	161.3			$	176.7			$	184.7				5.8	%

(1)	Budget amounts exclude the FY 2003 and FY 2004 supplemental appropriations for the war operations in Iraq and Afghanistan.

Over the past several years, the DoD budgets have experienced increased focus on command, control, communications, intelligence, surveillance and reconnaissance (C³ISR), precision-guided weapons, unmanned aerial vehicles (UAVs), network-centric communications, Special Operations Forces (SOF) and missile defense. In addition, the DoD philosophy has focused on a transformation strategy that balances modernization and recapitalization (or upgrading existing platforms) while enhancing readiness and joint operations. As a result, defense budget program allocations continue to favor advanced information technologies related to command, control and communications (C³) and ISR. Furthermore, the DoD's emphasis on system interoperability, force multipliers and providing battlefield commanders with real-time data is increasing the electronic content of nearly all major military procurement and research programs. As a result, it is expected that the DoD's budget for communications and defense electronics will continue to grow. We believe L-3 is well positioned to benefit from the expected increased spending in those areas. While there is no assurance that the requested DoD budget increases, particularly those for the investment account, will continue to be approved by Congress, the current outlook is one of increased DoD spending, which we believe will continue to positively affect L-3's future orders and sales and favorably affect our future operating profits and cash flows because of increased sale volumes. Conversely, a decline in the budget for the DoD investment account would generally have a negative affect on future orders, sales, operating profits and cash flows of defense contractors, including L-3, depending on the weapons platforms and programs affected by such budget reductions. However, L-3 believes that its businesses are significant participants in the sectors of the DoD investment account and DoD O&M account that are the highest priority for U.S. military transformation, and we believe that they will continue to be, even in a declining DoD budget environment.

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In addition, increased emphasis on U.S. homeland security may increase demand for our capabilities in areas such as security systems, information security, crisis management, preparedness and prevention services, and civilian security operations.

All of our U.S. Government contracts are subject to audit and various cost controls, and include standard provisions for termination for the convenience of the U.S. Government. Multiyear U.S. Government contracts and related orders are subject to cancellation if funds for contract performance for any subsequent year become unavailable. Foreign government contracts generally include comparable provisions relating to termination for the convenience of the relevant foreign government.

Acquisitions

The table below summarizes the more significant acquisitions that we have completed during the years ended December 31, 2003, 2002 and 2001 and the nine-month period ended September 30, 2004.

Acquired Business				Date Acquired				Purchase Price(1)
								(in millions)
KDI Precision Products				May 4, 2001				$	78.9
EER Systems				May 31, 2001				$	124.4
Spar Aerospace Limited				November 23, 2001				$	146.8
Emergent Government Services Group(2)				November 30, 2001				$	39.0
BT Fuze Products				December 19, 2001				$	51.1
SY Technology (SY)				December 31, 2001				$	61.5
Aircraft Integration Systems (AIS) business of Raytheon Company				March 8, 2002				$	1,148.7	(3)
Detection Systems				June 14, 2002				$	110.3
Telos Corporation (a California Corporation)				July 19, 2002				$	22.3
ComCept, Inc.				July 31, 2002				$	37.1	(4)
Technology, Management and Analysis Corporation (TMA)				September 23, 2002				$	52.7
Electron Devices and Displays-Navigation Systems – San Diego businesses of Northrop Grumman(5)				October 25, 2002				$	135.6
Wolf Coach, Inc.				October 31, 2002				$	5.4	(6)
International Microwave Corporation (IMC)				November 8, 2002				$	41.1
Westwood Corporation				November 13, 2002				$	22.1
Wescam Inc.				November 21, 2002				$	124.3
Ship Analytics, Inc.				December 19, 2002				$	20.0	(7)
Avionics Systems business of Goodrich Corporation(8)				March 28, 2003				$	188.7
Aeromet, Inc.				May 30, 2003				$	18.4
Klein Associates Inc.				September 30, 2003				$	29.4
Military Aviation Services business of Bombardier, Inc. (MAS)				October 31, 2003				$	89.6	(9)
Vertex Aerospace LLC (Vertex)				December 1, 2003				$	664.8	(10)
Certain defense and aerospace assets of IPICOM, Inc.				December 10, 2003				$	27.6
Beamhit LLC				May 13, 2004				$	40.0	(11)(12)
Brashear, LP				June 14, 2004				$	36.3
AVISYS, Inc.				June 16, 2004				$	6.6	(11)(13)

(1)	The purchase price represents the contractual consideration for the acquired business, excluding adjustments for net cash acquired and acquisition costs.

(2)	Following the acquisition, we changed Emergent Government Services Group's name to L-3 Communications Analytics.

(3)	Includes $18.7 million related to additional assets contributed by Raytheon Company (Raytheon) to AIS. Following the acquisition, we changed AIS's name to L-3 Communications Integrated Systems (IS). The purchase price is subject to adjustment based on actual closing date tangible net assets, as discussed in Note 3 to the consolidated financial statements.

(4)	The purchase price consists of $14.5 million of cash and 229,494 shares of L-3 Holdings common stock valued at $10.6 million, which were paid on the closing date of the acquisition, plus an additional 219,028 shares of L-3 Holdings common stock valued at $12.0 million issued during 2003 and 2004, which was based on Comcept's financial performance for the fiscal years ended June 30, 2003 and 2004.

(5)	Following the acquisition, we changed the name of the Displays-Navigation Systems – San Diego business to L-3 Ruggedized Command & Control.

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(6)	Excludes additional purchase price, not to exceed $2.7 million, which is contingent upon the financial performance of Wolf Coach for the years ending December 31, 2004 and 2005.

(7)	Excludes additional purchase price, not to exceed $12.4 million, which is contingent upon (i) funding of a certain contract from a foreign government and (ii) the financial performance of Ship Analytics for the years ending December 31, 2004 and 2005.

(8)	Following the acquisition, we changed the name of Avionics Systems to L-3 Communications Avionics Systems, Inc.

(9)	Includes a $2.2 million final purchase price adjustment paid in October of 2004, which was based on the actual closing date net assets of MAS.

(10)	Includes a $3.3 million purchase price adjustment paid on the closing date and a $11.5 million final purchase price adjustment paid during the second quarter of 2004.

(11)	The purchase price is subject to adjustment based on actual closing date net assets or net working capital of the acquired business.

(12)	Excludes additional purchase price, which is contingent upon the financial performance of Beamhit for the years ending December 31, 2004, 2005, 2006 and 2007.

(13)	Excludes additional purchase price, not to exceed $10.0 million, which is contingent upon the financial performance of AVISYS for the years ending December 31, 2005 and 2006.

Additionally, during 2001, 2002, 2003 and the nine-month period ended September 30, 2004, we purchased other businesses, which individually and in the aggregate were not material to our consolidated results of operations, financial position or cash flows during the year acquired. The aggregate purchase price for these businesses was $30.9 million (all of which was paid in cash), and the increase to our sales from them for 2003 compared to 2002 was $2.5 million and for 2002 compared to 2001 was $14.5 million.

All of our business acquisitions are included in our consolidated results of operations from their respective effective dates of acquisitions. We regularly evaluate potential business acquisitions and joint venture transactions. On October 8, 2004, we acquired the stock of D.P. Associates Inc. On November 9, 2004 we acquired the Commercial Infrared business of Raytheon Company for approximately $44 million in cash. On December 9, 2004, we acquired the stock of Cincinnati Electronics for approximately $176 million. On December 30, 2004, we acquired the Canadian Navigation Systems and Space Sensors business from Northrop Grumman. We have also entered into agreements to acquire three businesses for an aggregate purchase price of approximately $500 million, payable in cash. These businesses include the Marine Controls Division of CAE, the Boeing Electron Dynamic Devices business and the General Dynamics Propulsion Systems business. We expect to complete these business acquisitions by March 31, 2005. We have not entered into any other agreements with respect to any material transactions at this time. Certain of these business acquisitions are subject to regulatory approval.

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The table below presents the estimated amount of L-3's contractual contingent commitments at September 30, 2004, for additional purchase price or earnouts payable in cash for certain of L-3's acquisitions.

				2004				2005				2006				2007				Total
Acquired Businesses:
AVYSIS, Inc.				$	—			$	—			$	5.0			$	5.0			$	10.0
Coleman Research Corporation					2.3				—				—				—				2.3
Wolf Coach, Inc.					1.2				1.4				1.3				—				3.9
Ship Analytics, Inc.					4.5				4.5				4.5				—				13.5
SY Technology					1.5				—				—				—				1.5
Total				$	9.5			$	5.9			$	10.8			$	5.0			$	31.2

These earnouts represent potential additional purchase price amounts that are contingent upon the post-acquisition financial performance of the acquired business. The amounts payable in 2004 have been finalized as of December 31, 2003, and, accordingly, have been included in other current liabilities, with a corresponding increase to goodwill at December 31, 2003. The contingent amounts for periods after 2004 will be recorded as an increase to goodwill for the acquisition if they become payable. All earnout payments are reported as cash paid for acquisition of businesses within investing activities on the statement of cash flows in the period of the payment.

Critical Accounting Policies

Our significant accounting policies are described in Note 2 to the consolidated financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and costs and expenses during the reporting period. The most significant of these estimates and assumptions relate to (1) contract revenues and profit or loss recognition, (2) market values for inventories reported at lower of cost or market, (3) pension and postretirement benefit obligations, (4) preliminary purchase price allocations for the acquired assets and assumed liabilities of acquired businesses, (5) recoverability and valuation of recorded amounts of long-lived assets, identifiable intangible assets and goodwill, (6) income taxes, including the valuations of deferred tax assets, (7) litigation reserves, and (8) environmental obligations. Actual amounts will differ from these estimates. We believe that critical accounting estimates have the following attributes: (1) we are required to make assumptions about matters that are uncertain at the time of the estimate; and (2) we could reasonably have used different estimates, or (3) changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations. We believe the following critical accounting policies contain the more significant judgements and estimates used in the preparation of our financial statements.

Contract Revenue Recognition and Contract Estimates.    The substantial majority of our sales require us to design, develop, manufacture, modify, upgrade, test and integrate complex aerospace and electronic equipment, and to provide related engineering and technical services according to the buyer's specifications. These sales are transacted using written revenue arrangements, or contracts, which are generally either fixed price, cost-reimbursable or time and material. These contracts are covered by the American Institute of Certified Public Accountants (AICPA) Statement of Position 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts (SOP 81-1) and Accounting Research Bulletin No. 45, Long-term Construction-Type Contracts (ARB 45). In addition, cost-reimbursable contracts are also specifically covered by Accounting Research Bulletin No. 43, Chapter 11, Section A, Government Contracts, Cost-Plus-Fixed Fee Contracts (ARB 43). Substantially all of our cost-reimbursable and time and material contracts are with the U.S. Government, primarily with the Department of Defense. Certain of our contracts with the U.S. Government are multi-year contracts that are funded annually by the customer, and sales on these multi-year contracts are based on amounts appropriated (funded) by the U.S. Government.

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Sales and profits on fixed-price contracts are substantially recognized using percentage-of-completion methods of accounting. Sales and profits on fixed-price production contracts under which units are produced and delivered in a continuous or sequential process are recorded as units are delivered based on their selling prices (the "units-of-delivery" method). Sales and profits on fixed-price production contracts under which units are not produced and delivered in a continuous or sequential process or under which a relatively few number of units are produced are recorded based on the ratio of total actual incurred costs to date to the total estimated costs at completion of the contract for each contract (the "cost-to-cost" method). Under the percentage-of-completion methods of accounting, a single estimated total profit margin is used to recognize profit for each contract over its entire period of performance, which can exceed one year. Sales and profits on fixed-price contracts that require us to perform services that are not related to production of tangible assets are recognized in accordance with SAB No. 104, Revenue Recognition.

Accounting for the sales on a fixed-price contract requires the preparation of estimates of (1) the total contract revenue, (2) the total costs at completion, which is equal to the sum of the actual incurred costs to date on the contract and the estimated costs to complete the contract's statement of work, and (3) the measurement of progress towards completion. The estimated profit or loss at completion on a contract is equal to the difference between the total estimated contract revenue and the total estimated cost at completion. Under the units-of-delivery percentage-of-completion method, sales on a fixed-price contract are recorded as the units are delivered during the period at an amount equal to the contractual selling price of those units. Under the cost-to-cost percentage-of-completion method, sales on a fixed-price contract are recorded at amounts equal to the ratio of cumulative costs incurred and total estimated costs at completion, multiplied by (i) the total estimated contract revenue, less (ii) the cumulative sales recognized in prior periods. The profit recorded on a contract in any period using either the units-of-delivery method or cost-to-cost method is equal to (i) the current estimated total profit margin multiplied by the cumulative sales recognized, less (ii) the amount of cumulative profit previously recorded for the contract. In the case of a contract for which the total estimated costs exceed the total estimated revenues, a loss arises, and a provision for the entire loss is recorded in the period that it becomes evident, and the unrecoverable costs on a loss contract that are expected to be incurred in future periods are recorded as a component of other current liabilities entitled "Estimated cost in excess of estimated contract value to complete contracts in process." Adjustments to original estimates for a contract's revenue, estimated costs at completion and estimated profit or loss are often required as work progresses under a contract, as experience is gained and as more information is obtained, even though the scope of work required under the contract may not change, or if contract modifications occur.

Sales on cost-reimbursable type contracts are recognized as allowable costs are incurred on the contract and become billable to the customer, at an amount equal to the allowable costs plus the estimated profit on those costs. The estimated profit on a cost-reimbursable contract is generally fixed or variable based on the contract fee arrangement. Sales on time-and-material type contracts are recognized at an amount equal to the direct labor hours incurred multiplied by the contractual fixed rate per hour, plus the actual costs of material and other direct non-labor costs. On a time-and-material contract the fixed hourly rates include amounts for the cost of direct labor, indirect contract costs and profit. Cost-reimbursable or time-and-material contracts generally contain less estimation risks than fixed-price contracts.

The impact of revisions in profit estimates for all types of contracts are recognized on a cumulative catch-up basis in the period in which the revisions are made. Provisions for anticipated losses on contracts are recorded in the period in which they become evident. Amounts representing contract change orders or claims are included in sales only when they can be reliably estimated and their realization is reasonably assured. The revisions in contract estimates, if significant, can materially affect our results of operations and cash flows, as well as our valuations of contracts in process.

For the year ended December 31, 2003: (1) sales on fixed-price contracts recognized using the units-of-delivery percentage-of-completion method accounted for approximately 20.8% of total sales, (2) sales on fixed-price contracts recognized using the cost-to-cost percentage of completion method accounted for approximately 30.6% of total sales, (3) sales on cost-reimbursable contracts accounted

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for approximately 29.8% of total sales, and (4) time-and-material contracts accounted for approximately 7.1% of total sales. The remaining 11.7% of sales for the year ended December 31, 2003, pertain to fixed-price revenue arrangements principally with commercial customers, which are not within the scope of SOP 81-1, ARB 43 or ARB 45 and are recorded as products are delivered or when services are performed, in accordance with SEC SAB No. 104, Revenue Recognition (SAB 104).

Goodwill and Identifiable Intangible Assets.    In accordance with Statement of Financial Accounting Standards (SFAS) No. 141, Business Combinations, L-3 allocates the cost of its acquired businesses (commonly referred to as the purchase price allocation) to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. As part of the purchase price allocations for L-3's acquired businesses, identifiable intangible assets are recognized as assets apart from goodwill if they arise from contractual or other legal rights, or if they are capable of being separated or divided from the acquired business and sold, transferred, licensed, rented or exchanged, unless the intangible asset is comprised of the assembled workforce of the acquired business.

Generally, the substantial majority of the intangible assets from the businesses that L-3 acquires are derived from the intellectual capital of the management, administrative, scientific, engineering and technical employees of the acquired businesses. The success of L-3's businesses is primarily dependent on the management, contracting, engineering and technical skills and knowledge of L-3's employees, rather than productive capital (machinery and equipment). Generally, patents, trademarks and licenses are not material to our acquired businesses. Furthermore, our U.S. Government contracts generally permit other companies to use our patents in most domestic work performed by such other companies for the U.S. Government. Therefore, the substantial majority of the intangible assets for L-3's acquired businesses are recognized as goodwill.

The values assigned to acquired identifiable intangible assets for customer relationships and technology are determined, as of the date of acquisition, based on estimates and judgements regarding expectations for the estimated future after-tax cash flows from those assets over their lives, including the probability of expected future contract renewals and sales, less a cost-of-capital charge, all of which is discounted to present value. If actual future after-tax cash flows differ significantly from their estimates, we may be required to record an impairment charge to write down the identifiable intangible assets to their realizable values. The value assigned to goodwill equals the amount of the purchase price of the business acquired in excess of the sum of the amounts assigned to identifiable acquired assets, both tangible and intangible, less liabilities assumed. At December 31, 2003, L-3 had goodwill of $3,652.4 million and identifiable intangible assets of $162.2 million.

L-3 reviews goodwill and intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and also reviews goodwill annually in accordance with SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 142 requires that goodwill be tested, at a minimum, annually for each reporting unit using a two-step process. A reporting unit is an operating segment, as defined in paragraph 10 of SFAS No. 131, Disclosures About Segments of an Enterprise and Related Information, or a component of an operating segment. A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and is reviewed. Two or more components of an operating segment may be aggregated and deemed a single reporting unit if the components have similar economic characteristics. The first step is to identify any potential impairment by comparing the carrying value of the reporting unit to its fair value. If a potential impairment is identified, the second step is to compare the implied fair value of goodwill with the carrying value of the goodwill to measure the impairment loss. The fair value of a reporting unit is estimated using a discounted cash flow valuation approach, and is dependent on estimates for future sales, operating income, depreciation and amortization, income tax payments, working capital changes, and capital expenditures, as well as, expected growth rates for cash flows and long-term interest rates, all of which are impacted by economic conditions related to the industries in which we operate as well as conditions in the U.S. capital markets. A decline in estimated fair value of a reporting unit could result in an unexpected impairment charge to goodwill, which could have a material adverse effect on our business, financial condition and results of operations.

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Pension Plan and Postretirement Benefit Plan Obligations.     The obligations for our pension plans and postretirement benefit plans and the related annual costs of employee benefits are calculated based on several long-term assumptions, including discount rates for employee benefit liabilities, rates of return on plan assets, expected annual rates for salary increases for employee participants in the case of pension plans, and expected annual increases in the costs of medical and other health care benefits in the case of postretirement benefit obligations. These long-term assumptions are subject to revision based on changes in interest rates, financial market conditions, expected versus actual returns on plan assets, participant mortality rates and other actuarial assumptions, including future rates of salary increases, benefit formulas and levels, and rates of increase in the costs of benefits. Changes in the assumptions, if significant, can materially affect the amount of annual net periodic benefit costs recognized in our results of operations from one year to the next, the liabilities for the pension plans and postretirement benefit plans, and our annual cash requirements to fund these plans.

Valuation of Deferred Income Tax Assets and Liabilities.    At December 31, 2003, we had net deferred tax assets of $253.3 million, including $17.2 million for loss carryforwards and $36.1 million for tax credit carryforwards which are subject to various limitations and will expire if unused within their respective carryforward periods. Deferred income taxes are determined separately for each of our tax-paying entities in each tax jurisdiction. The future realization of our deferred income tax assets ultimately depends on our ability to generate sufficient taxable income of the appropriate character (for example, ordinary income or capital gains) within the carryback and carryforward periods available under the tax law, and to a lesser extent, our ability to execute successful tax planning strategies. Based on our estimates of the amounts and timing of future taxable income and tax planning strategies, we believe that L-3 will be able to realize its deferred tax assets. A change in the ability of our operations to continue to generate future taxable income, or our ability to implement desired tax planning strategies, could affect our ability to realize the future tax deductions underlying our net deferred tax assets, and require us to provide a valuation allowance against our net deferred tax assets. The recognition of a valuation allowance would result in a reduction to net income and if significant, could have a material impact on our effective tax rate, results of operations and financial position in any given period.

Results of Operations

The following information should be read in conjunction with our consolidated financial statements and our unaudited condensed consolidated financial statements. Our results of operations for the periods presented are impacted significantly by our acquisitions. See Note 3 to the audited consolidated financial statements and Note 4 to the unaudited condensed consolidated financial statements for a discussion of our acquisitions.

Presentation of Sales and Costs and Expenses.    On the statements of operations, L-3 presents its sales and costs and expenses in two categories "Contracts, primarily U.S. Government" and "Commercial, primarily products." For a detailed description of these two categories, refer to Note 2 to the unaudited condensed consolidated financial statements and the audited consolidated financial statements.

Three Months Ended September 30, 2004 Compared with Three Months Ended September 30, 2003

The tables below provide two presentations of sales, operating income and operating margin data for L-3 for the three months ended September 30, 2004 (2004 Third Quarter) and September 30, 2003 (2003 Third Quarter). The first table presents the selected data segregated between L-3's U.S. Government contractor businesses and L-3's commercial businesses. See Note 2 to the unaudited condensed consolidated financial statements. The second table presents the selected data by reportable segment. See Note 15 to the unaudited condensed consolidated financial statements.

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				Three Months Ended September 30,
				2004				2003
				(dollars in millions)
Statement of Operations Presentation
Sales:
Contracts, primarily U.S. Government				$	1,586.1			$	1,108.6	(1)
Commercial, primarily products					198.1				156.0	(1)
Consolidated				$	1,784.2			$	1,264.6
Operating income:
Contracts, primarily U.S. Government				$	184.1			$	141.8	(1)
Commercial, primarily products					15.3				10.6	(1)
Consolidated				$	199.4			$	152.4
Operating margin(2):
Contracts, primarily U.S. Government					11.6	%			12.8	%
Commercial, primarily products					7.7	%			6.8	%
Consolidated					11.2	%			12.0	%
Reportable Segment Presentation
Sales(3):
Secure Communications & ISR				$	442.4			$	375.6
Training, Simulation & Government Services					329.4				249.3	(5)
Aircraft Modernization, O&M and Products(4)					573.6				256.4
Specialized Products					438.8				383.3	(5)
Consolidated				$	1,784.2			$	1,264.6
Operating income:
Secure Communications & ISR				$	53.6			$	45.1
Training, Simulation & Government Services					33.7				25.2	(5)
Aircraft Modernization, O&M and Products(4)					79.9				38.2
Specialized Products					32.2				43.9	(5)
Consolidated				$	199.4			$	152.4
Operating margin(2):
Secure Communications & ISR					12.1	%			12.0	%
Training, Simulation & Government Services					10.2	%			10.1	%
Aircraft Modernization, O&M and Products(4)					13.9	%			14.9	%
Specialized Products					7.3	%			11.4	%
Consolidated					11.2	%			12.0	%

(1)

Effective January 1, 2004, we combined our explosives detection systems (EDS) business into L-3 Security and Detection Systems, and our IMC business into L-3 Government Services, Inc. As a result of these business realignments, reclassifications between "Contracts, primarily U.S. Government" and "Commercial, primarily products" have been made to the prior period sales and operating income amounts to conform them to the current period presentation. Specifically, $6.9 million of sales and $6.1 million of operating income was reclassified from "Contracts, primarily U.S. Government" to "Commercial, primarily products", and $4.3 million of sales and $0.4 million of operating loss was reclassified from "Commercial, primarily products" to "Contracts, primarily U.S. Government." These business realignments and related reclassifications did not result in any changes to our consolidated results of operations, financial position or cash flow.

(2)	Operating margin is equal to operating income as a percentage of sales.

(3)	Sales are after intersegment eliminations. See Note 15 to the unaudited condensed consolidated financial statements.

(4)	During the 2004 Third Quarter, we changed the name of the reportable segment from Aviation Products & Aircraft Modernization to Aircraft Modernization, O&M and Products. The businesses and reporting units included in this reportable segment were not changed.

(5)

Effective January 1, 2004, we combined our IMC business into L-3 Government Services, Inc. As a result of this realignment of management responsibilities, $4.3 million of sales and $0.5 million of operating loss were reclassified from the Specialized Products segment to the Training, Simulation & Government Services segment. This reclassification to our reportable segments did not result in any changes to our consolidated results of operations, financial position or cash flows.

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Consolidated sales increased by $519.6 million, or 41.1%, to $1,784.2 million for the 2004 Third Quarter from $1,264.6 million for the 2003 Third Quarter. Organic sales growth for our defense businesses was 17.3%, or $193.4 million, driven by continued strong demand for L-3's secure communications and ISR systems, aircraft modernization, aviation products, training and government services, training devices, imaging products and naval power equipment and services. Organic sales growth for our commercial and other non-military businesses was 27.4%, or $39.6 million, primarily due to increased volume for commercial aviation products and for security products and maintenance services. The increase in consolidated sales from acquisitions was $286.6 million, or 22.7%. We define "organic sales growth," as the increase or decrease in sales for the current period compared to the prior period, excluding the increase in sales attributable to acquired businesses to the extent the acquired businesses were not included in L-3's results of operations for the entire current period and prior period. Our increases to sales from acquired businesses include all of L-3's acquired businesses regardless of their size. Our sales for "defense businesses" include our U.S. Government contractor businesses, all of which are presented under "Contracts, primarily U.S. Government" and commercial aviation products sold to military customers, which is presented under "Commercial, primarily products."

Sales from "Contracts, primarily U.S. Government" increased by $477.5 million, or 43.1%, to $1,586.1 million for the 2004 Third Quarter from $1,108.6 million for the 2003 Third Quarter. The increase in sales from acquired businesses was $286.6 million, or 25.9%. The acquired businesses include Klein, MAS, Vertex, and certain defense and aerospace assets of IPICOM, Inc., all of which were acquired in 2003, and AVISYS, Bay Metals, Beamhit, Brashear and the GEDD business, all of which were acquired in the second quarter of 2004. Organic sales growth was $190.9 million, or 17.2%, primarily because of higher sales volume for our secure network communications, ISR systems and communications products, aircraft modernization, operations and maintenance, training and government services, training devices, imaging products and naval power equipment and services. Organic sales growth does not include the portion of the U.S. Army Aviation and Missile Command (AMCOM) contract sales for maintenance and logistics support of rotary-wing aircraft at Fort Rucker, Alabama of $29.5 million attributable to Vertex's pre-acquisition ownership interest of 40% in the AMCOM contract, which is included in sales from acquired businesses.

Sales from "Commercial, primarily products" increased by $42.1 million, or 27.0%, to $198.1 million for the 2004 Third Quarter from $156.0 million for the 2003 Third Quarter. The increase was driven by organic sales growth for commercial aviation products and security products. There were no business acquisitions that affected the changes in these results.

Consolidated costs and expenses increased by $472.6 million, or 42.5%, to $1,584.8 million for the 2004 Third Quarter from $1,112.2 million for the 2003 Third Quarter, primarily as a result of the increase in sales.

Costs and expenses for "Contracts, primarily U.S. Government" increased by $435.2 million, or 45.0%, to $1,402.0 million for the 2004 Third Quarter from $966.8 million for the 2003 Third Quarter. The costs and expenses related to the increase in sales from acquired businesses was $260.1 million. The remaining increase is primarily attributed to costs and expenses associated with the organic sales growth of our defense businesses. Costs and expenses for our sales from contracts with the U.S. Government include selling, general and administrative (SG&A), independent research and development (IRAD) and bid and proposal (B&P) costs. These SG&A, IRAD and B&P costs are allowable indirect contract costs that are allocated to our U.S. Government contracts in accordance with U.S. Government regulations. We report SG&A, IRAD and B&P costs allocated to U.S. Government contracts as costs and expenses when the related contract sales are recognized as revenue. SG&A, IRAD and B&P costs included in costs and expenses for "Contracts, primarily U.S. Government" were $157.3 million for the 2004 Third Quarter and $128.3 million for the 2003 Third Quarter. See Note 5 to our unaudited condensed consolidated financial statements.

Costs and expenses for "Commercial, primarily products" increased by $37.4 million, or 25.7%, to $182.8 million for the 2004 Third Quarter from $145.4 million for the 2003 Third Quarter. Cost of sales increased by $37.3 million to $127.7 million for the 2004 Third Quarter from $90.4 million for the

48

2003 Third Quarter. The increase in cost of sales was primarily due to organic sales growth. SG&A expenses decreased by $2.1 million to $37.1 million for the 2004 Third Quarter from $39.2 million for the 2003 Third Quarter, and declined as a percentage of sales to 18.7% from 25.1% due to cost and expense reductions and sales volume increases. Research and development (R&D) expenses increased by $2.2 million to $18.0 million for the 2004 Third Quarter from $15.8 million for the 2003 Third Quarter, primarily due to development expenditures for Smartdeck^TM at our Avionics Systems business.

Consolidated operating income increased by $47.0 million, or 30.8%, to $199.4 million for the 2004 Third Quarter from $152.4 million for the 2003 Third Quarter. The increase was primarily due to higher sales for all of our segments. Consolidated operating income as a percentage of sales (operating margin) decreased to 11.2% for the 2004 Third Quarter, compared to 12.0% for the 2003 Third Quarter. The decrease was principally due to lower margins for the Vertex Aerospace business, which was acquired on December 1, 2003, and changes in product sales mix for certain businesses within our Specialized Products segment. The changes in the operating margins are explained in our segment results discussed below.

Operating income for "Contracts, primarily U.S. Government" increased by $42.3 million, or 29.8%, to $184.1 million for the 2004 Third Quarter from $141.8 million for the 2003 Third Quarter. Operating margin decreased by 1.2 percentage points to 11.6% for the 2004 Third Quarter from 12.8% for the 2003 Third Quarter. Operating margin decreased primarily because of lower operating margins from the Vertex Aerospace acquired business and lower sales for fuzing products. The 2003 Third Quarter operating income also included a $4.5 million gain related to the settlement of a claim.

Operating income for "Commercial, primarily products" increased by $4.7 million, or 44.3%, to $15.3 million for the 2004 Third Quarter from $10.6 million for the 2003 Third Quarter. Operating margin increased by 0.9 percentage points to 7.7% for the 2004 Third Quarter from 6.8% for the 2003 Third Quarter primarily because of cost reductions for microwave components and higher sales volume for commercial aviation products.

Interest expense increased by $2.5 million to $34.9 million for the 2004 Third Quarter from $32.4 million for the 2003 Third Quarter because of higher levels of outstanding debt during the 2004 Third Quarter compared to the levels of outstanding debt during the 2003 Third Quarter due to the sale of $400.0 million of 6 1/8% senior subordinated notes in December of 2003, which was partially offset by the conversions and redemptions of our $300.0 million of 5¼% convertible senior subordinated notes in January of 2004.

For the 2004 Third Quarter, other expense (income), net, includes $1.4 million of interest income.

The income tax provision for the 2004 Third Quarter was based on an estimated effective income tax rate of 36.5%. During October 2004, the U.S. Congress enacted a new tax law that restored the U.S. Federal income tax credit for research and experimentation expenses (R&E Tax Credit), retroactively from July 1, 2004 and continuing to December 31, 2005. As a result of applying the R&E Tax Credit to all of 2004, the estimated effective income tax rate for the full year 2004 is expected to decline from 36.5% to 36.0%. The lower tax rate will be included in our results for the 2004 fourth quarter and for the year ending December 31, 2004.

Basic earnings per share of L-3 Holdings (EPS) increased by $0.17 to $0.96 for the 2004 Third Quarter from $0.79 for the 2003 Third Quarter. Diluted EPS increased by $0.19, or 25.7%, to $0.93 for the 2004 Third Quarter from $0.74 for the 2003 Third Quarter.

Non-Cash Reductions to Diluted EPS From New Accounting Rule.    On September 30, 2004, the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB) reached a consensus on EITF Issue No. 04-8, The Effect of Contingently Convertible Debt on Diluted Earnings Per Share, which addresses when the diluted effect of contingently convertible debt instruments should be included in diluted EPS. EITF 04-8 requires that contingently convertible debt instruments are to be included in the computation of diluted EPS regardless of whether the market price trigger has been met. EITF 04-8 also requires that prior period diluted EPS amounts presented for comparative purposes be restated. EITF 04-8 is expected to be effective for reporting periods ending after

49

December 15, 2004. We expect to adopt the provisions of EITF 04-8 during the 2004 fourth quarter. The impact of applying EITF 04-8 to our CODES will result in non-cash reductions to our reported diluted EPS for the 2004 Third Quarter of $0.04 from $0.93 to $0.89 and $0.03 from $0.74 to $0.71 for the 2003 Third Quarter. See Liquidity and Capital Resources—Statement of Cash Flows Financing Activities below and Note 8 to the unaudited condensed consolidated financial statements for a discussion of the conversion and redemption of our CODES, which occurred during October 2004.

Secure Communications & ISR

Sales within our Secure Communications & ISR segment increased by $66.8 million, or 17.8%, to $442.4 million for the 2004 Third Quarter from $375.6 million for the 2003 Third Quarter. Organic sales growth was $63.0 million, or 16.8%, reflecting continued strong demand from the DoD and other U.S. Government agencies for our secure network communications, ISR systems and communications products. The increase in sales from acquired businesses was $3.8 million. The acquired businesses include certain defense and aerospace assets of IPICOM, Inc., which was acquired in 2003.

Operating income increased by $8.5 million to $53.6 million for the 2004 Third Quarter from $45.1 million for the 2003 Third Quarter. Operating margin increased slightly by 0.1 percentage points to 12.1% for the 2004 Third Quarter from 12.0% for the 2003 Third Quarter. These increases were primarily due to slightly higher operating margins for communications products resulting from sales growth.

Training, Simulation & Government Services

Sales within our Training, Simulation & Government Services segment increased by $80.1 million, or 32.1%, to $329.4 million for the 2004 Third Quarter from $249.3 million for the 2003 Third Quarter. Organic sales growth was $77.4 million, or 31.0%, driven by increased sales of training and government services. The increase in sales from acquired businesses was $2.7 million. The acquired businesses include Beamhit and the GEDD business, which were both acquired during the second quarter of 2004.

Operating income increased by $8.5 million to $33.7 million for the 2004 Third Quarter from $25.2 million for the 2003 Third Quarter because of higher sales volume for training and operations services. Operating margin increased slightly by 0.1 percentage points to 10.2% for the 2004 Third Quarter from 10.1% for the 2003 Third Quarter.

Aircraft Modernization, O&M and Products

Sales within our Aircraft Modernization, O&M and Products segment increased by $317.2 million, or 123.7%, to $573.6 million for the 2004 Third Quarter from $256.4 million for the 2003 Third Quarter. The increase in sales from acquired businesses was $262.9 million. The acquired businesses include Vertex and MAS, which were acquired during 2003, and AVISYS, which was acquired during the second quarter of 2004. Organic sales growth was $54.3 million, or 21.2%, driven by sales of $44.2 million from the AMCOM contract and an increase in volume for commercial aviation products.

Operating income increased by $41.7 million to $79.9 million for the 2004 Third Quarter from $38.2 million for the 2003 Third Quarter because of higher sales volume partially offset by lower operating margin. Operating margin declined by 1.0 percentage points to 13.9% for the 2004 Third Quarter from 14.9% for the 2003 Third Quarter. Margins from acquired businesses, primarily Vertex, decreased operating margin by 3.2 percentage points. This decrease was partially offset by 0.8 percentage points for the incentives and award fees earned on the AMCOM contract and by 1.4 percentage points, primarily from commercial aviation products. The operating margin increase from commercial aviation products was due to higher sales volume, which was partially offset by certification costs for new product introductions.

Specialized Products

Sales within our Specialized Products segment increased by $55.5 million, or 14.5%, to $438.8 million for the 2004 Third Quarter from $383.3 million for the 2003 Third Quarter. Organic sales

50

growth was $38.3 million, or 10.0%. The increase was primarily driven by increased sales of training devices, imaging products, naval power equipment and services, security products and maintenance of security systems. These increases were partially offset by lower sales volume for fuzing products because of additional acceptance testing that delayed shipments and product remediation efforts for undersea dipping sonar products, which reduced production and sales volume. The increase in sales from acquired businesses was $17.2 million. The acquired businesses include Klein, which was acquired in September 2003, and Bay Metals and Brashear, which were both acquired during the second quarter of 2004.

Operating income decreased by $11.7 million to $32.2 million for the 2004 Third Quarter from $43.9 million for the 2003 Third Quarter primarily because of lower sales volume and additional acceptance testing for certain fuzing products, changes in product sales mix for security products, including fewer than expected sales of higher margin explosives detection systems (EDS) and production delays for undersea dipping sonar products caused by efforts to improve the reliability of certain products. The 2003 Third Quarter operating income also included a $4.5 million gain related to the settlement of a claim. These decreases to operating income were partially offset by cost reductions and volume increases for imaging products, naval power equipment and services and microwave components. Operating margin decreased by 4.1 percentage points to 7.3% for the 2004 Third Quarter from 11.4% for the 2003 Third Quarter. Operating margin decreased by 1.4 percentage points due to lower margins for security products, 1.8 percentage points due to volume decreases and additional costs for fuzing and undersea dipping sonar products and 0.9 percentage points primarily due to a gain of $4.5 million recorded in the 2003 Third Quarter related to the settlement of a claim.

Nine Months Ended September 30, 2004 Compared with Nine Months Ended September 30, 2003

The tables below provide two presentations of sales, operating income and operating margin data for L-3 for the nine months ended September 30, 2004 (2004 Nine Month Period) and September 30, 2003 (2003 Nine Month Period). The first table presents the selected data segregated between L-3's U.S. Government contractor businesses and L-3's commercial businesses. See Note 2 to the unaudited condensed consolidated financial statements. The second table presents the selected data by reportable segment. See Note 15 to the unaudited condensed consolidated financial statements.

				Nine Months Ended September 30,
				2004				2003
				(dollars in millions)
Statement of Operations Presentation
Sales:
Contracts, primarily U.S. Government				$	4,462.0			$	3,132.0	(1)
Commercial, primarily products					523.8				448.5	(1)
Consolidated				$	4,985.8			$	3,580.5
Operating income:
Contracts, primarily U.S. Government				$	484.2			$	368.8	(1)
Commercial, primarily products					44.9				21.2	(1)
Consolidated				$	529.1			$	390.0
Operating margin(2):
Contracts, primarily U.S. Government					10.9	%			11.8	%
Commercial, primarily products					8.6	%			4.7	%
Consolidated					10.6	%			10.9	%

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				Nine Months Ended September 30,
				2004				2003
				(dollars in millions)
Reportable Segment Presentation
Sales(3):
Secure Communications & ISR				$	1,240.3			$	1,055.9
Training, Simulation & Government Services					911.4				750.6	(5)
Aircraft Modernization, O&M and Products(4)					1,647.4				662.5
Specialized Products					1,186.7				1,111.5	(5)
Consolidated				$	4,985.8			$	3,580.5
Operating income:
Secure Communications & ISR				$	156.6			$	120.0
Training, Simulation & Government Services					100.9				85.6	(5)
Aircraft Modernization, O&M and Products(4)					183.9				92.7
Specialized Products					87.7				91.7	(5)
Consolidated				$	529.1			$	390.0
Operating margin(2):
Secure Communications & ISR					12.6	%			11.4	%
Training, Simulation & Government Services					11.1	%			11.4	%
Aircraft Modernization, O&M and Products(4)					11.2	%			14.0	%
Specialized Products					7.4	%			8.3	%
Consolidated					10.6	%			10.9	%

(1)

Effective January 1, 2004, we combined our EDS business into L-3 Security and Detection Systems, and our IMC business into L-3 Government Services, Inc. As a result of these business realignments, reclassifications between "Contracts, primarily U.S. Government" and "Commercial, primarily products" have been made to the prior period sales and operating income amounts to conform them to the current period presentation. Specifically, $50.1 million of sales and $11.8 million of operating income was reclassified from "Contracts, primarily U.S. Government" to "Commercial, primarily products", and $25.0 million of sales and $0.4 million of operating income was reclassified from "Commercial, primarily products" to "Contracts, primarily U.S. Government." These business realignments and related reclassifications did not result in any changes to our consolidated results of operations, financial position or cash flows.

(2)	Operating margin is equal to operating income as a percentage of sales.

(3)	Sales are after intersegment eliminations. See Note 15 to the unaudited condensed consolidated financial statements.

(4)	During the 2004 Third Quarter, we changed the name of the reportable segment from Aviation Products & Aircraft Modernization to Aircraft Modernization, O&M and Products. The businesses and reporting units included in this reportable segment were not changed.

(5)

Effective January 1, 2004, we combined our IMC business into L-3 Government Services, Inc. As a result of this realignment of management responsibilities, $23.4 million of sales and $2.2 million of operating income were reclassified from the Specialized Products segment to the Training, Simulation & Government Services segment. This reclassification to our reportable segments did not result in any changes to our consolidated results of operations, financial position or cash flows.

Consolidated sales increased by $1,405.3 million, or 39.2%, to $4,985.8 million for the 2004 Nine Month Period from $3,580.5 million for the 2003 Nine Month Period. Organic sales growth for our defense businesses was 16.3%, or $513.6 million, driven by continued strong demand for L-3's secure communications and ISR systems, aircraft modernization, aviation products, training and government services, training devices, imaging products and naval power equipment and services. Organic sales growth for our commercial and other non-military businesses was 9.9%, or $42.2 million, principally due to increased volume for commercial aviation products. The increase in consolidated sales from acquired businesses was $849.5 million, or 23.7%.

Sales from "Contracts, primarily U.S. Government" increased by $1,330.0 million, or 42.5%, to $4,462.0 million for the 2004 Nine Month Period from $3,132.0 million for the 2003 Nine Month Period. The increase in sales from acquired businesses was $822.1 million, or 26.2%. The acquired businesses include Aeromet, Klein, MAS, Vertex, and certain defense and aerospace assets of IPICOM, Inc., all of which were acquired in 2003, and AVISYS, Bay Metals, Beamhit, Brashear and

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the GEDD business, all of which were acquired in the second quarter of 2004. Organic sales growth was $507.9 million, or 16.2%, primarily because of higher sales volume for our secure network communications, ISR systems and communications products, aircraft modernization, operations and maintenance, training and government services, training devices, imaging products, military aviation products and naval power equipment and services. Organic sales growth does not include the portion of the AMCOM contract sales of $73.2 million attributable to Vertex's pre-acquisition ownership interest of 40% in the contract, which is included in sales from acquired businesses.

Sales from "Commercial, primarily products" increased by $75.3 million, or 16.8%, to $523.8 million for the 2004 Nine Month Period from $448.5 million for the 2003 Nine Month Period. The increase in sales from the Avionics Systems and Flight Systems Engineering acquired businesses, both acquired in 2003, was $27.4 million. Organic sales increased by 10.7%, or $47.9 million, primarily due to the increased volume for commercial aviation products.

Consolidated costs and expenses increased by $1,266.2 million, or 39.7%, to $4,456.7 million for the 2004 Nine Month Period from $3,190.5 million for the 2003 Nine Month Period, primarily as a result of the increase in sales.

Costs and expenses for "Contracts, primarily U.S. Government" increased by $1,214.6 million, or 44.0%, to $3,977.8 million for the 2004 Nine Month Period from $2,763.2 million for the 2003 Nine Month Period. The costs and expenses related to the increase in sales from acquired businesses was $750.2 million. The remaining increase is primarily attributed to costs and expenses associated with the organic sales growth of our defense businesses. SG&A, IRAD and B&P costs included in costs and expenses for "Contracts, primarily U.S. Government" were $436.7 million for the 2004 Nine Month Period and $365.6 million for the 2003 Nine Month Period. See Note 5 to our unaudited condensed consolidated financial statements.

Costs and expenses for "Commercial, primarily products" increased by $51.6 million, or 12.1%, to $478.9 million for the 2004 Nine Month Period from $427.3 million for the 2003 Nine Month Period. Cost of sales increased by $42.5 million to $320.9 million for the 2004 Nine Month Period from $278.4 million for the 2003 Nine Month Period. The increase in cost of sales was primarily due to increased costs attributable to the Avionics Systems acquired business and higher sales volume for our commercial aviation products, services related to security products and maintenance of security systems. SG&A expenses decreased by $1.1 million to $107.5 million for the 2004 Nine Month Period from $108.6 million for the 2003 Nine Month Period, and declined as a percentage of sales to 20.5% from 24.2% due to cost and expense reductions and sales volume increases. R&D expenses increased by $10.2 million to $50.5 million for the 2004 Nine Month Period from $40.3 million for the 2003 Nine Month Period, primarily due to development expenditures for Smartdeck^TM.

Consolidated operating income increased by $139.1 million, or 35.7%, to $529.1 million for the 2004 Nine Month Period from $390.0 million for the 2003 Nine Month Period. The increase was primarily due to higher sales from all of our segments. Consolidated operating margin decreased to 10.6% from 10.9% for the 2004 Nine Month Period compared to the 2003 Nine Month Period. The changes in the operating margins for our segments are discussed below.

Operating income for "Contracts, primarily U.S. Government" increased by $115.4 million, or 31.3%, to $484.2 million for the 2004 Nine Month Period from $368.8 million for the 2003 Nine Month Period. Operating margin declined by 0.9 percentage points to 10.9% for the 2004 Nine Month Period from 11.8% for the 2003 Nine Month Period. Operating margin decreased primarily because of lower operating margins from the Vertex Aerospace acquired business and lower sales for fuzing products. The 2003 Nine Month Period operating income also included a $4.5 million gain related to the settlement of a claim.

Operating income for "Commercial, primarily products" increased by $23.7 million, or 111.8%, to $44.9 million for the 2004 Nine Month Period from $21.2 million for the 2003 Nine Month Period. Operating margin increased by 3.9 percentage points to 8.6% for the 2004 Nine Month Period from 4.7% for the 2003 Nine Month Period primarily because of cost reductions for microwave components, higher sales volume for commercial aviation products and cost and expense reductions at our

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PrimeWave Communications business. These increases were partially offset by development expenditures for Smartdeck^TM, certification costs for new commercial aviation products and fewer than expected sales of higher margin EDS systems.

Interest expense increased by $8.6 million to $106.8 million for the 2004 Nine Month Period from $98.2 million for the 2003 Nine Month Period because of higher levels of outstanding debt during the 2004 Nine Month Period compared to the levels of outstanding debt during the 2003 Nine Month Period. Our outstanding debt increased as a result of the sale of $400.0 million of 6 1/8% senior subordinated notes in December of 2003 and the sale of $400.0 million of 6 1/8% senior subordinated notes in May of 2003. This increase was partially offset by the early retirement of our $180.0 million of 8½% senior subordinated notes in June of 2003 and the conversions and redemptions of our $300.0 million of 5¼% convertible senior subordinated notes in January of 2004.

For the 2004 Nine Month Period, other expense (income), net, includes a $2.6 million loss for our pro rata share of the losses related to our investments accounted for using the equity method, a $1.5 million loss related to an increase in the liability that represents the fair value assigned to the embedded derivatives related to the CODES, and $2.9 million of interest income.

The income tax provision for the 2004 Nine Month Period was based on an estimated effective income tax rate of 36.5%.

L-3 Holdings' basic EPS increased by $0.61 to $2.48 for the 2004 Nine Month Period from $1.87 for the 2003 Nine Month Period. L-3 Holdings' diluted EPS increased by $0.64 to $2.41 for the 2004 Nine Month Period from $1.77 for the 2003 Nine Month Period. Net income for the 2003 Nine Month Period includes an after-tax charge of $7.2 million, or $.07 per diluted share, for the early retirement of our $180.0 million of 8½% senior subordinated notes. Excluding this debt retirement charge, diluted EPS would have increased by $0.57 for the 2004 Nine Month Period compared to the 2003 Nine Month Period.

The impact of applying EITF 04-8 to our CODES will result in non-cash reductions to our reported diluted EPS for the 2004 Nine Month Period of $0.09 from $2.41 to $2.32 and $0.05 from $1.77 to $1.72 for the 2003 Nine Month Period. See the discussion above concerning the 2004 Third Quarter results of operations.

Secure Communications & ISR

Sales within our Secure Communications & ISR segment increased by $184.4 million, or 17.5%, to $1,240.3 million for the 2004 Nine Month Period from $1,055.9 million for the 2003 Nine Month Period. Organic sales growth was $157.7 million, or 14.9%, reflecting continued strong demand from the DoD and other U.S. Government agencies for our secure network communications, ISR systems and communications products. The increase in sales from acquired businesses was $26.7 million, or 2.5%. The acquired businesses include Aeromet and certain defense and aerospace assets of IPICOM, Inc., which were acquired in 2003.

Operating income increased by $36.6 million to $156.6 million for the 2004 Nine Month Period from $120.0 million for the 2003 Nine Month Period because of higher sales volume for communications products and ISR systems and lower operating losses for the PrimeWave Communications business due to cost and expense reductions. Operating margin increased by 1.2 percentage points to 12.6% for the 2004 Nine Month Period from 11.4% for the 2003 Nine Month Period, primarily because of organic sales growth for ISR systems and communications products and cost reductions and lower operating losses for the PrimeWave Communications business. These improvements to operating margin were partially offset by a loss related to the design, development and testing activities on a production contract for transportable tactical satellite communications terminals, which reduced operating margin by 0.6 percentage points.

Training, Simulation & Government Services

Sales within our Training, Simulation & Government Services segment increased by $160.8 million, or 21.4%, to $911.4 million for the 2004 Nine Month Period from $750.6 million for the 2003

54

Nine Month Period. Organic sales growth was $154.1 million, or 20.5%, driven by increased sales of training and government services. The increase in sales from acquired businesses was $6.7 million. The acquired businesses include Beamhit and the GEDD business, which were both acquired during the second quarter of 2004.

Operating income increased by $15.3 million to $100.9 million for the 2004 Nine Month Period from $85.6 million for the 2003 Nine Month Period because of higher sales volume for training and operations services. Operating margin decreased by 0.3 percentage points to 11.1% for the 2004 Nine Month Period from 11.4% for the 2003 Nine Month Period. The decrease was primarily due to higher sales from cost-reimbursable, time-and-material and unit-price type contracts, for which the ability to earn higher profit margins is lower than those for fixed-priced type contracts.

Aircraft Modernization, O&M and Products

Sales within our Aircraft Modernization, O&M and Products segment increased by $984.9 million, or 148.7%, to $1,647.4 million for the 2004 Nine Month Period from $662.5 million for the 2003 Nine Month Period. The increase in sales from acquired businesses was $788.9 million. The acquired businesses include Vertex, MAS, Avionics Systems and Flight Systems Engineering, which were acquired during 2003, and AVISYS, which was acquired during the second quarter of 2004. Organic sales growth was $196.0 million, or 29.6%, driven by sales of $109.9 million from the AMCOM contract, $38.6 million for aircraft modernization, operations and maintenance and $47.5 million primarily for commercial and military aviation products.

Operating income increased by $91.2 million to $183.9 million for the 2004 Nine Month Period from $92.7 million for the 2003 Nine Month Period because of higher sales volume partially offset by lower operating margin. Operating margin declined by 2.8 percentage points to 11.2% for the 2004 Nine Month Period from 14.0% for the 2003 Nine Month Period. Margins from acquired businesses, primarily Vertex, decreased operating margin by 2.1 percentage points, margins on the AMCOM contract, a new competitively awarded contract for which performance commenced in December of 2003, decreased operating margin by 0.2 percentage points, and the remaining decrease is primarily due to increased certification costs for new commercial aviation products.

Specialized Products

Sales within our Specialized Products segment increased by $75.2 million, or 6.8%, to $1,186.7 million for the 2004 Nine Month Period from $1,111.5 million for the 2003 Nine Month Period. Organic sales growth was $48.0 million, or 4.3%. The increase was driven by increased sales of $87.7 million primarily for training devices, imaging products, naval power equipment and services, maintenance of security systems and fuzing products. These increases were partially offset by volume declines of $17.1 million for ruggedized computers and displays and lower volume of $22.6 million for undersea warfare products. The increase in sales from acquired businesses was $27.2 million. The acquired businesses include Klein, which was acquired in September 2003, and Bay Metals and Brashear, which were both acquired during the second quarter of 2004.

Operating income decreased by $4.0 million to $87.7 million for the 2004 Nine Month Period from $91.7 million for the 2003 Nine Month Period primarily because of additional acceptance testing for certain fuzing products, changes in product sales mix for security products, including fewer than expected sales of higher margin EDS, and production delays for undersea dipping sonar products caused by efforts to improve the reliability of certain products. These decreases were partially offset by cost reductions for microwave components and higher volume for imaging products and naval power equipment and services. Operating margin decreased by 0.9 percentage points to 7.4% for the 2004 Nine Month Period from 8.3% for the 2003 Nine Month Period. Operating margin decreased by 1.4 percentage points due to additional costs for fuzing and undersea dipping sonar products, 0.9 percentage points due to lower margins for security products and 0.4 percentage points due to a gain of $4.5 million recorded in the 2003 Third quarter related to the settlement of a claim. These decreases were partially offset by an increase of 1.8 percentage points primarily for cost reductions for microwave components and higher volume for imaging products and naval power equipment and services.

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The tables below provide two presentations of sales, operating income and operating margin data for L-3 for the years ended December 31, 2003, 2002 and 2001. The first table presents the selected data segregated between L-3's U.S. Government contractor businesses and L-3's commercial businesses. See Note 2 to the audited consolidated financial statements. The second table presents the selected data by reportable segment. See Note 18 to the audited consolidated financial statements.

				Year Ended December 31,
				2003				2002				2001
				(dollars in millions)
Statement of Operations Presentation
Sales:
Contracts, primarily U.S. Government(1)				$	4,401.7			$	3,581.3			$	1,928.1
Commercial, primarily products(1)					659.9				429.9				419.3
Consolidated				$	5,061.6			$	4,011.2			$	2,347.4
Operating income:
Contracts, primarily U.S. Government(1)				$	537.9			$	442.3			$	230.4	(2)
Commercial, primarily products(1)					43.1				11.7				44.9	(2)
Consolidated				$	581.0			$	454.0			$	275.3
Operating margin(3):
Contracts, primarily U.S. Government					12.2	%			12.3	%			11.9	%
Commercial, primarily products					6.5	%			2.7	%			10.7	%
Consolidated					11.5	%			11.3	%			11.7	%
Reportable Segment Presentation
Sales(4):
Secure Communications & ISR				$	1,439.4			$	1,053.3			$	450.5
Training, Simulation & Government Services(5)					1,009.3				808.6				596.8
Aircraft Modernization, O&M and Products(6)					1,019.6				677.5				263.3
Specialized Products(5)					1,593.3				1,471.8				1,036.8
Consolidated				$	5,061.6			$	4,011.2			$	2,347.4
Operating income:
Secure Communications & ISR				$	172.9			$	103.5			$	32.0	(2)
Training, Simulation & Government Services(5)					115.5				96.8				65.7	(2)
Aircraft Modernization, O&M and Products					147.8				105.7				85.6	(2)
Specialized Products(5)					144.8				148.0				92.0	(2)
Consolidated				$	581.0			$	454.0			$	275.3
Operating margin(3):
Secure Communications & ISR					12.0	%			9.8	%			7.1	%
Training, Simulation & Government Services					11.4	%			12.0	%			11.0	%
Aircraft Modernization, O&M and Products					14.5	%			15.6	%			32.5	%
Specialized Products					9.1	%			10.1	%			8.9	%
Consolidated					11.5	%			11.3	%			11.7	%

(1)

Effective January 1, 2004, we combined our explosives detection systems (EDS) business into L-3 Security and Detection Systems, our IMC business into L-3 Government Services, Inc., the EMP business into our ESSCO business and the Apcom business into our Communication Systems-East business (2004 Business Realignments). As a result of the 2004 Business Realignments, reclassifications between "Contracts, primarily U.S. Government" and "Commercial, primarily products" have been made to the prior period sales and operating income amounts, however, since EDS was primarily a U.S. Government contracting business prior to 2003, the sales and operating income for EDS were not reclassified for 2002 and 2001. Specifically, $96.5 million of 2003 sales, $9.1 million of 2002 sales, $11.9 million of 2001 sales, $26.3 million of 2003 operating income, $6.1 million of 2002 operating loss and $6.8 million of 2001 operating loss was reclassified from "Contracts, primarily U.S. Government" to "Commercial, primarily products". Additionally, $30.6 million of 2003 sales, $9.2 million of 2002 sales, $7.8 million of 2001 sales, $2.1 million of 2003 operating income, $7.4 million of 2002 operating loss and $9.0 million of 2001 operating loss was reclassified from "Commercial, primarily products" to "Contracts,

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	primarily U.S. Government". The 2004 Business Realignments and related reclassifications did not result in any changes to our consolidated results of operations, financial position or cash flow.

(2)

Operating income includes goodwill amortization expense for the year ended December 31, 2001, of $30.9 million for "Contracts, primarily U.S. Government," $11.4 million for "Commercial, primarily products," $42.3 million for L-3 on a consolidated basis, $3.8 million for the Secure Communications & ISR segment, $7.1 million for the Training, Simulation & Government Services segment, $7.7 million for the Aircraft Modernization, O&M and Products segment and $23.7 million for the Specialized Products segment.

(3)	Operating margin is equal to operating income as a percentage of sales.

(4)	Sales are after intersegment eliminations. See Note 18 to the consolidated financial statements included elsewhere herein.

(5)

Effective January 1, 2004, we combined our IMC business into L-3 Government Services, Inc. As a result of this realignment of management responsibilities, $29.1 million of 2003 sales, $2.3 million of 2002 sales, $3.9 million of 2003 operating income and $0.3 million of 2002 operating income was reclassified from the Specialized Products segment to the Training, Simulation & Government Services segment. This reclassification to our reportable segments did not result in any changes to our consolidated results of operations, financial position or cash flows.

(6)	During the 2004 Third Quarter, we changed the name of the reportable segment from Aviation Products & Aircraft Modernization to Aircraft Modernization, O&M and Products. The businesses and reporting units included in this reportable segment were not changed

Year Ended December 31, 2003 Compared with Year Ended December 31, 2002

Consolidated sales increased by $1,050.4 million, or 26.2%, to $5,061.6 million for 2003 from sales of $4,011.2 million for 2002. The increase in consolidated sales from acquisitions was $833.6 million, or 20.8%. Organic sales growth for our defense businesses was 15.4%, or $499.8 million, and was driven by continued strong demand for secure communications and intelligence, surveillance and reconnaissance (ISR) systems and products, aircraft modernization, simulation and training services, government services, and an increase in shipments of naval power equipment. Organic sales for our commercial businesses declined by 10.6%, or $45.4 million, due to the continued weakness in the aviation and communications markets. Sales for explosives detection systems (EDS) decreased $237.6 million primarily because the initial installation of EDS at major U.S. airports by the U.S. Transportation Security Administration (TSA) was completed by the end of 2002. Consolidated organic sales growth, excluding the EDS business, from both periods was 12.4%. Consolidated organic sales growth for all of L-3's businesses, including the decline for the EDS business, was $216.8 million, or 5.4%. We define "organic sales growth," as the increase or decrease in sales for the current period compared to the prior period, excluding the increase in sales attributable to acquired businesses to the extent the acquired businesses were not included in L-3's results of operations for the entire current period and prior period. Our "defense businesses" are comprised of our U.S. Government contractor businesses, other than our EDS business, all of which are presented under "Contracts, primarily U.S. Government."

Sales from "Contracts, primarily U.S. Government," which comprises our defense businesses, and in 2002, our EDS business, increased by $820.4 million, or 22.9%, to $4,401.7 million for 2003 from $3,581.3 million for 2002. The increase in sales from acquired businesses was $659.7 million, or 18.4%. The acquired businesses include IS, Telos, ComCept, TMA, Electron Devices, Ruggedized Command & Control, IMC, Westwood, Wescam and Ship Analytics, which were acquired in 2002 and Aeromet, Klein, MAS, Vertex and certain defense and aerospace assets of IPICOM, Inc., which were acquired during 2003. Excluding sales from acquired businesses, sales increased by $253.5 million primarily because of organic sales growth from our defense businesses for ISR and secure communications systems and products, aircraft modernization, communications software and engineering support services, training services, navigation products and naval power equipment. These increases were partially offset by a decline in sales volume primarily from our EDS business, and to a lesser extent, from our fuzing products, training devices, undersea warfare products and display systems. Additionally, sales were reduced by $92.8 million because of a reclassification, primarily related to the EDS business, between "Contracts, primarily U.S. Government" and "Commercial, primarily products" due to the 2004 Business Realignments discussed in the table above.

Sales from "Commercial, primarily products" increased by $230.0 million, or 53.5%, to $659.9 million for 2003 from $429.9 million for 2002. The increase in sales from acquired businesses was $173.9 million, or 40.5%. The acquired businesses include Detection Systems and Wolf Coach, which were acquired in 2002 and Avionics Systems, which was acquired during 2003. Excluding sales from

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acquired businesses, organic sales declined for L-3's commercial businesses by $36.7 million, due primarily to lower revenues for aviation and communications products caused by continued weak demand in those commercial markets. Additionally, sales increased by $92.8 million as a result of the reclassification due to the 2004 Business Realignments.

Consolidated costs and expenses increased by $923.4 million to $4,480.6 million for 2003 from $3,557.2 million for 2002, consistent with the increase in sales.

Costs and expenses for "Contracts, primarily U.S. Government" increased by $724.8 million to $3,863.8 million for 2003 from $3,139.0 million for 2002. Approximately 81% of the increase is attributable to our acquired businesses. The remaining increase is primarily attributed to organic sales growth from our defense businesses for ISR and secure communications systems and products, aircraft modernization, communications software and engineering support services, training services, navigation products and naval power equipment. These increases were partially offset by declines from our EDS business, fuzing products, training devices and display systems due to lower volume.

Cost of sales for L-3's U.S. Government contractor businesses include selling, general and administrative (SG&A), independent research and development (IRAD) and bid and proposal (B&P) costs. These SG&A, IRAD and B&P costs are allowable indirect contract costs that are allocated to our U.S. Government contracts in accordance with U.S. Government regulations. We report SG&A, IRAD and B&P costs allocated to U.S. Government contracts as costs of sales when the related contract sales are recognized, rather than account for them as period expenses. SG&A, IRAD and B&P costs included in cost of sales for "Contracts, primarily U.S. Government" were $499.9 million, or 11.4% of sales for 2003, compared to $432.8 million, or 12.1% of sales for 2002 (See Notes 2 and 4 to our consolidated financial statements).

Costs and expenses for "Commercial, primarily products" increased by $198.6 million to $616.8 million for 2003 from $418.2 million for 2002. The increase was primarily due to increased sales attributable to our acquired businesses, as well as a $3.9 million provision for bad debt and inventory for the PrimeWave Communications business. SG&A expenses increased by $28.6 million to $140.6 million or 21.3% of sales for 2003 from $112.0 million or 26.1% of sales for 2002. The increase was primarily attributable to acquired businesses and increased costs for security products due to maintenance costs associated with detection systems placed in service. This increase was partially offset by lower SG&A expenses at the PrimeWave Communications business and our commercial communications products businesses due to cost and expense reductions. Research and development (R&D) expenses increased by $23.5 million to $59.2 million for 2003 from $35.7 million for 2002. The increase was primarily due to the Avionics Systems acquired business and development expenses for cargo security products, partially offset by lower R&D expenses incurred at the PrimeWave Communications business because of cost and expense reductions.

Consolidated operating income increased by $127.0 million to $581.0 million for 2003 from $454.0 million for 2002. The increase was primarily due to higher sales from all of our segments. Consolidated operating margin increased slightly by 0.2 percentage points to 11.5% for 2003 from 11.3% for 2002. The changes in the operating margins for our segments are discussed below.

Operating income for "Contracts, primarily U.S. Government" increased by $95.6 million to $537.9 million for 2003 from $442.3 million for 2002. Operating income was reduced by $22.9 million because of the reclassification due to the 2004 Business Realignments. Operating margin declined slightly by 0.1 percentage points to 12.2% for 2003 from 12.3% for 2002. The reclassification due to the 2004 Business Realignments reduced operating margin by 0.3 percentage points. Operating margin increased by 0.2 percentage points primarily due to sales growth and cost improvements for ISR and secure communications systems and products and naval power equipment.

Operating income for "Commercial, primarily products" increased by $31.4 million to $43.1 million for 2003 from $11.7 million for 2002. Operating income increased by $22.9 million because of the reclassification due to the 2004 Business Realignments. Operating margin improved by 3.8 percentage points to 6.5% for 2003 from 2.7% for 2002. The reclassification due to the 2004 Business Realignments increased operating margin by 3.0 percentage points. The remaining increase was due to

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lower losses from certain commercial businesses due to cost and expense reductions and higher margins from the Avionics Systems acquired business partially offset by lower margins on commercial aviation products and microwave components due to lower sales volume and higher development expenses for cargo security products.

Interest expense increased by $10.2 million to $132.7 million for 2003 from $122.5 million for 2002. The increase is attributable to the higher average outstanding debt during 2003 and lower savings from fixed-to-variable interest rate swap agreements of $1.0 million.

Interest and other income decreased by $4.7 million to $0.2 million in 2003 from $4.9 million in 2002. The decrease was due to lower interest income earned because of lower average cash and cash equivalents balances, a loss of $2.2 million recorded related to the sale of the commercial broadband test equipment assets of our Celerity business and an increase in losses on our investments accounted for using the equity method during 2003 compared to 2002.

The 2003 period includes a charge of $11.2 million ($7.2 million after-tax, or $0.07 per diluted share of L-3 Holdings common stock) for the early retirement of $180 million of our 8½% Senior Subordinated Notes due 2008. See "Liquidity and Capital Resources" below. The 2002 period includes a charge of $16.2 million ($9.9 million after-tax, or $0.11 per diluted share of L-3 Holdings common stock) for the early retirement of $225 million of our 10 3/8% Senior Subordinated Notes due 2007. In accordance with SFAS No. 145, the 2002 debt retirement charge, which was classified as an extraordinary item in the prior year presentation, has been reclassified as a component of income from continuing operations.

Minority interest decreased by $2.7 million to $3.5 million for 2003 from $6.2 million for 2002 because of lower net income for Aviation Communications and Surveillance Systems (ACSS) due to lower sales caused by continued weakness in the commercial aviation market and higher product development expenses.

The income tax provision for 2003 is based on an effective income tax rate of 36.0%, compared with an effective income tax rate of 35.5% for 2002. With respect to the expected effective income tax rate for 2004 compared to 2003, the current U.S. federal research and experimentation (R&E) tax credit is scheduled to expire on June 30, 2004. If the R&E tax credit is not renewed, L-3's 2004 effective income tax rate would increase. The R&E tax credit lowered L-3's 2003 effective income tax rate by 1.9% points. Additionally, currently changes are being proposed to the U.S. federal tax laws for extra territorial income (ETI), and some alternative proposals, if enacted, could cause an increase in L-3's 2004 effective income tax rate. The ETI tax credit lowered L-3's 2003 effective income tax rate by 1.5% points.

L-3 Holdings' basic EPS before cumulative effect of a change in accounting principle increased by $0.56 to $2.89 for 2003 from $2.33 for 2002. L-3 Holdings' diluted EPS before cumulative effect of a change in accounting principle increased by $0.53 to $2.71 for 2003 from $2.18 for 2002. Net income for 2002 includes a charge, net of income taxes, of $24.4 million ($0.28 per basic share and $0.25 per diluted share) for the cumulative effect of a change in accounting principle for goodwill impairment in connection with the adoption of SFAS No. 142. Including the effect of a change in accounting principle, basic EPS for 2002 was $2.05 and diluted EPS for 2002 was $1.93.

L-3 Holdings' diluted weighted-average common shares outstanding increased by 8.9% to 106.1 million for 2003 from 97.4 million for 2002. The increase principally reflects the additional shares outstanding from the sale of 14.0 million shares of L-3 Holdings common stock on June 28, 2002.

The L-3 Holdings 2003 and 2002 diluted EPS computations did not include the effect of the 7.8 million shares of L-3 Holdings common stock that are issuable upon conversion of the $420.0 million of 4% Senior Subordinated Convertible Contingent Debt Securities (CODES) because the conditions required for them to become convertible were not satisfied. However, if the CODES had been convertible, diluted EPS would have been $0.09 lower than reported for 2003 and diluted EPS, before cumulative effect of a change in accounting principle would have been $0.05 lower than reported for 2002.

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Secure Communications & ISR

Sales within our Secure Communications & ISR segment increased by $386.1 million, or 36.7%, to $1,439.4 million for 2003 from $1,053.3 million for 2002. Organic sales growth was $250.4 million, or 23.8%, due to continued strong demand and increased spending by the DoD and other U.S. Government agencies for our secure communications and ISR systems and products, which were partially offset by a decline in sales of $5.5 million for the PrimeWave Communications business. The increase in sales from acquired businesses was $135.7 million. The acquired businesses include IS and ComCept, which were acquired during 2002, and Aeromet and certain defense and aerospace assets of IPICOM, Inc., which were acquired during 2003.

Operating income increased by $69.4 million to $172.9 million for 2003 from $103.5 million for 2002 because of higher sales and operating margin. Operating margin increased to 12.0% for 2003 from 9.8% for 2002 because of higher organic sales growth for defense systems and products, cost improvements and lower losses at our PrimeWave Communications business.

Training, Simulation & Government Services

Sales within our Training, Simulation & Government Services segment increased by $200.7 million, or 24.8%, to $1,009.3 million for 2003 from $808.6 million for 2002. Organic sales growth was $81.7 million, or 10.1%, driven by training and government services, including communications software support and engineering support. The increase in sales from the Telos, TMA, IMC and Ship Analytics acquired businesses, which were all acquired in 2002, was $119.0 million.

Operating income increased by $18.7 million to $115.5 million for 2003 from $96.8 million for 2002 because of higher sales, which were partially offset by lower operating margin. Operating margin declined by 0.6 percentage points to 11.4% for 2003 from 12.0% for 2002. The decrease was primarily due to higher sales from cost-reimbursable type and time and material type contracts, which generally are less profitable than fixed-priced type contracts. Margins increased by 0.3 percentage points from acquired businesses.

Aircraft Modernization, O&M and Products

Sales within our Aircraft Modernization, O&M and Products segment increased by $342.1 million, or 50.5%, to $1,019.6 million for 2003 from $677.5 million for 2002. Organic sales growth was $129.9 million, or 19.2%, primarily due to $144.7 million for aircraft modernization and modification driven by DoD demand. This increase was partially offset by volume declines of $10.8 million for commercial aviation products caused by the continued weakness in the commercial aviation markets and volume declines of $4.0 million primarily for display systems due to the timing of contractual shipments. The increase in sales from acquired businesses was $212.2 million. The acquired businesses include IS, which was acquired in 2002, and Avionics Systems, MAS and Vertex, which were acquired in 2003.

Operating income increased by $42.1 million to $147.8 million for 2003 from $105.7 million for 2002 because of higher aircraft modernization sales, which were partially offset by lower sales for commercial aviation products and lower operating margin. Operating margin declined by 1.1 percentage points to 14.5% for 2003 from 15.6% for 2002. Volume declines for commercial aviation products, which have higher margins than aircraft modification sales, decreased operating margin by 0.9 percentage points. Similarly, margins decreased by 0.4 percentage points primarily due to volume growth for aircraft modernization, which earns lower margins than commercial aviation products. These decreases were partially offset by the Avionics Systems and MAS acquired businesses, which increased margin by 0.2 percentage points.

Specialized Products

Sales within our Specialized Products segment increased by $121.5 million, or 8.3%, to $1,593.3 million for 2003 from $1,471.8 million for 2002. Organic sales declined 16.7%, or $245.2 million, or $7.6 million, or 0.5% excluding the decline for EDS. EDS sales declined by $237.6 million (discussed below). Volume declined by $46.4 million for fuzing and acoustic undersea warfare products and

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training devices because of certain contracts approaching their scheduled completion and the timing of sales on 2003 orders, which are expected to increase in 2004. Volume declined by $22.3 million for telemetry products and microwave components due to the continued weakness in the commercial communications markets. These decreases were partially offset by an increase of $46.6 million for naval power equipment due to higher shipments arising from the resolution of the production and quality control issues at the SPD Electrical Systems business and $14.5 million primarily for FTSATs and guidance products due to strong demand from the DoD. The increase in sales from acquired businesses was $366.7 million. The acquired businesses include Detection Systems, Ruggedized Command & Control, Electron Devices, Wolf Coach, Westwood and Wescam, all of which were acquired in 2002, and Klein, which was acquired in 2003.

Sales of EDS declined by $237.6 million to $101.5 million for 2003 compared with $339.1 million for 2002, primarily because the initial installation of EDS at major U.S. airports by the TSA was completed by the end of 2002, which reduced the TSA's procurement requirements for new systems.

Operating income decreased by $3.2 million to $144.8 million for 2003 from $148.0 million for 2002. Operating margin decreased by 1.0 percentage points to 9.1% for 2003 from 10.1% for 2002. Lower sales for EDS reduced operating margin by 0.6 percentage points. Volume declines for telemetry, fuzing and undersea warfare products lowered operating margin by 0.5 percentage points. Lower margins from acquired businesses reduced operating margin by 0.6 percentage points. The resolution of production quality problems for naval power equipment caused increased shipments and reduced rework costs, which increased operating margin by 0.5 percentage points. The settlement of a claim increased operating margin by 0.2 percentage points.

Year Ended December 31, 2002 Compared with Year Ended December 31, 2001

Consolidated sales increased by $1,663.8 million to $4,011.2 million for 2002 from $2,347.4 million for 2001. Sales from "Contracts, primarily U.S. Government" increased by $1,653.2 million to $3,581.3 million for 2002 from $1,928.1 million for 2001. The L-3 Analytics, BT Fuze, ComCept, EER, Electron Devices, IMC, IS, KDI, Ruggedized Command & Control, Ship Analytics, Spar, SY, Telos, TMA, Wescam and Westwood acquired businesses contributed $1,224.8 million of the increase in sales. Excluding these acquisitions, sales grew $428.4 million, or 22.2%, in 2002. Volume increased by $320.9 million for EDS, $156.8 million for secure communication systems, $20.6 million for training services and devices, $20.1 million for navigation and guidance products and $8.1 million for military displays products. These sales increases were partially offset by declines of $17.3 million on naval power equipment and $14.5 million on static transfer switches used for commercial applications. Sales of ballistic missile targets and services declined $53.0 million. The remaining decline in sales of $13.3 million was primarily related to acoustic undersea warfare products because of lower volume on spares. Sales from "Commercial, primarily products" increased $10.6 million to $429.9 million for 2002 from $419.3 million for 2001. The Detection Systems and Wolf Coach acquired businesses contributed $91.6 million of the increase in sales. Excluding these acquisitions, sales declined $81.0 million or 19.3%. This decrease in sales was due to volume declines of $49.2 million on commercial aviation products, $31.7 million on microwave components and $11.8 million on PrimeWave communication products. These declines were partially offset by increases of $5.5 million for maritime voyage recorders and $6.2 million primarily for technical and product support services for commercial customers.

"Commercial, primarily products" sales declined to 10.7% of total sales for 2002 from 17.9% for 2001. The decline was primarily attributable to the acquisitions we completed during 2002, including the IS acquisition, and to a lesser extent, the decline in our commercial sales. This decline was attributable to the continued weakness in the commercial aviation and communications markets.

Consolidated costs and expenses increased by $1,485.1 million to $3,557.2 million for 2002 from $2,072.1 million for 2001, primarily as a result of the increase in sales. In accordance with SFAS No. 142, on January 1, 2002 we stopped amortizing our goodwill to expenses. Goodwill amortization expense was $42.3 million for 2001. SFAS No. 142 also requires that we evaluate the fair value of our goodwill annually to determine if it has been impaired. We evaluated the carrying value of our

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goodwill as of January 1, 2002 in accordance with the transition provisions of SFAS No. 142 and wrote-off $30.8 million of goodwill related to certain of our space and broadband commercial communications businesses, which has been reported as a $24.4 million loss after income taxes for the cumulative effect of a change in accounting principle, as discussed below. If we experience any impairments to the carrying value of our goodwill after January 1, 2002, we will have to report them as a loss from operations. During 2002, we did not have any other goodwill impairments.

Costs and expenses for "Contracts, primarily U.S. Government" increased by $1,441.3 million to $3,139.0 million for 2002 from $1,697.7 million for 2001. Approximately 75% of the increase is attributable to our acquired businesses. The remaining increase is primarily attributed to internal growth for EDS and secure communication systems. Goodwill amortization expense was $30.9 million for 2001. SG&A costs allocated to our U.S. Government contracts were $432.8 million for 2002 and $306.9 million for 2001 (see Note 4 to our consolidated financial statements).

Costs and expenses for "Commercial, primarily products" increased by $43.8 million to $418.2 million for 2002 from $374.4 million for 2001. The increase is primarily due to increased sales as a result of the Detection Systems acquired business, which was partially offset by lower expenses for microwave components products due to lower sales volume. Goodwill amortization expense was $11.4 million for 2001. SG&A expenses, including R&D expenses, increased by $30.6 million to $147.7 million for 2002 from $117.1 million for 2001, primarily because of SG&A expenses incurred by our acquired businesses.

Consolidated operating income increased by $178.7 million to $454.0 million for 2002 from $275.3 million for 2001. The increase was due to higher sales for all of our segments. The impact of not amortizing goodwill increased consolidated operating income by $42.3 million. Consolidated operating income as a percentage of sales (operating margin) declined by 0.4 percentage points to 11.3% for 2002 from 11.7% for 2001. The impact of not amortizing goodwill increased consolidated operating margin by 1.1 percentage points. Operating margins compared to operating margins for 2001, excluding goodwill amortization expense, declined for our Training, Simulation & Support Services, Aircraft Modernization, O&M and Products and Specialized Products segments, and increased for our Secure Communications & ISR segment. The changes in the operating margins for our segments are discussed below.

Operating income for "Contracts, primarily U.S Government" increased by $211.9 million to $442.3 million for 2002 from $230.4 million for 2001. Operating margin increased by 0.4 percentage points to 12.3% for 2002, from 11.9% for 2001. The impact of not amortizing goodwill increased operating margin by 0.9 percentage points. Operating income for 2002 includes a loss of $3.0 million for the settlement in June 2002 of certain litigations that we assumed in connection with a business we acquired in 1999, which reduced operating margin for 2002 by 0.1 percentage points. The remaining decline in operating margin was due to the absence in 2002 of a favorable performance adjustment recorded in 2001 on the AVCATT contract. Operating income included approximately $20 million of losses in both 2002 and 2001 related to our naval power equipment business that were caused by production problems which reduced sales volume and related costs to fix manufacturing and quality control problems.

Operating income for "Commercial, primarily products" declined by $33.2 million to $11.7 million for 2002 from $44.9 million for 2001. Operating margin declined by 8.0 percentage points to 2.7% for 2002 from 10.7% for 2001. The decline was principally attributable to lower gross margin contributions from commercial aviation products, microwave components, and space and broadband communication products because of volume declines, as well as continued marketing, selling and development expenses for the PrimeWave business. The impact of not amortizing goodwill partially offset these decreases in operating margin by 2.6 percentage points.

Interest expense increased by $36.1 million to $122.5 million for 2002 from $86.4 million for 2001. The increase is attributable to higher outstanding debt for 2002 primarily related to the financing of the IS acquisition, which was partially offset by lower interest rates on our debt. Our interest rate swap agreements, which converted the fixed interest rates on $580.0 million of our senior subordinated notes to variable interest rates, reduced our interest expense for 2002 by $9.6 million because of

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declining interest rates. In June of 2002, we also redeemed our $225.0 million 10 3/8% senior subordinated notes and replaced them with senior subordinated notes that have a 7 5/8% fixed interest rate which reduced our interest expense by $3.1 million. See "Liquidity and Capital Resources – Financing Activities" below.

Interest and other income increased by $3.2 million to $4.9 million for 2002 from $1.7 million for 2001, principally due to interest income earned on our cash and cash equivalents. Additionally, 2001 included a net gain of $0.6 million, comprising a gain on the sale of a 30% interest in the ACSS business, largely offset by the write-down of the carrying value of an investment in the common stock of a telecommunications company because the decline in value for that common stock was determined to be other than temporary.

The income tax provision for 2002 is based on an effective income tax rate of 35.5%, compared with an effective income tax rate of 38.0% for the year ended December 31, 2001. The decrease in the effective income tax rate is primarily attributable to the adoption of SFAS No. 142. Amortization expense for goodwill that is not deductible for income tax purposes caused an increase in our effective income tax rate prior to the adoption of SFAS No. 142.

L-3 Holdings' basic EPS before cumulative effect of a change in accounting principle increased $0.79 to $2.33 for 2002 from $1.54 for 2001. L-3 Holdings' diluted EPS before cumulative effect of a change in accounting principle increased $0.71 to $2.18 for 2002 from $1.47 for 2001. The impact of not amortizing goodwill in 2002 increased L-3 Holdings' basic EPS before cumulative effect of a change in accounting principle by $0.45 and diluted EPS before cumulative effect of a change in accounting principle by $0.40. Excluding the increase in earnings attributable to not amortizing goodwill, basic EPS before cumulative effect of a change in accounting principle grew 17.1% and diluted EPS before cumulative effect of a change in accounting principle grew 16.6%. L-3 Holdings' basic EPS was $2.05 and L-3 Holdings' diluted EPS was $1.93 after an after-tax charge of $9.9 million ($0.11 per basic and diluted share) for the early retirement of $225.0 million of our 10 3/8% senior subordinated notes and a loss of $24.4 million ($0.28 per basic share and $0.25 per diluted share) for the cumulative effect of a change in accounting principle for a goodwill impairment, recorded effective as of January 1, 2002 in connection with the adoption of SFAS No. 142.

L-3 Holdings' diluted weighted-average common shares outstanding increased by 14.1% to 97.4 million for 2002 from 85.4 million for 2001. The increase principally reflects the additional shares outstanding from the sale of 9.2 million shares of L-3 Holdings common stock effective May 2, 2001, and the sale of 14.0 million shares of L-3 Holdings common stock effective June 28, 2002.

The L-3 Holdings diluted EPS computation for 2002 did not include the dilutive effect of the 7.8 million shares of L-3 Holdings common stock that are issuable upon conversion of the CODES (See Notes 8 and 12 to the consolidated financial statements) because the conditions for their conversion were not satisfied. However, if the CODES had been convertible, reported diluted EPS would have decreased by approximately $0.03 for 2002.

Secure Communications & ISR

Sales for the Secure Communications & ISR segment increased by $602.8 million to $1,053.3 million for 2002 from $450.5 million for 2001. The IS and ComCept acquired businesses, contributed $458.6 million of sales. Excluding these acquisitions, sales grew $144.2 million, or 32.0%. Volumes on secure communication systems, secure data links and military communications products increased $156.8 million because of greater demand for secure communications from the DoD and U.S. Government intelligence agencies. These increases were partially offset by a decrease in sales of $12.6 million primarily due to lower volumes of PrimeWave communication products.

Operating income increased by $71.5 million to $103.5 million for 2002 from $32.0 million for 2001 because of higher sales and operating margin. Operating margin improved by 2.7 percentage points to 9.8% for 2002 compared to 7.1% for 2001. The impact of not amortizing goodwill increased operating margin by 0.4 percentage points. Increased volume and cost improvements on secure communication systems increased margins by 1.7 percentage points. Higher losses for the PrimeWave

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business in 2002 due to lower sales, higher marketing, selling and development expenses and a provision to increase the allowance for doubtful accounts by $3.0 million lowered operating margin by 0.9 percentage points. The remaining change in operating margins was principally attributable to margins from the IS acquired business, which was higher than the segment operating margin for 2001.

Training, Simulation & Government Services

Sales for the Training, Simulation & Government Services segment increased by $211.8 million to $808.6 million for 2002 from $596.8 million for 2001. The L-3 Analytics, EER, IMC, Ship Analytics, SY Technologies, Telos and TMA acquired businesses contributed $213.2 million of the increase in sales. Excluding these acquisitions, sales declined $1.4 million, or 0.2%. Sales for ballistic missile targets and services at our Coleman Research business declined by $53.0 million primarily because of a contract completed in 2002 and the delay in the award of its follow-on contract, which is related to the U.S. Missile Defense Agency's decision to consolidate the target requirements for all of its major missile defense programs into a single contract for fiscal year 2003. The decline in ballistic missile targets and services was largely offset by volume increases for training services from new contracts with the DoD, contracts competitively awarded during 2001 and software and systems engineering services.

Operating income increased by $31.1 million to $96.8 million for 2002 from $65.7 million for 2001 because of higher sales and operating margin. Operating margin increased by 1.0 percentage points to 12.0% for 2002 compared to 11.0% for 2001 principally because of the impact of not amortizing goodwill.

Aircraft Modernization, O&M and Products

Sales for the Aircraft Modernization, O&M and Products segment increased $414.2 million to $677.5 million for 2002 from $263.3 million for 2001. The IS and Spar acquired businesses contributed $446.5 million to sales. Excluding acquisitions, sales declined $32.3 million, or 12.3%, because of lower volumes for commercial aviation recorders and TCAS products that were partially offset by sales increases for military displays products and commercial maritime voyage recorders. The decline in commercial aviation products sales was caused by a decline in orders and customer-directed deferrals of deliveries stemming from the continued downturn in the commercial aircraft industry that began in 2001 and which remained weak during 2002.

Operating income increased by $20.1 million to $105.7 million for 2002 from $85.6 million for 2001, because of higher sales from acquired businesses. Operating margin declined by 16.9 percentage points to 15.6% for 2002 from 32.5% for 2001. The impact of not amortizing goodwill increased operating margin by 1.1 percentage points. Lower volumes on TCAS and aviation recorders, increased development expenses for a terrain awareness warning system and a commercial displays product-line reduced operating margin by 5.5 percentage points. The remaining decrease in operating margin of 12.5 percentage points was principally attributable to margins from the IS and Spar acquired businesses, which averaged 13.6% and were lower than the segment operating margin for 2001. Margins for our aircraft modification businesses are lower than the margins for our commercial aviation products businesses, and the aircraft modification businesses generated 68.1% of the segment's sales for 2002 compared with only 5.7% for 2001, which reduced the overall margin for the entire segment as we expected.

Specialized Products

Sales for the Specialized Products segment increased by $435.0 million to $1,471.8 million for 2002 from $1,036.8 million for 2001. The BT Fuze, Detection Systems, Electron Devices, KDI, Ruggedized Command & Control, Wescam, Westwood and Wolf Coach acquired businesses contributed $198.1 million of sales. Excluding these acquisitions, sales increased by $236.9 million, or 22.8%. Sales of EDS used in airport security, principally relating to a contract from the Transportation Security Administration, contributed $320.9 million of the increase in sales. Navigation and guidance products sales also increased by $20.1 million. These increases to sales were partially offset by volume declines

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of $17.3 million on naval power equipment arising from lower shipments caused by production capacity diverted to fixing quality control problems, $16.8 million on training devices because certain contracts were completed in 2002, $15.9 million for acoustic undersea warfare products primarily arising from lower spares volume, and $14.5 million for commercial static transfer switches because of the deterioration of the internet service provider market. The remaining decline of $39.6 million was principally on microwave components and telemetry and space products arising from continued softness and declining demand in the space, broadband and wireless commercial communications markets.

Operating income increased by $56.0 million to $148.0 million for 2002 from $92.0 million for 2001 because of higher sales and operating margin. Operating margin improved by 1.2 percentage points to 10.1% for 2002 compared to 8.9% for 2001. The impact of not amortizing goodwill increased operating margin by 1.6 percentage points. Higher volumes for EDS caused an increase in operating margin of 2.6 percentage points. These increases were partially offset by declines in operating margin that was primarily related to lower volumes on naval power equipment, microwave components and training devices, and the absence in 2002 of a favorable performance adjustment recorded in 2001 on the AVCATT contract.

Liquidity and Capital Resources

Balance Sheet

Contracts in process increased by $242.4 million to $1,857.7 million at September 30, 2004 from $1,615.3 million at December 31, 2003. See Note 5 to the unaudited condensed consolidated financial statements. The increase included $26.3 million related to acquired business and $216.1 million principally from:

•

increases of $133.9 million in unbilled contract receivables due to sales exceeding deliveries and billings for secure network communications, ISR systems, communications products, training and government services, and incentive fees earned but not yet billed in the AMCOM contract. These increases were partially offset by a decrease in unbilled contract receivables for aircraft modernization due to milestone billings, and lower EDS sales;

•	increases of $43.8 million in billed receivables because of higher sales volume of secure network communications systems, training devices and aircraft modernization. These increases were partially offset by a reduction in billed receivables for EDS due to lower sales volumes and improved collections for communication software support services;

•	increases of $17.3 million in inventoried contract costs, primarily for ruggedized computers and displays, aircraft modernization and secure network communications. These increases were partially offset by a decrease for communications products due to deliveries during the period; and

•	increases of $21.1 million in inventories at lower of cost or market due to increases for security products, primarily EDS, partially offset by decreases for satellite communications due to higher sales volume.

L-3's days receivable outstanding (DRO) was 72.3 at September 30, 2004, compared to 70.3 at December 31, 2003. We calculate our DRO by dividing (i) our aggregate end of period billed receivables and net unbilled contract receivables, by (ii) our sales for the last twelve-month period adjusted on a pro forma basis to include sales from acquisitions that we completed as of the end of the period (which amounted to $6,661.4 million for the twelve-month period ended September 30, 2004), multiplied by 365.

L-3's days inventory held (DIH) was 34.2 at September 30, 2004, compared with 36.3 at December 31, 2003. We calculate DIH by dividing (i) our aggregate end of period net inventoried contract costs and inventories at lower of cost or market, by (ii) our cost of sales for the last twelve-month period adjusted on a pro forma basis to include cost of sales from acquisitions that we completed as of the end of the period (which amounted to $5,739.4 million for the twelve month period ended September 30, 2004), multiplied by 365.

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Included in contracts in process at September 30, 2004 are net billed receivables of $4.3 million and net inventories of $9.6 million related to our PrimeWave Communications business. At December 31, 2003, we had $6.7 million of net billed receivables and $11.4 million of net inventories related to our PrimeWave Communications business.

The increase in other current assets during the 2004 Nine Month Period was principally due to deposits paid to vendors for the procurement of subsystems used in our airport security products.

The decrease in property, plant and equipment (PP&E) during the 2004 Nine Month Period was principally related to depreciation expense and disposals, partially offset by capital expenditures. The percentage of depreciation expense to average gross PP&E increased to 9.5% for the 2004 Nine Month Period from 9.0% for the 2003 Nine Month Period. The increase was attributable to the impact of business acquisitions completed during 2003. We did not change any of the depreciation methods or assets estimated useful lives that L-3 uses to calculate its depreciation expense.

Goodwill increased by $110.5 million to $3,762.9 million at September 30, 2004 from $3,652.4 million at December 31, 2003. The increase was comprised of (i) $74.3 million for acquisitions completed during the 2004 Nine Month Period, (ii) $33.3 million for increases to purchase price payments for certain acquisitions completed prior to January 1, 2004, related to final closing date net assets of the acquired businesses and contingent purchase price adjustments or earnouts, which were resolved during the period, and (iii) $2.9 million primarily related to final estimates of fair value for assets acquired and liabilities assumed in connection with business acquisitions completed prior to January 1, 2004.

The increase in accounts payable was due to increased purchases from third-party vendors and subcontractors to support higher volumes for sales and related contracts-in-process, and the timing of payments for such purchases. The increase in accrued employment costs was due to the timing of payments of salaries and wages to employees. The decrease in other current liabilities was primarily due to the payment of the remaining purchase price for the acquisition of certain aerospace and defense assets of IPICOM, Inc. The increase in pension and postretirement benefit liabilities was primarily due to pension expenses exceeding related cash contributions of $48.0 million.

Pension Plans

L-3 maintains defined benefit pension plans covering employees at certain of its businesses. At December 31, 2003, our balance sheet included a pension benefits liability of $221.0 million, an increase of $15.9 million from $205.1 million at December 31, 2002. The increase is due to pension expense recognized exceeding our pension funding and an increase in the minimum liability of $6.5 million. At the end of 2003, L-3's projected benefit obligation, which includes accumulated benefits plus the incremental benefits attributable to projected future salary increases for covered employees, was $902.1 million and exceeded the fair value of L-3's pension plan assets of $561.7 million by $340.4 million. At the end of 2002, L-3's projected benefit obligation was $713.9 million and exceeded the fair value of L-3's pension plan assets of $431.7 million by $282.2 million. The increase in the unfunded status of our pension plans of $58.2 million from $282.2 million at the end of 2002 to $340.4 million at the end of 2003, was principally due to the $76.9 million actuarial loss that we experienced in 2003. The substantial majority of our 2003 actuarial loss was due to the reduction in the discount rate of 50 basis points that we made at the end of 2003 to 6.25% from 6.75% at the end of 2002, which increased the present value of L-3's projected benefit obligations at the end of 2003 by $62.0 million. The difference between the unfunded status amount of $340.4 million at the end of 2003 and the pension liability recorded on our balance sheet of $221.0 million is attributable to net unrecognized actuarial losses partially offset by the minimum pension liability of $114.9 million. In accordance with SFAS No. 87, Employer's Accounting for Pensions, the actuarial gains and losses that our pension plans experienced in 2003 were not recognized in pension expense for 2003. Instead, they were deferred and will be amortized to pension expense in future periods over the estimated average remaining service periods of the covered employees. (See Note 16 to our consolidated financial statements.)

L-3 uses a November 30 measurement date to determine its end of year (December 31) pension benefit obligations and fair value of pension plan assets, and a fiscal year ending November 30 to

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determine its annual pension expense, including actual returns on plan assets. L-3's actual return on plan assets for 2003, based on the fiscal year ended November 30, 2003, was $64.0 million or 14.8% on the fair value of plan assets at the beginning of the fiscal year. However, L-3's actual return on plan assets for the twelve months ended December 31, 2003 was approximately $94.8 million, or 26.6%.

Our pension expense for 2003 was $70.5 million. We expect pension expense for 2004 to be between $70 million and $75 million. As discussed above, at the end of 2003, we reduced our discount rate from 6.75% to 6.25%, which will increase the interest cost component of pension expense for 2004. The higher interest cost in our estimated 2004 pension expense is expected to be substantially offset by the increase of $130.0 million in our pension plan assets during 2003, which will increase our expected return on plan assets by approximately $12.0 million, and decrease our estimated pension expense by the same amount. Our actual pension expense for 2004 will be based upon a number of factors, including the effect of any additional acquired businesses for which we assume liabilities for pension benefits, actual pension plan contributions and changes (if any) to our pension assumptions for 2004, including the discount rate, expected long-term return on plan assets and salary increases.

Our contributions for the full year 2003 were $60.8 million. During 2002 and 2003, the U.S. Congress granted plan sponsors an interest rate reduction for calculating minimum pension plan contributions. For 2004, we expect to contribute approximately $55.0 million to our pension plans assuming the extension of such interest rate reduction, or $75.0 million if the interest rate reduction is not extended. A substantial portion of our pension plan contributions for L-3's businesses that are U.S. Government contractors are recoverable as allowable indirect contract costs at amounts generally equal to the annual pension contributions.

Our projected benefit obligation and annual pension expense are significantly affected by the discount rate assumption we use. For example, an additional reduction to the discount rate of 25 basis points would have increased our projected benefit obligation at December 31, 2003 by approximately $32 million, and our estimated pension expense for 2004 by approximately $5 million. Conversely, an increase to the discount rate of 25 basis points would have decreased our projected benefit obligation at December 31, 2003 by approximately $32 million, and our estimated pension expense for 2004 by approximately $5 million.

Our shareholders' equity at December 31, 2003 reflects a non-cash charge of $4.2 million (net of tax) to record the increase in the minimum pension liability for the year ended December 31, 2003 in accordance with SFAS No. 87. This non-cash charge had no effect on our compliance with the financial covenants of our debt agreements and did not impact our results of operations for 2003.

Statement of Cash Flows

Nine Months Ended September 30, 2004 Compared with Nine Months Ended September 30, 2003

Cash increased to $367.3 million at September 30, 2004 from $134.9 million at December 31, 2003. The table below provides a summary of our cash flows for the periods indicated.

				Nine Months Ended September 30,
				2004				2003
				(in millions)
Net cash from operating activities				$	408.0			$	327.1
Net cash used in investing activities					(183.9	)			(316.8	)
Net cash from financing activities					8.4				232.1
Net increase in cash				$	232.5			$	242.4

Operating Activities

We generated $408.0 million of cash from operating activities during the 2004 Nine Month Period, an increase of $80.9 million from the $327.1 million generated during the 2003 Nine Month Period. Net income adjusted for non-cash expenses and deferred income taxes increased by $122.0 million to

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$481.9 million for the 2004 Nine Month Period from $359.9 million for the 2003 Nine-Month Period. Deferred income taxes increased primarily because of larger estimated tax deductions arising from our recent acquisitions. Non-cash expenses consist primarily of contributions of L-3 Holdings' common stock to employee savings plans of $37.6 million and depreciation and amortization of $89.5 million. During the 2004 Nine Month Period, the use of cash related to the change in operating assets and liabilities was $73.9 million, compared to $32.8 million for the 2003 Nine Month Period. The use of cash for contracts in process was primarily driven by increases in unbilled contract receivables and billed receivables arising from the organic sales growth for our businesses, as discussed above under "Liquidity and Capital Resources—Balance Sheet" and "Results of Operations". The use of cash for other current assets was primarily due to deposits paid to vendors during the 2004 Nine Month Period. The source of cash for accounts payable was due to increased purchases of materials, components and services and the timing of payments for such purchases. The timing of payment dates of employee salaries and wages was a source of cash. The source of cash for other current liabilities was primarily due to cash received from billings in excess of costs incurred for certain training and satellite communications contracts and the timing of interest payments, which was partially offset by the payment upon settlement of a foreign currency hedging forward contract, and cash payments for costs incurred in excess of estimated contract values for certain contracts in a loss position. The source of cash from the change in pension and postretirement benefit liabilities was due to expenses exceeding related cash contributions.

Our cash interest payments, which are based on the fixed rate coupons and the interest payment dates of our debt, were approximately $29 million for the first quarter of 2004, $30 million for the second quarter of 2004, and $41 million for the 2004 Third Quarter. These cash interest payments, before any potential savings from our interest rate swap agreements, are expected to be approximately $30 million for the fourth quarter of 2004. The interest payments for the third quarter of 2004 exceed those for each of the other three quarters of 2004 because of the timing of the interest coupon payments on the $400.0 million of 6 1/8% Senior Subordinated Notes we sold in December 2003, which are paid in January and July, commencing July 2004.

L-3 receives substantial income tax deductions from its acquisitions of businesses that are structured as asset purchases for income tax purposes. The effect of these income tax deductions is that our cash payments for income taxes are less than our provision for income taxes reported on the statement of operations. This difference is presented in the deferred income tax provision on our statement of cash flows. The deferred income tax provision primarily results from deducting amortization of tax intangibles, including goodwill, from the acquisitions structured as asset purchases on L-3's income tax returns over 15 years, in accordance with income tax rules and regulations, while no goodwill amortization is recorded for financial reporting purposes, in accordance with SFAS No. 142. We expect our business acquisitions that have been structured as asset purchases for income tax purposes to continue to generate substantial annual deferred tax benefits through 2017. While these income tax deductions are reported as changes to deferred income tax liabilities and assets, they are not differences that are scheduled to reverse in future periods from normal operations. Rather, they will only reverse if L-3 sells its acquired businesses or incurs a goodwill impairment loss for them, because in either case, L-3's financial reporting amounts for goodwill would be greater than the income tax basis for goodwill.

Investing Activities

During the 2004 Nine Month Period, we used $134.6 million of cash for acquisitions of businesses. We paid $89.7 million to acquire Beamhit, Brashear, GEDD, AVISYS and Bay Metals. We paid $11.5 million for the final contractual purchase price adjustment for the Vertex acquired business. We also paid $33.4 million primarily for the remaining contractual purchase price for certain aerospace and defense assets of IPICOM, Inc., and for earnouts, most of which were accrued as other current liabilities at December 31, 2003. During the 2003 Nine Month Period, we used $261.4 million of cash to acquire businesses, including Avionics Systems, Aeromet and Klein Associates.

On October 8, 2004, we acquired the stock of D.P. Associates Inc. In addition, we have entered into agreements to acquire certain businesses for an approximate aggregate purchase price of $511

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million, payable in cash. These businesses include Cincinnati Electronics, Northrop Grumman's Canadian Navigation Systems and Space Sensors System business and the Marine Controls Division of CAE. We have not entered into any other agreements with respect to any material transactions at this time. Certain of these business acquisitions are subject to regulatory approval. We expect to complete the acquisitions by December 31, 2004, and will finance them using cash on hand and/or a portion of the proceeds from the expected notes offering discussed below in Financing Activities.

We make capital expenditures for the improvement of manufacturing facilities and equipment. We expect to use approximately $85 million of cash for capital expenditures, net of cash proceeds from dispositions of property, plant and equipment, for the full year of 2004.

Financing Activities

Debt

Senior Credit Facilities.    At September 30, 2004, the senior credit facilities were comprised of a $500.0 million five-year revolving credit facility maturing on May 15, 2006 and a $250.0 million 364-day revolving facility maturing on February 22, 2005. At September 30, 2004, available borrowings under our senior credit facilities were $671.5 million, after reductions for outstanding letters of credit of $78.5 million. There were no outstanding borrowings under our senior credit facilities at September 30, 2004.

Redemptions and Related Conversion of Convertible Debt into Common Stock.    On December 22, 2003, L-3 Holdings announced a full redemption of $300.0 million of its 5.25% Convertible Senior Subordinated Notes due 2009 (Convertible Notes), which expired on January 9, 2004. At December 31, 2003, holders of approximately $1.6 million of the Convertible Notes had exercised their conversion rights and converted such notes into 40,000 shares of L-3 Holdings common stock. On January 9, 2004, holders of $298.2 million of the Convertible Notes exercised their conversion rights and converted such notes into 7,317,327 shares of L-3 Holdings common stock. The remaining $0.2 million of Convertible Notes were redeemed for cash on January 12, 2004. On October 5, 2004, L-3 Holdings announced a full redemption of all the $420.0 million of its 4.00% Senior Subordinated Convertible Contingent Debt Securities (CODES) due 2011 which expired on Thursday, October 21, 2004. On October 21, 2004, holders of $419.8 million of the principal amount of CODES exercised their conversion rights and converted such CODES into 7,800,797 shares of L-3 Holdings common stock. The remaining $0.2 million of the CODES were redeemed for cash on October 25, 2004, at a redemption price of 102.0% of the principal amount, plus accrued and unpaid interest (including contingent interest) to October 25, 2004.

Senior Subordinated Notes Offering and Redemption of Senior Subordinated Notes.    On November 12, 2004, L-3 Communications sold the outstanding notes through a private placement, as described herein. The net proceeds were used to redeem our outstanding $200.0 million of 8% Senior Subordinated Notes due 2008 and for general corporate purposes, including payments for business acquisitions.

On November 12, 2004, L-3 Communications initiated a full redemption of all of our outstanding $200.0 million aggregate principal amount of 8% Senior Subordinated Notes due 2008. Such notes were redeemed by us at a redemption price of 102.667% of the principal amount thereof, plus accrued and unpaid interest. We completed this redemption on December 13, 2004. In connection with the early redemption of the $200 million of 8% Senior Subordinated Notes, we expect to record a pre-tax debt retirement charge of approximately $5.0 million, or $0.03 per diluted L-3 Holdings share, net of taxes.

Interest Rate Swap Agreements.    Depending on interest rate levels, we may enter into interest rate swap agreements to convert certain of our fixed interest rate debt obligations to variable interest rates, or terminate any existing interest rate swap agreements. The variable interest rate that we pay under the swap agreements is equal to (i) the variable rate basis, plus (ii) the variable rate spread. See Note 8 to the Unaudited Condensed Consolidated Financial Statements for a detailed table of our interest rate swap agreement that is currently outstanding, and a table that presents the activity for our terminated interest rate swap agreements through September 30, 2004.

Outstanding interest rate swap agreements reduced interest expense by $2.0 million during the 2004 Third Quarter, compared to $2.7 million during the 2003 Third Quarter and by $4.1 million

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during the 2004 Nine Month Period, compared to $5.5 million during the 2003 Nine Month Period. Interest expense was reduced by $1.1 million for the 2004 Third Quarter, compared to $0.9 million for the 2003 Third Quarter and by $3.2 million for the 2004 Nine Month Period compared to $2.1 million for the 2003 Nine Month Period for amortization of deferred gains on terminated interest rate swap agreements.

Debt Covenants.    The senior credit facilities and senior subordinated notes agreements contain financial covenants and other restrictive covenants, which remain in effect so long as we owe any amount or any commitment to lend exists thereunder. We are in compliance with those covenants in all material respects. The borrowings under the senior credit facilities are guaranteed by L-3 Holdings and by substantially all of the material domestic subsidiaries of L-3 Communications on a senior basis. The payments of principal and premium, if any, and interest on the senior subordinated notes are unconditionally guaranteed, on an unsecured senior subordinated basis, jointly and severally, by substantially all of L-3 Communications' restricted subsidiaries other than its foreign subsidiaries. The guarantees of the senior subordinated notes are junior to the guarantees of the senior credit facilities and rank pari passu with each other. See "Description of Other Indebtedness" for a description of our debt and related financial covenants.

Equity

In January of 2004, L-3 Holdings announced that its Board of Directors declared its first quarterly cash dividend of $0.10 per share. On March 15, 2004, L-3 Holdings paid cash dividends of $10.5 million in aggregate to shareholders of record at the close of business on February 17, 2004.

In April of 2004, L-3 Holdings announced that its Board of Directors declared a regular quarterly dividend of $0.10 per share. On June 15, 2004, L-3 Holdings paid cash dividends of $10.6 million in aggregate to shareholders of record at the close of business on May 17, 2004.

In July of 2004, L-3 Holdings announced that its Board of Directors declared a regular quarterly dividend of $0.10 per share. On September 15, 2004, L-3 Holdings paid cash dividends of $10.7 million in aggregate to shareholders of record at the close of business on August 17, 2004.

On October 12, 2004 L-3 Holdings announced that its Board of Directors declared a regular quarterly dividend of $0.10 per share. On December 15, 2004, L-3 Holdings paid cash dividends of $11.6 million in aggregate to shareholders of record at the close of business on November 17, 2004.

As discussed above under "Statement of Cash Flows—Financing," holders of $419.8 million principal amount of our CODES exercised their conversion rights and converted such CODES into 7,800,797 shares of L-3 Holdings common stock.

Based upon our current level of operations, we believe that our cash from operating activities, together with available borrowings under the senior credit facilities, will be adequate to meet our anticipated requirements for working capital, capital expenditures, commitments, research and development expenditures, contingent purchase prices, program and other discretionary investments, dividends and interest payments for the foreseeable future. There can be no assurance, however, that our business will continue to generate cash flow at current levels, or that currently anticipated improvements will be achieved. If we are unable to generate sufficient cash flow from operations to service our debt, we may be required to sell assets, refrain from declaring quarterly dividends, reduce capital expenditures, refinance all or a portion of our existing debt or obtain additional financing. Our ability to make scheduled principal payments or to pay interest on or to refinance our indebtedness depends on our future performance and financial results, which, to a certain extent, are subject to general conditions in or affecting the defense industry and to general economic, political, financial, competitive, legislative and regulatory factors beyond our control. There can be no assurance that sufficient funds will be available to enable us to service our indebtedness, or make necessary capital expenditures and to make discretionary investments.

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Year Ended December 31, 2003 Compared with Years Ended December 31, 2002 and 2001

Our cash position was $134.9 million at December 31, 2003 and December 31, 2002 and $361.0 million at December 31, 2001. The table below provides a summary of our cash flows for the periods indicated.

				Year Ended December 31,
				2003				2002				2001
				(in millions)
Net cash from operating activities				$	456.1			$	318.5			$	173.0
Net cash used in investing activities					(1,088.1	)			(1,810.5	)			(424.9	)
Net cash from financing activities					632.0				1,265.9				580.3
Net increase (decrease) in cash				$	—			$	(226.1	)		$	328.4

Operating Activities

We generated $456.1 million of cash from operating activities during 2003, an increase of $137.6 million from $318.5 million generated during 2002. Net income adjusted for non-cash expenses and deferred income taxes increased by $114.4 million to $530.3 million for 2003 from $415.9 million for 2002. Deferred income taxes increased primarily because of larger estimated tax deductions arising from our recent acquisitions. Non-cash expenses consist primarily of contributions of L-3 Holdings' common stock to employee savings plans and depreciation and amortization. During 2003, the use of cash from the change in operating assets and liabilities decreased to $74.2 million, compared to $97.4 million for 2002. The use of cash for contracts in process was driven by increases in unbilled receivables primarily for our defense businesses, partially offset by collections primarily for our EDS business. The use of cash for other assets was primarily due to capitalized software development costs for new products. The use of cash for accounts payable was due to the timing of payments. The timing of payments to employees for salaries and wages was a source of cash because costs and expenses for salaries and wages exceeded cash payments for them. The source of cash from the change in pension and postretirement benefits was due to expenses exceeding related cash contributions. Pension plan contributions in 2003 amounted to $60.8 million, and exceeded our originally planned contributions for 2003 by more than $10 million. The use of cash for other current liabilities was to fund certain contracts in a loss position for which estimated costs exceeded the estimated contract value, partially offset by cash collections for milestone billings in excess of cost incurred on contracts primarily for training devices.

The source of cash from other liabilities was generated primarily from terminating interest rate swap agreements. During 2003, we terminated interest rate swap agreements, which is discussed in "Derivative Financial Instruments", and generated cash proceeds related to deferred gains on them of $19.9 million, of which $2.1 million was recorded in other current liabilities and $17.8 million was recorded in other liabilities. For 2002, we also terminated interest rate swap agreements and generated cash proceeds related to net deferred gains on them of $16.8 million.

During 2002, we generated $318.5 million of cash from operating activities, an increase of $145.5 million from $173.0 million generated during 2001. Net income adjusted for non-cash expenses and deferred income taxes increased by $132.4 million to $415.9 million in 2002 from $283.5 million in 2001. During 2002, the use of cash from the change in operating assets and liabilities decreased to $97.4 million, compared to $110.5 million in 2001.

Our cash flows from operating activities during 2002 reflect increases in billed and unbilled receivables, other current assets and other assets. The use of cash related to customer advances was due to liquidations on certain foreign contracts. The use of cash for other current liabilities was to fund contracts in a loss position for which estimated costs exceed the estimated contract value, and was partially offset by an increase in accrued warranty costs primarily for explosive detection systems delivered in 2002. The timing of payments to employees for salaries and wages, as well as the timing

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of interest payments, was a source of cash. The source of cash in other liabilities was primarily due to deferred gains on the termination of our swap agreements. Pension plan contributions in 2002 amounted to $47.4 million.

In 2001, we used cash for increases in inventories, receivables and negative operating margins related to our PrimeWave business and naval power equipment products, as well as for incurred contract costs in excess of billings for the continued effort on the AVCATT contract. These uses of cash were partially offset by a settlement of certain items related to a services agreement and lower income tax payments.

Our cash from operating activities includes interest payments on debt of $119.9 million for 2003, $109.3 million for 2002 and $81.6 million for 2001. Our interest expense also includes amortization of deferred debt issue costs and deferred gains on terminated interest swap agreements, which are non-cash items.

Our cash from operating activities includes income tax payments, net of refunds, of $17.3 million for 2003, $2.1 million for 2002, and $4.9 million for 2001. Our income tax payments were substantially less than our provisions for income taxes reported on our statements of operations primarily because of income tax deductions from our acquired businesses structured as asset purchases and income tax deductions for compensation expense arising from the exercise of employee stock options. The income tax deductions from the exercise of employee stock options are accounted for as a reduction to current income taxes payable and an increase to shareholders' equity (see Note 13 to our consolidated financial statements). L-3 receives substantial income tax deductions from its acquisitions of businesses that are structured as asset purchases for income tax purposes. The effect of these income tax deductions is that our cash payments for income taxes are less than our provision for income taxes reported on the statement of operations. This difference is presented in the deferred income tax provision on our statement of cash flows. The deferred income tax provision primarily results from deducting amortization of tax intangibles, including goodwill, from the acquisitions structured as asset purchases on L-3's income tax returns over 15 years, in accordance with income tax rules and regulations, while no goodwill amortization is recorded for financial reporting purposes, in accordance with SFAS No. 142. We expect that the acquisitions L-3 has completed through December 31, 2003 will continue to generate substantial annual deferred tax benefits through 2017. While these income tax deductions are reported as changes to deferred income tax liabilities and assets, they are not differences that are scheduled to reverse in future periods from normal operations. Rather, they will only reverse if L-3 sells its acquired businesses or incurs a goodwill impairment loss for them, because in either case, L-3's financial reporting amounts for goodwill would be greater than the income tax basis for goodwill. L-3 also receives significant income tax deductions and deferred tax benefits from its acquired businesses structured as asset purchases for income tax purposes from accelerated depreciation of plant and equipment.

Investing Activities

During 2003, we used $1,014.4 million of cash for acquisitions of businesses. We paid $988.3 million to acquire Avionics Systems, Aeromet, MAS, Vertex and certain assets of IPICOM, Inc. We also paid $26.1 million for certain acquisitions that we completed prior to January 1, 2003, for purchase price adjustments based on final closing date net assets of the acquired businesses and earnouts, which were resolved during the period. During 2002, we invested $1,742.1 million to acquire businesses, primarily for Integrated Systems and Detection Systems. During 2001, we invested $446.9 million to acquire businesses.

On May 31, 2001, we sold a 30% interest in ACSS to Thales Avionics for $75.2 million in cash, which resulted in an after-tax gain of $4.3 million.

Financing Activities

Debt

Senior Credit Facilities.    At December 31, 2003, the senior credit facilities were comprised of a $500.0 million five-year revolving credit facility maturing on May 15, 2006 and a $250.0 million

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364-day revolving facility. On February 24, 2004, the maturity date of the 364-day revolving credit facility was extended to February 22, 2005.

At December 31, 2003, available borrowings under our senior credit facilities were $665.9 million, after reductions for outstanding letters of credit of $84.1 million. There were no outstanding borrowings under our senior credit facilities at December 31, 2003.

Redemptions.    On December 22, 2003, L-3 Holdings announced a full redemption of $300.0 million of its 5.25% Convertible Senior Subordinated Notes due 2009 (Convertible Notes), which expired on January 9, 2004. At December 31, 2003, holders of approximately $1.6 million of the Convertible Notes had exercised their conversion rights and converted such notes into 40,000 shares of L-3 Holdings common stock. On January 9, 2004, holders of $298.2 million of the Convertible Notes exercised their conversion rights and converted such notes into 7,317,327 shares of L-3 Holdings common stock. The remaining $0.2 million of Convertible Notes were redeemed on January 12, 2004 for cash. As a result of these conversions and redemptions, our principal amount of long-term debt decreased by $298.4 million and shareholders' equity increased by $292.3 million in January 2004 compared to December 31, 2003.

On May 21, 2003, L-3 Communications initiated a full redemption of all the outstanding $180.0 million aggregate principal amount of 8½% Senior Subordinated Notes due 2008 (May 1998 Notes). On June 20, 2003, we purchased and paid cash for all the outstanding May 1998 Notes, including accrued interest. During 2003, we recorded a pre-tax charge of $11.2 million, comprising of premiums and other transaction costs of $7.8 million and $3.4 million to write-off the unamortized balance of debt issue costs and the deferred loss on the terminated interest rate swap agreements related to the May 1998 Notes.

On June 6, 2002, L-3 Communications commenced a tender offer to purchase any and all of its $225.0 million aggregate principal amount of 10 3/8% Senior Subordinated Notes due 2007. The tender offer expired on July 3, 2002. On June 25, 2002, L-3 Communications sent a notice of redemption for all of its 10 3/8% Senior Subordinated Notes due 2007 that remained outstanding after the expiration of the tender offer. Upon sending the notice, the remaining notes became due and payable at the redemption price as of July 25, 2002. During 2002, we recorded a pre-tax charge of $16.2 million ($9.9 million after-tax), comprised of premiums, fees and other transaction costs of $12.5 million and $3.7 million to write-off the remaining balance of unamortized debt issue costs relating to these notes.

Debt Issuances.    The table below presents a summary of our issuances of debt obligations for 2001, 2002 and 2003. Our outstanding debt obligations, all of which are senior subordinated debt, were rated BB– by Standard & Poor's and Ba3 by Moody's at December 31, 2003. For additional details about the terms of our debt at December 31, 2003, see Note 8 to our consolidated financial statements.

Description of Debt Issuances				Issue Date				Principal Amount				Discount				Commissions and Other Offering Expenses				Net Proceeds				Semi-Annual Interest Payment Dates
				(in millions)
L-3 Communications
6 1/8% Senior Subordinated Notes due January 15, 2014				December 22, 2003				$	400.0			$	7.4			$	1.6			$	391.0	(1)		January 15 and July 15
6 1/8% Senior Subordinated Notes due July 15, 2013				May 21, 2003					400.0				1.8				7.1				391.1	(2)		January 15 and July 15
7 5/8% Senior Subordinated Notes due June 15, 2012				June 28, 2002					750.0				—				18.5				731.5	(3)		June 15 and December 15
L-3 Holdings
4% Senior Subordinated Convertible Contingent Debt Securities (CODES) due September 15, 2011(4)				October 24, 2001					420.0				—				12.8				407.2	(5)		March 15 and September 15

(1)	The net proceeds from this offering were used to repay $275.0 million of borrowings outstanding under our senior credit facilities and to increase cash and cash equivalents.

(2)	The net proceeds from this offering were used to redeem the 8 1/2% Senior Subordinated Notes due 2008 and to increase cash and cash equivalents.

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(3)

The net proceeds from this offering and the concurrent sale of 14.0 million shares of L-3 Holdings' common stock, discussed below under "-Equity," were used to (a) repay $500.0 million borrowed on March 8, 2002, under our senior subordinated bridge loan facility, (b) repay the indebtedness outstanding under our senior credit facilities, (c) repurchase and redeem the 10 3/8% Senior Subordinated Notes due 2007 (discussed above) and (d) increase cash and cash equivalents.

(4)

On October 5, 2004, L-3 Holdings initiated a full redemption of all its $420 million of 4.00% Senior Subordinated Convertible Contingent Debt Securities (CODES) due 2011. On October 21, 2004, holders of $419.8 million of the principal amount of CODES exercised their conversion rights and converted such CODES into 7.8 million shares of L-3 Holdings common stock. The remaining $0.2 million of CODES were redeemed for cash on October 25, 2004 at a redemption price of 102% of the principal amount, plus accrued and unpaid interest (including contingent interest) to October 25, 2004.

(5)	The net proceeds from this offering were used to increase cash and cash equivalents.

Debt Covenants.    The senior credit facilities and senior subordinated notes indentures contain financial covenants and other restrictive covenants which remain in effect so long as we owe any amount or any commitment to lend exists thereunder. See Note 8 to our consolidated financial statements for a description of our debt and related financial covenants at December 31, 2003. We are currently in compliance with those covenants in all material respects.

Equity

On June 28, 2002, L-3 Holdings sold 14.0 million shares of its common stock in a public offering for $56.60 per share. Upon closing, we received net proceeds of $766.8 million after deducting underwriting discounts and commissions and other offering expenses. The net proceeds from this sale and the concurrent sale of senior subordinated notes by L-3 Communications were used to (1) repay $500.0 million borrowed on March 8, 2002, under our senior subordinated bridge loan facility, (2) repay the indebtedness outstanding under our senior credit facilities, (3) repurchase and redeem the 10 3/8% Senior Subordinated Notes due 2007 discussed above and (4) increase cash and cash equivalents.

On April 23, 2002, L-3 Holdings announced that its Board of Directors had authorized a two-for-one stock split on all shares of L-3 Holdings common stock. The stock split entitled all shareholders of record at the close of business on May 6, 2002 to receive one additional share of L-3 Holdings common stock for every share held on that date. The additional shares were distributed to shareholders in the form of a stock dividend on May 20, 2002. Upon completion of the stock spilt, L-3 Holdings had approximately 80 million shares of common stock outstanding.

On May 2, 2001, L-3 Holdings sold 9.2 million shares of its common stock in a public offering for $40.00 per share. In addition, as part of the transaction, other selling stockholders, including affiliates of Lehman Brothers Inc., sold 4.7 million secondary shares. Upon closing, we received net proceeds of $353.6 million, which we used to repay borrowings outstanding under our senior credit facilities, pay for the KDI and EER acquisitions and to increase cash and cash equivalents.

Contractual Obligations

The table below presents our contractual obligations at December 31, 2003.

								Year(s) Ending December 31,
Contractual Obligations:				Total				2004				2005-2006				2007-2008				2009 and thereafter
				(in millions)
Principal amount of L-3 Communications Corporation long-term debt				$1,750.0				$	—			$	—			$	200.0			$	1,550.0
Principal amount of L-3 Holdings Inc. long-term debt				718.4					—				—				—				718.4
Non-cancelable operating leases				574.8					82.6				158.3				106.6				227.3
Notes payable and capital lease obligations				10.8					9.3				1.5				—				—
Purchase obligations(1)				637.8					587.3				48.4				1.6				0.5
Other long-term liabilities(2)				96.9					68.0	(3)			11.2				3.7				14.0
Total				$3,788.7				$	747.2			$	219.4			$	311.9			$	2,510.2

(1)	Represents open purchase orders at December 31, 2003 for amounts expected to be paid for goods or services that are legally binding on us.

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(2)	Other long-term liabilities primarily consists of workers compensation, deferred compensation and litigation settlement accruals for the years ending December 31, 2005 and thereafter and also includes pension and postretirement benefit plan contributions that we expect to pay in 2004.

(3)

Our pension and postretirement benefit plan funding policy is generally to contribute in accordance with cost accounting standards that affect government contractors, subject to the Internal Revenue Code and regulations thereon. During 2002 and 2003, U.S. Congress had granted plan sponsors an interest rate reduction for calculating minimum pension plan contributions. For 2004, we expect to contribute approximately $55.0 million to our pension plans, assuming the extension of such interest rate reduction, or $75.0 million if the interest rate reduction is not extended and $13.0 million to our postretirement benefit plans. Due to the current uncertainty of the amounts used to compute our expected pension and postretirement benefit plan funding, we believe it is not practicable to reasonably estimate such future funding for periods in excess of 1 year.

Off Balance Sheet Arrangements

On December 31, 2002, we entered into two real estate lease agreements, as lessee, with a third-party lessor, which expire on December 31, 2005 and are accounted for as operating leases. On or before the lease expiration date, we can exercise options under the lease agreements to either renew the leases, purchase both properties for $28.0 million, or sell both properties on behalf of the lessor (the "Sale Option"). If we elect the Sale Option, we must pay the lessor a residual guarantee amount of $22.7 million for both properties, on or before the lease expiration date, and at the time both properties are sold, we must pay the lessor a supplemental rent equal to the gross sales proceeds in excess of the residual guarantee amount not to exceed $5.3 million.

We have a contract to provide and operate for the U.S. Air Force (USAF) a full-service training facility, including simulator systems near a USAF base. We acted as the construction agent on behalf of the third-party owner-lessors for procurement and construction for the simulator systems, which were completed and delivered in August 2002. On December 31, 2002, we, as lessee, entered into an operating lease agreement for a term of 15 years for one of the simulator systems with the owner-lessor. At the end of the lease term, we may elect to purchase the simulator system at fair market value, which can be no less than $2.6 million and no greater than $6.4 million. If we do not elect to purchase the simulator system, then on the date of expiration, we shall pay to the lessor, as additional rent, $2.6 million and return the simulator system to the lessor. The aggregate non-cancelable rental payments under this operating lease are $32.5 million, including the additional rent of $2.6 million. On February 27, 2003, we, as lessee, entered into an operating lease agreement for a term of 15 years for the remaining simulation systems with the owner-lessor. At the end of the lease term, we may elect to purchase the simulator systems at fair market value, which can be no less than $4.1 million and no greater than $14.5 million. If we do not elect to purchase the simulator systems, then on the date of expiration, we shall return the simulator systems to the lessor. The aggregate non-cancelable rental payments under this operating lease are $53.3 million.

Derivative Financial Instruments

Included in our derivative financial instruments are foreign currency forward contracts, interest rate swap agreements. All of our derivative financial instruments that are sensitive to market risk are entered into for purposes other than trading.

Interest Rate Risk.    Our financial instruments that are sensitive to changes in interest rates include borrowings under the senior credit facilities and interest rate swap agreements all of which are denominated in U.S. dollars. At September 30, 2004, there were no outstanding borrowings under our senior credit facilities. The interest rates on the senior subordinated notes are fixed-rate and are not affected by changes in interest rates. Depending on interest rate levels, we may enter into interest rate swap agreements to convert certain of our fixed interest rate debt obligations to variable interest rates, or terminate any existing interest rate swap agreements. The variable interest rate paid by us is equal to (i) the variable rate basis, plus (ii) the variable rate spread. The table below presents our interest rate swap agreement outstanding as of September 30, 2004.

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Inception Date

Fixed Rate Debt Obligation

Notional Amount

Variable Rate Basis

Average Variable Rate Spread

Interest Settlement Dates

March 2004

$400,000 of 6 1/8% Senior Subordinated Notes due 2014

$100,000

Six-Month USD LIBOR(1)

1.55%

January 15 and July 15

(1)	The six-month USD LIBOR interest rate was 2.20% on September 30, 2004, 1.94% on June 30, 2004 and 1.16% on March 31, 2004.

The table below presents our terminated interest rate swap agreements activity through September 30, 2004.

																				Cash Proceeds Received at Termination(2)												September 30, 2004
Inception Date				Termination Date				Fixed Rate Debt Obligation				Notional Amount				Average Variable Rate Paid(1)				Interest Expense Reduction(3)				Deferred Gain (Loss)(4)				Total				Cumulative Recognized Deferred Gain (Loss)(5)				Balance of Unamortized Deferred Gain (Loss)(6)
April 2004				September 2004				$400,000 of 6 1/8% Senior Subordinated Notes due 2014				$	100,000				2.9	%		$	542			$	(542	)		$	—			$	—			$	(542	)
March 2004				September 2004				$400,000 of 6 1/8% Senior Subordinated Notes due 2014				$	100,000				3.6	%			415				(415	)			—				—				(415	)
July 2003				September 2003				$400,000 of 6 1/8% Senior Subordinated Notes due 2013				$	400,000				2.1	%			2,687				8,017				10,704				819				7,198
March 2003				June 2003				$750,000 of 7 5/8% Senior Subordinated Notes due 2012				$	200,000				4.4	%			1,578				6,727				8,305				965				5,762
January 2003				March 2003				$750,000 of 7 5/8% Senior Subordinated Notes due 2012				$	200,000				4.0	%			1,202				5,238				6,440				873				4,365
June 2002				September 2002				$750,000 of 7 5/8% Senior Subordinated Notes due 2012				$	200,000				4.1	%			1,762				12,173				13,935				2,508				9,665
November 2001				August 2002				$180,000 of 8½% Senior Subordinated Notes due 2008				$	180,000				5.3	%			1,186				(559	)			627				(559	)			—
July 2001				June 2002				$200,000 of 8% Senior Subordinated Notes due 2008				$	200,000				3.9	%			3,446				5,229				8,675				1,934				3,295
																				$	12,818			$	35,868			$	48,686			$	6,540			$	29,328

(1)	Represents the average variable interest rate L-3 paid for the interest payment period in which the interest rate swap agreements were terminated.

(2)	Cash proceeds received at termination are included in cash from operating activities on L-3's statement of cash flows in the period received.

(3)	Represents the interest expense reduction for the interest payment period in which the interest rate swap agreements were terminated.

(4)	Represents the mark-to market value of the interest rate swap agreements at termination date, which is being amortized over the remaining term of the underlying debt instrument.

(5)	Represents the cumulative amount of deferred gain recognized as a reduction to interest expense through September 30, 2004.

(6)	The current portion of unamortized deferred gains at September 30, 2004, aggregating $4,144, is included in other current liabilities. The remaining $25,184 is included in other liabilities.

When we enter into interest rate swap agreements, we attempt to manage exposure to counterparty credit risk by only entering into agreements with major financial institutions that are expected to be able to fully perform under the terms of such agreements. Cash payments between us and the counterparties are made in accordance with the terms of the interest rate swap agreements. Such payments are recorded as adjustments to interest expense. Additional data on our debt obligations, our applicable borrowing spreads included in the interest rates we pay on borrowings under the senior credit facilities and interest rate swap agreements are provided in Notes 8 and 9 to our audited consolidated financial statements.

Foreign Currency Exchange Risk.    We conduct some of our operations outside the U.S. in functional currencies other than the U.S. dollar. Additionally, some of our U.S. and foreign operations have contracts with customers which are denominated in currencies other than the functional

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currencies of those operations. To mitigate the risk associated with certain of these contracts denominated in foreign currency we have entered into foreign currency forward contracts. At September 30, 2004, the notional value of foreign currency forward contracts was $112.8 million and the fair value of these contracts was $0.3 million, which represented a liability. We account for these contracts as cash flow hedges.

Equity Price Risk.    Our equity investments in common stocks and limited partnerships are subject to equity price risk, including equity risk. The fair values of our investments are based on quoted market prices for investments which are readily marketable securities, and estimated fair value for nonreadily marketable securities, which is generally equal to historical cost unless such investment has experienced an other-than-temporary impairment. Both the carrying values and estimated fair values of such instruments amounted to $18.3 million at September 30, 2004.

Backlog and Orders

We define funded backlog as the value of funded orders received from customers, less the amount of sales recognized on those funded orders. We define funded orders as the value of contract awards received from the U.S. Government, for which the U.S. Government has appropriated funds, plus the value of contract awards and orders received from customers other than the U.S. Government. Our funded backlog at December 31, 2003 was $3,893.3 million and at December 31, 2002 was $3,228.6 million. We expect to record as sales approximately 81.2% of our funded backlog as of December 31, 2003 during 2004. However, there can be no assurance that our funded backlog will become sales in any particular period, if at all. Funded orders received for the year ended December 31, 2003 were $5,477.4 million, $4,383.1 million for the year ended December 31, 2002 and $2,456.1 million for the year ended December 31, 2001.

Our funded backlog does not include the full value of our contract awards including those pertaining to multi-year, cost-plus reimbursable contracts, which are generally funded on an annual basis. Funded backlog also excludes the sales value of unexercised contract options that may be exercised by customers under existing contracts and the sales value of purchase orders that we may receive under indefinite quantity contracts or basic ordering agreements.

Research and Development

The following table presents L-3's company-sponsored and customer-funded research and development costs for 2003, 2002 and 2001. See Note 2 to the consolidated financial statements for a discussion of L-3's accounting policies for research and development costs.

				For the Year Ended December 31,
				2003				2002				2001
Company-Sponsored Research and Development Costs:
U.S. Government Contractor Businesses				$	135.7			$	125.1			$	81.0
Commercial Businesses					52.8				34.8				26.5
Total				$	188.5			$	159.9			$	107.5
Customer-Funded Research and Development Costs				$	573.1			$	480.9			$	319.4

Contingencies

A substantial majority of our revenues are generated from providing products and services under legally binding agreements, or contracts with U.S. Government customers. The U.S. Government contracts are subject to extensive legal and regulatory requirements, and, from time to time, agencies of the U.S. Government investigate whether such contracts were and are being conducted in accordance with these requirements. Under U.S. Government procurement regulations, an indictment of the Company by a federal grand jury could result in the Company being suspended for a period of time from eligibility for awards of new government contracts. A conviction could result in debarment

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from contracting with the federal government for a specified term. In addition, all of our U.S. Government contracts are subject to audit and various pricing and cost controls, and include standard provisions for termination for the convenience of the U.S. Government. U.S. Government contracts and related orders are subject to cancellation if funds for contracts become unavailable or for termination for the convenience of the U.S. Government. Foreign government contracts generally include comparable provisions relating to termination for the convenience of the relevant foreign government.

Additionally, we have been periodically subject to litigation, claims or assessments and various contingent liabilities incidental to our businesses. For a detailed discussion of items of litigation, see Note 12 to the unaudited condensed consolidated financial statements. Litigation is inherently uncertain and it is possible that an adverse decision could be rendered against us, which could have a material adverse effect on our consolidated financial position, results of operations or cash flows.

We also continually assess our obligations with respect to applicable environmental protection laws. While it is difficult to determine the timing and ultimate cost to be incurred by us in order to comply with these laws, based upon available internal and external assessments, with respect to those environmental loss contingencies of which we are aware, we believe that even without considering potential insurance recoveries, if any, there are no environmental loss contingencies that, individually or in the aggregate, would be material to our consolidated results of operations. We accrue for these contingencies when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated.

Recently Issued Accounting Standards

In December of 2003, the Financial Accounting Standards Board (FASB) revised its FASB Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46R). FIN 46R clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements. FIN 46R requires that a business enterprise review all of its legal structures used to conduct its business activities, including those to hold assets, and its majority-owned subsidiaries, to determine whether those legal structures are variable interest entities (VIEs) required to be consolidated for financial reporting purposes by the business enterprise. Generally a VIE is a legal structure for which the holders of a majority voting equity (ownership) interest may not have a controlling financial interest in the legal structure. Variable interests in a VIE are the contractual, ownership, creditor or other pecuniary interests in the VIE that change with changes in the fair value of the net assets exclusive of variable interests.. FIN 46R provides guidance for identifying legal structures which are VIEs and the variable interests in a VIE, and also provides guidance for determining whether a business enterprise shall consolidate a VIE. FIN 46R requires that a business enterprise that holds a significant variable interest in a VIE make new disclosures in its financial statements. We adopted the provisions of FIN 46R during the interim period ended March 31, 2004. We do not hold any significant interests in VIEs that require consolidation or additional disclosures.

On December 8, 2003, President Bush signed the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the "Act"). This Act introduces a federal subsidy to employees who sponsor retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. In May of 2004, the FASB issued FASB Staff Position 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (FSP 106-2). FSP 106-2 provides guidance on the accounting for the effects of the Act and requires certain disclosures regarding the effect of the federal subsidy provided by the Act. The guidance in FSP 106-2 applies only if (i) the prescription drug benefits under our defined benefit postretirement health care plan are considered actuarially equivalent to Medicare Part D and therefore qualify for the subsidy under the Act, and (ii) the expected subsidy will reduce our share of the cost of the underlying postretirement prescription drug coverage. FSP 106-2 is effective for the first interim period beginning after June 15, 2004. We have determined that the benefits provided by certain of our postretirement benefit plans are actuarially equivalent to Medicare Part D, but have concluded that the effects of the Act do not constitute a significant event. Therefore, the amount of the accumulated postretirement benefit obligation or net periodic benefit cost recorded in the

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unaudited condensed consolidated financial statements and disclosed in the accompanying notes do not include the effects of the Act. The effects of the Act will be incorporated in the measurement of our postretirement benefits liability and periodic benefit cost for the year ending December 31, 2005.

On September 30, 2004 the EITF reached a consensus on issue No. 04-8, The Effect of Contingently Convertible Debt on Diluted Earnings Per Share. See "Results of Operations" above for a description of EITF No. 04-8 and a discussion of its impact on our results of operations.

In December of 2004, the FASB revised its FASB Statement No. 123, Accounting for Stock Based Compensation (SFAS 123) and renamed it FASB Statement No. 123, Share-Based Payment (SFAS 123R). SFAS 123R requires that compensation expense relating to share-based payment transactions be recognized in financial statements. The scope of SFAS 123R includes a wide range of share-based compensation arrangements, including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. This standard replaces SFAS 123 and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. We are required to adopt the provisions of SFAS 123R for the interim period ending September 30, 2005. We are currently assessing the provisions of SFAS 123R. We previously elected not to adopt the fair value based method of accounting for stock-based employee compensation as permitted by SFAS 123. The adoption of SFAS 123R will result in the recording of non-cash compensation expenses, which are not currently recognized in our financial statements. In accordance with SFAS 123, we disclose pro forma net income and earnings per share as adjusted for non-cash compensation expense arising from share-based payment transactions. For a further discussion of our accounting for stock-based employee compensation and disclosure of our pro forma historical net income and earnings per share, see Note 2 to the audited consolidated financial statements and Note 3 to the unaudited condensed consolidated financial statements, each included elsewhere herein.

Inflation

The effect of inflation on our sales and earnings has not been significant. Although a majority of our sales are made under long-term contracts, the selling prices of such contracts, established for deliveries in the future, generally reflect estimated costs to be incurred in these future periods. In addition, some of our contracts provide for price adjustments through cost escalation clauses.

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BUSINESS

Overview

We are a leading supplier of a broad range of products used in a substantial number of aerospace and defense platforms. We also are a major supplier of subsystems on many platforms, including those for secure communication networks, mobile satellite communications, information security systems, shipboard communications, naval power systems, fuzes and safety and arming devices for missiles and munitions, microwave assemblies for radars and missiles, telemetry and instrumentation and airport security systems. We also are a prime system contractor for aircraft modernization and operations & maintenance (O&M), Intelligence, Surveillance and Reconnaissance (ISR) collection platforms, training and simulation, and government systems support services. Our customers include the U.S. Department of Defense and its prime contractors, the U.S. Department of Homeland Security, certain U.S. Government intelligence agencies, major aerospace and defense contractors, foreign government ministries of defense, commercial customers and certain other U.S. federal, state and local government agencies. For the year ended December 31, 2003, direct and indirect sales to the U.S. Department of Defense provided 69.3% of our sales, and sales to commercial customers, foreign governments and U.S. federal, state and local government agencies, other than the U.S. Department of Defense provided 30.7% of our sales. For the year ended December 31, 2003, we had sales of $5,061.6 million, of which U.S. customers accounted for approximately 83.1% and foreign customers accounted for approximately 16.9%, net cash from operating activities of $456.1 million and operating income of $581.0 million. For the nine months ended September 30, 2004, we had sales of $4,985.8 million, net cash from operating activities of $408.0 million and operating income of $529.1 million.

For the twelve months ended September 30, 2004, we had sales of $6,466.9 million, net cash from operating activities of $537.0 million and operating income of $720.1 million.

We have four reportable segments: (1) Secure Communications & ISR; (2) Training, Simulation & Government Services; (3) Aircraft Modernization, O&M and Products (formerly known as Aviation Products & Aircraft Modernization); and (4) Specialized Products.

Secure Communications & ISR

Our businesses in this segment provide products and services for the global ISR market, specializing in signals intelligence (SIGINT) and communications intelligence (COMINT) systems. These products and services provide the warfighter in real-time the unique ability to collect and analyze unknown electronic signals from command centers, communication nodes and air defense systems for real-time situation awareness and response. The businesses in this segment also provide secure, high data rate communications systems for military and other U.S. Government and foreign government reconnaissance and surveillance applications. We believe our systems and products are critical elements for a substantial number of major communication, command and control, intelligence gathering and space systems. Our systems and products are used to connect a variety of airborne, space, ground and sea-based communication systems and are used in the transmission, processing, recording, monitoring and dissemination functions of these communication systems. Our major secure communication programs and systems include:

	•	secure data links that enable networked communications for airborne, satellite, ground and sea-based remote platforms, both manned and unmanned, for real-time information collection and dissemination to users;

	•	highly specialized fleet management and support, including procurement, systems integration, sensor development, modifications and maintenance for signals intelligence and ISR special mission aircraft and airborne surveillance systems;

	•	strategic and tactical signals intelligence systems that detect, collect, identify, analyze and disseminate information;

	•	secure terminal and communication network equipment and encryption management; and

	•	communication systems for surface and undersea vessels and manned space flights.

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Training, Simulation & Government Services.

Our businesses in this segment provide a full range of training, simulation and support services, including:

	•	services designed to meet customer training requirements for aircrews, navigators, mission operators, gunners and maintenance technicians for virtually any platform, including military fixed and rotary wing aircraft, air vehicles and various ground vehicles, and computer-based training systems;

	•	communication software support, information technology services and a wide range of engineering development services and integration support;

	•	high-end engineering and information support services used for command, control, communications and ISR architectures, as well as for air warfare modeling and simulation tools for applications used by the U.S. Department of Defense, Department of Homeland Security and U.S. Government intelligence agencies, including missile and space systems, Unmanned Aerial Vehicles (UAVs) and military aircraft; and

	•	developing and managing extensive programs in the United States and internationally that focus on teaching, training and education, logistics, strategic planning, organizational design, democracy transition and leadership development.

Aircraft Modernization, Operations and Maintenance (O&M) and Products.

Our businesses in this segment provide aircraft modernization and operations & maintenance services and aviation products, including:

	•	engineering, modification, maintenance, logistics and upgrades for aircraft, vehicles and personnel equipment;

	•	turnkey aviation life cycle management services that integrate custom developed and commercial off-the-shelf products for various military fixed and rotary wing aircraft, including heavy maintenance and structural modifications and interior modifications and constructions;

	•	aerospace and other technical services related to large fleet support, such as aircraft and vehicle modernization, maintenance, repair and overhaul, logistics support, and supply chain management, primarily for military training, tactical, cargo and utility aircraft, anti-missile defense systems and tanks;

	•	advanced cockpit avionics products and specialized avionics repair and overhaul services for various segments of the aviation market;

	•	airborne traffic and collision avoidance systems (TCAS) and terrain awareness warning systems for commercial and military applications;

	•	commercial, solid-state, crash-protected cockpit voice recorders, flight data recorders and cruise ship hardened voyage recorders; and

	•	ruggedized custom cockpit displays for military and high-end commercial applications.

Specialized Products.

Our businesses in this segment supply products, including components, subsystems and systems, to military and commercial customers in several niche markets. These products include:

	•	naval warfare products, including acoustic undersea warfare products for mine hunting, dipping and anti-submarine sonars and naval power distribution, conditioning, switching and protection equipment for surface and undersea platforms;

	•	ruggedization and integration of commercial off-the-shelf technology for displays, computers and electronic systems for military and commercial applications;

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	•	security systems for aviation and port applications, including those for detection of explosives, concealed weapons, contraband and illegal narcotics, and to inspect agricultural products and to examine cargo;

	•	telemetry, instrumentation, space and navigation products, including products for tracking and flight termination;

	•	premium fuzing products and safety and arming devices for missiles and munitions;

	•	microwave components used in radar communication satellites, wireless communication equipment, electronic surveillance, communication and electronic warfare applications and countermeasure systems;

	•	high performance antennas and ground based radomes;

	•	training devices and motion simulators which produce advanced virtual reality simulation and high-fidelity representations of cockpits and mission stations for fixed and rotary wing aircraft and land vehicles; and

	•	precision stabilized electro-optic surveillance systems, including high magnification lowlight, daylight and forward looking infrared sensors, laser range finders, illuminators and designators, and digital and wireless communication systems.

Industry Overview

The U.S. defense industry has undergone dramatic consolidation over the past decade resulting in the emergence of five dominant prime system contractors: The Boeing Company, Lockheed Martin Corporation, Northrop Grumman Corporation, Raytheon Company and General Dynamics Corporation. We believe that one outcome of this consolidation is that the DoD must ensure that vertical integration does not diminish the fragmented, yet critical DoD vendor base. Additionally, we believe it has become uneconomical for the prime contractors to design, develop and manufacture numerous essential products, components and subsystems for their own use. As the prime contractors continue to evaluate their core competencies and competitive positions, focusing their resources on larger programs and platforms, we expect the prime contractors to continue to exit non-strategic business areas and procure these needed elements on more favorable terms from independent, commercially oriented suppliers. Examples of this trend include recent divestitures of certain non-core defense-related businesses by several of the prime contractors.

The focus on cost reduction by the prime contractors and the DoD is also driving increased use of commercial off-the-shelf products for upgrades of existing systems and in new systems. We believe the prime contractors will continue to apply their resources and capabilities on major platforms and systems, utilizing commercially oriented "best of breed" suppliers to produce subsystems, components and products. We believe successful suppliers will continue to use their resources to complement and support, rather than compete with, the prime contractors. We anticipate that several relationships between the major prime contractors and their primary suppliers will continue to evolve in a fashion similar to those employed in the automotive and commercial aircraft industries. We expect that these relationships will be defined by critical partnerships encompassing increasingly greater outsourcing of non-core products and systems by the prime contractors to their key merchant suppliers and increasing supplier participation in the development of future programs. We believe that early involvement in the upgrading of existing systems and the design and engineering of new systems incorporating the prime contractor outsourced products will provide merchant suppliers, including us, with a competitive advantage in securing new business and provide the prime contractors with significant cost reduction opportunities through the coordination of the design, development and manufacturing processes. However, notwithstanding these defense industry outsourcing trends, all of the dominant prime system contractors have some vertically integrated businesses, which causes suppliers of defense products and subsystems, including L-3, to compete directly against the prime system contractors in certain business areas.

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Business Strategy

We intend to grow our sales, improve our profitability and build on our position as a leading supplier of systems, products and services to the major contractors in the aerospace and defense industry, as well as the U.S. Government. Our strategy to achieve these objectives includes:

Expanding Supplier Relationships.    As an independent supplier, we anticipate that our growth will be driven by expanding our share of existing programs and by participating in new programs. We identify opportunities where we are able to use our strong relationships to increase our business presence and allow customers to reduce their costs. We also expect to benefit from continued outsourcing of subsystems, components and products by prime contractors, which positions us to be a supplier to multiple bidders on prime contract bids.

Supporting Customer Requirements.    We intend to continue to align our research and development, manufacturing and new business efforts to complement our customers' requirements and provide state-of-the-art products.

Improving Operating Margins.    We intend to continue to improve our operating performance by continuing to reduce overhead expenses, consolidating certain of our businesses and business processes and increasing the productivity of our businesses.

Leveraging Technical and Market Leadership Positions.    We are applying our technical expertise and capabilities to expand our core defense businesses and apply them to certain closely aligned defense markets and applications, such as homeland security.

Maintaining Diversified Business Mix.    We have a diverse and broad business mix with limited reliance on any single program, a favorable balance of cost-reimbursable and fixed-price contracts, a significant follow-on business and an attractive customer profile.

Capitalizing on Strategic Acquisition Opportunities.    We intend to enhance our existing product base through internal research and development efforts and selective acquisitions of businesses that will add new products in areas that complement our present technologies. We regularly evaluate opportunities to acquire businesses. See "Risk Factors — Risks Related to L-3 — Our acquisition strategy involves risks, and we may not successfully implement our strategy."

Selected Recent Acquisitions

During the year ended December 31, 2003, we used cash of $1,014.4 million to acquire businesses. During the nine months ended September 30, 2004, we used cash of $89.8 million to acquire five businesses. (See Management's Discussion and Analysis of Results of Operations and Financial Condition—Acquisitions). The table below summarizes the contractual purchase price for the more significant businesses that we acquired during 2003 and 2004. The purchase prices disclosed below do not include adjustments for net cash acquired and acquisition costs. For certain of these acquisitions, the purchase price may be subject to adjustment based on actual closing date net assets, net working capital of the acquired business and/or the post-acquisition financial performance of the acquired business.

Business

Date Acquired

Acquired From

Purchase Price ($ millions)

Business Description

Avionics Systems

March 28, 2003

Goodrich Corporation

$188.7

Develops and manufactures innovative avionics solutions for substantially all segments of the aviation market, and sells its products to the military, business jet, general aviation, rotary wing aircraft and air transport markets.

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Business

Date Acquired

Acquired From

Purchase Price ($ millions)

Business Description

Aeromet, Inc.

May 30, 2003

Aeromet, Inc. Shareholders

$17.5

Designs, develops and integrates infrared and optical systems for airborne ISR.

Klein Associates

September 30, 2003

OYO Corporation of Japan

$30.0

Designs, manufactures and supports side-scan sonar, sub-bottom profilers and related instruments and accessories for undersea search and survey, including intrusion detection systems for port security applications.

Military Aviation Services

October 31, 2003

Bombardier, Inc.

$87.4

Provides systems engineering support and avionics modernization, and provides a full range of technical services in the areas of aircraft maintenance, repair and upgrade for military aircraft and business and regional jets and the refurbishment and modernization of selected commercial aircraft.

Vertex Aerospace LLC

December 1, 2003

Veritas Capital

$650.0

Provider of aerospace and other technical services to the U.S. Department of Defense and other government agencies. Services include logistics support, fixed and rotary wing aircraft modernization and maintenance, supply chain management and pilot training. Support for tactical, cargo and utility aircraft and other defense-related platforms.

Beamhit LLC

May 13, 2004

Beamhit LLC Shareholders

$40.0

Develops and supplies laser marksmanship training systems.

Brashear, L.P.

June 14, 2004

Brashear, L,P.

$36.3

Designs, develops and manufactures electro-optical systems such as laser ranging and tracking systems, test range instrumentation, telescope systems, naval fire control systems, laser beam directors and ground fire control.

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Business

Date Acquired

Acquired From

Purchase Price ($ millions)

Business Description

Commercial Infrared

November 9, 2004

Raytheon Company

$44.2

Produces uncooled thermal infrared detectors and imaging systems for the public safety, fire and rescue, security, transportation and industrial markets.

Cincinnati Electronics

December 9, 2004

CMC Electronics Inc.

$176.4

Designs, develops and manufactures infrared imaging sensors and sub-systems, infrared missile warning systems, space launch electronic sub-systems and high-reliability electronic equipment specially designed and qualified for use on missiles, launch vehicles and spacecraft.

Canadian Navigation Systems and Space Sensors System

December 30, 2004

Northrop Grumman Corporation

$65.0

Designs, develops and integrates electronic products and systems for aviation and ground vehicles, specializing in aircraft navigation systems and products, military grade displays, vehicle electronics and systems support services for a variety of defense electronics and weapons programs.

Products and Services

Secure Communications & ISR

The systems and products, selected applications and selected platforms or end users of our Secure Communications & ISR segment at December 31, 2003 are summarized in the table below.

Systems/Products				Selected Applications				Selected Platforms/End Users
Signals Intelligence
•Prime mission systems integration and sensor development				•Signal processing, airborne radio frequency applications, antenna technology, real-time process control and software development				•USAF Big Safari Fleet, Rivet Joint, Combat Sent, Cobraball and subsystems for U-2 and EP-3
High Data Rate Communications
•Wideband data links and ground terminals				•High performance, wideband secure communication links for relaying of intelligence and reconnaissance information				•Manned aircraft, UAVs, naval ships, terminals and satellites
Satellite Communication Terminals
•Ground-based satellite communication terminals and payloads				• Interoperable, transportable ground terminals				•Remote personnel provided with communication links to distant forces

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Systems/Products

Selected Applications

Selected Platforms/End Users

•Satellite communication and tracking system

•On-board satellite external communications, video systems, solid state recorders and ground support equipment

•International Space Station, Space Shuttle and various satellites

•Satellite command and control sustainment and support

•Software integration, test and maintenance support satellite control network and engineering support for satellite launch system

•U.S. Air Force Satellite Control Network and rocket launch system

Military Communications

•Shipboard communications systems

•Internal and external communications (radio room)

•Naval vessels

Information Security Systems

•Secure communication terminals and equipment

•Secure and non-secure voice, data and video communication for office and battlefield utilizing Integrated Services Digital Network (ISDN)

•U.S. Armed services, intelligence and security agencies

We believe that we are an established leader in the development, construction and installation of communication systems for high performance intelligence collection, imagery processing and ground, air, sea and satellite communications for the DoD and other U.S. Government agencies. We provide secure, high data rate, real-time communication systems for surveillance, reconnaissance and other intelligence collection systems. We also design, develop, produce and integrate communication systems and support equipment for space, ground and naval applications, as well as provide communication software support services to military and related government intelligence markets. Businesses of the Secure Communications & ISR segment include high data rate communications links, satellite communications terminals, naval vessel communication systems, space communications and satellite control systems, signal intelligence information processing systems, information security systems, tactical battlefield sensor systems and commercial communication systems.

Signals Intelligence (SIGINT)

We believe that we are a world leader in SIGINT and ISR systems providing unique, highly specialized fleet management and support for special mission aircraft, including prime mission systems integration, sensor development, aircraft modernization and maintenance and procurement for a range of customers, primarily under classified contracts. Our primary mission in this area is to support the USAF Big Safari fleet, including the Rivet Joint, Combat Sent and Cobra Ball RC-135 aircraft, through long-term sole-source contracts.

High Data Rate Communications

We believe that we are a technology leader in high data rate, covert, jam-resistant microwave communications used in military and other national agency reconnaissance and surveillance applications. Our product line covers a full range of tactical and strategic secure point-to-point and relay data transmission systems, products and support services that conform to military and intelligence specifications. Our systems and products are capable of providing battlefield commanders with real-time, secure surveillance and targeting information and were used extensively by U.S. armed forces in the war operations in Bosnia and Kosovo, and are being used for Operation Iraqi Freedom in Iraq and Operation Enduring Freedom in Afghanistan.

Our current family of strategic and tactical data links or CDL (Common Data Link) systems are considered DoD standards for data link hardware. Our primary focus is spread spectrum secure communication links technology, which involves transmitting a data signal with a high-rate noise signal making it difficult to detect by others, and then re-capturing the signal and removing the noise. Our data links use point-to-point and point-to-multipoint architectures.

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We provide these secure high bandwidth products to the U.S. Air Force, the U.S. Navy, the U.S. Army and various U.S. Government agencies, many through long-term programs. The scope of these programs include air-to-ground, air-to-air, ground-to-air and satellite communications such as the U-2 Support Program, GUARDRAIL, ASTOR and major UAV (unmanned aerial vehicle) programs, such as Predator, Global Hawk and Fire Scout.

We remain the industry leader in the mobile airborne satellite terminal product market, delivering mobile satellite communication services to many airborne platforms. These services provide real-time connectivity between the battlefield and non-local exploiters of ISR data.

Satellite Communication Terminals

We provide ground-to-satellite, high availability, real-time global communications capability through a family of transportable field terminals used to communicate with commercial, military and international satellites. These terminals provide remote personnel with constant and effective communication capability and provide communication links to distant forces. Our TSS (TriBand SATCOM Subsystem) employs a 6.25 meter dish with a single point feed that provides C, Ku and X band communication to support the U.S. Army. We also offer an 11.3 meter antenna satellite terminal which is transportable on two C-130 aircraft. The SHF (Super High Frequency) PTS (Portable Terminal System) is a lightweight (28 pounds), portable terminal, which communicates through DSCS, NATO or SKYNET satellites and brings connectivity to small military tactical units and mobile command posts.

We provide System Engineering and Software/Life-cycle support to the Air Force Satellite control network as well as the eastern and western test ranges. These contracts were recently won and are scheduled to remain in effect beyond 2010.

Space Communications and Satellite Control

We have produced and are delivering three communication subsystems for the ISS (International Space Station). These systems will control all ISS radio frequency communications and external video activities. We also provide solid-state recorders and memory units for data capture, storage, transfer and retrieval for space applications. Our standard NASA tape recorder has completed over five million hours of service without a mission failure. Our recorders are on National Oceanic & Atmospheric Administration weather satellites, the Earth Observing Satellite, AM spacecraft and Landsat-7 Earth-monitoring spacecraft. We have extended this technology to our Strategic Tactical Airborne Recorder (S/TAR^TM) which was selected for the new Shared Reconnaissance Port (SHARP) Program. We also provide space and satellite system simulation, satellite operations and computer system training, depot support, network engineering, resource scheduling, launch system engineering, support, software integration and test through cost-plus contracts with the U.S. Air Force.

Military Communications

We provide integrated, computer controlled switching systems for the interior and exterior voice and data needs of naval vessels. Our products include the MarCom Integrated Voice Communication Systems for Aegis class destroyers and for the LPD amphibious ship class. We produced the MarCom Baseband Switch for Los Angeles class submarines. Our MarCom secure digital switching system provides an integrated approach to the specialized voice and data communications needs of shipboard environments, for internal and external communications, command and control and air traffic control. Along with the Keyswitch Integrated Terminals, MarCom provides automated switching of radio/cryptocircuits, which results in significant time savings. Without MarCom it would take approximately one hour to switch twelve radio/cryptocircuits using the previously existing switching system. Our Marcom secure digital switching system is able to switch the same number of radio/cryptocircuits in approximately twelve seconds. We also offer on-board, high data rate communications systems, which provide a data link for carrier battle groups, which are interoperable with the U.S. Air Force's Surveillance/reconnaissance terminals. We supply the "communications on the move" capability needed for the digital battlefield by packaging advanced communications into the U.S. Army's Interim Brigade Combat Team Commander's Vehicle.

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Information Security Systems

We believe that we are a leader in the development of secure communications equipment for both military and commercial applications. We are producing the next generation digital, ISDN-compatible STE (secure terminal equipment). STE provides clearer voice and approximately thirteen-times faster data/fax transmission capabilities than the previous generation of secure telecommunications equipment. STE also supports secure conference calls and secure video teleconferencing. STE uses a CryptoCard security system which consists of a small, portable, cryptographic module holding the algorithms, keys and personalized credentials to identify its user for secure communications access. We also provide the workstation component of the U.S. Government's EKMS (Electronic Key Management System), the next generation of information security systems. EKMS is the government's system to replace current "paper" encryption keys that are used to secure government communications with "electronic" encryption keys. The work-station component we provide produces and distributes the electronic keys. We also develop specialized strategic and tactical signal intelligence systems to detect, acquire, collect, and process information derived from electronic sources. These systems are used by classified customers for intelligence gathering and require high-speed digital signal processing and high-density custom hardware designs.

Training, Simulation & Government Services

The products and services, selected applications and selected platforms or end users of our Training, Simulation & Government Services segment at December 31, 2003 are summarized in the table below.

Products/Services				Selected Applications				Selected Platforms/End Users
Training and Simulation
•Battlefield and Weapon Simulation				•Missile system modeling and simulation •Design and manufacture custom ballistic missile targets that are ground launched and air launched for threat replication targets				•U.S. Army Missile Command      •U.S. Army Missile Command
•Training				•Training for soldiers on complex command and control systems				•DoD
				•Training and logistics services and training device support				•DoD and foreign governments
•Human Patient Simulators				•Medical Training				•Medical schools, nursing schools, and DoD
Engineering Development and Integration Support
•System Support				•C3ISR (Command, Control, Communications, Intelligence, Surveillance and Reconnaissance), modeling and simulation				•U.S. Armed services, intelligence and security agencies, MDA, NASA and other U.S. Government agencies
•Surveillance products				•Remote surveillance for U.S. border				•Border Patrol, Immigration and Naturalization Service and U.S. Customs
•Communication software support services				•Value-added, critical software support for C3I (Command, Control, Communication and Intelligence) systems and other engineering and technical services				•DoD, FAA and NASA
•Crisis Incident Management System				•Emergency operations support associated with natural disasters, industrial accidents and acts of terrorism				•Federal, state and local government agencies for homeland defense

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Training and Simulation

We believe that we are a leading provider of training, simulation and support services to the U.S. and foreign military agencies.

Our products and services are designed to meet customer training requirements for aircrews, navigators, mission operators, gunners and maintenance technicians for virtually any platform, including military fixed and rotary wing aircraft, air vehicles and various ground vehicles. As one of the leading suppliers of training services, we believe that we are able to leverage our unique full-service capabilities to develop fully integrated, innovative solutions for training systems, to propose and provide program upgrades and modifications, and to provide hands-on, best-in-class training operations in accordance with customer requirements in a timely manner. In addition, we are developing, demonstrating, evaluating and transitioning training technologies and methods for use by warfighters at the U.S. Air Force's Fighter Training Research Division.

We also design and develop prototypes of ballistic missile targets for present and future threat scenarios. We provide high-fidelity custom targets to the DoD that are complementary to the U.S. Government's growing focus and priority on national missile defense and space programs. We are the only provider of ballistic missile targets that has successfully launched a ballistic missile target from an Air Force Cargo Aircraft.

We also develop and manage extensive programs in the United States and internationally, focusing on training and education, strategic planning, organizational design, democracy transition and leadership development. To provide these services, we utilize a pool of experienced former armed service, law enforcement and other national security professionals. In the United States, our personnel are instructors in the U.S. Army's Force Management School and other schools and courses and are also involved in recruiting for the U.S. Army. In addition, we own approximately 40% of Medical Education Technologies, Inc., which has developed and is producing human patient simulators for sale to medical teaching and training institutions and the DoD.

We also produce incident management software to support Emergency Management and Homeland Security applications for first responders to crisis situations.

Engineering Development and Integration Support

We believe that we are a premier provider of numerous air campaign modeling and simulation tools for applications, such as Thunder, Storm and Brawler, for the U.S. Air Force Studies and Analysis Agency, and of space science research for NASA. We also provide high-end systems support for the HAWK and PATRIOT missile systems, Unmanned Aerial Vehicles (UAVs), the Cooperative Engagement Capacity (CEC) Program, and the F/A-18.

Our products and services specialize in communication systems, training and simulation equipment and a broad range of hardware and software for the U.S. Army, Air Force and Navy, the Federal Aviation Administration and the Missile Defense Agency (MDA). As one of the leading suppliers of high-end engineering and information support, we believe we are able to provide value-added C³ISR engineering support, wargames simulation and modeling of battlefield communications.

Our Ilex Systems business provides systems and software engineering products and services for military applications. We specialize in the innovative application of state-of-the-art software technology and software development methodologies to produce comprehensive real-time solutions satisfying our customers' systems and software needs. We specialize in providing engineering services to the U.S. Army military intelligence community, including the Communications-Electronics Command (CECOM) Software Engineering Center. These engineering services include the development and maintenance of Intelligence, Electronic Warfare, Fusion and Sensor systems and software.

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Aircraft Modernization, O&M and Products

The systems and products, selected applications and selected platforms or end users of our Aircraft Modernization, O&M and Products segment at December 31, 2003, are summarized in the table below.

Systems/Products				Selected Applications				Selected Platforms/End Users
Aviation Products
•Solid state crash protected cockpit voice and flight data recorders				•Voice recorders that continuously record the most recent 30-120 minutes of voice and sounds from cockpit and aircraft inter- communications. Flight data recorders record the last 25 hours of flight parameters				•Business and commercial aircraft and certain military transport aircraft; sold to both aircraft manufacturers and airlines under the Fairchild brand name
•TCAS (Traffic Alert and Collision Avoidance System)				•Reduce the potential for midair aircraft collisions by providing visual and audible warnings and maneuvering instructions to pilots				•Commercial and business regional and military transport aircraft
•Advanced cockpit avionics				•Design, manufacture and supply quality pilot safety and situation awareness products				•Commercial and business regional and military transport aircraft
Display Products
•Cockpit and mission displays and controls				•High performance, ruggedized flat panel and cathode ray tube displays and processors				•Military aircraft, including surveillance, fighters and bombers, attack helicopters, transport aircraft and land vehicles
Aircraft Modernization
•High end aviation product modernization services				•Turnkey aviation life cycle management services, including installation of special mission equipment, aircraft navigation and avionics products				•Various military and commercial wide body and rotary wing aircraft

Aviation and Maritime Recorders

We manufacture commercial, solid-state, crash-protected recorders, commonly known as black boxes, under the Fairchild brand name for the aviation and maritime industries, and have delivered approximately 59,100 flight recorders to aircraft manufacturers and airlines around the world. We believe we are the leading manufacturer of commercial cockpit voice recorders and flight data recorders. The hardened voyage recorder, launched from our state-of-the-art aviation technology, and expanded to include cutting edge internet communication protocols, has taken an early leadership position within the maritime industry. We offer three types of recorders:

•	the cockpit voice recorder, which records the last 30 to 120 minutes of crew conversation and ambient sounds from the cockpit;

•	the flight data recorder, which records the last 25 hours of aircraft flight parameters, such as speed, altitude, acceleration and thrust from each engine and direction of the flight in its final moments; and

•	the hardened voyage recorder, which stores and protects 12 hours of voice, radar, radio and shipboard performance data on solid state memory.

Recorders are highly ruggedized instruments, designed to absorb the shock equivalent to that of an object traveling at 268 knots and stopping in 18 inches, resist fire to 1,100 degrees centigrade and resist pressure to 20,000 feet undersea for 30 days. Our recorders are mandated and regulated by

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various worldwide agencies for use in commercial airlines and many business aviation aircraft. In addition, our aviation recorders are certified and approved for installation at many of the world's leading aircraft original equipment manufacturers (OEMs), while our maritime recorders are an integral component of a mandated recording system for numerous vessels that travel on international waters. The U.S. military has required the installation of black boxes in military transport aircraft.

We have completed development of a combined voice and data recorder and we are developing an enhanced recorder that monitors engine and other aircraft parameters for use in maintenance and safety applications.

Traffic Alert and Collision Avoidance Systems (TCAS)

TCAS is an avionics safety system that was developed to reduce the potential for mid-air collisions. The system is designed to operate independently from the air traffic control (ATC) system to provide a complementary supplement to the existing ATC system. TCAS operates by transmitting interrogations that elicit replies from transponders in nearby aircraft. The system tracks aircraft within certain range and altitude bands to determine whether they have the potential to become a collision threat.

There are two levels of TCAS protection currently in operation: TCAS I and TCAS II. In the United States, passenger aircraft with 10 to 30 seats must be equipped with a TCAS I system. The TCAS II system is required for passenger aircraft with more than 30 seats. These aircraft, as well as aircraft used in all-cargo operations, must also be equipped with either Mode S or Mode C transponders. The transponder provides altitude and airplane identification to TCAS-equipped aircraft as well as to the ATC system.

If the TCAS I system calculates that an aircraft may be a threat, it provides the pilot with a visual and audible traffic advisory. The advisory information provides the intruder aircraft's range and relative altitude/bearing. In addition to traffic advisories, a TCAS II system will provide the pilot a resolution advisory (RA). This resolution advisory recommends a vertical maneuver to provide separation from the intruder aircraft.

TCAS systems have proven to be very effective, with many documented successful RAs. TCAS II has been in worldwide operation in many aircraft types since 1990. Today, over 16,700 airline, corporate and military aircraft are equipped with TCAS II-type systems, logging over 100 million hours of operation. The number of reported near mid-air collisions in the U.S. has decreased significantly since 1989, a period during which both passenger and cargo air traffic has increased substantially.

We have introduced our Traffic and Terrain Collision Avoidance System (T²CAS^TM), a safety avionics system that integrates aircraft performance-based Terrain Awareness Warning System (TAWS) capability into our TCAS. Unlike our competitors' products, T²CAS is a true terrain avoidance system that bases its operator alerts on an aircraft's actual ability to climb at a given moment, instead of using predetermined computations. T²CAS reduces weight, power consumption, space requirements, and wiring because it's a combined TCAS and TAWS solution. Our TCAS customers can simply swap out the TCAS box for the new T²CAS box and use existing power and wiring. T²CAS was certified by the FAA on February 11, 2003.

All of our TCAS products, including T²CAS, are sold by our consolidated subsidiary, Aviation Communications & Surveillance Systems L.L.C. (ACSS). We own 70% of ACSS.

Advanced Cockpit Avionics

We manufacture advanced cockpit avionics and provide specialized avionics repair and overhaul services for the general, business, regional, military and commercial aviation markets. We offer a family of products specializing in electro-mechanical and solid-state gyros, collision avoidance systems, lightning detection systems, terrain awareness and warning systems, emergency power supplies and flat panel multifunction displays.

Display Products

We design, develop and manufacture ruggedized displays for military and high-end commercial applications. Our current product lines include a family of high performance display processing

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systems, which use either a cathode ray tube or an active matrix liquid crystal display. Our displays are used in numerous airborne, ship-board and ground-based platforms and are designed to survive in military and harsh environments.

Aircraft Modernization

We are dedicated to providing solutions that integrate custom-developed and commercial off-the-shelf products to satisfy military and commercial aviation requirements. We have a broad range of capabilities in the design, development, manufacturing, installation and integration of complex special purpose airborne systems, aircraft modifications and related services on numerous types of multi-engine aircraft, various rotary platforms and logistics support for government and commercial customers. We believe that we are a leader in maritime patrol aircraft (MPA) upgrades and maintenance, for both domestic and international customers.

Specialized Products

The products, selected applications and selected platforms or end users of our Specialized Products segment at December 31, 2003 are summarized in the table below.

Products				Selected Applications				Selected Platforms/ End Users
Naval Warfare Products
•Airborne dipping sonars				•Submarine detection and localization				•Various military helicopters
•Side scan sonars				•Submerged mine countermeasures				•U.S. Navy and foreign navies
•Submarine and surface ship towed arrays				•Submarine and surface ship detection and localization				•U.S. Navy and foreign navies
•Naval and commercial power delivery and switching products				•Switching, distribution and protection, as well as frequency and voltage conversion				•All naval combatants: submarines, surface ships and aircraft carriers
•Commercial transfer switches, uninterruptible power supplies and power products				•Production and maintenance of systems and high-speed switches for power interruption prevention				•Federal Aviation Administration, internet service providers, financial institutions and rail transportation
•Shipboard electronics racks, rugged computers, rugged displays and communication terminals				•Ruggedized displays, computers and electronic systems				•Naval Vessels and other DoD applications
Security Systems
•Explosives detection systems				•Rapid scanning of passenger checked baggage and carry-on luggage, scanning of large cargo containers				•Airports, embassies, federal and state facilities, customs, border patrol
Telemetry, Instrumentation and Space Products
•Aircraft, missile and satellite telemetry and instrumentation systems				•Real-time data acquisition, measurement, processing, simulation, distribution, display and storage for flight testing				•Aircraft, missiles and satellites
•Global satellite communications systems				•Satellite transmission of voice, video and data				•Rural telephony or private networks, direct to home uplinks, satellite news gathering and wideband applications
Navigation Products
•GPS (Global Positioning Systems) receivers				•Location tracking				•Guided projectiles and precision munitions

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Products				Selected Applications				Selected Platforms/ End Users
•Navigation systems and subsystems, gyroscopes, reaction wheels, star sensor				•Space navigation				•Hubble Space Telescope, Delta IV launch vehicle and satellites
Premium Fuzing Products
•Fuzing Products				•Munitions and electronic and electro-mechanical safety and arming devices (ESADs)				•Various DoD and foreign military customers
Microwave Components
•Passive components, switches and wireless assemblies				•Radio transmission, switching and conditioning, antenna and base station testing and monitoring, broad-band and narrow-band applications (wireless, Specialized Mobile Radio (SMR) and paging infrastructure)				•DoD, telephony service providers and original equipment manufacturers
•Safety products				•Radio frequency monitoring and measurement for safety				•Monitor cellular base station and industrial radio frequency emissions
•Satellite and wireless components (channel amplifiers, transceivers, converters, filters and multiplexers)				•Satellite transponder control, channel and frequency separation				•Communications satellites and wireless communications equipment
•Amplifiers and amplifier based components (amplifiers, up/down converters and Ka assemblies)				•Automated test equipment military electronic warfare, ground and space communications				•DoD and commercial satellite operators
•Traveling wave tubes, power modules, klystrons and digital broadcast				•Microwave vacuum electron devices and power modules to military and commercial markets				•DoD/Foreign, military- manned/unmanned platforms, various missile programs and commercial broadcast
Antenna Products
•Ultra-wide frequency and advanced radar antennas and rotary joints				•Surveillance and radar detection				•Military aircraft including surveillance, fighters and bombers, attack helicopters and transport
•Precision antennas serving major military and commercial frequencies, including Ka band				•Antennas for high frequency, millimeter satellite communications				•Various military and commercial customers including scientific astronomers
Training Devices and Motion Simulators
•Military Aircraft Flight Simulators				•Training for pilots, navigators, flight engineers, gunners and operators				•Military fixed and rotary winged aircraft and ground vehicles
Electro-Optical Sensors
•Targeted stabilized camera systems with integrated sensors and wireless communication systems				•Intelligence, Data Collection, Surveillance and Reconnaissance				•DoD, intelligence and security agencies, law enforcement, manned and unmanned platforms

Naval Warfare Products

We believe that we are one of the world's leading suppliers of acoustic undersea warfare systems. Our experience spans a wide range of platforms, including helicopters, submarines and surface ships. Our products include towed array sonar, hull mounted sonar, airborne dipping sonar, ocean mapping sonar and side scan sonar for navies around the world.

We believe that we are also a leading provider of state-of-the-art power electronics systems and electrical power delivery systems and subsystems. We provide communications and control systems for the military and commercial customers. We offer the following:

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•	military power propulsion, distribution and conversion equipment and components, each of which focus on motor drives switching, distribution and protection, and also provide engineering design and development, manufacturing and overhaul and repair services; and

•	ship control and interior communications equipment.

Telemetry, Instrumentation and Space Products

We believe that we are a leader in the development and marketing of component products and systems used in telemetry and instrumentation for airborne applications such as satellites, aircraft, UAVs, launch vehicles, guided missiles, projectiles and targets. Telemetry involves the collection of data for various equipment performance parameters and is required when the object under test is moving too quickly or is of too great a distance to use a direct connection to collect such data. Telemetry products measure, process, receive and collect thousands of parameters of a platform's operation, including heat, vibration, stress and operational performance and transmit this data to the ground.

Additionally, our satellite telemetry equipment transmit data necessary for ground processing. These applications demand high reliability of their components because of the high cost of satellite repair and the need for uninterrupted service. Telemetry products also provide the data used to terminate the flight of missiles and rockets under errant conditions and/or at the end of a mission. These telemetry and command/control products are currently used for a variety of missile and satellite programs.

We offer value-added solutions that provide our customers with complex product integration and comprehensive support. Within the satellite ground segment equipment market, we focus on the telephony, video broadcasting and multimedia niches. Our customers include foreign communications companies, domestic and international prime communications infrastructure contractors, telecommunications and satellite service providers, broadcasters and media-related companies. We also provide space products for advanced guidance and control systems, including gyroscopes, controlled momentum devices and star sensors. These products are used on satellites, launch vehicles, the Hubble Telescope, the Space Shuttle and the International Space Station.

Navigation Products

We provide airborne equipment and data link systems that gather critical information and then process, format and transmit the data to the ground from communications satellites, spacecraft, aircraft and missiles. These products are available in both commercial off-the-shelf and custom configurations and include software and software engineering services. Our primary customers include many of the major defense contractors who manufacture aircraft, missiles, warheads, launch vehicles and munitions. Our ground station instrumentation receives, encrypts and/or decrypts the serial stream of combined data in real-time as it is received from the airborne platform. We believe that we are a leader in digital GPS receiver technology for high performance military applications. These GPS receivers are currently in use on aircraft, cruise missiles and precision guided bombs and provide highly accurate positioning and navigational information. Additionally, we provide navigation systems for high performance weapon pointing and positioning systems for programs such as Multiple Launch Rocket System (MLRS) and Mortar Fire Control System (MFCS).

Premium Fuzing Products

We believe that we are a leading provider of premium fuzing products, including proximity fuzes, electronic and electro-mechanical safety and arming devices (ESADs) and self-destruct/sub-munition grenade fuzes. ESADs prevent the inadvertent firing and detonation of guided missiles during handling, flight operations and the initial phases of launch. Our proximity fuzes are used in smart munitions. All of these are considered to be critical safety and arming products. Additionally, during missile flight the ESAD independently analyzes flight conditions and determines safe separation distance after a missile launch.

Microwave Components

We are a premier worldwide supplier of commercial off-the-shelf and custom, high performance radio frequency (RF) microwave components, assemblies and instruments supplying the wireless

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communications, industrial and military markets. We are also a leading provider of state-of-the-art space-qualified commercial satellite and strategic military RF products and millimeter amplifier based products. We sell many of these components under the well-recognized Narda brand name through a comprehensive catalog of standard, stocked hardware. We also sell our products through a direct sales force and an extensive network of market representatives. Specific catalog offerings include wireless products, electro-mechanical switches, power dividers and hybrids, couplers/detectors, attenuators, terminations and phase shifters, isolators and circulators, adapters, control products, sources, mixers, waveguide components, RF safety products, power meters/monitors and custom passive products. Passive components are generally purchased in both narrow and broadband frequency configurations by wireless equipment manufacturers, wireless service providers and military equipment suppliers. Commercial applications include cellular and PCS base station automated test equipment, and equipment for the paging industry. Military applications include electronic surveillance and countermeasure systems.

Our space-qualified and wireless components separate various signals and direct them to sections of the satellites' payload. Our main satellite products are channel amplifiers and linearizers, payload products, transponders and antennas. Channel amplifiers amplify the weak signals received from earth stations, and then drive the power amplifier tubes that broadcast the signal back to earth. Linearizers, used either in conjunction with a channel amplifier or by themselves, pre-distort a signal to be transmitted back to earth before it enters a traveling wave tube for amplification. This pre-distortion is exactly the opposite of the distortion created at peak power by the traveling wave tube and, consequently, has a cancellation effect that keeps the signal linear over a much larger power band of the tube. The traveling wave tube and area covered by the satellite is significantly increased.

Narda is the world's largest supplier of non-ionizing radiation safety detection equipment. These devices are used to quantify and alarm of exposure to excessive RF radiation. This equipment is used by wireless tower operators and the military to protect personnel, and insure compliance to various published standards. We design and manufacture both broad and narrow band amplifiers and amplifier-based products in the microwave and millimeter wave frequencies. We use these amplifiers in defense and communications applications. These devices can be narrow band for communication needs or broadband for electronic warfare.

We offer standard packaged amplifiers for use in various test equipment and system applications. We design and manufacture millimeter range (at least 20 to 38GHz) amplifier products for use in emerging communication applications such as back haul radios, LMDS (Local Multipoint Distribution Service) and ground terminals for LEO satellites. Narda filters are sold to some of the world's leading service providers and base station OEMs. Robust demand continues for Narda filters due to ongoing system upgrades by service providers for 2.5G and 3.0G applications geared toward providing higher data rate capabilities for the commercial cellular and PCS marketplace.

We also design, manufacture and market solid state, broadband wireless communications infrastructure equipment, subsystems and modules used to provide point-to-multipoint (PMP) and point-to-point (PTP) terrestrial and satellite-based distribution services in frequency bands from 24 to 38 Gigahertz. Our products include solid-state power amplifiers, hub transmitters, active repeaters, cell-to-cell relays, Internet access systems and other millimeter wave-based modules and subsystems. These products are used in various applications, such as broadband communications, local loop services and Ka-band satellite communications.

We also provide microwave vacuum electron devices and power modules for manned and unmanned airborne radars, F-14, F-16, Predator and Global Hawk platforms and for missile applications for the AMRAAM and Patriot. In addition, we provide modules for VHF TV transmitters.

Antenna Products

We produce high performance antennas under the Randtron brand name that are designed for:

•	surveillance of high-resolution, ultra-wide frequency bands;

•	detection of low radar cross-section targets and low radar cross-section installations;

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•	severe environmental applications; and

•	polarization diversity.

Our primary product is a sophisticated 24-foot diameter antenna used on all E-2C surveillance aircraft. This airborne antenna is a rotating aerodynamic radome containing a UHF surveillance radar antenna, an IFF antenna, and forward and aft auxiliary antennas. We have been funded to begin the development of the next generation for this antenna. We also produce broadband antennas for a variety of tactical aircraft, and rotary joints for the AWAC antenna. We have delivered over 2,000 sets of antennas for aircraft in 2003 and have a backlog of orders through 2005.

We are a leading supplier of ground based radomes used for air traffic control, weather radar, defense and scientific purposes. These radomes enclose an antenna system as a protective shield against the environment and are intended to enhance the performance of an antenna system.

Training Devices and Motion Simulators

Our training devices and motion simulators business designs, develops and manufacturers advanced virtual reality simulation and high-fidelity representations of cockpits and mission stations for aircraft and land vehicles. We have developed flight simulators for most of the U.S. military aircraft in active operation. We have numerous proprietary technologies and fully-developed systems integration capabilities that provide us with a competitive advantage. Our proprietary software is used for visual display systems, high-fidelity system models, database production, digital radar land mass image simulation and creation of synthetic environments. We are also a leader in developing training systems that allow multiple trainees at multiple sites to engage in networked group, unit and task force training and combat simulations.

Security Systems

We also design, manufacture and install screening systems to screen packages for explosives, firearms and contraband in airports, security check points, cruise lines, government and, commercial and military buildings. In addition, we provide cargo-screening systems for rapid inspection of incoming goods through rapidly deployable mobile systems to high-throughput, high-penetration fixed systems.

Electro Optical Cameras

We also design and manufacture wireless visual information systems that capture images from mobile platforms and transmit them in real time to tactical command centers for interpretation or to production facilities for broadcast.

Backlog and Orders

We define funded backlog as the value of funded orders received from customers, less the amount of sales recognized on those funded orders. We define funded orders as the value of contract awards received from the U.S. Government, for which the U.S. Government has appropriated funds, plus the value of contract awards and orders received from customers other than the U.S. Government. For additional information on our backlog and orders, see Management's Discussion and Analysis of Results of Operations and Financial Condition — Backlog and Orders.

Major Customers

For the year ended December 31, 2003, direct and indirect sales to the DoD provided approximately 69.3% of our sales. Approximately 61.2% of our sales to the DoD were directly to the customer, and approximately 38.8% of our sales to the DoD were indirect to its prime contractors and subcontractors. All U.S. Government customers, including federal, state and local agencies, accounted for 76.3% of our sales for 2003. For the year ended December 31, 2003, foreign governments provided 10.0% of our sales, and commercial customers provided 13.7% of our sales.

Our U.S. Government sales are predominantly derived from contracts with agencies of, and prime contractors to, the U.S. Government. Various U.S. Government agencies and contracting entities

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exercise independent and individual purchasing decisions, subject to annual appropriations by the U.S. Congress. As of December 31, 2003, we had approximately 1,000 contracts with a value exceeding one million. Our largest program represented 4.4% of our sales for the year ended December 31, 2003. No other program represented more than 2.9% of sales for the year ended December 31, 2003. For the year ended December 31, 2003, sales from our five largest programs amounted to $719.8 million, or 14.2% of our sales.

Research and Development

We conduct research and development activities that consist of projects involving basic research, applied research, development, and systems and other concept studies. We employ scientific, engineering and other personnel to improve our existing product-lines and develop new products and technologies. As of December 31, 2003, we employed approximately 19,100 engineers, a substantial portion of whom hold advanced degrees. For an analysis of L-3's research and development costs, see Management's Discussion and Analysis of Results of Operations and Financial Condition—Research and Development.

Competition

We encounter intense competition in all of our businesses. We believe that we are a significant supplier for many of the products that we manufacture and services we provide in our DoD, government and commercial businesses.

Defense and Government Business

Our ability to compete for defense contracts depends on a variety of factors, including:

•	the effectiveness and innovation of our technologies and research and development programs;

•	our ability to offer better program performance than our competitors at a lower cost; and

•	the capabilities of our facilities, equipment and personnel to undertake the programs for which we compete.

In some instances, we are the incumbent supplier or have been the sole provider for many years for certain programs. We refer to such contracts as "sole-source" contracts. In such cases, there may be other suppliers who have the capability to compete for the programs involved, but they can only enter or reenter the market if the customer chooses to reopen or re-compete the particular program to competition. Sole-source contracts accounted for 63.3% and competitive contracts accounted for 36.7% of our total sales for the year ended December 31, 2003. The majority of our sales are derived from contracts with the U.S. Government and its prime contractors, which are principally awarded on the basis of negotiations or competitive bids.

We believe that the U.S. defense industry structure contains three tiers of defense contractors. The first tier is dominated by five large prime system contractors: The Boeing Company, Lockheed Martin Corporation, Northrop Grumman Corporation, Raytheon Company and General Dynamics Corporation, all of whom compete for major platform programs. The second tier defense contractors are generally smaller products and niche subsystems contractors and is comprised of traditional aerospace and defense companies, as well as the non-core aerospace and defense businesses of certain larger industrial conglomerates. Some of the defense contractors in the second tier also compete for platform programs. We believe the second tier includes L-3, Honeywell International Inc., Rockwell Collins Inc., Harris Corporation, ITT Industries, Inc., the North American operations of BAE Systems PLC, Alliant Techsystems Inc., United Technologies Corporation, Computer Science Corporation, Science Applications International Corporation, and United Defense Industries Inc. The third tier, represents the vendor base and supply chain for niche products and is comprised of numerous smaller publicly and privately owned aerospace and defense contractors.

We believe we are the aerospace and defense supplier with the broadest and most diverse product portfolio. We supply our products and services to all of the five prime system contractors and in

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several cases directly to the end customers. We primarily compete with third tier contractors and certain of the second tier contractors. However, we also compete directly with the large prime system contractors for certain products and subsystems where they have vertically integrated businesses, and in the areas of aircraft modernization and maintenance, ISR, simulation and training, and government services, where L-3 is a system supplier. We are larger than all of the third tier contractors and believe we have greater resources than all of them. We believe that most of our businesses enjoy the number one or number two competitive position in their respective market niches. We believe that the primary competitive factors for our businesses are technology, research and development capabilities, quality, cost, market position and past performance. In addition, our ability to compete for non "sole source" contracts often requires us to "team" with one or more of the prime system contractors that bid and compete for major platform programs. Furthermore, our ability to "team" with a prime system contractor is often dependent upon the outcome of a competitive process for subcontracts awarded by the prime contractors. We believe that we will continue to be a successful participant in the business areas in which we compete, based upon the quality and cost competitiveness of our products and services.

Commercial Activities

Our commercial sales increased to 11.7% of our total sales for the year ended December 31, 2003 compared with 10.7% for the year ended December 31, 2002. We do not expect our commercial sales to appreciably increase on a relative basis in the future. Our ability to compete for commercial business depends on a variety of factors, including:

•	Pricing;

•	Product features and performance;

•	Reliability, scalability and compatibility;

•	Customer relationships, service and support; and

•	Brand recognition.

In these markets, we compete with various companies, several of which are listed below:

•    Rockwell Collins, Inc.;				•    Honeywell International Inc.;
•    Globecomm Systems, Inc.;				•    Smiths Industries; and
•    ViaSat, Inc.;				•    Airspan Networks, Inc.

We believe that our sales in these business areas will remain relatively constant as a percentage of our total sales.

Patents and Licenses

We do not believe that our patents, trademarks and licenses are material to our operations. Furthermore, our U.S. Government contracts generally permit us to use patents owned by other government contractors. Similar provisions in U.S. Government contracts awarded to other companies make it impossible for us to prevent the use of our patents in most domestic work performed by other companies for the U.S. Government.

Raw Materials

In manufacturing our products, we use our own production capabilities as well as a diverse base of third party suppliers and subcontractors. Although aspects of certain of our businesses require relatively scarce raw materials, we have not experienced difficulty in our ability to procure raw materials, components, sub-assemblies and other supplies required in our manufacturing processes.

Contracts

A significant portion of our sales are derived from strategic, long-term programs and from sole-source contracts. For the year ended December 31, 2003, approximately 63.3% of our sales were

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generated from sole-source business and 36.7% from competitive business. Our customer satisfaction and performance record are evidenced by our receipt of performance-based award fees exceeding 90% of the available award fees on average during the year ended December 31, 2003. We believe that our customers will award long-term, sole-source, outsourcing contracts to the most capable merchant supplier in terms of quality, responsiveness, design, engineering and program management support, as well as cost. As a consequence of our strong competitive position, for the year ended December 31, 2003, we won contract awards at a rate in excess of 55% on new competitive contracts that we bid on, and at a rate in excess of 95% on the contracts we rebid for which we were the incumbent supplier.

Generally, our contracts are either fixed-price or cost-reimbursable. On a fixed-price contract, we agree to perform the scope of work required by the contract for a predetermined contract price. Although a fixed-price contract generally permits us to retain profits if the total actual contract costs are less than the estimated contract costs, we bear the risk that increased or unexpected costs may reduce our profit or cause us to sustain losses on the contract. Conversely, on a cost-reimbursable contract we are paid our allowable incurred costs plus a profit which can be fixed or variable depending on the contract's fee arrangement up to predetermined funding levels determined by our customers. Therefore, on a cost-reimbursable contract we do not bear the risks of unexpected cost overruns, provided that we do not incur costs that exceed the predetermined funded amounts. Generally, a fixed-price contract offers higher profit margins than a cost-reimbursable contract, which is commensurate with the greater levels of risk assumed on a fixed-price contract. Our operating profit margins on fixed-price contracts generally range between 10% and 15%, while our profit margins on cost-reimbursable contracts generally range between 7% and 10%.

We have a diverse business mix with limited reliance on any single program, a balance of cost-reimbursable and fixed-price type contracts, a significant sole-source follow-on business and an attractive customer profile. For the year ended December 31, 2003, 63.1% of our sales were generated from fixed-price type contracts and 36.9% from cost-reimbursable type contracts and time-and-material type contracts, providing us with a sales mix of higher profit margin (fixed-price) business and predictable profitability (cost-reimbursable and time-and-material). See Management's Discussion and Analysis of Results of Operations and Financial Condition – Critical Accounting Policies. Substantially all of our cost-reimbursable type contracts are with the U.S. Government, including the DoD. Substantially all of our sales to commercial customers are transacted under fixed-price sales arrangements, and are included in our fixed-price contract sales.

Regulatory Environment

Most of our U.S. Government business is subject to unique procurement and administrative rules based on both laws and regulations, including the U.S. Federal Acquisition Regulation (FAR) that provide various profit and cost controls, rules for allocations of costs, both direct and indirect, to contracts and non-reimbursement of unallowable costs such as lobbying expenses, interest expenses and certain costs related to business acquisitions, including for example the incremental depreciation and amortization expenses arising from fair value increases to the historical carrying values of acquired assets. Our contract administration and cost accounting policies and practices are also subject to oversight by government inspectors, technical specialists and auditors.

Companies supplying defense-related equipment to the U.S. Government are subject to certain additional business risks specific to the U.S. defense industry. Among these risks are the ability of the U.S. Government to unilaterally suspend a company from new contracts pending resolution of alleged violations of procurement laws or regulations. In addition, U.S. Government contracts are conditioned upon the continuing availability of Congressional appropriations. Congress usually appropriates funds for a given program on a September 30 fiscal year basis, even though contract performance may take several years. Consequently, at the outset of a major program, the contract is usually partially funded, and additional monies are normally committed to the contract by the procuring agency only as appropriations are made by Congress for future fiscal years.

U.S. Government contracts are, by their terms, subject to unilateral termination by the U.S. Government either for its convenience or default by the contractor if the contractor fails to perform

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the contracts' scope of work. Upon termination other than for a contractor's default, the contractor will normally be entitled to reimbursement for allowable costs and an allowance for profit. Foreign defense contracts generally contain comparable provisions permitting termination at the convenience of the government. To date, none of our significant fixed-price contracts have been terminated.

As is common in the U.S. defense industry, we are subject to business risks, including changes in the U.S. Government's procurement policies (such as greater emphasis on competitive procurement), governmental appropriations, national defense policies or regulations, service modernization plans, and availability of funds. A reduction in expenditures by the U.S. Government for products and services of the type we manufacture and provide, lower margins resulting from increasingly competitive procurement policies, a reduction in the volume of contracts or subcontracts awarded to us or the incurrence of substantial contract cost overruns could materially adversely affect our business.

Certain of our sales are under foreign military sales (FMS) agreements directly between the U.S. Government and foreign governments. In such cases, because we serve only as the supplier, we do not have unilateral control over the terms of the agreements. These contracts are subject to extensive legal and regulatory requirements and, from time to time, agencies of the U.S. Government investigate whether our operations are being conducted in accordance with these laws and regulations. Investigations could result in administrative, civil, or criminal liabilities, including repayments, disallowance of certain costs, or fines and penalties.

Certain of our sales are direct commercial sales to foreign governments. These sales are subject to U.S. Government approval and licensing under the Arms Export Control Act. Legal restrictions on sales of sensitive U.S. technology also limit the extent to which we can sell our products to foreign governments or private parties.

Environmental Matters

Our operations are subject to various environmental laws and regulations relating to the discharge, storage, treatment, handling, disposal and remediation of certain materials, substances and wastes used in our operations. We continually assess our obligations and compliance with respect to these requirements.

In connection with the acquisition on March 8, 2002 of the Aircraft Integration Systems business from Raytheon, we assumed responsibility for implementing certain corrective actions, required under federal law to remediate the Greenville, Texas site location, and to pay a portion of those remediation costs. The hazardous substances requiring remediation have been substantially characterized, and the remediation system has been partially implemented. We have estimated that our share of the remediation cost will not exceed $2.5 million, and will be incurred over a period of 25 years. We have established adequate reserves for these costs.

We have also assessed the risk of environmental contamination for the various manufacturing facilities of our other acquired businesses and, where appropriate, have obtained indemnification, either from the sellers of those acquired businesses or through pollution liability insurance. We believe that our current operations are in substantial compliance with all existing applicable environmental laws and permits. We believe our current expenditures will allow us to continue to be in compliance with applicable environmental laws and regulations. While it is difficult to determine the timing and ultimate cost to be incurred in order to comply with these laws, based upon available internal and external assessments, with respect to those environmental loss contingencies of which we are aware, we believe that even without considering potential insurance recoveries, if any, there are no environmental loss contingencies that, individually or in the aggregate, would be material to our consolidated results of operations, financial position or cash flows.

Despite our current level of compliance, new laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the imposition of new clean-up requirements may require us to incur costs in the future that could have a negative effect on our financial condition, results of operations or cash flows.

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Pension Plans

In connection with our 1997 acquisition of the ten business units from Lockheed Martin and the formation of L-3, we assumed certain defined benefit pension plan liabilities for present and former employees and retirees of certain businesses which were transferred from Lockheed Martin to us. Prior to this acquisition, Lockheed Martin received a letter from the Pension Benefit Guaranty Corporation (the "PBGC") which requested information regarding the transfer of such pension plans and indicated that the PBGC believed certain of such pension plans were underfunded using the PBGC's actuarial assumptions. The PBGC assumptions result in a larger liability for accrued benefits than the assumptions used for financial reporting under Statement of Financial Accounting Standards No. 87. The PBGC underfunding is related to the Communication Systems -- West and Aviation Recorders pension plans (the "Subject Plans").

With respect to the Subject Plans, Lockheed Martin entered into an agreement (the "Lockheed Martin Commitment") among Lockheed Martin, L-3 Communications and the PBGC dated as of April 30, 1997. The material terms and conditions of the Lockheed Martin Commitment include a commitment by Lockheed Martin to the PBGC to, under certain circumstances, assume sponsorship of the Subject Plans or provide another form of financial support for the Subject Plans. The Lockheed Martin Commitment will continue with respect to any Subject Plan until such time as such Subject Plan is no longer underfunded on a PBGC basis for two consecutive years or, at any time after May 31, 2002, if we achieve investment grade credit ratings.

Upon the occurrence of certain events, Lockheed Martin, at its option, has the right to decide whether to cause us to transfer sponsorship of any or all of the Subject Plans to Lockheed Martin, even if the PBGC has not sought to terminate the Subject Plans. If Lockheed Martin did assume sponsorship of these plans, it would be primarily liable for the costs associated with funding the Subject Plans or any costs associated with the termination of the Subject Plans, but we would be required to reimburse Lockheed Martin for these costs. To date, there has been no impact on pension expense and funding requirements resulting from this arrangement. In the event Lockheed Martin assumes sponsorship of the Subject Plans we would be required to reimburse Lockheed Martin for all amounts that it contributes to, or costs it incurs with respect to, the Subject Plans. For the year ended December 31, 2003, we contributed $4.8 million to the Subject Plans. For subsequent years, our funding requirements will depend upon prevailing interest rates, return on pension plan assets and underlying actuarial assumptions.

We have performed our obligations under the letter agreement with Lockheed Martin and the Lockheed Martin Commitment and have not received any communications from the PBGC concerning actions which the PBGC contemplates taking in respect of the Subject Plans.

Employees

As of December 31, 2003, we employed approximately 38,700 full-time and part-time employees, the majority of whom are located in the United States. Of these employees, approximately 21.4% are covered by 56 separate collective bargaining agreements with various labor unions. Our ability to retain and train our employees is critical to the continued success of L-3's businesses. We have a continuing need for skilled and professional personnel to meet contract schedules and obtain new and ongoing orders for our products. We believe that relations with our employees are positive.

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Properties

The table below provides information about our significant facilities and properties at December 31, 2003.

Location				Owned				Leased
				(thousands of square feet)
L-3 Corporate Offices, New York, NY					—				51.2
Washington Operations, Arlington, VA					—				8.3
Secure Communication & ISR:
Camden, NJ					—				575.0
Greenville, TX					—				3,043.5
Salt Lake City, UT					—				561.6
Training, Simulation & Government Services:
Huntsville, AL					—				101.6
Colorado Springs, CO					—				77.0
Orlando, FL					—				175.1
Kirkwood, NY					—				428.0
Arlington, TX					21.3				47.5
Alexandria, VA					—				94.5
Arlington, VA					—				84.7
Chantilly, VA					—				88.8
Aircraft Modernization, O&M and Products:
Selma, AL					—				205.5
Phoenix, AZ					—				90.3
Sarasota, FL					—				143.7
Alpharetta, GA					93.0				—
Rolling Meadows, IL					45.0				6.7
Lexington, KY					—				273.2
Grand Rapids, MI					110.0				—
South Madison, MS					—				164.0
Waco, TX					761.8				221.1
Calgary, Canada					65.5				—
Edmonton, Canada					—				366.3
Mirabel, Canada					397.2				81.2
Specialized Products:
Anaheim, CA					—				474.2
Menlo Park, CA					—				97.5
San Carlos, CA					191.6				—
San Diego, CA					196.0				202.6
Sylmar, CA					—				253.0
Largo, FL					46.4				—
Ocala, FL					111.7				—
St. Petersburg, FL					—				112.0
Budd Lake, NJ					—				114.0
Hauppauge, NY					90.0				150.0
Cincinnati, OH					222.6				—
Tulsa, OK					—				129.9
Lancaster, PA					—				143.8
Philadelphia, PA					—				210.5
Williamsport, PA					208.6				—
Arlington, TX					60.7				135.1
Grand Prairie, TX					—				125.0
Burlington, Canada					—				124.0
Leer, Germany					32.2				33.2

At December 31, 2003, in the aggregate, we owned approximately 2.7 million square feet and leased approximately 11.5 million square feet of manufacturing facilities and properties.

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Legal Proceedings

From time to time we are involved in legal proceedings arising in the ordinary course of our business. We believe that we are adequately reserved for these liabilities and that there is no litigation that will have a material adverse effect on our consolidated results of operations, financial condition or cash flows. However, as discussed below, we are a party to a number of material litigations, for which an adverse determination could have a material adverse effect on our consolidated financial position, results of operations or cash flows.

L-3 Integrated Systems and its predecessors have been involved in a litigation with Kalitta Air arising from a contract to convert Boeing 747 aircraft from passenger configuration to cargo freighters. The lawsuit was brought in the northern district of California on January 31, 1997. The aircraft were modified using Supplemental Type Certificates (STCs) issued in 1988 by the Federal Aviation Administration (FAA) to Hayes International, Inc. (Hayes/Pemco) as a subcontractor to GATX/Airlog Company (GATX). Between 1988 and 1990, Hayes/Pemco modified five aircraft as a subcontractor to GATX using the STCs. Between 1990 and 1994, Chrysler Technologies Airborne Systems, Inc. (CTAS), a predecessor to L-3 Integrated Systems, performed as a subcontractor to GATX and modified an additional five aircraft using the STCs. Two of the aircraft modified by CTAS were owned by American International Airways, the predecessor to Kalitta Air. In 1996, the FAA determined that the engineering data provided by Hayes/Pemco supporting the STCs was inadequate and issued an Airworthiness Directive that effectively grounded the ten modified aircraft. The Kalitta Air aircraft have not been in revenue service since that date. The matter was tried in January 2001 against GATX and CTAS with the jury finding fault on the part of GATX but rendering a unanimous defense verdict in favor of CTAS. Certain co-defendants had settled prior to trial. The U.S. Ninth Circuit Court of Appeals has reversed and remanded the trial court's summary judgment rulings in favor of CTAS regarding a negligence claim by Kalitta Air, which asserts that CTAS as an expert in aircraft modification should have known that the STCs were deficient, and excluding certain evidence at trial. Based on this ruling, a retrial has been scheduled for September 2004. In preparation for retrial, Kalitta Air has submitted to us an expert report on damages that calculated Kalitta Air's damages at either $232 million or $602 million, depending on different factual assumptions. We have retained experts whose reports indicate that, even in the event of an adverse jury finding on the liability issues at trial, Kalitta Air has already recovered amounts from the other parties to the initial suit that more than fully compensated Kalitta Air for any damages it incurred. CTAS' insurance carrier has accepted defense of the matter with a reservation of its right to dispute its obligations under the applicable insurance policy in the event of an adverse jury finding. The trial began on January 18, 2005, and is expected to go to the jury for deliberation in mid-to late February 2005. We have meritorious defenses and intend to continue to vigorously defend this matter. However, litigation is inherently uncertain and it is possible that an adverse jury decision could be rendered, which could have a material adverse effect on our consolidated financial position, results of operations or cash flows.

On November 18, 2002, we initiated a proceeding against OSI Systems, Inc. (OSI) in the United States District Court sitting in the Southern District of New York seeking, among other things, a declaratory judgment that we had fulfilled all of our obligations under a letter of intent with OSI (the "OSI Letter of Intent"). Under the OSI Letter of Intent, we were to negotiate definitive agreements with OSI for the sale of certain businesses we acquired from PerkinElmer, Inc. on June 14, 2002. On February 7, 2003, OSI filed an answer and counterclaims alleging, among other things, that we defrauded OSI, breached obligations of fiduciary duty to OSI and breached our obligations under the OSI Letter of Intent. OSI seeks damages in excess of $100 million, not including punitive damages. Under the OSI Letter of Intent, we proposed selling to OSI the conventional detection business and the ARGUS business that we acquired from PerkinElmer, Inc. Negotiations with OSI lasted for almost one year and ultimately broke down over issues regarding, among other things, intellectual property, product-line definitions, allocation of employees and due diligence. Discovery on the matter is essentially complete. We believe that the claims asserted by OSI in its suit are without merit and intend to vigorously defend against the OSI claims.

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L-3 Communications Vertex Aerospace LLC (formerly known as Vertex Aerospace LLC and acquired by L-3 Communications Corporation on December 1, 2003) (L-3 Vertex) is named as a defendant in one remaining wrongful death lawsuit in the United States District Court, Western District of North Carolina arising from the crash of Air Midwest Flight 5481 at Charlotte-Douglas International Airport in Charlotte, North Carolina on January 8, 2003. The crash resulted in the deaths of nineteen passengers and two crewmembers. Each of the lawsuits alleges contributing factors, including that the accident was caused by the improper maintenance of the aircraft by L-3 Vertex, and seeks to recover compensatory and punitive damages. Twenty claims resulting from this incident have previously settled. The National Transportation Safety Board (NTSB) investigated the cause of the crash and has concluded that the crash was caused by the incorrect rigging of the elevator control system compounded by the airplane's center of gravity, which was substantially aft of the certified limit, with several other contributing factors. L-3 Vertex believes that it has meritorious defenses to the pending lawsuits, and intends to defend the cases vigorously. The actions have been tendered to L-3 Vertex's insurance carrier, who has accepted the defense of each action served upon L-3 Vertex to date. L-3 Vertex was also indemnified by Air Midwest for losses L-3 Vertex incurred arising out of its provision of maintenance services to Air Midwest. Based on the availability of insurance and the indemnification from Air Midwest, we do not believe we will have a material liability in this matter.

On July 1, 2004, lawsuits were filed on behalf of the estates of 31 Russian children in the state courts of Washington, Arizona, California, Florida, New York and New Jersey against Honeywell, Honeywell TCAS, the Company, ACSS, Thales USA and Thales France. The suits are based on facts arising out of the crash over southern Germany of a Bashkirian Airways Tupelov TU 154M aircraft and a DHL Boeing 757 cargo aircraft. On-board the Tupelov aircraft were 12 crew members and 57 passengers, including 45 children. The Boeing aircraft carried a crew of 3. Both aircraft were equipped with a Honeywell/ACSS Model 2000, Change 7 Traffic Collision and Avoidance Systems. Sensing the other aircraft, the on-board DHL TCAS instructed the DHL pilot to climb, and the Tupelov on-board TCAS instructed the Tupelov pilot to descend. However, the Swiss air traffic controller ordered the Tupelov pilot to climb. The Tupelov pilot disregarded the onboard TCAS and put the Tupelov aircraft into a climb striking the DHL aircraft in midair at approximately 35,000 feet. All crew and passengers of both planes were lost. Investigations by the NTSB after the crash revealed that both TCAS units were performing as designed. The suits allege negligence and strict product liability based upon the design of the units and the training provided to resolve conflicting commands and seek compensatory damages. The Company's insurers have accepted defense of the matter and retained counsel. All parties subsequently agreed to litigate this matter in the Federal Court in New Jersey and to dismiss the actions brought in the state courts. Based on the defenses available to the Company and ACSS and the insurance coverage, we do not expect the Company or ACSS to incur a material liability in this matter.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In connection with our incorporation, L-3 Holdings, Messrs. Lanza and LaPenta and certain other parties entered into a Stockholders Agreement, which has terminated except for the terms relating to registration rights.

Pursuant to the Stockholders Agreement, at this time Messrs. Lanza and LaPenta have the right, subject to certain conditions, to require L-3 Holdings to register their shares of its common stock under the Securities Act of 1933. Each of Messrs. Lanza and LaPenta have one demand registration right.

In addition, the Stockholders Agreement provides Messrs. Lanza and LaPenta with piggyback registration rights. The Stockholders Agreement provides, among other things, that L-3 Holdings will pay expenses incurred in connection with:

• the two demand registrations requested by each of Messrs. Lanza and LaPenta; and

• any registration in which those parties participate through piggyback registration rights granted under the agreement.

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MANAGEMENT

Directors, Executive Officers and Key Employees

The following table provides information concerning the directors, executive officers and key employees of L-3 Communications as of December 31, 2004:

Name				Age				Position
Frank C. Lanza					73			Chairman, Chief Executive Officer and Director
Robert V. LaPenta					59			President, Chief Financial Officer and Director
Michael T. Strianese					48			Senior Vice President, Finance
Christopher C. Cambria					46			Senior Vice President, General Counsel and Secretary
Charles J. Schafer					57			Senior Vice President — Business Operations and President, Products Group
James W. Dunn					60			Senior Vice President — President, Sensors and Simulation Group
Jimmie V. Adams					68			Vice President — Washington D.C. Operations
David T. Butler III					48			Vice President — Planning
Ralph G. D'Ambrosio					37			Vice President — Controller
Kenneth R. Goldstein					58			Vice President — Taxes
Joseph S. Paresi					49			Vice President — Product Development
Robert W. RisCassi					68			Vice President — Washington D.C. Operations
Stephen M. Souza					51			Vice President — Treasurer
Dr. Jill J. Wittels					55			Vice President — Business Development
Claude R. Canizares(1)					59			Director
Thomas A. Corcoran(1)(2)					60			Director
Robert B. Millard(2)					54			Director
John M. Shalikashvili(2)(3)					68			Director
Arthur L. Simon(1)(3)					72			Director
Alan H. Washkowitz(2)(3)					64			Director
John P. White					67			Director

(1)	Member of the Audit Committee.

(2)	Member of the Compensation Committee.

(3)	Member of Nominating/Corporate Governance Committee.

Frank C. Lanza, Chairman and Chief Executive Officer and Director since April 1997. From April 1996, when Loral Corporation was acquired by Lockheed Martin Corporation, until April 1997, Mr. Lanza was Executive Vice President of Lockheed Martin, a member of Lockheed Martin's Executive Council and Board of Directors and President and Chief Operating Officer of Lockheed Martin's command, control, communications and intelligence ("C³I") and Systems Integration Sector, which comprised many of the businesses Lockheed Martin acquired from Loral. Prior to the April 1996 acquisition of Loral, Mr. Lanza was President and Chief Operating Officer of Loral, a position he held since 1981. He joined Loral in 1972 as President of its largest division, Electronic Systems. His earlier experience was with DalmoVictor and Philco Western Development Laboratory.

Robert V. LaPenta, President and Chief Financial Officer and Director since April 1997. From April 1996, when Loral was acquired by Lockheed Martin, until April 1997, Mr. LaPenta was a Vice President of Lockheed Martin and was Vice President and Chief Financial Officer of Lockheed Martin's C³I and Systems Integration Sector. Prior to the April 1996 acquisition of Loral, he was Loral's Senior Vice President and Controller, a position he held since 1981. He joined Loral in 1972 and was named Vice President and Controller of its largest division in 1974. He became Corporate

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Controller in 1978 and was named Vice President in 1979. Mr. LaPenta is on the Board of Trustees of Iona College, the Board of Trustees of The American College of Greece and the Board of Directors of Core Software Technologies.

Michael T. Strianese, Senior Vice President—Finance. Mr. Strianese became a Senior Vice President in March 2001. He joined us in April 1997 as Vice President—Finance and Controller and was our Controller until July 2000. From April 1996, when Loral was acquired by Lockheed Martin, until April 1997, Mr. Strianese was Vice President and Controller of Lockheed Martin's C³I and Systems Integration Sector. From 1991 to the April 1996 acquisition of Loral, he was Director of Special Projects at Loral. Mr. Strianese is a Certified Public Accountant.

Christopher C. Cambria, Senior Vice President—Secretary and General Counsel. Mr. Cambria became a Senior Vice President in March 2001. He joined us in June 1997 as Vice President—General Counsel and Secretary. From 1994 until joining us, Mr. Cambria was an associate with Fried, Frank, Harris, Shriver & Jacobson. From 1986 until 1993, he was an associate with Cravath, Swaine & Moore. Mr. Cambria is a director of Core Software Technologies.

Charles J. Schafer, Senior Vice President—Business Operations and President of the Products Group. Mr. Schafer became a Senior Vice President in April 2002. Mr. Schafer was appointed President of the Products Group in September 1999. He joined us in August 1998 as Vice President—Business Operations. Prior to August 1998, he was President of Lockheed Martin's Tactical Defense Systems Division, a position he also held at Loral since September 1994. Prior to the April 1996 acquisition of Loral, Mr. Schafer held various executive positions with Loral, which he joined in 1984.

James W. Dunn, Senior Vice President—President, Sensors and Simulation Group. Mr. Dunn became a Senior Vice President in January 2004. He joined us in June 2000 as President of our Link Simulation and Training division. Prior to joining us, from April 1996, when Loral Corporation was acquired by Lockheed Martin, until May 2000, Mr. Dunn served as president of several Lockheed Martin business units, including the Tactical Defense Systems Group, the Defense Systems Group, Fairchild Systems and the NESS Eagan, Akron and Archibald divisions. Prior to that, Mr. Dunn was with the Loral Corporation, which he joined in 1978, and held a series of management positions there during his 18-year tenure, including President of Loral Fairchild Systems, Senior Vice President of Engineering and Senior Vice President of Program Management.

Jimmie V. Adams, Vice President—Washington, D.C. Operations. General Jimmie V. Adams (U.S.A.F.-ret.) joined us in May 1997. From April 1996 until April 1997, he was Vice President of Lockheed Martin's Washington Operations for the C³I and Systems Integration Sector. Prior to the April 1996 acquisition of Loral, he had held the same position at Loral since 1993. Before joining Loral in 1993, he was Commander in Chief, Pacific Air Forces, Hickam Air Force Base, Hawaii, capping a 35-year career with the U.S. Air Force. He was also Deputy Chief of Staff for plans and operation for U.S. Air Force headquarters and Vice Commander of Headquarters Tactical Air Command and Vice Commander in Chief of the U.S. Air Forces Atlantic at Langley Air Force Base. He is a command pilot with more than 141 combat missions.

David T. Butler III, Vice President—Planning. Mr. Butler became a Vice President in December 2000. He joined us in 1997 as our corporate Director of Planning and Strategic Development. Prior to joining us, he was the Controller for Lockheed Martin Fairchild Systems from 1996 to 1997. Prior to the acquisition of Loral, Mr. Butler was Controller of Loral Fairchild Systems from 1992 to 1996. From 1981 to 1992, Mr. Butler held a number of financial positions with Loral Electronic Systems.

Ralph G. D'Ambrosio, Vice President and Controller. Mr. D'Ambrosio became a Vice President in July 2001 and Controller in August 2000. He joined us in August 1997, and until July 2000 was our Assistant Controller. Prior to joining us, he was a senior manager at Coopers & Lybrand L.L.P., where he held a number of positions since 1989. Mr. D'Ambrosio is a Certified Public Accountant.

Kenneth R. Goldstein, Vice President—Taxes. Mr. Goldstein became a Vice President in October 2003. He joined us in 1997 as our corporate director of taxes. From April 1996, when Loral was acquired by Lockheed Martin, until April 1997, Mr. Goldstein was a director of taxes at Lockheed

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Martin Corporation. From 1981 to 1996, Mr. Goldstein was the director of taxes at Loral Corporation. Mr. Goldstein joined Loral Corporation in 1978 as a tax manager.

Joseph S. Paresi, Vice President—Product Development and President of the Security Systems Division. Mr. Paresi joined us in April 1997. From April 1996 until April 1997, Mr. Paresi was Corporate Director of Technology for Lockheed Martin's C³I and Systems Integration Sector. Prior to the April 1996 acquisition of Loral, Mr. Paresi was Corporate Director of Technology for Loral, a position he held since 1993. From 1978 to 1993, Mr. Paresi was a Systems Engineer, Director of Marketing and Director of International Programs at Loral Electronic Systems. Mr. Paresi is currently a director of AnnisTech, Inc.

Robert W. RisCassi, Vice President—Washington, D.C. Operations. General Robert W. RisCassi (U.S. Army-ret.) joined us in April 1997. From April 1996 until April 1997, he was Vice President of Land Systems for Lockheed Martin's C³I and Systems Integration Sector. Prior to the April 1996 acquisition of Loral, he had held the same position for Loral since 1993. He joined Loral in 1993 after retiring as U.S. Army Commander in Chief, United Nations Command/Korea. His 35-year military career included posts as Army Vice Chief of Staff; Director, Joint Staff, Joint Chiefs of Staff; Deputy Chief of Staff for Operations and Plans; and Commander of the Combined Arms Center. General RisCassi is currently a director of Alliant Techsystems Inc.

Stephen M. Souza, Vice President and Treasurer. Mr. Souza joined us in August 2001. Prior to joining us he was the Treasurer of ASARCO Inc. from 1999 to August 2001 and Assistant Treasurer from 1992 to 1999.

Jill J. Wittels, Vice President—Business Development. Dr. Wittels joined us in March 2001. From July 1998 to February 2001 she was President and General Manager of BAE Systems' Information and Electronic Warfare Systems/Infrared and Imaging Systems division and its predecessor company. From January 1997 to July 1998, Dr. Wittels was Vice President—Business Development and Operations for IR Focalplane Products at Lockheed Martin. Dr. Wittels is on the Board of Overseers for the Department of Energy's Fermi National Accelerator Lab. Dr. Wittels is also a director of Innovative Micro Technology, Inc. and Millivision, Inc.

Claude R. Canizares, Director since May 2003. Member of the audit committee. Since 1974, Professor Canizares has been a faculty member of the Massachusetts Institute of Technology (MIT). He currently serves as the Associate Provost and Bruno Rossi Professor of Experimental Physics, overseeing the MIT Lincoln Laboratory. In addition, he is a principal investigator and Associate Director of NASA's Chandra X-ray Observatory. Professor Canizares is a member of the National Academy of Sciences, the International Academy of Astronautics and a fellow of the American Physical Society and the American Association for the Advancement of Science. He is also a member of the Board of Trustees of the Associated Universities, Inc., the Board of Physics and Astronomy of the National Research Council and the Air Force Scientific Advisory Board.

Thomas A. Corcoran, Director since July 1997. Chairman of the audit committee and member of the compensation committee. Since March 2001, Mr. Corcoran has been the President and Chief Executive Officer of Gemini Air Cargo. Mr. Corcoran is also president of Corcoran Enterprises, LLC, a private management consulting firm. Mr. Corcoran was the President and Chief Executive Officer of Allegheny Teledyne Incorporated from October 1999 to December 2000. From October 1998 to September 1999, he was President and Chief Operating Officer of the Space & Strategic Missiles Sector of Lockheed Martin Corporation. From March 1995 to September 1998 he was the President and Chief Operating Officer of the Electronic Systems Sector of Lockheed Martin Corporation. From 1993 to 1995, Mr. Corcoran was President of the Electronics Group of Martin Marietta Corporation. Prior to that he worked for General Electric for 26 years and from 1983 to 1993 he held various management positions with GE Aerospace and was a company officer from 1990 to 1993. Mr. Corcoran is a member of the Board of Trustees of Stevens Institute of Technology, the Board of Directors of American Ireland Fund, the Board of Directors of REMEC Corporation and the Board of Directors of United Industrial Corporation.

Robert B. Millard, Director since April 1997. Chairman of the compensation committee. Mr. Millard is a Managing Director of Lehman Brothers Inc., head of Lehman Brothers' Principal Trading

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& Investments Group and principal of the Merchant Banking Group. Mr. Millard joined Lehman Brothers Inc. in 1978 when Kuhn Loeb & Co. was acquired by Lehman Brothers and became a Managing Director of Lehman Brothers Inc. in 1983. Mr. Millard joined Kuhn Loeb & Co. in 1976. Mr. Millard is a director of GulfMark Offshore, Inc. and Weatherford International, Inc.

John M. Shalikashvili, Director since August 1998. Member of the compensation and nominating/corporate governance committees. General Shalikashvili (U.S. Army-ret.) is an independent consultant and a Visiting Professor at Stanford University. General Shalikashvili was the senior officer of the United States military and principal military advisor to the President of the United States, the Secretary of Defense and National Security Council by serving as the thirteenth Chairman of the Joint Chiefs of Staff, Department of Defense, for two terms from 1993 to 1997. Prior to his tenure as Chairman of the Joint Chiefs of Staff, he served as the Commander in Chief of all United States forces in Europe and as NATO's tenth Supreme Allied Commander, Europe (SACEUR). He has also served in a variety of command and staff positions in the continental United States, Alaska, Belgium, Germany, Italy, Korea, Turkey and Vietnam. General Shalikashvili is a director of The Boeing Company, United Defense Industries Inc., Frank Russell Trust Company and Plug Power, Inc.

Arthur L. Simon, Director since April 2000. Member of the audit and nominating/corporate governance committees. Mr. Simon is an independent consultant. Before his retirement, Mr. Simon was a partner at Coopers & Lybrand, L.L.P., Certified Public Accountants, from 1968 to 1994. He is a director of Loral Space & Communications Ltd.

Alan H. Washkowitz, Director since April 1997. Chairman of the nominating/corporate governance committee and member of the compensation committee. Mr. Washkowitz is a Managing Director of Lehman Merchant Banking Group, and is responsible for the oversight of Lehman Brothers Inc. Merchant Banking Portfolio Partnership L.P. Mr. Washkowitz joined Lehman Brothers Inc. in 1978 when Kuhn Loeb & Co. was acquired by Lehman Brothers. Mr. Washkowitz is a director of Peabody Energy Corporation.

John P. White, Director since October 2004. Dr. White is presently on the faculty of the John F. Kennedy School of Government of Harvard University and is the Managing Partner of Global Technology Partners, LLC. Dr. White has a long history of government service, serving as U.S. Deputy Secretary of Defense from 1995-1997; as Deputy Director of the Office of Management and Budget from 1978 to 1981, and as Assistant Secretary of Defense, Manpower, Reserve Affairs and Logistics from 1977 to 1978. Dr. White also served as a lieutenant in the United States Marine Corps from 1959 to 1961. Prior to his most recent government position, Dr. White was the Director of the Center For Business and Government at Harvard University and the Chairman of the Commission on Roles and Missions of the Armed Forces. Dr. White has extensive private sector experience, including service as Chairman and CEO of the Interactive Systems Corporation, a position he held from 1981 to 1988. Following Interactive Systems Corporation's sale to the Eastman Kodak Company in 1988, he was General Manager of the Integration and Systems Product Division and a Vice President of Kodak until 1992. Dr. White also spent nine years at the RAND Corporation, where he served as the Senior Vice President of National Security Research Programs and as a member of the Board of Trustees. He continues to serve as a Senior Fellow to the RAND Corporation. Dr. White is a current member of the Council on Foreign Relations. He also serves as a Director of IRG International, Inc., the Institute for Defense Analyses and the Concord Coalition and Center for Excellence in Government. He is a member of the Director of Central Intelligence's National Security Advisory Panel and of the Policy and Global Affairs Oversight Committee of the National Research Council.

L-3 Holdings' certificate of incorporation provides for a classified board of directors divided into three classes. Class I will expire at the annual meeting of the stockholders to be held in 2005; Class II will expire at the annual meeting of the stockholders to be held in 2007; and Class III will expire at the annual meeting of the stockholders to be held in 2006. At each annual meeting, L-3 Holdings' stockholders will elect the successors to directors whose terms will then expire to serve from the time of election and qualification until the third annual meeting following election and until their successors have been elected and qualified, or until their resignation or removal, if any. Increases or decreases in the number of directorships will be distributed among the three classes so that, as nearly as possible, each class will consist of an equal number of directors.

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Our executive officers and key employees serve at the discretion of our board of directors.

The Board of Directors and Certain Governance Matters

Our board of directors directs the management of our business and affairs, as provided by Delaware law, and conducts its business through meetings of the board of directors and three standing committees: the audit, nominating/corporate governance and compensation committees. In addition, from time to time, special committees may be established under the direction of the board of directors when necessary to address specific issues. Each executive officer serves at the discretion of the board of directors.

Compensation of Directors

The directors who are also our employees or employees of our subsidiaries or affiliates do not receive compensation for their services as directors. The non-employee directors receive annual compensation of $50,000 for service on the board of directors, of which $40,000 is paid in cash on a quarterly basis, and $10,000 is paid in shares of L-3 Holdings' common stock. The chairman of the audit committee receives additional cash annual compensation of $7,500. The chairman of the compensation committee receives additional cash annual compensation of $5,000. In addition, non-employee directors receive annual stock option grants of shares of L-3 Holdings' common stock, which vest in three equal annual installments. The non-employee directors are entitled to reimbursement for their reasonable out-of-pocket expenses in connection with their travel to and attendance at meetings of the board of directors or committees thereof. In addition, the non-employee directors will be compensated $1,500 per board meeting attended, $2,000 per audit committee meeting attended, $1,500 per compensation committee meeting attended and $1,000 per telephonic audit or compensation committee meeting in which they participate.

Non-employee directors may defer up to 100 percent of the cash portion of their annual cash compensation (including meeting fees) otherwise payable to the director. Subject to certain limitations, a participating director's deferred compensation will be distributed in a lump sum on, or distributed in annual installments commencing on, the 30th day following the date he or she ceases to be a director. Deferral elections are irrevocable during any calendar year and must be made before the beginning of the calendar year in which his/her compensation is earned. Interest is accrued on deferred amounts. Depending on a director's investment election, deferred amounts earn interest at a rate based on the 90-day U.S. Government Treasury Bill or the performance of L-3 Holdings' common stock.

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Executive Compensation and Other Matters

Summary Compensation Table

The following table provides summary information concerning compensation paid or accrued by us to or on behalf of our Chief Executive Officer and each of our four other most highly compensated executive officers who served in such capacities at December 31, 2003, collectively referred to herein as the named executive officers, for services rendered to us during each of the last three years.

																Long-Term Compensation Awards
Name and Principal Position				Year				Annual Compensation								Securities Underlying Stock Options (#)				All Other Compensation ($)(1)
								Salary ($)				Bonus ($)
Frank C. Lanza					2003				875,000				975,000				75,000				6,180
(Chairman and Chief Executive					2002				825,000				850,000				400,000				11,125
Officer)					2001				750,000				750,000				—				11,125
Robert V. LaPenta					2003				675,000				865,000				75,000				43,509
(President and Chief Financial					2002				625,000				750,000				400,000				39,287
Officer)					2001				545,577				650,000				—				34,306
Michael T. Strianese					2003				365,000				435,000				75,000				19,726
(Senior Vice President,					2002				331,250				375,000				—				19,690
Finance)					2001				255,000				300,000				54,000				13,790
Christopher C. Cambria					2003				235,000				435,000				75,000				12,383
(Senior Vice President,					2002				235,000				375,000				—				12,038
Secretary and General Counsel)					2001				235,000				300,000				54,000				10,838
Charles J. Schafer
(Senior Vice President, Business					2003				308,750				400,000				50,000				24,018
Operations and President of					2002				268,750				350,000				—				24,449
the Products Group)					2001				248,230				250,000				36,000				118,438

(1)

Amounts for the year ended December 31, 2003 include: (a) our matching contributions of $9,600 under our savings plan for Mr. LaPenta, $8,000 for Messrs. Strianese and Cambria and $8,085 for Mr. Schafer; and (b) the value of supplemental life insurance programs in the amounts of $6,180 for Mr. Lanza, $33,909 for Mr. LaPenta, $11,726 for Mr. Strianese, $4,383 for Mr. Cambria and $15,933 for Mr. Schafer.

Option Grants in Fiscal Year 2003

The following table shows the options to purchase L-3 Holdings' common stock granted in fiscal year 2003 to the named executive officers.

Name				Options Granted (#)				% Total Options Granted				Per Share Exercise Price ($)				Expiration Date				Grant Date Value ($)
Frank C. Lanza					75,000				3.26	%			45.80				11/14/13				1,051,250
Robert V. LaPenta					75,000				3.26	%			45.80				11/14/13				1,051,250
Michael T. Strianese					75,000				3.26	%			35.60				3/4/13				892,250
Christopher C. Cambria					75,000				3.26	%			35.60				3/4/13				892,250
Charles J. Schafer					50,000				2.17	%			35.60				3/4/13				594,833
					350,000																4,481,833

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Option Exercises and Fiscal Year-End Values

The following table provides information on options to purchase L-3 Holdings' common stock that were exercised during fiscal year 2003 by our named executive officers; the total numbers of exercisable and non-exercisable options to purchase L-3 Holdings' common stock owned by our named executive officers at December 31, 2003; and the aggregate dollar value of such options that were in-the-money at December 31, 2003.

				Shares Acquired on Exercise (#)				Value Realized ($)				Number of Securities Underlying Unexercised Options at Fiscal Year-End (#)								Value of Unexercised In-The-Money Options at Fiscal Year-end ($)(1)
Name												Exercisable				Unexercisable(2)				Exercisable				Unexercisable(2)
Frank C. Lanza					300,000				10,483,500				1,661,906				341,666				73,562,528				417,000
Robert V. LaPenta					—				—				1,661,906				341,666				73,562,528				417,000
Michael T. Strianese					—				—				93,000				93,000				2,241,210				1,391,970
Christopher C. Cambria					—				—				107,800				93,000				2,723,838				1,391,970
Charles J. Schafer					—				—				39,000				62,000				769,110				927,980

(1)	In accordance with SEC rules, the values of the in-the-money options were calculated by subtracting the exercise prices of the options from the December 31, 2003 closing stock price of L-3 Holdings' common stock of $51.36.

(2)	These options are unexercisable because they have not yet vested under their terms.

Pension Plan

PENSION PLAN TABLE

The following table shows the estimated annual pension benefits payable under the L-3 Communications Corporation Pension Plan and Supplemental Executive Retirement Plan to a covered participant upon retirement at normal retirement age (65), based on a career average compensation (salary and bonus) and years of credited service with us.

				Years of Credited Service
Average Compensation at Retirement				5				10				15				20				25				30				35
$   500,000				$	39,100			$	70,485			$	95,638			$	115,833			$	132,074			$	145,214			$	155,811
600,000					47,127				84,955				115,277				139,621				159,190				175,000				187,740
700,000					55,156				99,426				134,917				163,410				186,308				204,790				219,674
800,000					63,184				113,897				154,557				187,197				213,424				234,577				251,603
900,000					71,212				128,365				174,194				210,982				240,537				264,362				283,532
1,000,000					79,240				142,836				193,835				234,773				267,658				294,155				315,469
1,100,000					87,270				157,309				213,478				258,563				294,776				323,943				347,399
1,200,000					95,296				171,777				233,115				282,348				321,890				353,728				379,329
1,300,000					103,326				186,250				252,759				306,141				349,012				383,520				411,264
1,400,000					111,352				200,717				272,395				329,926				376,126				413,308				443,197
1,500,000					119,382				215,190				292,038				353,716				403,244				443,097				475,129
1,600,000					127,409				229,658				311,675				377,501				430,359				472,882				507,057
1,700,000					135,438				244,130				331,317				401,293				457,478				502,672				538,989
1,800,000					143,465				258,600				350,956				425,080				484,596				532,462				570,924
1,900,000					151,495				273,072				370,599				448,872				511,715				562,253				602,858
2,000,000					159,521				287,539				390,234				472,655				538,828				592,036				634,786

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As of December 31, 2003, the current annual compensation and current years of credited service (including for Messrs. LaPenta and Strianese, years of credited service as an employee of Loral and Lockheed Martin) for each of the following persons were: Mr. Lanza, $1,725,000 and seven years; Mr. LaPenta, $1,425,000 and 32 years; Mr. Strianese, $740,000 and 14 years; Mr. Cambria, $610,000 and seven years; and Mr. Schafer, $658,750 and five years.

Compensation Committee Interlocks and Insider Participation

During the 2003 fiscal year, Messrs. Robert Millard, John Montague, and Alan Washkowitz served as members of the compensation committee of the board of directors. In May 2003, Mr. Montague resigned as a director and member of the compensation committee and in July 2003 General Shalikashvili was appointed a member of the committee. None of these individuals has served us or any of our subsidiaries as an officer or employee.

None of our executive officers serves as a member of the board of directors or compensation committee of any entity which has one or more executive officers serving as a member of our board of directors or compensation committee.

Employment Agreements

We entered into an employment agreement (the "Employment Agreements") effective on April 30, 1997 with each of Mr. Lanza, our Chairman and Chief Executive Officer, and Mr. LaPenta, our President and Chief Financial Officer. The Employment Agreements provided for an initial term of five years, which would automatically renew for one-year periods thereafter, unless a party thereto gave notice of its intent to terminate at least 90 days prior to the expiration of the term. Mr. Lanza's employment agreement was renewed in April 2003. Mr. LaPenta's employment agreement expired in April 2002.

Upon a termination without cause or resignation for good reason, we will be obligated, through the end of the term, to (i) continue to pay the base salary and (ii) continue to provide life insurance and medical and hospitalization benefits comparable to those provided to other senior executives; provided, however, that any such coverage shall terminate to the extent that Mr. Lanza is offered or obtains comparable benefits coverage from any other employer. The Employment Agreements provided for confidentiality during employment and at all times thereafter. There was also a noncompetition and non-solicitation covenant which was effective during the employment term and for one year thereafter; provided, however, that if the employment terminated following the expiration of the initial term, the noncompetition covenant would only be effective during the period, if any, that we paid the severance described above.

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OWNERSHIP OF CAPITAL STOCK

Security Ownership of Certain Beneficial Owners

All outstanding capital stock of L-3 Communications is owned by L-3 Holdings. As of December 31, 2004, there were 115,681,992 shares of L-3 Holdings' common stock outstanding. We know of no person who, as of December 31, 2004, beneficially owned more than five percent of the common stock, except as set forth below.

Name of Beneficial Owner				Amount and Nature of Beneficial Ownership				Percent of Class
Citigroup Inc.(1) 153 East 53rd Street New York, New York 10043.					12,646,127				10.9	%

(1)	Based on a Schedule 13G/A filed with the S.E.C., dated February 13, 2004, in which Citigroup Inc. reported that it had shared voting and dispositive power over 12,646,127 shares of common stock.

Security Ownership of Management

The following table shows the amount of L-3 Holdings' common stock beneficially owned (unless otherwise indicated) by L-3 Holdings' executive officers, L-3 Holdings' directors, and by all of L-3 Holdings' current executive officers and directors as a group. Except as otherwise indicated, all information listed below is as of December 31, 2004.

Name of Beneficial Owner				Shares of Common Stock Beneficially Owned (1)(2)				Percentage of Shares of Common Stock Outstanding (3)
Directors and Executive Officers
Frank C. Lanza					5,071,581				4.3	%
Robert V. LaPenta					4,876,459				4.2	%
Michael T. Strianese					107,094				—
Christopher C. Cambria					121,068				—
Charles J. Schafer					48,778				—
James W. Dunn					32,042				—
Claude R. Canizares					504				—
Thomas A. Corcoran(4)					16,033				—
Robert B. Millard(4)(5)(6)					41,216				—
John M. Shalikashvili(4)					12,371				—
Arthur L. Simon(4)					18,737				—
Alan H. Washkowitz(4)(5)(7)					260,427				—
John P. White					—				—
Directors and Executive Officers as a Group (13 persons)(8)					10,606,310				8.9	%

(1)

The shares of L-3 Holdings common stock beneficially owned include the number of shares (i) issuable under employee stock options and exercisable within 60 days of December 31, 2004 and (ii) allocated to the accounts of executive officers under our savings plans. Of the number of shares shown above, (i) the following represent shares that may be acquired upon exercise of employee stock options for the accounts of: Mr. Lanza, 1,820,239 shares; Mr. LaPenta, 1,820,239 shares; Mr. Strianese, 106,000 shares; Mr. Cambria, 119,967 shares; Mr. Schafer, 47,667 shares; and

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	Mr. Dunn, 31,334 shares; and (ii) the following represent shares; allocated under our saving plans to the accounts of: Mr. LaPenta, 1,183 shares; Mr. Strianese, 1,094 shares; Mr. Cambria, 1,101 shares; Mr. Schafer, 1,111 shares; and Mr. Dunn, 708 shares.

(2)	The number of shares shown includes shares that are individually or jointly owned, as well as shares over which the individual has either sole or shared investment or voting authority.

(3)

Share ownership does not exceed one percent of the class unless otherwise indicated. Under Rule 13d-3, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person's actual ownership or voting power with respect to the number of shares of common stock actually outstanding at December 31, 2004.

(4)	Includes 15,167 shares issuable and exercisable under director stock options within 60 days of December 31, 2004 in the case of Mr. Corcoran, 12,167 shares in the case of General Shalikashvili and Mr. Simon and 9,167 shares in the case of Messrs. Millard and Washkowitz.

(5)

Robert B. Millard and Alan H. Washkowitz, each of whom is a member of our board of directors, are each a Managing Director of Lehman Brothers Inc. and limited partners of Lehman Brothers Capital Partners III, L.P. As limited partners of Lehman Brothers Capital Partners III, L.P., Messrs. Millard and Washkowitz may be deemed to share beneficial ownership of shares of L-3 Holdings' common stock held by Lehman Brothers Capital Partners III, L.P. Such individuals disclaim any such beneficial ownership and those shares of common stock are not reflected in the numbers shown in this table.

(6)	Excludes 105,278 shares owned by a charitable foundation of which Mr. Millard and his wife are the sole trustees, and as to which Mr. Millard disclaims beneficial ownership.

(7)	Includes 111,324 shares in trust, for the benefit of Mr. Washkowitz's children, for which Mr. Washkowitz and his wife are co-trustees and as to which Mr. Washkowitz disclaims beneficial ownership.

(8)	Includes 4,003,281 shares issuable under employee stock options and exercisable under employee stock options within 60 days of December 31, 2004, and 5,197 shares allocated to the accounts of executive officers under our savings plans.

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DESCRIPTION OF OTHER INDEBTEDNESS

Senior Credit Facilities of L-3 Communications Corporation

The senior credit facilities of L-3 Communications Corporation have been provided by a syndicate of banks led by Bank of America, N.A., as administrative agent. The senior credit facilities are comprised of:

(A) a $500 million revolving credit facility that matures on May 15, 2006 (the "Revolving Credit Facility"); and

(B) a $250 million revolving credit facility that matures on February 22, 2005 (the "Revolving 364 Day Facility" and together with (A) above, the "senior credit facilities").

However, all or a portion of the Revolving 364 Day Facility may be extended annually on the maturity date of the Revolving 364 Day Facility for a period of 364 days with the consent of lenders holding at least 50% of the commitments to make 364-day loans (February 22, 2005, as extended in accordance with the foregoing, the "364 Day Termination Date"). L-3 Communications Corporation may also convert the outstanding principal amount of any or all of the loans outstanding under the Revolving 364 Day Facility to term loans on the 364 Day Termination Date if it meets certain conditions. The senior credit facilities include availability for letters of credit, and the Revolving Credit Facility allows borrowings up to a specified amount on same-day notice (the "Swingline Loans").

All borrowings under the senior credit facilities bear interest, at L-3 Communications Corporation's option, at either:

(A) "base rate" equal to, for any day, the higher of:

	•	0.50% per annum above the latest federal funds effective rate; and

	•	the rate of interest in effect for such day as publicly announced from time to time by Bank of America, N.A. as its "reference rate,"

	plus a spread ranging from 2.00% to 0.50% per annum, and adjusted periodically, depending on L-3 Communications Corporation's Debt Ratio (as defined below) at the time of determination or

(B) "LIBOR" equal to, for any interest period (as defined in the senior credit facilities), the London interbank offered rate for such interest period as determined in accordance with the senior credit facilities and as adjusted to reflect any reserve requirements, plus a spread ranging from 3.00% to 1.50% per annum, and adjusted periodically, depending on the Debt Ratio at the time of determination, provided that Swingline Loans can only bear interest at the "base rate" plus the applicable spread.

The Debt Ratio is defined in the senior credit facilities as the ratio of Consolidated Total Debt to Consolidated EBITDA. Consolidated Total Debt is equal to outstanding indebtedness for borrowed money or the deferred purchase price of property, including capitalized lease obligations, plus permitted convertible securities guaranteed by L-3 Communications Corporation or its subsidiaries minus the lesser of actual unrestricted cash or $50 million. Consolidated EBITDA is equal to consolidated net income (excluding impairment losses incurred on goodwill and identifiable intangible assets or debt and equity investments, gains or losses incurred on the retirement of debt, extraordinary gains and losses and gains and losses in connection with asset dispositions and discontinued operations) for the most recent four quarters, plus consolidated interest expense (including consolidated interest expense of L-3 Holdings for permitted convertible securities guaranteed by L-3 Communications Corporation or its subsidiaries), income taxes, depreciation and amortization minus depreciation and amortization related to minority interest.

L-3 Communications Corporation will pay commitment fees calculated at a rate ranging from 0.50% to 0.35% per annum for the Revolving Credit Facility and 0.45% to 0.30% per annum for the Revolving 364 Day Facility, depending on the Debt Ratio in effect at the time of determination, on the daily amount of the available unused commitment under the senior credit facilities. These commitment fees are payable quarterly in arrears and upon termination of the senior credit facilities.

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L-3 Communications Corporation will pay a letter of credit fee calculated at a rate ranging from (A) 1.50% to 0.75% per annum in the case of performance letters of credit and (B) 3.00% to 1.50% per annum in the case of all other letters of credit, in each case depending on the Debt Ratio at the time of determination. L-3 Communications Corporation will also pay a fronting fee equal to 0.125% per annum on the aggregate face amount of all outstanding letters of credit. Such fees will be payable quarterly in arrears and upon the termination of the senior credit facilities. In addition, L-3 Communications Corporation will pay customary transaction charges in connection with any letters of credit. The senior credit facilities provide for the issuance of letters of credit in currencies other than United States dollars.

The above interest rates are adjusted for changes in the Debt Ratio and reach their maximum if the Debt Ratio is greater than 4.25 to 1.0 and reach their minimum if that ratio is less than 2.75 to 1.0.

In the event that we convert any or all of the outstanding principal amount under the Revolving 364 Day Facility into term loans (the "Applicable Converted Commitment") on any 364 Termination Date, we would have to repay the principal amount of the resulting term loans by May 16, 2006.

Borrowings under the senior credit facilities are subject to mandatory prepayment (i) with the net proceeds of any incurrence of indebtedness that is not permitted under the senior credit facilities and (ii) with the net proceeds of asset sales, in both cases subject to certain exceptions.

L-3 Communications Corporation's obligations under the senior credit facilities are secured by:

	•	a pledge by L-3 Communications Holdings of the stock of L-3 Communications Corporation; and

	•	a pledge by L-3 Communications Corporation and substantially all of its material direct and indirect subsidiaries of all of the stock of their respective material domestic subsidiaries and 65% of the stock of their material first-tier foreign subsidiaries.

In addition, indebtedness under the senior credit facilities is guaranteed by L-3 Communications Holdings and by substantially all of L-3 Communications Corporation's direct and indirect material domestic subsidiaries.

The senior credit facilities contain customary covenants and restrictions on L-3 Communications Corporation's ability to engage in certain activities. In addition, the senior credit facilities provide that L-3 Communications Corporation must meet or exceed an interest coverage ratio and must not exceed the Debt Ratio or a specified senior debt ratio. The senior debt ratio is defined as the ratio of Consolidated Total Debt other than subordinated debt to Consolidated EBITDA. The senior credit facilities also include customary events of default.

Under the senior credit facilities, each of the following items constitutes an event of default:

	•	L-3 Communications Corporation fails to pay principal or amounts drawn under letters of credit when due;

	•	L-3 Communications Corporation fails to pay interest within five days after that amount becomes due;

	•	any representation or warranty made is incorrect in any material respect;

	•	L-3 Communications Corporation does not comply with its financial and other covenants (and, for some of other covenants, the default continues for 30 days);

	•	L-3 Communications Corporation or any of its subsidiaries defaults under any indebtedness, guarantee obligation or interest rate hedging agreement in the aggregate amount of at least $15.0 million for more than 10 days and that default is a payment default or would enable the holder of the obligation to accelerate the obligation;

	•	certain events of bankruptcy, insolvency or reorganization occur with respect to L-3 Communications Corporation or any of its subsidiaries;

	•	certain events occur with respect to any employee benefit plan of L-3 Communications Corporation or its affiliates covered by ERISA that would have a material adverse effect;

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	•	L-3 Communications Holdings, L-3 Communications Corporation or any of the subsidiaries of L-3 Communications Corporation fails to pay judgments aggregating in excess of $15.0 million, which judgments are not paid, covered by insurance, discharged or stayed for a period of 60 days;

	•	any of the pledge agreements ceases to be in full force and effect or L-3 Communications Corporation or any party to any pledge agreement so asserts, or the lien under any of the pledge agreements ceases to be an enforceable first priority lien (subject to a grace period in certain cases);

	•	the guarantees of the senior credit facilities are held to be enforceable or invalid or cease to be in full force and effect, or any guarantor denies its obligations under its guarantee; and

	•	a change of control.

If an event of default occurs involving certain events of bankruptcy, insolvency or reorganization of L-3 Communications Corporation, the commitments under the senior credit facilities will automatically terminate and the loans, including accrued interest, and all other amounts owed under the agreements will become immediately due and payable. If any other event of default occurs, then lenders holding the majority in aggregate principal amount of the loans under any senior credit facility may declare the commitments under that facility to be terminated and the loans, including accrued interest, and all other amounts owed under that facility to be immediately due and payable. Upon any acceleration, L-3 Communications Corporation must cash collateralize any undrawn letters of credit under the senior credit facilities.

7 5/8% Senior Subordinated Notes due 2012

L-3 Communications Corporation has outstanding $750.0 million in aggregate principal amount of 7 5/8% Senior Subordinated Notes due 2012 (the "2002 Notes"). The 2002 Notes are subject to the terms and conditions of an Indenture dated as of June 28, 2002, among L-3 Communications Corporation, the guarantors named therein and in supplements thereto and The Bank of New York as trustee (the "2002 Indenture"). The following summary of the material provisions of the 2002 Indenture does not purport to be complete, and is subject to and qualified in its entirety by reference to, all of the provisions of the 2002 Indenture and those terms made a part of the 2002 Indenture by the Trust Indenture Act of 1939, as amended. All terms defined in the 2002 Indenture and not otherwise defined herein are used below with the meanings set forth in the 2002 Indenture.

General

The 2002 Notes will mature on June 15, 2012 and bear interest at 7 5/8% per annum, payable semi-annually on December 15 and June 15 of each year. The 2002 Notes are general unsecured obligations of L-3 Communications Corporation and are subordinated in right of payment to all existing and future senior debt of L-3 Communications Corporation and rank pari passu with the May 2003 Notes, the December 2003 Notes and the outstanding notes and the exchange notes. The 2002 Notes are unconditionally guaranteed, on an unsecured senior subordinated basis, jointly and severally by all of L-3 Communications Corporation's restricted subsidiaries other than its foreign subsidiaries. These guarantees are pari passu with the guarantees of the outstanding notes and the exchange notes, the December 2003 Notes and the May 2003 Notes.

Optional Redemption

The 2002 Notes are subject to redemption at any time, at the option of L-3 Communications Corporation, in whole or in part, on or after June 15, 2007 at redemption prices (plus accrued and unpaid interest) starting at 103.813% of principal (plus accrued and unpaid interest) during the 12-month period beginning June 15, 2007 and declining annually to 100% of principal (plus accrued and unpaid interest) on June 15, 2010 and thereafter.

Before June 15, 2005, L-3 Communications Corporation may on any one or more occasions redeem up to an aggregate of 35% of the 2002 Notes originally issued at a redemption price of

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107.625% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of certain equity offerings by L-3 Communications Corporation or the net cash proceeds of certain equity offerings by L-3 Communications Holdings that are contributed to L-3 Communications Corporation as common equity capital; provided that at least 65% of the 2002 Notes originally issued remain outstanding immediately after the occurrence of each such redemption; and provided, further, that any such redemption must occur within 120 days of the date of the closing of such equity offering.

Change of Control

Upon the occurrence of a change of control, each holder of the 2002 Notes may require L-3 Communications Corporation to repurchase all or a portion of such holder's 2002 Notes at a purchase price equal to 101% of the principal amount (plus accrued and unpaid interest and liquidated damages, if any). Generally, a change of control means the occurrence of any of the following:

• the disposition of all or substantially all of L-3 Communications Corporation's assets to any person;

• the adoption of a plan relating to the liquidation or dissolution of L-3 Communications Corporation;

• the consummation of any transaction in which a person other than the principals and their related parties becomes the beneficial owner of more than 50% of the voting stock of L-3 Communications Corporation; or

• the first day on which a majority of the members of the Board of Directors of L-3 Communications Corporation are not continuing directors.

Subordination

The 2002 Notes are general unsecured obligations of L-3 Communications Corporation and are subordinate to all existing and future senior debt of L-3 Communications Corporation. The 2002 Notes rank senior in right of payment to all subordinated indebtedness of L-3 Communications Corporation. The guarantees of L-3 Communications Corporation's subsidiaries under the 2002 Notes are general unsecured obligations of the guarantors and are subordinated to the senior debt and to the guarantees of senior debt of those guarantors. These guarantees under the 2002 Notes rank senior in right of payment to all subordinated Indebtedness of those guarantors.

Antilayering Provision

The 2002 Indenture provides that (i) L-3 Communications Corporation will not incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness that is subordinate or junior in right of payment to any senior debt and senior in any respect in right of payment to the 2002 Notes, and (ii) no guarantor of the 2002 Notes will incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness that is subordinate or junior in right of payment to any senior debt of a guarantor and senior in any respect in right of payment to any of the subsidiary guarantees of the 2002 Notes.

Certain Covenants

The 2002 Indenture contains a number of covenants restricting the operations of L-3 Communications Corporation, limiting the ability of L-3 Communications Corporation to incur additional Indebtedness, pay dividends or make distributions, sell assets, issue subsidiary stock, restrict distributions from subsidiaries, create certain liens, enter into certain consolidations or mergers and enter into certain transactions with affiliates.

In the event that the 2002 Notes are assigned a rating of Baa3 or better by Moody's and BBB- or better by S&P and no event of default has occurred and is continuing, certain covenants in the 2002 Indenture will be suspended. If the ratings should subsequently decline to below Baa3 or BBB-, the suspended covenants will be reinstituted.

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Events of Default

Events of Default under the 2002 Indenture include the following:

• a default for 30 days in the payment when due of interest on, or liquidated damages with respect to the 2002 Notes;

• default in payment when due of the principal of or premium, if any, on the 2002 Notes;

• failure by L-3 Communications Corporation to comply with certain provision of the 2002 Indenture (subject, in some but not all cases, to notice and cure periods);

• default under indebtedness for money borrowed by L-3 Communications Corporation or any of its restricted subsidiaries in excess of $25.0 million, which default results in the acceleration of such indebtedness prior to its express maturity;

• failure by L-3 Communications Corporation or any restricted subsidiary that would be a significant subsidiary to pay final judgments aggregating in excess of $25.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;

• except as permitted by the 2002 Indenture, any guarantee under the 2002 Notes shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any guarantor, or any person acting on behalf of any guarantor under the 2002 Notes, shall deny or disaffirm its obligations under its guarantee; or

• certain events of bankruptcy or insolvency with respect to L-3 Communications Corporation or any of its significant subsidiaries or any group of subsidiaries that, taken as a whole, would constitute a significant subsidiary.

Upon the occurrence of an Event of Default, with certain exceptions, the Trustee or the holders of at least 25% in principal amount of the then outstanding 2002 Notes may accelerate the maturity of all the 2002 Notes as provided in the 2002 Indenture.

6 1/8% Senior Subordinated Notes due 2013

L-3 Communications Corporation has outstanding $400.0 million in aggregate principal amount of 6 1/8% Senior Subordinated Notes due 2013 (the "May 2003 Notes"). The May 2003 Notes are subject to the terms and conditions of an Indenture dated as of May 21, 2003, among L-3 Communications Corporation, the guarantors named therein and in supplements thereto and The Bank of New York as trustee (the "May 2003 Indenture"). The following summary of the material provisions of the May 2003 Indenture does not purport to be complete, and is subject to and qualified in its entirety by reference to, all of the provisions of the May 2003 Indenture and those terms made a part of the May 2003 Indenture by the Trust Indenture Act of 1939, as amended. All terms defined in the May 2003 Indenture and not otherwise defined herein are used below with the meanings set forth in the May 2003 Indenture.

General

The May 2003 Notes will mature on July 15, 2013 and bear interest at 6 1/8% per annum, payable semi-annually on July 15 and January 15 of each year. The May 2003 Notes are general unsecured obligations of L-3 Communications Corporation and are subordinated in right of payment to all existing and future senior debt of L-3 Communications Corporation and rank pari passu with the 2002 Notes, the December 2003 Notes and the outstanding notes and the exchange notes. The May 2003 Notes are unconditionally guaranteed, on an unsecured senior subordinated basis, jointly and severally by all of L-3 Communications Corporation's restricted subsidiaries other than its foreign subsidiaries. These guarantees are pari passu with the guarantees of the outstanding notes and the exchange notes, the 2002 Notes and the December 2003 Notes.

Optional Redemption

The May 2003 Notes are subject to redemption at any time, at the option of L-3 Communications Corporation, in whole or in part, on or after July 15, 2008 at redemption prices (plus accrued and

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unpaid interest) starting at 103.063% of principal (plus accrued and unpaid interest) during the 12-month period beginning July 15, 2008 and declining annually to 100% of principal (plus accrued and unpaid interest) on July 15, 2011 and thereafter.

Before July 15, 2006, L-3 Communications Corporation may on any one or more occasions redeem up to an aggregate of 35% of the May 2003 Notes originally issued at a redemption price of 106.125% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of certain equity offerings by L-3 Communications Corporation or the net cash proceeds of certain equity offerings by L-3 Communications Holdings that are contributed to L-3 Communications Corporation as common equity capital; provided that at least 65% of the May 2003 Notes originally issued remain outstanding immediately after the occurrence of each such redemption; and provided, further, that any such redemption must occur within 120 days of the date of the closing of such equity offering.

Change of Control

Upon the occurrence of a change of control, each holder of the May 2003 Notes may require L-3 Communications Corporation to repurchase all or a portion of such holder's May 2003 Notes at a purchase price equal to 101% of the principal amount (plus accrued and unpaid interest and liquidated damages, if any). Generally, a change of control means the occurrence of any of the following:

• the disposition of all or substantially all of L-3 Communications Corporation's assets to any person;

• the adoption of a plan relating to the liquidation or dissolution of L-3 Communications Corporation;

• the consummation of any transaction in which a person other than the principals and their related parties becomes the beneficial owner of more than 50% of the voting stock of L-3 Communications Corporation; or

• the first day on which a majority of the members of the Board of Directors of L-3 Communications Corporation are not continuing directors.

Subordination

The May 2003 Notes are general unsecured obligations of L-3 Communications Corporation and are subordinate to all existing and future senior debt of L-3 Communications Corporation. The May 2003 Notes rank senior in right of payment to all subordinated indebtedness of L-3 Communications Corporation. The guarantees of L-3 Communications Corporation's subsidiaries under the May 2003 Notes are general unsecured obligations of the guarantors and are subordinated to the senior debt and to the guarantees of senior debt of those guarantors. These guarantees under the May 2003 Notes rank senior in right of payment to all subordinated Indebtedness of those guarantors.

Antilayering Provision

The May 2003 Indenture provides that (i) L-3 Communications Corporation will not incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness that is subordinate or junior in right of payment to any senior debt and senior in any respect in right of payment to the May 2003 Notes, and (ii) no guarantor of the May 2003 Notes will incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness that is subordinate or junior in right of payment to any senior debt of a guarantor and senior in any respect in right of payment to any of the subsidiary guarantees of the May 2003 Notes.

Certain Covenants

The May 2003 Indenture contains a number of covenants restricting the operations of L-3 Communications Corporation, limiting the ability of L-3 Communications Corporation to incur additional Indebtedness, pay dividends or make distributions, sell assets, issue subsidiary stock, restrict distributions from subsidiaries, create certain liens, enter into certain consolidations or mergers and enter into certain transactions with affiliates.

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In the event that the May 2003 Notes are assigned a rating of Baa3 or better by Moody's and BBB- or better by S&P and no event of default has occurred and is continuing, certain covenants in the 2002 Indenture will be suspended. If the ratings should subsequently decline to below Baa3 or BBB-, the suspended covenants will be reinstituted.

Events of Default

Events of Default under the May 2003 Indenture include the following:

• a default for 30 days in the payment when due of interest on, or liquidated damages with respect to the May 2003 Notes;

• default in payment when due of the principal of or premium, if any, on the May 2003 Notes;

• failure by L-3 Communications Corporation to comply with certain provision of the 2002 Indenture (subject, in some but not all cases, to notice and cure periods);

• default under indebtedness for money borrowed by L-3 Communications Corporation or any of its restricted subsidiaries in excess of $25.0 million, which default results in the acceleration of such indebtedness prior to its express maturity;

• failure by L-3 Communications Corporation or any restricted subsidiary that would be a significant subsidiary to pay final judgments aggregating in excess of $25.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;

• except as permitted by the May 2003 Indenture, any guarantee under the May 2003 Notes shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any guarantor, or any person acting on behalf of any guarantor under the May 2003 Notes, shall deny or disaffirm its obligations under its guarantee; or

• certain events of bankruptcy or insolvency with respect to L-3 Communications Corporation or any of its significant subsidiaries or any group of subsidiaries that, taken as a whole, would constitute a significant subsidiary.

Upon the occurrence of an Event of Default, with certain exceptions, the Trustee or the holders of at least 25% in principal amount of the then outstanding May 2003 Notes may accelerate the maturity of all the May 2003 Notes as provided in the May 2003 Indenture.

6 1/8% Senior Subordinated Notes due 2014

L-3 Communications Corporation has outstanding $400.0 million in aggregate principal amount of 6 1/8% Senior Subordinated Notes due 2014 (the "December 2003 Notes"). The December 2003 Notes are subject to the terms and conditions of an Indenture dated as of December 22, 2003, among L-3 Communications Corporation, the guarantors named therein and in supplements thereto and The Bank of New York as trustee (the "December 2003 Indenture"). The following summary of the material provisions of the December 2003 Indenture does not purport to be complete, and is subject to and qualified in its entirety by reference to, all of the provisions of the December 2003 Indenture and those terms made a part of the December 2003 Indenture by the Trust Indenture Act of 1939, as amended. All terms defined in the December 2003 Indenture and not otherwise defined herein are used below with the meanings set forth in the December 2003 Indenture.

General

The December 2003 Notes will mature on January 15, 2014 and bear interest at 6 1/8% per annum, payable semi-annually on July 15 and January 15 of each year. The December 2003 Notes are general unsecured obligations of L-3 Communications Corporation and are subordinated in right of payment to all existing and future senior debt of L-3 Communications Corporation and rank pari passu with the 2002 Notes, the May 2003 Notes and the outstanding notes and the exchange notes. The December 2003 Notes are unconditionally guaranteed, on an unsecured senior subordinated basis, jointly and severally by all of L-3 Communications Corporation's restricted subsidiaries other than its foreign subsidiaries. These guarantees are pari passu with the guarantees of the outstanding notes and the exchange notes, the 2002 Notes and the May 2003 Notes.

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Optional Redemption

The December 2003 Notes are subject to redemption at any time, at the option of L-3 Communications Corporation, in whole or in part, on or after January 15, 2009 at redemption prices (plus accrued and unpaid interest) starting at 103.063% of principal (plus accrued and unpaid interest) during the 12-month period beginning January 15, 2009 and declining annually to 100% of principal (plus accrued and unpaid interest) on January 15, 2012 and thereafter.

Before January 15, 2007, L-3 Communications Corporation may on any one or more occasions redeem up to an aggregate of 35% of the December 2003 Notes originally issued at a redemption price of 106.125% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of certain equity offerings by L-3 Communications Corporation or the net cash proceeds of certain equity offerings by L-3 Communications Holdings that are contributed to L-3 Communications Corporation as common equity capital; provided that at least 65% of the December 2003 Notes originally issued remain outstanding immediately after the occurrence of each such redemption; and provided, further, that any such redemption must occur within 120 days of the date of the closing of such equity offering.

Change of Control

Upon the occurrence of a change of control, each holder of the December 2003 Notes may require L-3 Communications Corporation to repurchase all or a portion of such holder's December 2003 Notes at a purchase price equal to 101% of the principal amount (plus accrued and unpaid interest and liquidated damages, if any). Generally, a change of control means the occurrence of any of the following:

• the disposition of all or substantially all of L-3 Communications Corporation's assets to any person;

• the adoption of a plan relating to the liquidation or dissolution of L-3 Communications Corporation;

• the consummation of any transaction in which a person other than the principals and their related parties becomes the beneficial owner of more than 50% of the voting stock of L-3 Communications Corporation; or

• the first day on which a majority of the members of the Board of Directors of L-3 Communications Corporation are not continuing directors.

Subordination

The December 2003 Notes are general unsecured obligations of L-3 Communications Corporation and are subordinate to all existing and future senior debt of L-3 Communications Corporation. The December 2003 Notes rank senior in right of payment to all subordinated indebtedness of L-3 Communications Corporation. The guarantees of L-3 Communications Corporation's subsidiaries under the December 2003 Notes are general unsecured obligations of the guarantors and are subordinated to the senior debt and to the guarantees of senior debt of those guarantors. These guarantees under the December 2003 Notes rank senior in right of payment to all subordinated Indebtedness of those guarantors.

Antilayering Provision

The December 2003 Indenture provides that (i) L-3 Communications Corporation will not incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness that is subordinate or junior in right of payment to any senior debt and senior in any respect in right of payment to the December 2003 Notes, and (ii) no guarantor of the December 2003 Notes will incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness that is subordinate or junior in right of payment to any senior debt of a guarantor and senior in any respect in right of payment to any of the subsidiary guarantees of the December 2003 Notes.

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Certain Covenants

The December 2003 Indenture contains a number of covenants restricting the operations of L-3 Communications Corporation, limiting the ability of L-3 Communications Corporation to incur additional Indebtedness, pay dividends or make distributions, sell assets, issue subsidiary stock, restrict distributions from subsidiaries, create certain liens, enter into certain consolidations or mergers and enter into certain transactions with affiliates.

In the event that the December 2003 Notes are assigned a rating of Baa3 or better by Moody's and BBB- or better by S&P and no event of default has occurred and is continuing, certain covenants in the 2002 Indenture will be suspended. If the ratings should subsequently decline to below Baa3 or BBB-, the suspended covenants will be reinstituted.

Events of Default

Events of Default under the December 2003 Indenture include the following:

• a default for 30 days in the payment when due of interest on, or liquidated damages with respect to the December 2003 Notes;

• default in payment when due of the principal of or premium, if any, on the December 2003 Notes;

• failure by L-3 Communications Corporation to comply with certain provision of the 2002 Indenture (subject, in some but not all cases, to notice and cure periods);

• default under indebtedness for money borrowed by L-3 Communications Corporation or any of its restricted subsidiaries in excess of $25.0 million, which default results in the acceleration of such indebtedness prior to its express maturity;

• failure by L-3 Communications Corporation or any restricted subsidiary that would be a significant subsidiary to pay final judgments aggregating in excess of $25.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;

• except as permitted by the December 2003 Indenture, any guarantee under the December 2003 Notes shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any guarantor, or any person acting on behalf of any guarantor under the December 2003 Notes, shall deny or disaffirm its obligations under its guarantee; or

• certain events of bankruptcy or insolvency with respect to L-3 Communications Corporation or any of its significant subsidiaries or any group of subsidiaries that, taken as a whole, would constitute a significant subsidiary.

Upon the occurrence of an Event of Default, with certain exceptions, the Trustee or the holders of at least 25% in principal amount of the then outstanding December 2003 Notes may accelerate the maturity of all the December 2003 Notes as provided in the December 2003 Indenture.

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THE EXCHANGE OFFER

General

L-3 hereby offers, upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal (which together constitute the exchange offer), to exchange up to $650.0 million aggregate principal amount of our 5 7/8% Senior Subordinated Notes due 2015, which we refer to in this prospectus as the outstanding notes, for a like aggregate principal amount of our 5 7/8% Series B Senior Subordinated Notes due 2015, which we refer to in this prospectus as the exchange notes, properly tendered on or prior to the expiration date and not withdrawn as permitted pursuant to the procedures described below. The exchange offer is being made with respect to all of the outstanding notes.

As of the date of this prospectus, $650.0 million aggregate principal amount of the outstanding notes is outstanding. This prospectus, together with the letter of transmittal, is first being sent on or about                 , 2005, to all holders of outstanding notes known to L-3. L-3's obligation to accept outstanding notes for exchange pursuant to the exchange offer is subject to certain conditions set forth under "Certain Conditions to the Exchange Offer" below. L-3 currently expects that each of the conditions will be satisfied and that no waivers will be necessary.

Purpose and Effect of the Exchange Offer

We have entered into a registration rights agreement with the initial purchasers of the outstanding notes in which we agreed, under some circumstances, to file a registration statement relating to an offer to exchange the outstanding notes for exchange notes. We also agreed to use all commercially reasonable efforts to cause the exchange offer registration statement to become effective under the Securities Act as promptly as practicable, but in no event later than 180 days after the closing date and to keep the exchange offer open for a period of not less than 20 business days. The exchange notes will have terms substantially identical to the outstanding notes, except that the exchange notes will not contain terms with respect to transfer restrictions, registration rights and additional interest for failure to observe certain obligations in the registration rights agreement. The outstanding notes were issued on November 12, 2004.

Under certain circumstances set forth in the registration rights agreement, we will use all commercially reasonable efforts to cause the SEC to declare effective a shelf registration statement with respect to the resale of the outstanding notes and keep the statement, effective for up to two years after the closing date.

If we fail to comply with certain obligations under the registration rights agreement, we will be required to pay additional interest to holders of the outstanding notes.

Each holder of outstanding notes that wishes to exchange outstanding notes for transferable exchange notes in the exchange offer will be required to make the following representations:

• any exchange notes will be acquired in the ordinary course of its business;

• the holder will have no arrangements or understanding with any person to participate in the distribution of the outstanding notes or the exchange notes within the meaning of the Securities Act;

• the holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of L-3 or if it is an affiliate, that it will comply with applicable registration and prospectus delivery requirements of the Securities Act to the extent applicable;

• if the holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the exchange notes; and

• if the holder is a broker-dealer, that it will receive exchange notes for its own account in exchange for outstanding notes that were acquired as a result of market-making activities or

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other trading activities and that it will be required to acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. See "Plan of Distribution."

Resale of Exchange Notes

Based on interpretations of the SEC staff set forth in no action letters issued to unrelated third parties, we believe that exchange notes issued under the exchange offer in exchange for outstanding notes may be offered for resale, resold and otherwise transferred by any exchange note holder without compliance with the registration and prospectus delivery provisions of the Securities Act, if:

• the holder is not an "affiliate" of ours within the meaning of Rule 405 under the Securities Act;

• the exchange notes are acquired in the ordinary course of the holder's business; and

• the holder does not intend to participate in the distribution of the exchange notes.

Any holder who tenders in the exchange offer with the intention of participating in any manner in a distribution of the exchange notes:

• cannot rely on the position of the staff of the SEC enunciated in Exxon Capital Holdings Corporation or similar interpretive letters; and

• must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.

This prospectus may be used for an offer to resell, for the resale or for other retransfer of exchange notes only as specifically set forth in this prospectus. With regard to broker-dealers, only broker-dealers that acquired the outstanding notes as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where the outstanding notes were acquired by the broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. Please read the section captioned "Plan of Distribution" for more details regarding the transfer of exchange notes.

Terms of the Exchange Offer

Upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal, we will accept for exchange any outstanding notes properly tendered and not withdrawn prior to the expiration date. We will issue $1,000 principal amount of exchange notes in exchange for each $1,000 principal amount of outstanding notes surrendered under the exchange offer. Outstanding notes may be tendered only in integral multiples of $1,000.

The form and terms of the exchange notes will be substantially identical to the form and terms of the outstanding notes except the exchange notes will be registered under the Securities Act, will not bear legends restricting their transfer and will not provide for any additional amounts upon our failure to fulfill our obligations under the registration rights agreement to file, and cause to be effective, a registration statement. The exchange notes will evidence the same debt as the outstanding notes. The exchange notes will be issued under and entitled to the benefits of the same indenture that authorized the issuance of the outstanding notes.

The exchange offer is not conditioned upon any minimum aggregate principal amount of outstanding notes being tendered for exchange.

As of the date of this prospectus, $650.0 million aggregate principal amount of the outstanding notes are outstanding. This prospectus and a letter of transmittal are being sent to all registered holders of outstanding notes. There will be no fixed record date for determining registered holders of outstanding notes entitled to participate in the exchange offer.

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We intend to conduct the exchange offer in accordance with the provisions of the exchange offer and registration rights agreement, the applicable requirements of the Securities Act and the Securities Exchange Act of 1934 and the rules and regulations of the SEC. Outstanding notes that are not tendered for exchange in the exchange offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits the holders have under the indenture relating to the outstanding notes, except for any rights under the exchange offer and registration rights agreement that by their terms terminate upon the consummation of the exchange offer.

We will be deemed to have accepted for exchange properly tendered outstanding notes when we have given oral or written notice of the acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders for the purposes of receiving the exchange notes from us and delivering exchange notes to the holders. Under the terms of the exchange offer and registration rights agreement, we reserve the right to amend or terminate the exchange offer, and not to accept for exchange any outstanding notes not previously accepted for exchange, upon the occurrence of any of the conditions specified below under the caption "—Certain Conditions to the Exchange Offer."

Holders who tender outstanding notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of outstanding notes. We will pay all charges and expenses, other than certain applicable taxes described below, in connection with the exchange offer. It is important that you read the section labeled "—Fees and Expenses" below for more details regarding fees and expenses incurred in the exchange offer.

Expiration Date; Extensions; Amendments

The exchange offer will expire at 5:00 p.m., New York City time on                 , 2005, unless in our sole discretion we extend it.

In order to extend the exchange offer, we will notify the exchange agent orally or in writing of any extension. We will notify the registered holders of outstanding notes of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date.

We reserve the right, in our sole discretion:

• to delay accepting for exchange any outstanding notes;

• to extend the exchange offer or to terminate the exchange offer and to refuse to accept outstanding notes not previously accepted if any of the conditions set forth below under "—Certain Conditions to the Exchange Offer" have not been satisfied, by giving oral or written notice of the delay, extension or termination to the exchange agent; or

• under the terms of the exchange offer and registration rights agreement, to amend the terms of the exchange offer in any manner.

Any delay in acceptance, extension, termination, or amendment will be followed as promptly as practicable by oral or written notice to the registered holders of outstanding notes. If we amend the exchange offer in a manner that we determine constitutes a material change, we will promptly disclose the amendment in a manner reasonably calculated to inform the holder of outstanding notes of the amendment.

Without limiting the manner in which we may choose to make public announcements of any delay in acceptance, extension, termination or amendment of the exchange offer, we will have no obligation to publish, advertise, or otherwise communicate any public announcement, other than by making a timely release to a financial news service.

Certain Conditions to the Exchange Offer

Despite any other term of the exchange offer, we will not be required to accept for exchange, or exchange any exchange notes for, any outstanding notes, and we may terminate the exchange offer as provided in this prospectus before accepting any outstanding notes for exchange if in our reasonable judgment:

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• the exchange notes to be received will not be tradable by the holder. without restriction under the Securities Act, the Securities Exchange Act and without material restrictions under the blue sky or securities laws of substantially all of the states of the United States;

• the exchange offer, or the making of any exchange by a holder of outstanding notes, would violate applicable law or any applicable interpretation of the staff of the SEC: or

• any action or proceeding has been instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer that, in our judgment, would reasonably be expected to impair our ability to proceed with the exchange offer.

In addition, we will not be obligated to accept for exchange the outstanding notes of any holder that has not made to us:

• the representations described under "—Purpose and Effect of the Exchange Offer," "—Procedures for Tendering" and "Plan of Distribution"; and

• such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to make available to it an appropriate form for registration of the exchange notes under the Securities Act.

We expressly reserve the right, at any time or at various times, to extend the period of time during which the exchange offer is open. Consequently, we may delay acceptance of any outstanding notes by giving oral or written notice of the extension to their holders. During any such extensions, all notes previously tendered will remain subject to the exchange offer, and we may accept them for exchange. We will return any outstanding notes that we do not accept for exchange for any reason without expense to their tendering holder as promptly as practicable after the expiration or termination of the exchange offer.

We expressly reserve the right to amend or terminate the exchange offer, and to reject for exchange any outstanding notes not previously accepted for exchange, upon the occurrence of any of the conditions of the exchange offer specified above. We will give oral or written notice of any extension, amendment, nonacceptance, or termination to the holders of the outstanding notes as promptly as practicable.

These conditions are for our sole benefit and we may assert them regardless of the circumstances that may give rise to them or waive them in whole or in part at any or at various times in our sole discretion. If we fail at any time to exercise any of the foregoing rights, this failure will not constitute a waiver of this right. Each right will be deemed an ongoing right that we may assert at any time or at various times.

In addition, we will not accept for exchange any outstanding notes tendered, and will not issue exchange notes in exchange for any outstanding notes, if at the time any stop order will be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act.

Procedures for Tendering

Only a holder of outstanding notes may tender the outstanding notes in the exchange offer. To tender in the exchange offer, a holder must:

• complete, sign and date the accompanying letter of transmittal, or a facsimile of the letter of transmittal; have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires; and mail or deliver the letter of transmittal or facsimile to the exchange agent prior to the expiration date; or

• comply with DTC's Automated Tender Offer Program procedures described below.

In addition, either:

• the exchange agent must receive the outstanding notes along with the accompanying letter of transmittal; or

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• the exchange agent must receive, prior to the expiration date, a timely confirmation of book-entry transfer of the outstanding notes into the exchange agent's account at DTC according to the procedures for book-entry transfer described below or a properly transmitted agent's message; or

• the holder must comply with the guaranteed delivery procedures described below.

To be tendered effectively, the exchange agent must receive any physical delivery of a letter of transmittal and other required documents at the address set forth below under "— Exchange Agent" prior to the expiration date.

The tender by a holder that is not withdrawn prior to the expiration date will constitute an agreement between the holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal.

The method of delivery of outstanding notes, the letter of transmittal and all other required documents to the exchange agent is at the holder's election and risk. Rather than mail these items, we recommend that holders use an overnight or hand delivery service. In all cases, holders should allow sufficient time to assure delivery to the exchange agent before the expiration date. Holders should not send the letter of transmittal or outstanding notes to us. Holders may request their respective brokers, dealers, commercial banks, trust companies or other nominees to effect the above transactions for them.

Any beneficial owner whose outstanding notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct it to tender on the owners behalf. If the beneficial owner wishes to tender on its own behalf, it must, prior to completing and executing the accompanying letter of transmittal and delivering its outstanding notes either:

• make appropriate arrangements to register ownership of the outstanding notes in such owner's name; or

• obtain a properly completed bond power from the registered holder of outstanding notes.

The transfer of registered ownership may take considerable time and may not be completed prior to the expiration date.

Signatures on a letter of transmittal or a notice of withdrawal described below must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or another "eligible institution" within the meaning of Rule 17Ad-15 under the Exchange Act, unless the outstanding notes are tendered:

• by a registered holder who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the accompanying letter of transmittal; or

• for the account of an eligible institution.

If the accompanying letter of transmittal is signed by a person other than the registered holder of any outstanding notes listed on the outstanding notes, the outstanding notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holder's name appears on the outstanding notes and an eligible institution must guarantee the signature on the bond power.

If the accompanying letter of transmittal or any outstanding notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, these persons should so indicate when signing. Unless waived by us, they should also submit evidence satisfactory to us of their authority to deliver the accompanying letter of transmittal.

The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC's system may use DTC's Automated Tender Offer Program to tender. Participants in the

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program may. instead of physically completing and signing the accompanying letter of transmittal and delivering it to the exchange agent, transmit their acceptance of the exchange offer electronically. They may do so by causing DTC to transfer the outstanding notes to the exchange agent in accordance with its procedures for transfer. DTC will then send an agent's message to the exchange agent. The term "agent's message" means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, to the effect that:

• DTC has received an express acknowledgment from a participant in its Automated Tender Offer Program that is tendering outstanding notes that are the subject of the book-entry confirmation;

• the participant has received and agrees to be bound by the terms of the accompanying letter of transmittal, or, in the case of an agent's message relating to guaranteed delivery, that the participant has received and agrees to be bound by the applicable notice of guaranteed delivery; and

• the agreement may be enforced against that participant.

We will determine in our sole discretion all outstanding questions as to the validity, form, eligibility, including time or receipt, acceptance of tendered outstanding notes and withdrawal of tendered outstanding notes. Our determination will be final and binding. We reserve the absolute right to reject any outstanding notes not properly tendered or any outstanding notes the acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular outstanding notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the accompanying letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of outstanding notes must be cured within such time as we will determine. Although we intend to notify holders of defects or irregularities with respect to tenders of outstanding notes, neither we, the exchange agent, nor any other person will incur any liability for failure to give the notification. Tenders of outstanding notes will not be deemed made until any defects or irregularities have been cured or waived. Any outstanding notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the exchange agent without cost to the tendering holder, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date.

In all cases, we will issue exchange notes for outstanding notes that we have accepted for exchange under the exchange offer only after the exchange agent timely receives:

• outstanding notes or a timely book-entry confirmation of the outstanding notes into the exchange agent's account at DTC; and

• a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent's message.

By signing the accompanying letter of transmittal or authorizing the transmission of the agent's message, each tendering holder of outstanding notes will represent or be deemed to have represented to us that, among other things:

• any exchange notes that the holder receives will be acquired in the ordinary course of its business;

• the holder has no arrangement or understanding with any person or entity to participate in the distribution of the exchange notes;

• if the holder is not a broker-dealer, that it is not engaged in and does not intend to engage in the distribution of the exchange notes;

• if the holder is a broker-dealer that will receive exchange notes for its own account in exchange for outstanding notes that were acquired as a result of market-making activities or other trading activities. that it will deliver a prospectus, as required by law, in connection with any resale of any exchange notes. See "Plan of Distribution"; and

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• the holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of ours or, if the holder is an affiliate, it will comply with any applicable registration and prospectus delivery requirements of the Securities Act.

Book-Entry Transfer

The exchange agent will make a request to establish an account with respect to the outstanding notes at DTC for purposes of the exchange offer promptly after the date of this prospectus. Any financial institution participating in DTC's system may make book-entry delivery of outstanding notes by causing DTC to transfer the outstanding notes into the exchange agent's account at DTC in accordance with DTC's procedures for transfer. Holders of outstanding notes who are unable to deliver confirmation of the book-entry tender of their outstanding notes into the exchange agent's account at DTC or all other documents required by the letter of transmittal to the exchange agent on or prior to the expiration date must tender their outstanding notes according to the guaranteed delivery procedures described below.

Guaranteed Delivery Procedures

Holders wishing to tender their outstanding notes but whose outstanding notes are not immediately available or who cannot deliver their outstanding notes, the accompanying letter of transmittal or any other available required documents to the exchange agent or comply with the applicable procedures under DTC's Automated Tender Offer Program prior to the expiration date may tender if:

• the tender is made through an eligible institution;

• prior to the expiration date, the exchange agent receives from the eligible institution either a properly completed and duly executed notice of guaranteed delivery, by facsimile transmission, mail or hand delivery, or a properly transmitted agent's message and notice of guaranteed delivery:

• setting forth the name and address of the holder, the registered number(s) of the outstanding notes and the principal amount of outstanding notes tendered:

• stating that the tender is being made thereby; and

• guaranteeing that, within three New York Stock Exchange trading days after the expiration date, the accompanying letter of transmittal, or facsimile thereof, together with the outstanding notes or a book-entry confirmation, and any other documents required by the accompanying letter of transmittal will be deposited by the eligible institution with the exchange agent; and

• the exchange agent receives the properly completed and executed letter of transmittal, or facsimile thereof, as well as all tendered outstanding notes in proper form for transfer or a book-entry confirmation. and all other documents required by the accompanying letter of transmittal, within three New York Stock Exchange trading days after the expiration date.

Upon request to the exchange agent, a notice of guaranteed delivery will be sent to holders who wish to tender their outstanding notes according to the guaranteed delivery procedures set forth above.

Withdrawal of Tenders

Except as otherwise provided in this prospectus, holders of outstanding notes may withdraw their tenders at any time prior to the expiration date.

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For a withdrawal to be effective:

• the exchange agent must receive a written notice of withdrawal, which notice may be by telegram, telex, facsimile transmission or letter of withdrawal at one of the addresses set forth below under "— Exchange Agent", or

• holders must comply with the appropriate procedures of DTC's Automated Tender Offer Program system.

Any notice of withdrawal must:

• specify the name of the person who tendered the outstanding notes to be withdrawn;

• identify the outstanding notes to be withdrawn, including the principal amount of the outstanding notes; and

• where certificates for outstanding notes have been transmitted, specify the name in which the outstanding notes were registered, if different from that of the withdrawing holder.

If certificates for outstanding notes have been delivered or otherwise identified to the exchange agent, then, prior to the release of the certificates, the withdrawing holder must also submit:

• the serial numbers of the particular certificates to be withdrawn; and

• a signed notice of withdrawal with signatures guaranteed by an eligible institution unless the holder is an eligible institution.

If outstanding notes have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn outstanding notes and otherwise comply with the procedures of that facility. We will determine all questions as to the validity, form and eligibility, including time of receipt, of the notices, and our determination will be final and binding on all parties. We will deem any outstanding notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer. Any outstanding notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder without cost to the holder, or, in the case of outstanding notes tendered by book-entry transfer into the exchange agent's account at DTC according to the procedures described above, the outstanding notes will be credited to an account maintained with DTC for outstanding notes, as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn, outstanding notes may be retendered by following one of the procedures described under "— Procedures for Tendering" above at any time on or prior to the expiration date.

Exchange Agent

The Bank of New York has been appointed as exchange agent for the exchange offer. You should direct questions and requests for assistance, requests for additional copies of this prospectus or for the letter of transmittal and requests for the notice of guaranteed delivery to the exchange agent as follows:

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By Mail:				By Facsimile:				By Hand or Overnight Delivery:
The Bank of New York Reorganization Unit 101 Barclay Street − 7 East New York, NY 10286 Attention:				The Bank of New York Reorganization Unit 101 Barclay Street − 7 East New York, NY 10286 Attention:                           (212)                 Confirm Receipt of Facsimile by telephone (212)				The Bank of New York Reorganization Unit 101 Barclay Street Lobby Level − Corp. Trust Window New York 10286 Attention:

Delivery of the letter of transmittal to an address other than as set forth above or transmission via facsimile other than as set forth above does not constitute a valid delivery of the letter of transmittal.

Fees and Expenses

We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitations by telephone or in person by our officers and regular employees and those of our affiliates.

We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to broker-dealers or others soliciting acceptance of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and reimburse it for its related reasonable out-of-pocket expenses.

We will pay the cash expenses to be incurred in connection with the exchange offer. The expenses are estimated in the aggregate to be approximately $300,000. They include:

• SEC registration fees;

• fees and expenses of the exchange agent and trustee;

• accounting and legal fees and printing costs; and

• related fees and expenses.

Transfer Taxes

We will pay all transfer taxes, if any, applicable to the exchange of outstanding notes under the exchange offer. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if:

• certificates representing outstanding notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of outstanding notes tendered;

• tendered outstanding notes are registered in the name of any person other than the person signing the letter of transmittal; or

• a transfer tax is imposed for any reason other than the exchange of outstanding notes under the exchange offer.

If satisfactory evidence of payment of the taxes is not submitted with the letter of transmittal, the amount of the transfer taxes will be billed to that tendering holder.

Holders who tender their outstanding notes for exchange will not be required to pay any transfer taxes. However, holders who instruct us to register exchange notes in the name of, or request that outstanding notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder will be required to pay any applicable transfer tax.

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Consequences of Failure to Exchange

Holders of outstanding notes who do not exchange their outstanding notes for exchange notes under the exchange offer will remain subject to the restrictions on transfer of the outstanding notes:

• as set forth in the legend printed on the notes as a consequence of the issuance of the outstanding notes under the exemption from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws; and

• otherwise as set forth in the offering memorandum distributed in connection with the private offering of the outstanding notes.

In general, you may not offer or sell the outstanding notes unless they are registered under the Securities Act, or if the offer or sale is exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act. Based on interpretations of the SEC staff, exchange notes issued under the exchange offer may be offered for resale, resold or otherwise transferred by their holders (other than any holder that is our "affiliate" within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that the holders acquired the exchange notes in the ordinary course of the holders' business and the holders have no arrangement or understanding with respect to the distribution of the exchange notes to be acquired in the exchange offer. Any holder who tenders in the exchange offer for the purpose of participating in a distribution of the exchange notes:

• cannot rely on the applicable interpretations of the SEC; and

• must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.

Accounting Treatment

We will record the exchange notes in our accounting records at the same carrying value as the outstanding notes, which is the aggregate principal amount, as reflected in our accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes in connection with the exchange offer. We will record the expenses of the exchange offer as incurred.

Other

Participation in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action to take.

We may in the future seek to acquire untendered outstanding notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any outstanding notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered outstanding notes.

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DESCRIPTION OF THE NOTES

The outstanding notes were issued and the exchange notes offered hereby will be issued under an indenture (the "Indenture") among the Company, as issuer, the Guarantors and The Bank of New York, as trustee (the "Trustee"). The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Notes are subject to all such terms, and holders of the Notes are referred to the Indenture and the Trust Indenture Act for a statement thereof.

The following summary of the material provisions of the Indenture describes the material terms of the Indenture but does not purport to be complete and is subject to, and qualified in its entirety by reference to, the provisions of the Indenture, including the definitions of certain terms contained therein and those terms made part of the Indenture by reference to the Trust Indenture Act. For definitions of certain capitalized terms used in the following summary, see "— Certain Definitions."

For purposes of this summary, the term "Company" refers only to L-3 Communications Corporation and not to any of its Subsidiaries.

Brief Description of the Notes and the Subsidiary Guarantees

The Notes:

• are general unsecured obligations of the Company;

• rank pari passu in right of payment with the May 2003 Notes, the December 2003 Notes and the 2002 Notes;

• are subordinated in right of payment to all current and future Senior Debt; and

• are senior in right of payment to any future Indebtedness of the Company that expressly provides that it is not senior to the Notes.

The Subsidiary Guarantees:

• are general unsecured obligations of the Guarantors;

• rank pari passu in right of payment with the guarantees of the May 2003 Notes, the December 2003 Notes and the 2002 Notes;

• are subordinated in right of payment to all current and future Senior Debt of the Guarantors; and

• are senior in right of payment to any future Indebtedness of the Guarantors that expressly provides that it is not senior to the Subsidiary Guarantees.

At September 30, 2004, the Company did not have any Senior Debt outstanding (excluding letters of credit, which aggregated $78.5 million). The Indenture permits the incurrence of additional Senior Debt in the future. See "— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock."

The Subsidiary Guarantees

The Indenture provides that the Company's payment obligations under the Notes are jointly and severally guaranteed (the "Subsidiary Guarantees") by all of the Company's present and future Restricted Subsidiaries, other than Foreign Subsidiaries. The obligations of each Guarantor under its Subsidiary Guarantee will be limited as necessary to prevent that Subsidiary Guarantee from constituting a fraudulent conveyance under applicable law. See "Risk Factors — The guarantees may be unenforceable due to fraudulent conveyance statutes, and accordingly, you could have no claim against the guarantors." The Subsidiary Guarantee of each Guarantor will be subordinated to the prior payment in full of all Senior Debt of such Guarantor, which would include the guarantees of amounts borrowed under the Senior Credit Facilities.

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Upon the release of a Guarantee by a Restricted Subsidiary under all then outstanding Credit Facilities, at any time after the suspension of certain covenants as provided below under the caption "— Certain Covenants — Changes in Covenants when Notes Rated Investment Grade," the Subsidiary Guarantee of such Restricted Subsidiary under the Indenture will be released and discharged at such time. In the event that any such Restricted Subsidiary thereafter Guarantees any Indebtedness of the Company under any Credit Facility (or if any released Guarantee under any Credit Facility is reinstated or renewed), or if at any time certain covenants are reinstituted as provided below under the caption "— Certain Covenants — Changes in Covenants when Notes Rated Investment Grade," then such Restricted Subsidiary will Guarantee the Notes on the terms and conditions set forth in the Indenture.

As of the date of this prospectus, not all of the Company's subsidiaries are "Restricted Subsidiaries." L-3 Communications Army Fleet Support, LLC, Aviation Communications & Surveillance Systems, LLC, Honeywell TCAS Inc., Digital Technics, L.P., ITel Solutions, LLC, L-3 Communications Secure Information Technology, Inc., Logimetrics, Inc., LogiMetrics FSC, Inc., L-3 Satellite Networks, L.L.C. and mmTECH, INC. are currently Unrestricted Subsidiaries. In addition, under the circumstances described below under the subheading "— Certain Covenants — Restricted Payments", the Company is permitted to designate certain of the Company's subsidiaries as "Unrestricted Subsidiaries." Unrestricted Subsidiaries are not subject to many of the restrictive covenants in the Indenture. Unrestricted Subsidiaries do not guarantee these Notes.

Principal, Maturity and Interest

The exchange notes will be limited in aggregate principal amount to $650.0 million. The Company may issue additional Notes from time to time after the offering of exchange notes. Any offering of additional Notes is subject to the covenant described below under the caption "— Certain Covenants – Incurrence of Indebtedness and Issuance of Preferred Stock." The Notes and any additional Notes subsequently issued under the Indenture will be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase.

The Notes will mature on January 15, 2015. Interest on the Notes will accrue at the rate of 5 7/8% per annum and will be payable semi-annually in arrears on July 15 and January 15, commencing on January 15, 2005, to Holders of record on the immediately preceding January 1 and July 1.

Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

Methods of Receiving Payments on the Notes

Principal, premium and Additional Interest, if any, and interest on the Notes will be payable at the office or agency of the Company maintained for such purpose within the City and State of New York or, at the option of the Company, payment of interest and Additional Interest, if any, may be made by check mailed to the Holders of the Notes at their respective addresses set forth in the register of Holders of Notes; provided that all payments of principal, premium, interest and Additional Interest with respect to Notes the Holders of which have given wire transfer instructions to the Company will be required to be made by wire transfer of immediately available funds to the accounts specified by the Holders thereof if such Holders shall be registered Holders of at least $250,000 in principal amount of Notes. Until otherwise designated by the Company, the Company's office or agency in New York will be the office of the Trustee maintained for such purpose. The exchange notes will be issued in denominations of $1,000 and integral multiples thereof.

Optional Redemption

The Notes will not be redeemable at the Company's option prior to January 15, 2010. Thereafter, the Notes will be subject to redemption at any time at the option of the Company, in whole or in part,

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upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Additional Interest, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on January 15 of the years indicated below:

Year				Percentage
2010					102.938	%
2011					101.958	%
2012					100.979	%
2013 and thereafter					100.000	%

Notwithstanding the foregoing, before January 15, 2008, the Company may on any one or more occasions redeem up to an aggregate of 35% of the Notes originally issued at a redemption price of 105.875% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date, with the net cash proceeds of one or more Equity Offerings by the Company or the net cash proceeds of one or more Equity Offerings by Holdings that are contributed to the Company as common equity capital; provided that at least 65% of the Notes originally issued remain outstanding immediately after the occurrence of each such redemption; and provided, further, that any such redemption must occur within 120 days of the date of the closing of such Equity Offering.

Subordination

The payment of principal of, premium and Additional Interest, if any, and interest on the Notes will be subordinated in right of payment, as set forth in the Indenture, to the prior payment in full in cash of all Senior Debt, whether outstanding on the Issue Date or thereafter incurred.

Upon any distribution to creditors of the Company:

(1)	in a liquidation or dissolution of the Company;

(2)	in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property;

(3)	in an assignment for the benefit of creditors; or

(4)	in any marshalling of the Company's assets and liabilities,

the holders of Senior Debt will be entitled to receive payment in full in cash of all Obligations due in respect of such Senior Debt (including interest after the commencement of any such proceeding at the rate specified in the applicable Senior Debt, whether or not an allowable claim in any such proceeding) before the Holders of Notes will be entitled to receive any payment with respect to the Notes, and until all Obligations with respect to Senior Debt are paid in full in cash, any distribution to which the Holders of Notes would be entitled shall be made to the holders of Senior Debt (except, in each case, that Holders of Notes may receive Permitted Junior Securities and payments made from the trust described under "— Legal Defeasance and Covenant Defeasance").

The Company also may not make any payment upon or in respect of the Notes (except in Permitted Junior Securities or from the trust described under "— Legal Defeasance and Covenant Defeasance") if:

(1)	a default in the payment of the principal of, premium, if any, or interest on Designated Senior Debt occurs and is continuing; or

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(2)

any other default occurs and is continuing with respect to Designated Senior Debt that permits holders of the Designated Senior Debt as to which such default relates to accelerate its maturity (or that would permit such holders to accelerate with the giving of notice or the passage of time or both) and the Trustee receives a notice of such default (a "Payment Blockage Notice") from the Company or the holders of any Designated Senior Debt.

Payments on the Notes may and shall be resumed:

(1)	in the case of a payment default, upon the date on which such default is cured or waived; and

(2)	in case of a nonpayment default, the earlier of the date on which such nonpayment default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is received, unless the maturity of any Designated Senior Debt has been accelerated.

No new period of payment blockage may be commenced unless and until:

(1)	360 days have elapsed since the effectiveness of the immediately prior Payment Blockage Notice; and

(2)	all scheduled payments of principal, premium and Additional Interest, if any, and interest on the Notes that have come due have been paid in full in cash.

No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 days.

The Indenture further requires that the Company promptly notify holders of Senior Debt if payment of the Notes is accelerated because of an Event of Default.

As a result of the subordination provisions described above, in the event of a liquidation or insolvency, Holders of Notes may recover less ratably than creditors of the Company who are holders of Senior Debt. At September 30, 2004 the Company did not have any Senior Debt outstanding (excluding letters of credit, which aggregated $78.5 million).

Mandatory Redemption

Except as set forth below under "— Repurchase at the Option of Holders", the Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

Repurchase at the Option of Holders

Change of Control

Upon the occurrence of a Change of Control, each Holder of Notes will have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the offer described below (the "Change of Control Offer") at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase (the "Change of Control Payment"). Within ten days following any Change of Control, the Company will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the date specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the "Change of Control Payment Date"), pursuant to the procedures required by the Indenture and described in such notice. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control.

On the Change of Control Payment Date, the Company will, to the extent lawful:

(1)	accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer;

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(2)	deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered; and

(3)	deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company.

The Paying Agent will promptly mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a principal amount of $1,000 or an integral multiple thereof.

The Indenture provides that, prior to mailing a Change of Control Offer, but in any event within 90 days following a Change of Control, the Company will either repay all outstanding Senior Debt or offer to repay all Senior Debt and terminate all commitments thereunder of each lender who has accepted such offer or obtain the requisite consents, if any, under all agreements governing outstanding Senior Debt to permit the repurchase of Notes required by this covenant. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

The Change of Control provisions described above will be applicable whether or not any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the Holders of the Notes to require that the Company repurchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction.

The Senior Credit Facilities prohibit the Company, in certain circumstances, from purchasing any Notes, and also provides that certain change of control events with respect to the Company constitute a default thereunder. Any future credit agreements or other agreements relating to Senior Debt to which the Company becomes a party may contain similar restrictions and provisions. In the event a Change of Control occurs at a time when the Company is prohibited from purchasing Notes, the Company could seek the consent of its lenders to the purchase of Notes or could attempt to refinance the borrowings that contain such prohibition. If the Company does not obtain such a consent or repay such borrowings, the Company will remain prohibited from purchasing Notes. In such case, the Company's failure to purchase tendered Notes would constitute an Event of Default under the Indenture and under the documentation governing certain of our other Indebtedness, which would, in turn, constitute a default under the Senior Credit Facilities. In such circumstances, the subordination provisions in the Indenture would likely restrict payments to the Holders of Notes. See "Risk Factors — Our ability to repurchase notes with cash upon a change of control may be limited."

Finally, the Company's ability to pay cash to the holders of Notes upon a purchase may be limited by the Company's then-existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any required purchases. Even if sufficient funds were otherwise available, the terms of the Senior Credit Facilities would prohibit, subject to certain exceptions, the Company's prepayment of Notes prior to their scheduled maturity. Consequently, if the Company is not able to prepay indebtedness outstanding under the Senior Credit Facilities and any other Senior Debt containing similar restrictions or obtain requisite consents, the Company will be unable to fulfill its repurchase obligations if holders of Notes exercise their purchase rights following a Change of Control, thereby resulting in a default under the Indenture and under the documentation governing certain of our other Indebtedness, which would, in turn, constitute a default under our Senior Credit Facilities. Furthermore, the Change of Control provisions of the Indenture and under the documentation governing certain of our other Indebtedness may in certain circumstances make more difficult or discourage a takeover of the Company.

The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in

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compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

The definition of Change of Control contains, with respect to the disposition of assets, the phrase "all or substantially all," which varies according to the facts and circumstances of the subject transaction and is subject to judicial interpretation. Accordingly, in certain circumstances there may be a degree of uncertainty in ascertaining whether a particular transaction would involve a disposition of "all or substantially all" of the assets of the Company and its Restricted Subsidiaries, and therefore it may be unclear as to whether a Change of Control has occurred and whether the holders have the right to require the Company to purchase the Notes. In the event that the Company were to determine that a Change of Control did not occur because not "all or substantially all" of the assets of the Company and its Restricted Subsidiaries had been sold and the holders of the Notes disagreed with such determination, the holders and/or the Trustee would need to seek a judicial determination of the issue.

Asset Sales

The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(1)

the Company or the Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (evidenced by an Officers' Certificate delivered to the Trustee which will include a resolution of the Board of Directors with respect to such fair market value in the event such Asset Sale involves aggregate consideration in excess of $10.0 million) of the assets or Equity Interests issued or sold or otherwise disposed of; and

(2)	at least 80% of the consideration therefor received by the Company or such Restricted Subsidiary, as the case may be, consists of cash, Cash Equivalents and/or Marketable Securities;

	provided, however, that:

	(a)	the amount of any Senior Debt of the Company or such Restricted Subsidiary that is assumed by the transferee in any such transaction; and

	(b)	any consideration received by the Company or such Restricted Subsidiary, as the case may be, that consists of (1) all or substantially all of the assets of one or more Similar Businesses, (2) other long-term assets that are used or useful in one or more Similar Businesses and (3) Permitted Securities shall be deemed to be cash for purposes of this provision.

Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Company may apply such Net Proceeds, at its option:

(1)	to repay Indebtedness under a Credit Facility;

(2)	to the acquisition of Permitted Securities;

(3)	to the acquisition of all or substantially all of the assets of one or more Similar Businesses;

(4)	to the making of a capital expenditure; or

(5)	to the acquisition of other long-term assets in a Similar Business.

Pending the final application of any such Net Proceeds, the Company may temporarily reduce Indebtedness under a Credit Facility or otherwise invest such Net Proceeds in any manner that is not prohibited by the Indenture.

Any Net Proceeds from Asset Sales that are not applied or invested as provided in the first sentence of this paragraph will be deemed to constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company will be required to make an offer to

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all Holders of the Notes (an "Asset Sale Offer") and any other Indebtedness that ranks pari passu with the Notes (including, without limitation, the December 2003 Notes, the May 1998 Notes and the 2002 Notes) that, by its terms, requires the Company to offer to repurchase such Indebtedness with such Excess Proceeds to purchase the maximum principal amount of Notes and pari passu Indebtedness that may be purchased out of such Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of purchase, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes or pari passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any Excess Proceeds for general corporate purposes. If the aggregate principal amount of Notes or pari passu Indebtedness surrendered by Holders thereof exceeds the amount of Excess Proceeds in an Asset Sale Offer, the Company shall repurchase such Indebtedness on a pro rata basis and the Trustee shall select the Notes to be purchased on a pro rata basis. Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero.

The Senior Credit Facilities will substantially limit the Company's ability to purchase subordinated Indebtedness, including the Notes. Any future credit agreements relating to Senior Debt may contain similar restrictions. See "Description of Other Indebtedness — Senior Credit Facilities of L-3 Communications Corporation."

Selection and Notice

If less than all of the Notes are to be redeemed at any time, selection of Notes for redemption will be made by the Trustee as follows:

(1)	in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed; or

(2)	if the Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate.

No Notes of $1,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address. Notices of redemption may not be conditional.

If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption.

Certain Covenants

Changes in Covenants when Notes Rated Investment Grade

If on any date following the date of the Indenture:

(1)

the Notes are rated Baa3 or better by Moody's and BBB\- or better by S&P (or, if either such entity ceases to rate the notes for reasons outside of the control of the Company, the equivalent investment grade credit rating from any other "nationally recognized statistical rating organization" within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by Company as a replacement agency); and

(2)	no Default or Event of Default shall have occurred and be continuing,

then, beginning on that day and subject to the provisions of the following paragraph, the provisions and covenants specifically listed under the following captions in this prospectus will be suspended:

	(a)	"— Repurchase at the Option of Holders-Asset Sales;"

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	(b)	"— Restricted Payments;"

	(c)	"— Incurrence of Indebtedness and Issuance of Preferred Stock;"

	(d)	"— Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries;"

	(e)	"— Transactions with Affiliates;"

	(f)	clauses (4)(a) and (b) of the covenant listed under "— Merger, Consolidation or Sale of Assets;"

	(g)	"— Payments for Consent;" and

	(h)	clauses (3)(a) and (b) of the covenant listed under "— Future Subsidiary Guarantees."

In addition, following the achievement of such investment grade ratings, (1) the Subsidiary Guarantees of the Company's Restricted Subsidiaries will be released at the time of the release of Guarantees under all outstanding Credit Facilities as described above under the caption "— The Subsidiary Guarantees" and, (2) as described below under the caption "— Future Subsidiary Guarantees," no Restricted Subsidiary thereafter acquired or created will be required to execute a Subsidiary Guarantee unless such Subsidiary Guarantees Indebtedness of the Company under a Credit Facility.

Notwithstanding the foregoing, if the rating assigned by any such rating agency should subsequently decline to below Baa3 or BBB-, respectively, the foregoing covenants shall be reinstituted as of and from the date of such rating decline. For purposes of determining whether a Restricted Payment exceeds the allowable amount under the calculation described in paragraphs 3(a) through (d) of "—Restricted Payments" below, the covenant described under the caption "—Restricted Payments" will be interpreted as if it had been in effect since the date of the Indenture. However, no default will be deemed to have occurred as a result of the provisions and covenants listed in 2(a) through (h) above while those provisions and covenants were suspended. There can be no assurance that the Notes will ever achieve an investment grade rating or that any such rating will be maintained.

Restricted Payments

The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(1)

declare or pay any dividend or make any other payment or distribution on account of the Company's or any of its Restricted Subsidiaries' Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Company) or to the direct or indirect holders of the Company's or any of its Restricted Subsidiaries' Equity Interests in their capacity as such (other than (A) dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);

(2)	purchase, redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any direct or indirect parent of the Company;

(3)	make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes except a payment of interest or principal at Stated Maturity; or

(4)	make any Restricted Investment (all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as "Restricted Payments"),

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unless, at the time of and after giving effect to such Restricted Payment:

(1)	no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; and

(2)

the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described below under the caption "— Incurrence of Indebtedness and Issuance of Preferred Stock"; and

(3)	such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries since April 30, 1997 (excluding Restricted Payments permitted by clauses (2) through (8) of the next succeeding paragraph or of the kind contemplated by such clauses that were made prior to the date of the Indenture), is less than the sum of:

	(a)	50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from July 1, 1997 to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus

	(b)	100% of the aggregate net cash proceeds received by the Company since April 30, 1997 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of Disqualified Stock or debt securities of the Company that have been converted into such Equity Interests (other than Equity Interests (or Disqualified Stock or convertible debt securities) sold to a Subsidiary of the Company and other than Disqualified Stock or convertible debt securities that have been converted into Disqualified Stock); plus

	(c)	to the extent that any Restricted Investment that was made after April 30, 1997 is sold for cash or otherwise liquidated or repaid for cash, the amount of cash received in connection therewith (or from the sale of Marketable Securities received in connection therewith); plus

	(d)	to the extent not already included in such Consolidated Net Income of the Company for such period and without duplication;

	(A)	100% of the aggregate amount of cash received as a dividend from an Unrestricted Subsidiary;

	(B)	100% of the cash received upon the sale of Marketable Securities received as a dividend from an Unrestricted Subsidiary; and

	(C)	100% of the net assets of any Unrestricted Subsidiary on the date that it becomes a Restricted Subsidiary.

As of September 30, 2004, the amount that would have been available to the Company for Restricted Payments pursuant to this paragraph (3) would have been $2,247.5 million, after giving effect to the conversion of the CODES into common stock of Holdings.

The foregoing provisions will not prohibit:

(1)	the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the Indenture;

(2)	the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness or Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, other Equity Interests of the Company (other than any Disqualified Stock); provided

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	that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (3) (b) of the preceding paragraph;

(3)	the defeasance, redemption, repurchase or other acquisition of subordinated Indebtedness (other than intercompany Indebtedness) in exchange for, or with the net cash proceeds from an incurrence of, Permitted Refinancing Indebtedness;

(4)

the repurchase, retirement or other acquisition or retirement for value of common Equity Interests of the Company or Holdings held by any future, present or former employee, director or consultant of the Company or any Subsidiary or Holdings issued pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement; provided, however, that the aggregate amount of Restricted Payments made under this clause (4) does not exceed $1.5 million in any calendar year and provided further that cancellation of Indebtedness owing to the Company from members of management of the Company or any of its Restricted Subsidiaries in connection with a repurchase of Equity Interests of the Company will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of the Indenture;

(5)	repurchases of Equity Interests deemed to occur upon exercise of stock options upon surrender of Equity Interests to pay the exercise price of such options;

(6)

payments to Holdings (A) in amounts equal to the amounts required for Holdings to pay franchise taxes and other fees required to maintain its legal existence and provide for other operating costs of up to $500,000 per fiscal year and (B) in amounts equal to amounts required for Holdings to pay federal, state and local income taxes to the extent such income taxes are actually due and owing; provided that the aggregate amount paid under this clause (B) does not exceed the amount that the Company would be required to pay in respect of the income of the Company and its Subsidiaries if the Company were a stand alone entity that was not owned by Holdings;

(7)	dividends paid to Holdings in amounts equal to amounts required for Holdings to pay interest and/or principal on Indebtedness that has been guaranteed by, or is otherwise considered Indebtedness of, the Company; and

(8)	other Restricted Payments in an aggregate amount since May 22, 1998 not to exceed $20.0 million.

The Board of Directors of the Company may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would not cause a Default. For purposes of making such determination, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary so designated will be deemed to be Restricted Payments at the time of such designation and will reduce the amount available for Restricted Payments under the first paragraph of this covenant. All such outstanding Investments will be deemed to constitute Investments in an amount equal to the fair market value of such Investments at the time of such designation. Such designation will only be permitted if such Restricted Payment would be permitted at such time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any non-cash Restricted Payment shall be determined by the Board of Directors whose resolution with respect thereto shall be delivered to the Trustee. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by the covenant "Restricted Payments" were computed.

Incurrence of Indebtedness and Issuance of Preferred Stock

The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become

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directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and that the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.

The foregoing limitation will not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):

(1)

the incurrence by the Company of additional Indebtedness under Credit Facilities (and the guarantee thereof by the Guarantors) in an aggregate principal amount outstanding pursuant to this clause (1) at any one time (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (1), not to exceed $750.0 million less the aggregate amount of all Net Proceeds of Asset Sales applied to repay any such Indebtedness pursuant to the covenant described above under the caption "— Asset Sales";

(2)	the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;

(3)	the incurrence by the Company and the Guarantors of $650.0 million in aggregate principal amount of each of the outstanding notes and the Exchange Notes and the Subsidiary Guarantees thereof;

(4)

the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (4), not to exceed $100.0 million at any time outstanding;

(5)

the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in connection with the acquisition of assets or a new Restricted Subsidiary; provided that such Indebtedness was incurred by the prior owner of such assets or such Restricted Subsidiary prior to such acquisition by the Company or one of its Restricted Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by the Company or one of its Restricted Subsidiaries; and provided further that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (5) does not exceed $50.0 million;

(6)	the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, Indebtedness that was permitted by the Indenture to be incurred (other than intercompany Indebtedness or Indebtedness incurred pursuant to clause (1) above);

(7)	Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims;

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	provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;

(8)

Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that:

	(a)	such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (a)); and

	(b)	the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;

(9)	the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:

	(a)	if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes; and

	(b)	(1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or one of its Restricted Subsidiaries and (2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or one of its Restricted Subsidiaries shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be;

(10)	the incurrence by the Company or any of the Guarantors of Hedging Obligations that are incurred for the purpose of:

	(a)	fixing, hedging or capping interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of the Indenture to be outstanding; or

	(b)	protecting the Company and its Restricted Subsidiaries against changes in currency exchange rates;

(11)	the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this covenant;

(12)

the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (12), and the issuance of preferred stock by Unrestricted Subsidiaries;

(13)	obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiaries in the ordinary course of business; and

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(14)	the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (14), not to exceed $100.0 million.

For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (14) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company shall, in its sole discretion, classify, or later reclassify, such item of Indebtedness in any manner that complies with this covenant. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this covenant.

Liens

The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien (other than Permitted Liens) securing Indebtedness on any asset now owned or hereafter acquired, or any income or profits therefrom or assign or convey any right to receive income therefrom, unless all payments due under the Indenture and the Notes are secured on an equal and ratable basis with the Obligations so secured until such time as such Obligations are no longer secured by a Lien.

Antilayering Provision

The Indenture provides that (A) the Company will not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Debt and senior in any respect in right of payment to the Notes, and (B) no Guarantor will incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Debt of a Guarantor and senior in any respect in right of payment to any of the Subsidiary Guarantees.

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary to:

(1)	(A) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits, or (B) pay any indebtedness owed to the Company or any of its Restricted Subsidiaries;

(2)	make loans or advances to the Company or any of its Restricted Subsidiaries; or

(3)	transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries.

However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

(1)	the provisions of security agreements that restrict the transfer of assets that are subject to a Lien created by such security agreements;

(2)	the provisions of agreements governing Indebtedness incurred pursuant to clause (5) of the second paragraph of the covenant described above under the caption "— Incurrence of Indebtedness and Issuance of Preferred Stock";

(3)	the Senior Credit Facilities, the Indenture, the Notes, the Exchange Notes, the December 2003 Indenture, the December 2003 Notes, the May 2003 Indenture, the May 2003 Notes, the 2002 Indenture and the 2002 Notes;

(4)	applicable law;

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(5)

any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred;

(6)	by reason of customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices;

(7)	purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the nature described in clause (3) of the preceding paragraph;

(8)	Permitted Refinancing Indebtedness, provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

(9)	contracts for the sale of assets, including, without limitation, customary restrictions with respect to a Subsidiary pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary;

(10)	agreements relating to secured Indebtedness otherwise permitted to be incurred pursuant to the covenants described under "Limitations on Incurrence of Indebtedness and Issuance of Preferred Stock" and "Liens" that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(11)	restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; or

(12)	customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business.

Merger, Consolidation or Sale of Assets

The Indenture provides that the Company may not consolidate or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to another Person unless:

(1)	the Company is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia;

(2)

the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made assumes all the obligations of the Company under the Registration Rights Agreement, the Notes and the Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee;

(3)	immediately after such transaction no Default or Event of Default exists; and

(4)

except in the case of a merger of the Company with or into a Wholly Owned Restricted Subsidiary of the Company, the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made, after giving pro forma effect to such transaction as if such transaction had occurred at the beginning of the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding such transaction either:

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	(a)	would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described above under the caption "— Incurrence of Indebtedness and Issuance of Preferred Stock"; or

	(b)	would have a pro forma Fixed Charge Coverage Ratio that is greater than the actual Fixed Charge Coverage Ratio for the same four-quarter period without giving pro forma effect to such transaction.

Notwithstanding the foregoing clause (4):

(1)	any Restricted Subsidiary may consolidate with, merge into or transfer all or part of its properties and assets to the Company; and

(2)	the Company may merge with an Affiliate that has no significant assets or liabilities and was incorporated solely for the purpose of reincorporating the Company in another State of the United States so long as the amount of Indebtedness of the Company and its Restricted Subsidiaries is not increased thereby.

Transactions with Affiliates

The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless:

(1)	such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and

(2)	the Company delivers to the Trustee:

	(a)	with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $5.0 million, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (1) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors; and

	(b)	with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $15.0 million, an opinion as to the fairness to the Holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

The foregoing provisions will not prohibit:

(1)	any employment agreement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(2)	any transaction with a Lehman Investor;

(3)	any transaction between or among the Company and/or its Restricted Subsidiaries;

(4)	transactions between the Company or any of its Restricted Subsidiaries, on the one hand, and a Permitted Joint Venture, on the other hand, on terms that are not materially less favorable to the Company or the applicable Restricted Subsidiary of the Company than those that could have been obtained from an unaffiliated third party; provided that:

	(a)	in the case of any such transaction or series of related transactions pursuant to this clause (4) involving aggregate consideration in excess of $5.0 million but less than $25.0 million, such transaction or series of transactions (or the agreement pursuant to which the transactions were executed) was approved by the Company's Chief Executive Officer or Chief Financial Officer; and

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	(b)	in the case of any such transaction or series of related transactions pursuant to this clause (4) involving aggregate consideration equal to or in excess of $25.0 million, such transaction or series of related transactions (or the agreement pursuant to which the transactions were executed) was approved by a majority of the disinterested members of the Board of Directors;

(5)	any transaction pursuant to and in accordance with the provisions of the Transaction Documents as the same are in effect on the Issue Date; and

(6)	any Restricted Payment that is permitted by the provisions of the Indenture described above under the caption "— Restricted Payments."

Payments for Consent

The Indenture provides that neither the Company nor any of its Subsidiaries will, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder of any Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless such consideration is offered to be paid or is paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

Reports

Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Indenture requires the Company to file with the Commission (and provide the Trustee and Holders with copies thereof, without cost to each Holder, within 15 days after it files them with the Commission):

(1)	within 90 days after the end of each fiscal year, annual reports on Form 10-K (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form);

(2)	within 45 days after the end of each of the first three fiscal quarters of each fiscal year, reports on Form 10-Q (or any successor or comparable form);

(3)	promptly from time to time after the occurrence of an event required to be therein reported, such other reports on Form 8-K (or any successor or comparable form); and

(4)	any other information, documents and other reports which the Company would be required to file with the Commission if it were subject to Section 13 or 15(d) of the Exchange Act;

provided, however, the Company shall not be so obligated to file such reports with the Commission if the Commission does not permit such filing, in which event the Company will make available such information to prospective purchasers of Notes, in addition to providing such information to the Trustee and the Holders, in each case within 15 days after the time the Company would be required to file such information with the Commission, if it were subject to Sections 13 or 15(d) of the Exchange Act.

Future Subsidiary Guarantees

The Company's payment obligations under the Notes are jointly and severally guaranteed by all of the Company's existing and future Restricted Subsidiaries, other than Foreign Subsidiaries. The Indenture provides that if the Company or any of its Subsidiaries shall acquire or create a Subsidiary (other than a Foreign Subsidiary or an Unrestricted Subsidiary) after the Issue Date, then such Subsidiary shall execute a Subsidiary Guarantee and deliver an opinion of counsel, in accordance with the terms of the Indenture. The Subsidiary Guarantee of each Guarantor ranks pari passu with the December 2003 Notes, the May 2003 Notes and the 2002 Notes and is subordinated to the prior payment in full of all Senior Debt of such Guarantor, which would include the guarantees of amounts borrowed under the Senior Credit Facilities. The obligations of each Guarantor under its Subsidiary Guarantee are limited so as not to constitute a fraudulent conveyance under applicable law.

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The Indenture also provides that, notwithstanding the foregoing, for so long as certain covenants are suspended as provided above under the caption "— Certain Covenants — Changes in Covenants when Notes Rated Investment Grade," no newly acquired or created Subsidiary will be required to execute a Subsidiary Guarantee unless such Subsidiary Guarantees Indebtedness of the Company under a Credit Facility. However, any Subsidiary (other than a Foreign Subsidiary or an Unrestricted Subsidiary) that Guarantees any Indebtedness of the Company under a Credit Facility will become a Subsidiary Guarantor and, if at any time certain covenants are reinstituted as provided above under the caption "— Certain Covenants — Changes in Covenants when Notes Rated Investment Grade," any newly acquired or created Subsidiary (other than a Foreign Subsidiary or an Unrestricted Subsidiary) will Guarantee the Notes on the terms and conditions set forth in the Indenture.

The Indenture provides that no Guarantor may consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person (except the Company or another Guarantor) unless:

(1)

subject to the provisions of the following paragraph, the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made assumes all the obligations of such Guarantor pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee, under the Notes and the Indenture;

(2)	immediately after giving effect to such transaction, no Default or Event of Default exists; and

(3)	the Company:

	(a)	would be permitted by virtue of the Company's pro forma Fixed Charge Coverage Ratio, immediately after giving effect to such transaction, to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the covenant described above under the caption "— Incurrence of Indebtedness and Issuance of Preferred Stock"; or

	(b)	would have a pro forma Fixed Charge Coverage Ratio that is greater than the actual Fixed Charge Coverage Ratio for the same four-quarter period without giving pro forma effect to such transaction.

Notwithstanding the foregoing clause (3):

(1)	any Guarantor may consolidate with, merge into or transfer all or part of its properties and assets to the Company or to another Guarantor; and

(2)	any Guarantor may merge with an Affiliate that has no significant assets or liabilities and was incorporated solely for the purpose of reincorporating such Guarantor in another State of the United States so long as the amount of Indebtedness of the Company and its Restricted Subsidiaries is not increased thereby.

The Indenture provides that in the event of a sale or other disposition of all of the assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all of the capital stock of any Guarantor, then such Guarantor (in the event of a sale or other disposition, by way of such a merger, consolidation or otherwise, of all of the capital stock of such Guarantor) or the corporation acquiring the property (in the event of a sale or other disposition of all of the assets of such Guarantor) will be released and relieved of any obligations under its Subsidiary Guarantee; provided that the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of the Indenture. See "— Repurchase at the Option of Holders — Asset Sales."

Events of Default and Remedies

The Indenture provides that each of the following constitutes an Event of Default:

(1)	default for 30 days in the payment when due of interest or Additional Interest, if any, on the Notes (whether or not prohibited by the subordination provisions of the Indenture);

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(2)	default in payment when due of the principal of or premium, if any, on the Notes (whether or not prohibited by the subordination provisions of the Indenture);

(3)	failure by the Company to comply with the provisions described under the captions "— Repurchase at the Option of Holders — Change of Control", "— Repurchase at the Option of Holders — Asset Sales" or "— Merger, Consolidation or Sale of Assets";

(4)	failure by the Company for 60 days after notice to comply with any of its other agreements in the Indenture or the Notes;

(5)

default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the Issue Date, which default results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness the maturity of which has been so accelerated, aggregates $25.0 million or more;

(6)	failure by the Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $25.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;

(7)	certain events of bankruptcy or insolvency with respect to the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary; and

(8)	except as permitted by the Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to be unenforceable or invalid.

If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately; provided, however, that so long as any Designated Senior Debt is outstanding, such declaration shall not become effective until the earlier of:

(1)	the day which is five Business Days after receipt by the Representatives of Designated Senior Debt of such notice of acceleration; or

(2)	the date of acceleration of any Designated Senior Debt.

Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Company or any Significant Subsidiary or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable without further action or notice. Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest.

In the case of any Event of Default occurring by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to the optional redemption provisions of the Indenture, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes. If an Event of Default occurs prior to January 15, 2010 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding the prohibition on redemption of the Notes prior to January 15, 2010, then the premium specified in the Indenture shall also become immediately due and payable to the extent permitted by law upon the acceleration of the Notes.

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The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes.

The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.

No Personal Liability of Directors, Officers, Employees and Stockholders

No director, officer, employee, incorporator or stockholder of the Company or any Subsidiary of the Company, as such, shall have any liability for any obligations of the Company or any Subsidiary of the Company under the Notes, the Subsidiary Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the Commission that such a waiver is against public policy.

Legal Defeasance and Covenant Defeasance

The Company may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding Notes ("Legal Defeasance") except for:

(1)	the rights of Holders of outstanding Notes to receive payments in respect of the principal of, premium and Additional Interest, if any, and interest on such Notes when such payments are due from the trust referred to below;

(2)	the Company's obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(3)	the rights, powers, trusts, duties and immunities of the Trustee, and the Company's obligations in connection therewith; and

(4)	the Legal Defeasance provisions of the Indenture.

In addition, the Company may, at its option and at any time, elect to have the obligations of the Company released with respect to certain covenants that are described in the Indenture ("Covenant Defeasance") and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under "Events of Default" will no longer constitute an Event of Default with respect to the Notes.

In order to exercise either Legal Defeasance or Covenant Defeasance:

(1)

the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium and Additional Interest, if any, and interest on the outstanding Notes on the stated maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date;

(2)	in the case of Legal Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that:

	(a)	the Company has received from, or there has been published by, the Internal Revenue Service a ruling; or

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	(b)	since the Issue Date, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3)

in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4)	no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit;

(5)	such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the Indenture) to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound;

(6)	the Company must have delivered to the Trustee an opinion of counsel to the effect that after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally;

(7)	the Company must deliver to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and

(8)	the Company must deliver to the Trustee an Officers' Certificate and an opinion of counsel, each stating that all conditions precedent provided for relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Transfer and Exchange

A Holder may transfer or exchange Notes in accordance with the Indenture. The registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company is not required to transfer or exchange any Note selected for redemption. Also, the Company is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed.

The registered Holder of a Note will be treated as the owner of it for all purposes.

Amendment, Supplement and Waiver

Except as provided in the next two succeeding paragraphs, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including consents obtained in connection with a tender offer or exchange offer for Notes).

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Without the consent of each Holder affected, an amendment or waiver may not (with respect to any Notes held by a non-consenting Holder):

(1)	reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;

(2)	reduce the principal of or change the fixed maturity of any Note or alter the provisions with respect to the redemption of the Notes (other than provisions relating to the covenants described above under the caption "— Repurchase at the Option of Holders");

(3)	reduce the rate of or change the time for payment of interest on any Note;

(4)	waive a Default or Event of Default in the payment of principal of or premium and Additional Interest, if any, or interest on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration);

(5)	make any Note payable in money other than that stated in the Notes;

(6)	make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of or premium and Additional Interest, if any, or interest on the Notes;

(7)	waive a redemption payment with respect to any Note (other than a payment required by one of the covenants described above under the caption "— Repurchase at the Option of Holders"); or

(8)	make any change in the foregoing amendment and waiver provisions.

In addition, any amendment to the provisions of Article 10 of the Indenture (which relates to subordination) will require the consent of the Holders of at least 75% in aggregate principal amount of the Notes then outstanding if such amendment would adversely affect the rights of Holders of Notes.

Notwithstanding the foregoing, without the consent of any Holder of Notes, the Company and the Trustee may amend or supplement the Indenture or the Notes:

(1)	to cure any ambiguity, defect or inconsistency;

(2)	to provide for uncertificated Notes in addition to or in place of certificated Notes;

(3)	to provide for the assumption of the Company's obligations to Holders of Notes in the case of a merger or consolidation;

(4)	to make any change that would provide any additional rights or benefits to the Holders of Notes or that does not adversely affect the legal rights under the Indenture of any such Holder;

(5)	to comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act; or

(6)	to conform the text of the Indenture or the Notes to any provision of this "Description of the Notes" to the extent that such provision in this "Description of the Notes" was intended to be a verbatim recitation of the Indenture, the Subsidiary Guarantees or the Notes.

Concerning the Trustee

The Indenture contains certain limitations on the rights of the Trustee, should it become a creditor of the Company, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee is permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Commission for permission to continue or resign.

The Holders of a majority in principal amount of the then outstanding Notes have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to

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the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default shall occur (which shall not be cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of such person's affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of Notes, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

Additional Information

Anyone who receives this prospectus may obtain a copy of the Indenture and Registration Rights Agreement without charge by writing to L-3 Communications Corporation, 600 Third Avenue, New York, New York 10016, Attention: Senior Vice President — Finance.

Book-Entry, Delivery and Form

The Exchange Notes will be represented by one or more global notes in registered, global form without interest coupons (collectively, the "Global Exchange Note"). The Global Exchange Note initially will be deposited upon issuance with the Trustee as custodian for The Depository Trust Company ("DTC"), in New York, New York, and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant as described below.

Except as set forth below, the Global Exchange Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Exchange Notes may not be exchanged for Exchange Notes in certificated form except in the limited circumstances described below. See "— Exchange of Book-Entry Notes for Certificated Notes." In addition, transfer of beneficial interests in the Global Notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants (including, if applicable, those of Euroclear and Clearstream), which may change from time to time.

The Notes may be presented for registration of transfer and exchange at the offices of the registrar.

Depository Procedures

DTC has advised the Company that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of Participants. The Participants include securities brokers and dealers (including the initial purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or Indirect Participants. The ownership interest and transfer of ownership interest of each actual purchaser of each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.

DTC has also advised the Company that pursuant to procedures established by it:

(1)	upon deposit of the Global Exchange Note, DTC will credit the accounts of Participants with portions of the principal amount of Global Exchange Note; and

(2)	ownership of such interests in the Global Exchange Note will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to Participants) or by Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global Exchange Note).

Investors in the Global Exchange Note may hold their interests therein directly through DTC, if they are Participants in such system, or indirectly through organizations (including Euroclear and

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Clearstream) that are Participants in such system. All interests in a Global Exchange Note, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held by Euroclear or Clearstream may also be subject to the procedures and requirements of such system.

The laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interest in a Global Exchange Note to such persons may be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants and certain banks, the ability of a person having a beneficial interest in a Global Exchange Note to pledge such interest to persons or entities that do not participate in DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of physical certificate evidencing such interests. For certain other restrictions on the transferability of the Notes see, "— Exchange of Book-Entry Notes for Certificated Notes."

Except as described below, owners of interests in the Global Exchange Notes will not have Notes registered in their names, will not receive physical delivery of Exchange Notes in certificated form and will not be considered the registered owners or Holders thereof under the Indenture for any purpose.

Payments in respect of the principal and premium and Additional Interest, if any, and interest on a Global Exchange Note registered in the name of DTC or its nominee will be payable by the Trustee to DTC or its nominee in its capacity as the registered Holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee will treat the persons in whose names the Exchange Notes, including the Global Exchange Notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, neither the Company, the Trustee nor any agent of the Company or the Trustee has or will have any responsibility or liability for:

(1)	any aspect of DTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interests in the Global Exchange Notes, or for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the Global Exchange Notes; or

(2)	any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.

DTC has advised the Company that its current practices, upon receipt of any payment in respect of securities such as the Exchange Notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date, in amounts proportionate to their respective holdings in principal amount of beneficial interests in the relevant security such as the Global Exchange Notes as shown on the records of DTC. Payments by Participants and the Indirect Participants to the beneficial owners of Notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the Trustee or the Company. Neither the Company nor the Trustee will be liable for any delay by DTC or its Participants in identifying the beneficial owners of the Exchange Notes, and the Company and the Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee as the registered owner of the Exchange Notes for all purposes.

Except for trades involving only Euroclear and Clearstream participants, interests in the Global Exchange Notes will trade in DTC's Same-Day Funds Settlement System and secondary market trading activity in such interests will, therefore, settle in immediately available funds, subject in all cases to the rules and procedures of DTC and its participants.

Transfers between Participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds. Transfers between participants in Euroclear and Clearstream will be effected in the ordinary way in accordance with their respective rules and operating procedures.

Subject to compliance with the transfer restrictions applicable to the Exchange Notes described herein, crossmarket transfers between Participants in DTC, on the one hand, and Euroclear or

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Clearstream participants, on the other hand, will be effected through DTC in accordance with DTC's rules on behalf of Euroclear or Clearstream, as the case may be, by its respective depository; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depository to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Exchange Note in DTC, and making or receiving payment in accordance with normal procedures for same-day fund settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the Depositaries for Euroclear or Clearstream.

Because of time zone differences, the securities accounts of a Euroclear or Clearstream participant purchasing an interest in a Global Exchange Note from a Participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear or Clearstream) immediately following the settlement date of DTC. Cash received in Euroclear or Clearstream as a result of sales of interests in a Global Exchange Note by or through a Euroclear or Clearstream participant to a Participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC's settlement date.

DTC has advised the Company that it will take any action permitted to be taken by a Holder of Exchange Notes only at the direction of one or more Participants to whose account DTC interests in the Global Exchange Notes are credited and only in respect of such portion of the aggregate principal amount of the Notes as to which such Participant or Participants has or have given direction. However, if there is an Event of Default under the Notes, DTC reserves the right to exchange Global Exchange Notes for legended Exchange Notes in certificated form, and to distribute such Exchange Notes to its Participants.

The information in this section concerning DTC, Euroclear and Clearstream and their book-entry systems has been obtained from sources that the Company believes to be reliable, but the Company takes no responsibility for the accuracy thereof.

Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the Global Exchange Note among participants in DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to perform such procedures, and such procedures may be discontinued at any time, None of the Company, the initial purchasers or the Trustee will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Exchange of Book-Entry Notes for Certificated Notes

A Global Exchange Note is exchangeable for definitive Exchange Notes in registered certificated form if:

(1)	DTC (A) notifies the Company that it is unwilling or unable to continue as depository for the Global Exchange Note and the Company thereupon fails to appoint a successor depository or (B) has ceased to be a clearing agency registered under the Exchange Act; or

(2)	the Company, at its option, notifies the Trustee in writing that it elects to cause issuance of the Exchange Notes in certificated form.

In addition, beneficial interests in a Global Exchange Note may be exchanged for certificated Exchange Notes upon request but only upon at least 20 days prior written notice given to the Trustee by or on behalf of DTC in accordance with customary procedures. In all cases, certificated Exchange Notes delivered in exchange for any Global Exchange Note or beneficial interest therein will be registered in names, and issued in any approved denominations, requested by or on behalf of DTC (in accordance with its customary procedures).

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Certificated Notes

Subject to certain conditions, any person having a beneficial interest in the Global Exchange Note may, upon request to the Trustee, exchange such beneficial interest for Exchange Notes in the form of certificated Exchange Notes. Upon any such issuance, the Trustee is required to register such certificated Exchange Notes in the name of, and cause the same to be delivered to, such person or persons (or the nominee of any thereof). In addition, if (i) the Company notifies the Trustee in writing that DTC is no longer willing or able to act as a depository and the Company is unable to locate a qualified successor within 90 days or (ii) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of Exchange Notes in the form of certificated Exchange Notes under the Indenture, then, upon surrender by the Global Exchange Note Holder of its Global Note, Notes in such form will be issued to each person that the Global Exchange Note Holder and DTC identify as being the beneficial owner of the related Exchange Notes.

Neither the Company nor the Trustee will be liable for any delay by the Global Exchange Note Holder or DTC in identifying the beneficial owners of Exchange Notes and the Company and the Trustee may conclusively rely on, and will be protected in relying on, instructions from the Global Exchange Note Holder or DTC for all purposes.

Same Day Settlement and Payment

The Indenture requires that payments in respect of the Exchange Notes represented by the Global Exchange Note (including principal, premium, if any, interest and Additional Interest, if any) be made by wire transfer of immediately available funds to the accounts specified by the Global Exchange Note Holder. With respect to certificated Exchange Notes, the Company will make all payments of principal, premium, if any, interest and Additional Interest, if any, by wire transfer of immediately available funds to the accounts specified by the Holders thereof or, if no such account is specified, by mailing a check to each such Holder's registered address. The Company expects that secondary trading in the certificated Exchange Notes will also be settled in immediately available funds.

Registration Rights; Additional Interest

The Company, the Guarantors and the initial purchasers entered into the Registration Rights Agreement on November 12, 2004. Pursuant to the Registration Rights Agreement, the Company and the Guarantors agreed to file with the Commission the Exchange Offer Registration Statement on the appropriate form under the Securities Act with respect to the Exchange Notes. Upon the effectiveness of the Exchange Offer Registration Statement, the Company will offer to the Holders of Transfer Restricted Securities pursuant to the Exchange Offer who are able to make certain representations the opportunity to exchange their Transfer Restricted Securities for Exchange Notes. If:

(1)	the Company and the Guarantors are not required to file the Exchange Offer Registration Statement or permitted to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy; or

(2)	any Holder of Transfer Restricted Securities notifies the Company prior to the 20th day following consummation of the Exchange Offer that:

	(a)	it is prohibited by law or Commission policy from participating in the Exchange Offer; or

	(b)	it may not resell the Exchange Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales; or

	(c)	it is a broker-dealer and owns Notes acquired directly from the Company or an affiliate of the Company,

the Company and the Guarantors will file with the Commission a Shelf Registration Statement to cover resales of the Notes by the Holders thereof who satisfy certain conditions relating to the

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provision of information in connection with the Shelf Registration Statement. The Company and the Guarantors will use their reasonable best efforts to cause the applicable registration statement to be declared effective as promptly as possible by the Commission.

For purposes of the foregoing, "Transfer Restricted Securities" means each outstanding note until:

(1)	the date on which such outstanding note has been exchanged by a person other than a broker-dealer for an Exchange Note in the Exchange Offer;

(2)	following the exchange by a broker-dealer in the Exchange Offer of an outstanding note for an Exchange Note, the date on which such Exchange Note is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement;

(3)	the date on which such outstanding note has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement; or

(4)	the date on which such outstanding note is distributed to the public pursuant to Rule 144 under the Act.

The Registration Rights Agreement provides that:

(1)	the Company and the Guarantors will file an Exchange Offer Registration Statement with the Commission on or prior to 90 days after the Issue Date;

(2)	the Company and the Guarantors will use all commercially reasonable efforts to have the Exchange Offer Registration Statement declared effective by the Commission on or prior to 180 days after the Issue Date;

(3)

unless the Exchange Offer would not be permitted by applicable law or Commission policy, the Company and the Guarantors will commence the Exchange Offer and use all commercially reasonable efforts to issue on or prior to 30 business days after the date on which the Exchange Offer Registration Statement was declared effective by the Commission, Exchange Notes in exchange for all Notes tendered prior thereto in the Exchange Offer; and

(4)

if obligated to file the Shelf Registration Statement, the Company and the Guarantors will use their best efforts to file the Shelf Registration Statement with the Commission on or prior to 30 days after such filing obligation arises and to use all commercially reasonable efforts to cause the Shelf Registration Statement to be declared effective by the Commission on or prior to 90 days after such obligation arises.

	If:

	(a)	the Company and the Guarantors fail to file any of the Registration Statements required by the Registration Rights Agreement on or before the date specified above for such filing;

	(b)	any of such Registration Statements is not declared effective by the Commission on or prior to the date specified for such effectiveness (the "Effectiveness Target Date");

	(c)	the Company and the Guarantors fail to consummate the Exchange Offer within 30 business days of the Effectiveness Target Date with respect to the Exchange Offer Registration Statement; or

	(d)	the Shelf Registration Statement or the Exchange Offer Registration Statement is declared effective but thereafter ceases, subject to certain exceptions, to be effective or usable in connection with resales of Transfer Restricted Securities during the periods specified in the Registration Rights Agreement (each such event referred to in clauses (a) through (d) above a "Registration Default"),

then the Company and the Guarantors will pay Additional Interest to each Holder of outstanding notes, with respect to the first 90-day period immediately following the occurrence of the first Registration Default in an amount equal to $.05 per week per $1,000 principal amount of outstanding notes held by such Holder.

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The amount of the Additional Interest will increase by an additional $.05 per week per $1,000 principal amount of outstanding notes with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of Additional Interest of $.50 per week per $1,000 principal amount of outstanding notes.

All accrued Additional Interest will be paid by the Company and the Guarantors on each Damages Payment Date to the Global Note Holder by wire transfer of immediately available funds or by federal funds check and to Holders of certificated outstanding notes by wire transfer to the accounts specified by them or by mailing checks to their registered addresses if no such accounts have been specified.

Following the cure of all Registration Defaults, the accrual of Additional Interest will cease.

Holders of outstanding notes will be required to make certain representations to the Company and the Guarantors (as described in the Registration Rights Agreement) in order to participate in the Exchange Offer and will be required to deliver information to be used in connection with the Shelf Registration Statement and to provide comments on the Shelf Registration Statement within the time periods set forth in the Registration Rights Agreement in order to have their outstanding notes included in the Shelf Registration Statement and benefit from the provisions regarding Additional Interest set forth above.

Certain Definitions

Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.

"2002 Indenture" means the indenture, dated as of June 28, 2002, among The Bank of New York, as trustee, the Comany and the guarantors thereto, with respect to the 2002 Notes.

"2002 Notes" means the $750,000,000 in aggregate principal amount of the Company's 7 5/8% Senior Subordinated Notes due 2012, issued pursuant to the 2002 Indenture on June 28, 2002.

"Acquired Debt" means, with respect to any specified Person:

(1)	Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, including, without limitation, Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Restricted Subsidiary of such specified Person; and

(2)	Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

"Additional Interest" means all additional interest then owing pursuant to Section 5 of the Registration Rights Agreement.

"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the voting securities of a Person shall be deemed to be control.

"Asset Sale" means:

(1)	the sale, lease, conveyance or other disposition of any assets or rights (including, without limitation, by way of a sale and leaseback) other than sales of inventory in the ordinary course of business (provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a

161

	whole will be governed by the provisions of the Indenture described above under the caption "— Change of Control" and/or the provisions described above under the caption "— Merger, Consolidation or Sale of Assets" and not by the provisions of the Asset Sale covenant); and

(2)	the issue or sale by the Company or any of its Subsidiaries of Equity Interests of any of the Company's Restricted Subsidiaries,

in the case of either clause (1) or (2), whether in a single transaction or a series of related transactions (A) that have a fair market value in excess of $5.0 million or (B) for net proceeds in excess of $5.0 million.

Notwithstanding the foregoing:

(1)	a transfer of assets by the Company to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;

(2)	an issuance of Equity Interests by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;

(3)	a Restricted Payment that is permitted by the covenant described above under the caption "— Certain Covenants — Restricted Payments"; and

(4)	a disposition of Cash Equivalents in the ordinary course of business will not be deemed to be an Asset Sale.

"Attributable Debt" in respect of a sale and leaseback transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended).

"Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP.

"Capital Stock" means:

(1)	in the case of a corporation, corporate stock;

(2)	in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3)	in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4)	any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

"Cash Equivalents" means:

(1)	United States dollars;

(2)	securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities of not more than one year from the date of acquisition;

(3)

certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any domestic financial institution to the Senior Credit Facilities or with any domestic commercial bank having capital and surplus in excess of $500.0 million and a Thompson Bank Watch Rating of "B" or better;

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(4)	repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5)	commercial paper having the highest rating obtainable from Moody's or S&P and in each case maturing within six months after the date of acquisition;

(6)	investment funds investing 95% of their assets in securities of the types described in clauses (1)-(5) above; and

(7)	readily marketable direct obligations issued by any State of the United States of America or any political subdivision thereof having maturities of not more than one year from the date of acquisition and having one of the two highest rating categories obtainable from either Moody's or S&P.

"Change of Control" means the occurrence of any of the following:

(1)

the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange Act) other than the Principals or their Related Parties (as defined below);

(2)	the adoption of a plan relating to the liquidation or dissolution of the Company;

(3)

the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above), other than the Principals and their Related Parties, becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Voting Stock of the Company (measured by voting power rather than number of shares); or

(4)	the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors.

"Consolidated Cash Flow" means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus:

(1)	an amount equal to any extraordinary loss plus any net loss realized in connection with an Asset Sale (to the extent such losses were deducted in computing such Consolidated Net Income); plus

(2)	provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was included in computing such Consolidated Net Income; plus

(3)

consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments (if any) pursuant to Hedging Obligations), to the extent that any such expense was deducted in computing such Consolidated Net Income; plus

(4)

depreciation, amortization (including amortization of goodwill, debt issuance costs and other intangibles but excluding amortization of other prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; minus

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(5)	non-cash items (excluding any items that were accrued in the ordinary course of business) increasing such Consolidated Net Income for such period, in each case, on a consolidated basis and determined in accordance with GAAP.

"Consolidated Net Income" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that:

(1)	the Net Income of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the referent Person or a Restricted Subsidiary thereof;

(2)

the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders;

(3)	the Net Income of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded;

(4)	the cumulative effect of a change in accounting principles shall be excluded;

(5)	the Net Income of any Unrestricted Subsidiary shall be excluded, whether or not distributed to the Company or one of its Restricted Subsidiaries; and

(6)	the Net Income of any Restricted Subsidiary shall be calculated after deducting preferred stock dividends payable by such Restricted Subsidiary to Persons other than the Company and its other Restricted Subsidiaries.

"Consolidated Tangible Assets" means, with respect to the Company, the total consolidated assets of the Company and its Restricted Subsidiaries, less the total intangible assets of the Company and its Restricted Subsidiaries, as shown on the most recent internal consolidated balance sheet of the Company and such Restricted Subsidiaries calculated on a consolidated basis in accordance with GAAP.

"Continuing Directors" means, as of any date of determination, any member of the Board of Directors of the Company who:

(1)	was a member of such Board of Directors on the date of the Indenture; or

(2)	was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election.

"Credit Facilities" means, with respect to the Company, one or more debt facilities (including, without limitation, the Senior Credit Facilities) or commercial paper facilities with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time (and whether or not with the original lender or lenders and whether provided under the original Credit Facilities or other credit, agreement, indenture or otherwise).

"December 2003 Indenture" means the indenture, dated as of December 22, 2003, between The Bank of New York, as trustee, the Company and the guarantors party thereto, with respect to the December 2003 Notes.

"December 2003 Notes" means the $400,000,000 in aggregate principal amount of the Company's 6 1/8% Senior Subordinated Notes due 2014, issued pursuant to the December 2003 Indenture on December 22, 2003.

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"Default" means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

"Designated Senior Debt" means:

(1)	any Indebtedness outstanding under the Senior Credit Facilities; and

(2)	any other Senior Debt permitted under the Indenture the principal amount of which is $25.0 million or more and that has been designated by the Company as "Designated Senior Debt."

"Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the Holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature; provided, however, that any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Company to repurchase such Capital Stock upon the occurrence of a Change of Control or an Asset Sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant described above under the caption "— Certain Covenants — Restricted Payments"; and provided further, that if such Capital Stock is issued to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company in order to satisfy applicable statutory or regulatory obligations.

"Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

"Equity Offering" means any public or private sale of equity securities (excluding Disqualified Stock) of the Company or Holdings, other than any private sales to an Affiliate of the Company or Holdings.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Existing Indebtedness" means any Indebtedness of the Company and its Restricted Subsidiaries (other than Indebtedness under the Senior Credit Facilities and the Notes) in existence on the date of the Indenture, until such amounts are repaid.

"Fixed Charges" means, with respect to any Person for any period, the sum, without duplication, of:

(1)

the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation, original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments (if any) pursuant to Hedging Obligations, but excluding amortization of debt issuance costs);

(2)	the consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during such period;

(3)	any interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon); and

(4)	the product of:

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	(a)	all dividend payments, whether or not in cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than dividend payments on Equity Interests payable solely in Equity Interests of the Company, times

	(b)	a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal,

in each case, on a consolidated basis and in accordance with GAAP.

"Fixed Charge Coverage Ratio" means, with respect to any Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person and its Restricted Subsidiaries for such period. In the event that the Company or any of its Restricted Subsidiaries incurs, assumes, Guarantees or redeems any Indebtedness (other than revolving credit borrowings) or issues preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, Guarantee or redemption of Indebtedness, or such issuance or redemption of preferred stock, as if the same had occurred at the beginning of the applicable four-quarter reference period. In addition, for purposes of making the computation referred to above:

(1)

acquisitions that have been made by the Company or any of its Restricted Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be deemed to have occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for such reference period shall be calculated without giving effect to clause (3) of the proviso set forth in the definition of Consolidated Net Income;

(2)	the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded; and

(3)	the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the referent Person or any of its Restricted Subsidiaries following the Calculation Date.

"Foreign Subsidiary" means a Restricted Subsidiary of the Company that was not organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof or has not guaranteed or otherwise provided credit support for any Indebtedness of the Company.

"GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which were in effect on April 30, 1997.

"Guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness.

"Guarantors" means each Subsidiary of the Company that executes a Subsidiary Guarantee in accordance with the provisions of the Indenture, and their respective successors and assigns.

"Hedging Obligations" means, with respect to any Person, the obligations of such Person under:

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(1)	currency exchange or interest rate swap agreements, interest rate cap agreements and currency exchange or interest rate collar agreements; and

(2)	other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or interest rates.

"Holdings" means L-3 Communications Holdings, Inc., a Delaware corporation.

"Indebtedness" means, with respect to any Person, any indebtedness of such Person, whether or not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or banker's acceptances or representing Capital Lease Obligations or the balance deferred and unpaid of the purchase price of any property or representing any Hedging Obligations, except any such balance that constitutes an accrued expense or trade payable, if and to the extent any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, as well as all indebtedness of others secured by a Lien on any asset of such Person (whether or not such indebtedness is assumed by such Person) and, to the extent not otherwise included, the Guarantee by such Person of any indebtedness of any other Person. The amount of any Indebtedness outstanding as of any date shall be:

(1)	the accreted value thereof, in the case of any Indebtedness that does not require current payments of interest; and

(2)	the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.

"Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel, moving and similar loans or advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Subsidiary not sold or disposed of in an amount determined as provided in the last paragraph of the covenant described above under the caption "— Restricted Payments."

"Issue Date" means November 12, 2004.

"Lehman Investor" means Lehman Brothers Holdings Inc. and any of its Affiliates.

"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).

"Marketable Securities" means, with respect to any Asset Sale, any readily marketable equity securities that are:

(1)	traded on The New York Stock Exchange, the American Stock Exchange or the Nasdaq National Market; and

(2)	issued by a corporation having a total equity market capitalization of not less than $250.0 million;

provided that the excess of:

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	(a)	the aggregate amount of securities of any one such corporation held by the Company and any Restricted Subsidiary; over

	(b)	ten times the average daily trading volume of such securities during the 20 immediately preceding trading days

shall be deemed not to be Marketable Securities; as determined on the date of the contract relating to such Asset Sale.

"May 2003 Indenture" means the indenture, dated as of May 21, 2003, between the Bank of New York, as trustee, and the Company, with respect to the May 2003 Notes.

"May 2003 Notes" means the $400,000,000 in aggregate principal amount of the Company's 6 1/8% Senior Subordinated notes due 2013, issued pursuant to the May 2003 Indenture on May 21, 2003.

"Moody's" means Moody's Investors Services, Inc.

"Net Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however:

(1)	any gain or loss, together with any related provision for taxes thereon, realized in connection with:

	(a)	any Asset Sale (including, without limitation, dispositions pursuant to sale and leaseback transactions); or

	(b)	the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and

(2)	any extraordinary gain or loss, together with any related provision for taxes on such extraordinary gain or loss; and

(3)	the cumulative effect of a change in accounting principles.

"Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP.

"Non-Recourse Debt" means Indebtedness:

(1)	as to which neither the Company nor any of its Restricted Subsidiaries:

	(a)	provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness);

	(b)	is directly or indirectly liable (as a guarantor or otherwise); or

	(c)	constitutes the lender;

(2)

no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness (other than Indebtedness incurred under Credit Facilities) of the Company or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and

(3)	as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries.

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"Obligations" means any principal, premium (if any), Additional Interest (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization, whether or not a claim for post-filing interest is allowed in such proceeding), penalties, fees, charges, expenses, indemnifications, reimbursement obligations, damages, guarantees and other liabilities or amounts payable under the documentation governing any Indebtedness or in respect thereto.

"Permitted Investment" means:

(1)	any Investment in the Company or in a Restricted Subsidiary of the Company that is a Guarantor;

(2)	any Investment in cash or Cash Equivalents;

(3)	any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment:

	(a)	such Person becomes a Restricted Subsidiary of the Company and a Guarantor; or

	(b)	such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company that is a Guarantor;

(4)	any Restricted Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption "— Repurchase at the Option of Holders — Asset Sales" or any disposition of assets not constituting an Asset sale;

(5)	any acquisition of assets solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company;

(6)	advances to employees not to exceed $2.5 million at any one time outstanding;

(7)	any Investment acquired in connection with or as a result of a workout or bankruptcy of a customer or supplier;

(8)	Hedging Obligations permitted to be incurred under the covenant described above under the caption "— Incurrence of Indebtedness and Issuance of Preferred Stock";

(9)	any Investment in a Similar Business that is not a Restricted Subsidiary; provided that the aggregate fair market value of all Investments outstanding pursuant to this clause (9) (valued on the date each such Investment was made and without giving effect to subsequent changes in value) may not at any one time exceed 10% of the Consolidated Tangible Assets of the Company; and

(10)	other Investments in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (10) that are at the time outstanding, not to exceed $30.0 million.

"Permitted Joint Venture" means any joint venture, partnership or other Person designated by the Board of Directors (until designation by the Board of Directors to the contrary); provided that:

(1)	at least 25% of the Capital Stock thereof with voting power under ordinary circumstances to elect directors (or Persons having similar or corresponding powers and responsibilities) is at the time owned (beneficially or directly) by the Company and/or by one or more Restricted Subsidiaries of the Company; and

(2)	such joint venture, partnership or other Person is engaged in a Similar Business. Any such designation or designation to the contrary shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing provisions.

"Permitted Junior Securities" means Equity Interests in the Company or debt securities that are subordinated to all Senior Debt (and any debt securities issued in exchange for Senior Debt) to

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substantially the same extent as, or to a greater extent than, the Notes and the Subsidiary Guarantees are subordinated to Senior Debt under the Indenture.

"Permitted Liens" means:

(1)	Liens securing Senior Debt of the Company or any Guarantor that was permitted by the terms of the Indenture to be incurred;

(2)	Liens in favor of the Company or any Guarantor;

(3)	Liens on property of a Person existing at the time such Person is merged into or consolidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company;

(4)	Liens on property existing at the time of acquisition thereof by the Company or any Subsidiary of the Company, provided that such Liens were in existence prior to the contemplation of such acquisition and do not extend to any other assets of the Company or any of its Restricted Subsidiaries;

(5)	Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;

(6)	Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of the covenant entitled "— Incurrence of Indebtedness and Issuance of Preferred Stock" covering only the assets acquired with such Indebtedness;

(7)	Liens existing on the Issue Date;

(8)	Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;

(9)	Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to obligations that do not exceed $50.0 million at any one time outstanding;

(10)	Liens on assets of Guarantors to secure Senior Debt of such Guarantors that was permitted by the Indenture to be incurred;

(11)	Liens securing Permitted Refinancing Indebtedness, provided that any such Lien does not extend to or cover any property, shares or debt other than the property, shares or debt securing the Indebtedness so refunded, refinanced or extended;

(12)	Liens incurred or deposits made to secure the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return of money bonds and other obligations of a like nature, in each case incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money);

(13)	Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods in the ordinary course of business;

(14)	Liens encumbering customary initial deposits and margin deposits, and other Liens incurred in the ordinary course of business that are within the general parameters customary in the industry, in each case securing Indebtedness under Hedging Obligations; and

(15)	Liens encumbering deposits made in the ordinary course of business to secure nondelinquent obligations arising from statutory or regulatory, contractual or warranty

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	requirements of the Company or its Subsidiaries for which a reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made.

"Permitted Refinancing Indebtedness" means any Indebtedness of the Company or any of its Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries; provided that:

(1)	the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus accrued interest on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses and prepayment premiums incurred in connection therewith);

(2)	such Permitted Refinancing Indebtedness has a final maturity date no earlier than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

(3)

if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and

(4)	such Indebtedness is incurred either by the Company or by the Restricted Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

"Permitted Securities" means, with respect to any Asset Sale, Voting Stock of a Person primarily engaged in one or more Similar Businesses; provided that after giving effect to the Asset Sale such Person shall become a Restricted Subsidiary and, unless the Asset Sale relates to a Foreign Subsidiary, a Guarantor.

"Principals" means any Lehman Investor, Frank C. Lanza and Robert V. LaPenta.

"Related Party" with respect to any Principal means:

(1)	any controlling stockholder, 50% (or more) owned Subsidiary, or spouse or immediate family member (in the case of an individual) of such Principal; or

(2)	any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding a more than 50% controlling interest of which consist of such Principal and/or such other Persons referred to in the immediately preceding clause (1).

"Representative" means the indenture trustee or other trustee, agent or representative for any Senior Debt.

"Restricted Investment" means an Investment other than a Permitted Investment.

"Restricted Subsidiary" means, with respect to any Person, each Subsidiary of such Person that is not an Unrestricted Subsidiary.

"Senior Credit Facilities" means the Second Amended and Restated 364 Day Credit Agreement, dated as of May 16, 2001, as in effect on the date of the Indenture among the Company, the lenders party thereto, Banc of America, N.A., as administrative agent, and Lehman Commercial Paper Inc., as syndication agent and documentation agent, and the Third Amended and Restated Credit Agreement, dated as of May 16, 2001, as in effect on the date of the Indenture among the Company, the lenders party thereto, Banc of America, N.A., as administrative agent, and Lehman Commercial Paper Inc., as syndication agent and documentation agent, and any related notes, collateral documents, letters of credit and guarantees, including any appendices, exhibits or schedules to any of the foregoing (as the

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same may be in effect from time to time), in each case, as such agreements may be amended, modified, supplemented or restated from time to time, or refunded, refinanced, restructured, replaced, renewed, repaid or extended from time to time (whether with the original agents and lenders or other agents and lenders or otherwise, and whether provided under the original credit agreement or other credit agreements, indentures or otherwise).

"Senior Debt" means:

(1)	all Indebtedness of the Company or any of its Restricted Subsidiaries outstanding under Credit Facilities and all Hedging Obligations with respect thereto;

(2)	any other Indebtedness permitted to be incurred by the Company or any of its Restricted Subsidiaries under the terms of the Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the Notes; and

(3)	all Obligations with respect to the foregoing.

Notwithstanding anything to the contrary in the foregoing, Senior Debt will not include:

(1)	any liability for federal, state, local or other taxes owed or owing by the Company;

(2)	any Indebtedness of the Company to any of its Subsidiaries or other Affiliates;

(3)	any trade payables; or

(4)	any Indebtedness that is incurred in violation of the Indenture. The May 2003 Notes, the December 2003 Notes and the 2002 Notes will be pari passu with the Notes and will not constitute Senior Debt.

"Significant Subsidiary" means any Subsidiary which is a "significant subsidiary" within the meaning of Rule 405 under the Securities Act.

"Similar Business" means a business, a majority of whose revenues in the most recently ended calendar year were derived from:

(1)	the sale of defense products, electronics, communications systems, aerospace products, avionics products and/or communications products;

(2)	any services related thereto;

(3)	any business or activity that is reasonably similar thereto or a reasonable extension, development or expansion thereof or ancillary thereto; and

(4)	any combination of any of the foregoing.

"Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

"Subsidiary" means, with respect to any Person:

(1)

any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

(2)	any partnership (A) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (B) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof).

"S&P" means Standard and Poor's Corporation.

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"Transaction Documents" means the Indenture, the Notes, the Purchase Agreement and the Registration Rights Agreement.

"Unrestricted Subsidiary" means any Subsidiary that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a board resolution, but only to the extent that such Subsidiary:

(1)	has no Indebtedness other than Non-Recourse Debt;

(2)	is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company;

(3)	is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation:

	(a)	to subscribe for additional Equity Interests; or

	(b)	to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results;

(4)	has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries; and

(5)	has at least one director on its board of directors that is not a director or executive officer of the Company or any of its Restricted Subsidiaries.

Any such designation by the Board of Directors shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing conditions and was permitted by the covenant described above under the caption "— Certain Covenants — Restricted Payments." If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption "— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock", the Company shall be in default of such covenant).

The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if:

(1)	such Indebtedness is permitted under the covenant described under the caption "— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock," calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and

(2)	no Default or Event of Default would be in existence following such designation.

"Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

"Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

(1)	the sum of the products obtained by multiplying (A) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (B) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by

(2)	the then outstanding principal amount of such Indebtedness.

173

"Wholly Owned" means, when used with respect to any Subsidiary or Restricted Subsidiary of a Person, a Subsidiary (or Restricted Subsidiary, as appropriate) of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries (or Wholly Owned Restricted Subsidiaries, as appropriate) of such Person and one or more Wholly Owned Subsidiaries (or Wholly Owned Restricted Subsidiaries, as appropriate) of such Person.

UNITED STATES FEDERAL TAX CONSEQUENCES OF THE EXCHANGE OFFER

Exchange of Notes

The exchange of outstanding notes for exchange notes in the exchange offer will not constitute a taxable event to holders for United States federal income tax purposes. Consequently, no gain or loss will be recognized by a holder upon receipt of an exchange note, the holding period of the exchange note will include the holding period of the outstanding note exchanged therefor and the basis of the exchange note will be the same as the basis of the outstanding note immediately before the exchange.

In any event, persons considering the exchange of outstanding notes for exchange notes should consult their own tax advisors concerning the United States federal income tax consequences in light of their particular situations as well as any consequences arising under the laws of any other taxing jurisdiction.

PLAN OF DISTRIBUTION

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for outstanding notes where the outstanding notes were acquired as a result of market-making activities or other trading activities. To the extent any such broker-dealer participates in the exchange offer and so notifies L-3, or causes L-3 to be so notified in writing, L-3 has agreed that for a period of 180 days after the date of this prospectus, it will make this prospectus, as amended or supplemented, available to such broker-dealer for use in connection with any such resale, and will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal.

We will not receive any proceeds from any sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own accounts pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of these methods of resale, at market prices prevailing at the time of resale, at prices related to the prevailing market prices or negotiated prices. Any resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any broker-dealer or the purchasers of any exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of the exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any resale of exchange notes and any commissions or concessions received by these persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

We have agreed to pay all expenses incident to the exchange offer, including the expenses of one counsel for the holders of the outstanding notes, other than commissions or concessions of any brokers or dealers and will indemnify the holders of outstanding notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act.

174

By its acceptance of the exchange offer, any broker-dealer that receives exchange notes pursuant to the exchange offer hereby agrees to notify L-3 prior to using the prospectus in connection with the sale or transfer of exchange notes, and acknowledges and agrees that, upon receipt of notice from L-3 of the happening of any event which makes any statement in this prospectus untrue in any material respect or which requires the making of any changes in this prospectus in order to make the statements therein not misleading or which may impose upon L-3 disclosure obligations that may have a material adverse effect on L-3 (which notice L-3 agrees to deliver promptly to such broker-dealer) such broker-dealer will suspend use of this prospectus until L-3 has notified such broker-dealer that delivery of this prospectus may resume and has furnished copies of any amendment or supplement to this prospectus to such broker-dealer.

LEGAL MATTERS

The validity of the exchange notes offered by this prospectus will be passed upon for us by Simpson Thacher & Bartlett LLP, New York, New York.

EXPERTS

Our consolidated financial statements as of December 31, 2003 and 2002, and for the three years ended December 31, 2003 included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

175

INDEX TO FINANCIAL STATEMENTS

Unaudited Condensed Consolidated Financial Statements as of September 30, 2004 and December 31, 2003 and for the three and nine months ended September 30, 2004 and September 30, 2003
Condensed Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003					F-3
Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2004 and September 30, 2003					F-4
Condensed Consolidated Statements of Cash Flows for the Three and Nine Months ended September 30, 2004 and September 30, 2003					F-6
Notes to Unaudited Condensed Consolidated Financial Statements					F-7
Consolidated Financial Statements as of December 31, 2003 and 2002 and for the years ended December 31, 2003, 2002 and 2001
Report of Independent Registered Public Accounting Firm					F-35
Consolidated Balance Sheets as of December 31, 2003 and December 31, 2002					F-36
Consolidated Statements of Operations for the years ended December 31, 2003, 2002 and 2001					F-37
Consolidated Statements of Shareholders' Equity for the years ended December 31, 2003, 2002 and 2001					F-38
Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001					F-39
Notes to Consolidated Financial Statements					F-40

F-1

L-3 COMMUNICATIONS HOLDINGS, INC. AND L-3 COMMUNICATIONS CORPORATION

Unaudited Condensed Consolidated Financial Statements as of September 30, 2004 and December 31, 2003 and for the Three and Nine Months Ended September 30, 2004 and 2003

F-2

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

				September 30, 2004				December 31, 2003
ASSETS
Current assets:
Cash and cash equivalents				$	367,338			$	134,876
Contracts in process					1,857,740				1,615,348
Deferred income taxes					107,473				152,785
Other current assets					63,416				34,693
Total current assets					2,395,967				1,937,702
Property, plant and equipment, net					503,238				519,749
Goodwill					3,762,905				3,652,436
Identifiable intangible assets					155,287				162,156
Deferred income taxes					73,465				100,482
Deferred debt issue costs					38,389				48,572
Other assets					73,966				71,793
Total assets				$	7,003,217			$	6,492,890
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade				$	255,495			$	195,548
Accrued employment costs					310,677				239,690
Accrued expenses					64,038				72,880
Customer advances					80,562				58,078
Income taxes					101,193				70,159
Other current liabilities					272,508				287,857
Total current liabilities					1,084,473				924,212
Pension and postretirement benefits					371,789				359,020
Other liabilities					105,800				101,651
Long-term debt					2,157,501				2,457,300
Total liabilities					3,719,563				3,842,183
Commitments and contingencies
Minority interests					79,106				76,211
Shareholders' equity:
L-3 Holdings' common stock $.01 par value; authorized 300,000,000 shares; issued and outstanding 107,210,608 and 97,077,495 shares (L-3 Communications common stock: $.01 par value, 100 shares authorized, issued and outstanding)					2,294,507				1,893,488
Retained earnings					988,186				757,467
Unearned compensation					(5,057	)			(3,622	)
Accumulated other comprehensive loss					(73,088	)			(72,837	)
Total shareholders' equity					3,204,548				2,574,496
Total liabilities and shareholders' equity				$	7,003,217			$	6,492,890

See notes to unaudited condensed consolidated financial statements.

F-3

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

				Three Months Ended September 30,
				2004				2003
Sales:
Contracts, primarily U.S. Government				$	1,586,043			$	1,108,600
Commercial, primarily products					198,089				156,011
Total sales					1,784,132				1,264,611
Costs and expenses:
Contracts, primarily U.S. Government					1,401,971				966,838
Commercial, primarily products:
Cost of sales					127,687				90,444
Selling, general and administrative expenses					37,082				39,204
Research and development expenses					18,032				15,753
Total costs and expenses					1,584,772				1,112,239
Operating income					199,360				152,372
Other expense (income), net					(1,687	)			(767	)
Interest expense					34,854				32,360
Minority interests in net income of consolidated subsidiaries					4,791				1,862
Income before income taxes					161,402				118,917
Provision for income taxes					58,912				42,810
Net income				$	102,490			$	76,107
L-3 Holdings' earnings per common share:
Basic				$	0.96			$	0.79
Diluted				$	0.93			$	0.74
L-3 Holdings' weighted average common shares outstanding:
Basic					107,005				96,435
Diluted					110,010				106,575

See notes to unaudited condensed consolidated financial statements.

F-4

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

				Nine Months Ended September 30,
				2004				2003
Sales:
Contracts, primarily U.S. Government				$	4,462,028			$	3,131,984
Commercial, primarily products					523,733				448,555
Total sales					4,985,761				3,580,539
Costs and expenses:
Contracts, primarily U.S. Government					3,977,820				2,763,232
Commercial, primarily products:
Cost of sales					320,863				278,498
Selling, general and administrative expenses					107,454				108,559
Research and development expenses					50,544				40,295
Total costs and expenses					4,456,681				3,190,584
Operating income					529,080				389,955
Other expense (income), net					1,728				(2,088	)
Interest expense					106,779				98,232
Minority interests in net income of consolidated subsidiaries					7,078				2,550
Loss on retirement of debt					—				11,225
Income before income taxes					413,495				280,036
Provision for income taxes					150,926				100,813
Net income				$	262,569			$	179,223
L-3 Holdings' earnings per common share:
Basic				$	2.48			$	1.87
Diluted				$	2.41			$	1.77
L-3 Holdings' weighted average common shares outstanding:
Basic					105,883				95,743
Diluted					109,113				105,755

See notes to unaudited condensed consolidated financial statements.

F-5

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

				Nine Months Ended September 30,
				2004				2003
Operating activities:
Net income				$	262,569			$	179,223
Loss on retirement of debt					—				11,225
Depreciation					68,342				57,746
Amortization of intangibles and other assets					21,151				13,465
Amortization of deferred debt issue costs (included in interest expense)					5,454				5,970
Deferred income tax provision					76,516				68,015
Minority interests in net income of consolidated subsidiaries					7,078				2,550
Contributions to employee savings plans in L-3 Holdings' common stock					37,575				28,473
Other non-cash items					3,189				(6,729	)
Subtotal					481,874				359,938
Changes in operating assets and liabilities, excluding acquired amounts:
Contracts in process					(216,085	)			(101,463	)
Other current assets					(25,366	)			(3,832	)
Other assets					(8,162	)			(7,348	)
Accounts payable					52,569				(11,695	)
Accrued employment costs					62,042				33,753
Accrued expenses					(7,512	)			1,764
Customer advances					19,417				(12,119	)
Income taxes					41,802				16,052
Other current liabilities					460				13,277
Pension and postretirement benefits					9,169				15,067
Other liabilities					(1,048	)			17,137
All other operating activities, principally foreign currency translation					(1,195	)			6,548
Subtotal					(73,909	)			(32,859	)
Net cash from operating activities					407,965				327,079
Investing activities:
Acquisition of businesses, net of cash acquired					(134,566	)			(261,385	)
Capital expenditures					(53,482	)			(53,972	)
Disposition of property, plant and equipment					9,504				1,092
Other investing activities					(5,381	)			(2,500	)
Net cash used in investing activities					(183,925	)			(316,765	)
Financing activities:
Proceeds from sale of senior subordinated notes					—				398,160
Redemption of senior subordinated notes					(187	)			(187,650	)
Debt issue costs					(1,906	)			(7,689	)
Cash dividends paid on common stock					(31,850	)			—
Proceeds from employee stock purchase plan					22,296				18,625
Proceeds from exercise of stock options					36,354				10,567
Distributions paid to minority interests					(4,183	)			(1,505	)
Other financing activities					(12,102	)			1,588
Net cash from financing activities					8,422				232,096
Net increase in cash					232,462				242,410
Cash and cash equivalents, beginning of the period					134,876				134,856
Cash and cash equivalents, end of the period				$	367,338			$	377,266

See notes to unaudited condensed consolidated financial statements.

F-6

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

1.    Description of Business

L-3 Communications Holdings, Inc. conducts its operations and derives all its operating income and cash flow through its wholly-owned subsidiary, L-3 Communications Corporation ("L-3 Communications"). L-3 Communications Holdings, Inc. ("L-3 Holdings" and together with its subsidiaries, "L-3" or the "Company") is a leading supplier of a broad range of products used in a substantial number of aerospace and defense platforms. L-3 also is a major supplier of subsystems on many platforms, including those for secure communication networks, mobile satellite communications, information security systems, shipboard communications, naval power systems, fuzes and safety and arming devices for missiles and munitions, microwave assemblies for radars and missiles, telemetry and instrumentation and airport security systems. The Company also is a prime system contractor for aircraft modernization and operations & maintenance (O&M), Intelligence, Surveillance and Reconnaissance (ISR) collection platforms, simulation and training, and government systems support services. The Company's customers include the U.S. Department of Defense (DoD) and its prime contractors, the U.S. Department of Homeland security (DHS), certain U.S. Government intelligence agencies, major aerospace and defense contractors, foreign governments, commercial customers and certain other U.S. federal, state and local government agencies.

The Company has four reportable segments: (1) Secure Communications & ISR; (2) Training, Simulation & Government Services; (3) Aircraft Modernization, O&M and Products (formerly known as Aviation Products & Aircraft Modernization); and (4) Specialized Products.

Secure Communications & ISR.    The businesses in this segment provide products and services for the global ISR market, specializing in signals intelligence (SIGINT) and communications intelligence (COMINT) systems. These products and services provide to the warfighter in real-time the unique ability to collect and analyze unknown electronic signals from command centers, communication nodes and air defense systems for real-time situation awareness and response. The businesses in this segment also provide secure, high data rate communications systems for military and other U.S. Government and foreign government reconnaissance and surveillance applications. The Company believes that its systems and products are critical elements for a substantial number of major communication, command and control, intelligence gathering and space systems. The Company's systems and products are used to connect a variety of airborne, space, ground and sea-based communication systems and are used in the transmission, processing, recording, monitoring and dissemination functions of these communication systems. The major secure communications programs and systems include:

	•	secure data links that enable networked communications for airborne, satellite, ground and sea-based remote platforms, both manned and unmanned, for real-time information collection and dissemination to users;

	•	highly specialized fleet management and support, including procurement, systems integration, sensor development, modifications and maintenance for signals intelligence and ISR special mission aircraft and airborne surveillance systems;

	•	strategic and tactical signals intelligence systems that detect, collect, identify, analyze and disseminate information;

	•	secure terminal and communication network equipment and encryption management; and

	•	communication systems for surface and undersea vessels and manned space flights.

Training, Simulation & Government Services.    The businesses in this segment provide a full range of training, simulation and support services, including:

F-7

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

	•	services designed to meet customer training requirements for aircrews, navigators, mission operators, gunners and maintenance technicians for virtually any platform, including military fixed and rotary wing aircraft, air vehicles and various ground vehicles, and computer-based training systems;

	•	communication software support, information technology services and a wide range of engineering development services and integration support;

	•	high-end engineering and information support services used for command, control, communications and ISR architectures, as well as for air warfare modeling and simulation tools for applications used by the DoD, DHS and U.S. Government intelligence agencies, including missile and space systems, Unmanned Aerial Vehicles (UAVs) and military aircraft; and

	•	developing and managing extensive programs in the United States and internationally that focus on teaching, training and education, logistics, strategic planning, organizational design, democracy transition and leadership development.

Aircraft Modernization, Operations and Maintenance (O&M) and Products.    The businesses in this segment provide aircraft modernization and operations & maintenance services, and aviation products, including:

	•	engineering, modification, maintenance, logistics and upgrades for aircraft, vehicles and personnel equipment;

	•	turnkey aviation life cycle management services that integrate custom developed and commercial off-the-shelf products for various military fixed and rotary wing aircraft, including heavy maintenance and structural modifications and interior modifications and constructions;

	•	aerospace and other technical services related to large fleet support, such as aircraft and vehicle modernization, maintenance, repair and overhaul, logistics support, and supply chain management, primarily for military training, tactical, cargo and utility aircraft, anti-missile defense systems and tanks.

	•	advanced cockpit avionics products and specialized avionics repair and overhaul services for various segments of the aviation market;

	•	airborne traffic and collision avoidance systems (TCAS) and terrain awareness warning systems for commercial and military applications;

	•	commercial, solid-state, crash-protected cockpit voice recorders, flight data recorders and cruise ship hardened voyage recorders; and

	•	ruggedized custom cockpit displays for military and high-end commercial applications.

Specialized Products.    The businesses in this segment supply products, including components, subsystems and systems, to military and commercial customers in several niche markets. These products include:

	•	naval warfare products, including acoustic undersea warfare products for mine hunting, dipping and anti-submarine sonars and naval power distribution, conditioning, switching and protection equipment for surface and undersea platforms;

	•	ruggedization and integration of commercial off-the-shelf technology for displays, computers and electronic systems for military and commercial applications;

F-8

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

	•	security systems for aviation and port applications, including those for detection of explosives, concealed weapons, contraband and illegal narcotics, and to inspect agricultural products and to examine cargo;

	•	telemetry, instrumentation, space and navigation products, including products for tracking and flight termination;

	•	premium fuzing products and safety and arming devices for missiles and munitions;

	•	microwave components used in radar communication satellites, wireless communication equipment, electronic surveillance, communication and electronic warfare applications and countermeasure systems;

	•	high performance antennas and ground based radomes;

	•	training devices and motion simulators which produce advanced virtual reality simulation and high-fidelity representations of cockpits and mission stations for fixed and rotary wing aircraft and land vehicles; and

	•	precision stabilized electro-optic surveillance systems, including high magnification lowlight, daylight and forward looking infrared sensors, laser range finders, illuminators and designators, and digital and wireless communication systems.

2.    Basis of Presentation

These unaudited condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements of L-3 Holdings and L-3 Communications for the fiscal year ended December 31, 2003, included in their Annual Report on Form 10-K for the fiscal year ended December 31, 2003.

The unaudited condensed consolidated financial statements comprise the unaudited condensed consolidated financial statements of L-3 Holdings and L-3 Communications. At September 30, 2004, L-3 Holdings' only asset is its investment in the common stock of L-3 Communications, its wholly-owned subsidiary, and its only obligations are the 4% Senior Subordinated Convertible Contingent Debt Securities due 2011 (CODES). See Note 8 for discussion of the conversion of substantially all of the CODES into shares of L-3 Holdings common stock, which occurred during October 2004. L-3 Holdings has also guaranteed the borrowings under the senior credit facilities of L-3 Communications. L-3 Holdings' obligations have been jointly, severally, fully and unconditionally guaranteed by L-3 Communications and certain of its domestic subsidiaries, and accordingly, such debt has been reflected as debt of L-3 Communications in its unaudited condensed consolidated financial statements in accordance with the U.S. Securities and Exchange Commission's (SEC) Staff Accounting Bulletin (SAB) No. 54. In addition, all issuances of equity securities, including grants of stock options and restricted stock by L-3 Holdings to employees of L-3 Communications, have been reflected in the unaudited condensed consolidated financial statements of L-3 Communications. As a result, the unaudited condensed consolidated financial positions, results of operations and cash flows of L-3 Holdings and L-3 Communications are substantially the same. See Note 17 for additional information.

The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles in the United States of America for a complete set of financial statements. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered

F-9

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

necessary for a fair presentation of the results for the interim periods presented have been included. The results of operations for the interim periods are not necessarily indicative of results for the full year.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and costs and expenses during the reporting period. The most significant of these estimates and assumptions relate to contract revenue and profit or loss recognition, market values for inventories reported at lower of cost or market, pension and postretirement benefit obligations, preliminary purchase price allocations for the acquired assets and assumed liabilities of acquired businesses, recoverability and valuation of recorded amounts of long-lived assets, identifiable intangible assets, goodwill, income taxes, including the valuations of deferred tax assets, litigation reserves and environmental obligations. Changes in estimates are reflected in the periods during which they become known. Actual amounts will differ from these estimates. For a more complete discussion of these estimates and assumptions, see the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2003.

On the statements of operations, the Company presents its sales and costs and expenses in two categories, "Contracts, primarily U.S. Government" and "Commercial, primarily products."

Contracts primarily U.S. Government.    Sales and costs and expenses for the Company's businesses that are primarily U.S. Government contractors are presented as "Contracts, primarily U.S. Government." The sales for the Company's U.S. Government contractor businesses are transacted using written revenue arrangements, or contracts, which primarily require the Company to design, develop, manufacture, modify, upgrade, test and integrate complex aerospace and electronic equipment, and to provide related engineering and technical services according to the buyer's specifications. Such buyers are predominantly the U.S. Department of Defense and other agencies of the U.S. Government, foreign government ministries of defense and defense prime contractors. These contracts are covered by the American Institute of Certified Public Accountants (AICPA) Statement of Position 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts (SOP 81-1), Accounting Research Bulletin No. 43, Chapter 11, Section A, Government Contracts, Cost-Plus-Fixed Fee Contracts (ARB 43) and Accounting Research Bulletin No. 45, Long-Term Construction Type Contracts (ARB 45). Sales reported under "Contracts, primarily U.S. Government" also include certain sales from contracts with domestic and foreign commercial customers, which also are covered by SOP 81-1 and ARB 45. Additionally, certain fixed price contracts require the Company to perform services that are not related to production of tangible assets, which are not covered by SOP 81-1, and these sales are recognized in accordance with SAB No. 104, Revenue Recognition.

Commercial, primarily products.    Sales and costs and expenses for the Company's businesses whose customers are primarily commercial business enterprises are presented as "Commercial, primarily products." Most of these sales are recognized in accordance with the SEC's SAB No. 104, and substantially all of the related revenue arrangements are not covered by SOP 81-1, ARB 43 or ARB 45. The Company's commercial businesses are substantially comprised of Aviation Communication & Surveillance Systems (ACSS), Aviation Recorders, Avionics Systems, Microwave Components and Security & Detection Systems.

Reclassifications.    Effective January 1, 2004, the Company combined its explosives detection systems (EDS) business into L-3 Security and Detection Systems, and its IMC business into L-3 Government Services, Inc. As a result of these business realignments, reclassifications between "Contracts, primarily U.S. Government" and "Commercial, primarily products" have been made to the prior period sales and operating income amounts to conform them to the current period presentation. Specifically, for the three

F-10

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

months ended September 30, 2003, $6,928 of sales and $6,064 of operating income was reclassified from "Contracts, primarily U.S. Government," to "Commercial, primarily products" and $4,314 of sales and $411 of operating loss was reclassified from "Commercial, primarily products" to "Contracts, primarily U.S. Government." For the nine months ended September 30, 2003, $50,099 of sales and $11,759 of operating income was reclassified from "Contracts, primarily U.S. Government" to "Commercial, primarily products," and $24,997 of sales and $419 of operating income was reclassified from "Commercial, primarily products" to "Contracts, primarily U.S. Government". These business realignments and related reclassifications did not result in any changes to our consolidated results of operations, financial position or cash flow. In addition, certain reclassifications have been made to the unaudited condensed consolidated balance sheet to conform prior period amounts to the current period balance sheet presentation. See Notes 6 and 15.

3.    Stock-Based Compensation

The Company accounts for employee stock-based compensation under the recognition and measurement principles of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees. Compensation expense for employee stock-based compensation is recognized in income based on the excess, if any, of the fair value of the L-3 Holdings' stock at the grant date of the award or other measurement date over the amount an employee must pay to acquire the stock. When the exercise price for stock-based compensation arrangements granted to employees equals or exceeds the fair value of the L-3 Holdings common stock at the date of grant, the Company does not recognize compensation expense. The Company elected not to adopt the fair value based method of accounting for stock-based employee compensation as permitted by the Financial Accounting Standards Board's (FASB) Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation (SFAS 123), as amended by SFAS No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of SFAS No. 123. Had the Company adopted the fair value based method provisions of SFAS 123 for all of its stock-based compensation, it would have recorded a non-cash expense for the estimated fair value of the stock-based compensation arrangements that the Company has granted to its employees amortized over the vesting period of the grants. Stock-based employee compensation is a non-cash expense, because the Company settles its stock-based compensation obligations by issuing shares of common stock instead of settling such obligations with cash payments. All of the stock options granted to employees by the Company are non-qualified stock options under U.S. income tax regulations.

The table below presents the "as reported" net income and L-3 Holdings earnings per share (EPS), and the "pro forma" net income and L-3 Holdings EPS that the Company would have reported if the Company had elected to recognize non-cash compensation expense in accordance with the fair value based method of accounting of SFAS 123.

F-11

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

				Three Months Ended September 30,
				2004				2003
Net income:
As reported				$	102,490			$	76,107
Less: Stock-based employee compensation expense under the fair value based method, net of income taxes					(4,936	)			(4,648	)
Pro forma				$	97,554			$	71,459
L-3 Holdings' Basic EPS:
As reported				$	0.96			$	0.79
Pro forma					0.91				0.74
L-3 Holdings' Diluted EPS:
As reported				$	0.93			$	0.74
Pro forma					0.89				0.69

				Nine Months Ended September 30,
				2004				2003
Net income:
As reported				$	262,569			$	179,223
Less: Stock-based employee compensation expense under the fair value based method, net of income taxes					(18,455	)			(14,221	)
Pro forma				$	244,114			$	165,002
L-3 Holdings' Basic EPS:
As reported				$	2.48			$	1.87
Pro forma					2.31				1.72
L-3 Holdings' Diluted EPS:
As reported				$	2.41			$	1.77
Pro forma					2.24				1.63

4.    Acquisitions

2004 Business Acquisitions.    During the nine months ended September 30, 2004, in separate transactions, the Company acquired five businesses, discussed below, for an aggregate purchase price of $89,733 in cash, plus acquisition costs.

	•	Substantially all of the assets and certain specified liabilities of Beamhit LLC on May 13, 2004, for $40,000 in cash, plus additional consideration contingent upon the financial performance of Beamhit for each of the years ending December 31, 2004, 2005, 2006 and 2007. Any such additional consideration will be accounted for as goodwill. Beamhit is a developer and supplier of laser marksmanship training systems, and adds a series of new products to the Company's expanding role in readiness training and simulation products and services.

	•	Substantially all of the assets and liabilities of Brashear, LP on June 14, 2004, for $36,290 in cash. Brashear is a developer and supplier of complex electro-optical systems, including laser ranging and tracking systems, test range instrumentation, telescope systems, naval fire control systems and laser beam directors for military and international customers. Brashear adds new capabilities to the Company's role in advanced optics.

	•	All of the outstanding common stock of AVISYS, Inc. on June 16, 2004, for $6,555 in cash, plus additional consideration not to exceed $23,000, which is contingent upon (i) an award and funding

F-12

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

		of a certain contract from the Department of Homeland Security on or before June 30, 2005 and (ii) the financial performance of AVISYS for each of the years ending December 31, 2004, 2005 and 2006. Any such additional consideration will be accounted for as goodwill. AVISYS develops products to counter the threat of a missile attack against civilian, commercial, military, and Head of State aircraft. AVISYS products are synergistic with the Company's existing avionics and telemetry products for military and commercial markets.

	•	Certain assets and liabilities of the General Electric Driver Development (GEDD) business on May 11, 2004, and substantially all of the assets and liabilities of Bay Metals and Fabrication, Inc. on June 8, 2004. GEDD develops software for driving simulators and provides assembly and maintenance service for driving simulators. Bay Metals is a metal fabricator and structural steel supplier for all phases of marine construction, ship repairs and fabrication.

Based on preliminary purchase price allocations, the goodwill recognized for the 2004 business acquisitions described above, was $74,282, approximately $65,200 of which is expected to be deductible for income tax purposes. Goodwill of $33,668 was assigned to the Training, Simulation & Government Services segment, $6,860 was assigned to the Aircraft Modernization, O&M and Products segment and $33,754 was assigned to the Specialized Products segment. The 2004 business acquisitions were financed with cash on hand. The purchase prices for Beamhit LLC and AVISYS, Inc. are subject to adjustment based on the closing date net assets or net working capital of the respective acquired business.

All of the acquisitions are included in the Company's results of operations from their respective effective dates of acquisition. The Company values acquired contracts in process on the date of acquisition at the remaining contract value less the Company's estimated costs to complete the contract and a reasonable profit allowance on the Company's completion effort commensurate with the profit margin that the Company earns on similar contracts. The purchase price allocations for Avionics Systems, Aeromet, Inc., Flight Systems Engineering and Klein Associates, all of which were acquired in 2003, have been finalized. The assets and liabilities recorded in connection with the purchase price allocations for Military Aviation Services (MAS), Vertex Aerospace, and certain defense and aerospace assets of IPICOM, all of which were acquired in the fourth quarter of 2003, and the 2004 business acquisitions are based upon preliminary estimates of fair values for contracts in process, inventories, estimated costs in excess of estimated contract value to complete contracts in process in a loss position, identifiable intangibles, goodwill, plant and equipment, and deferred income taxes. Actual adjustments will be based on the final purchase prices, including the payment of contingent consideration, and final appraisals and other analyses of fair values, which are in process. The Company expects to complete the purchase price allocations for MAS, Vertex Aerospace and certain defense and aerospace assets of IPICOM in the fourth quarter of 2004. The Company does not expect the differences between the preliminary and final purchase price allocations for these acquisitions to be material.

Vertex Aerospace Acquisition.    On December 1, 2003, the Company acquired Vertex Aerospace LLC (Vertex). In May of 2004, the Company and the seller of Vertex Aerospace agreed to a final purchase price of $664,750, based on the closing date net assets of Vertex Aerospace. The final purchase price represents an $11,500 increase to the contractual consideration paid prior to May of 2004 and was recorded as an increase to goodwill.

Aircraft Integration Systems Acquisition.    The Company is continuing its discussions with Raytheon Company (Raytheon) regarding the adjustment of the purchase price for the acquisition of Integration Systems (AIS), which was completed in March 2002. The AIS purchase price submitted by Raytheon to the Company amounted to approximately $1,163,000. The Company believes that, in accordance with the terms of the AIS asset purchase agreement concerning the closing date balance sheet, the purchase price for AIS submitted by Raytheon should be reduced by $100,000 to $1,063,000. In accordance with the asset

F-13

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

purchase agreement, the Company and Raytheon have begun the formal process to settle the disagreement and engage a neutral accountant to arbitrate the final purchase price. Any amount received by the Company for a reduction to the AIS purchase price will be recorded as a reduction to goodwill.

Unaudited Pro Forma Statement of Operations Data.    Assuming the business acquisitions the Company completed during 2004 occurred on January 1, 2004, the unaudited pro forma sales, net income and diluted earnings per share would have been approximately $5,028,500, $262,300 and $2.40 for the nine months ended September 30, 2004. Assuming the business acquisitions the Company completed during 2004 and 2003 occurred on January 1, 2003, the unaudited pro forma sales, net income and diluted earnings per share would have been approximately $4,260,900, $193,700 and $1.90 for the nine months ended September 30, 2003. The pro forma results are based on various assumptions and are not necessarily indicative of the results of operations that would have occurred had the Company completed the acquisitions on January 1, 2003 or January 1, 2004.

On October 8, 2004, the Company acquired the stock of D.P. Associates Inc.

The Company has also entered into agreements to acquire certain businesses for an approximate aggregate purchase price of $511,000, payable in cash. These businesses include Cincinnati Electronics, Northrop Grumman's Canadian Navigation Systems and Space Sensors System business, and the Marine Controls Division of CAE. Certain of these business acquisitions are subject to regulatory approval. The Company expects to complete the business acquisitions by December 31, 2004.

5.    Contracts in Process

The components of contracts in process are presented in the table below.

				September 30, 2004				December 31, 2003
Billed receivables, less allowances of $21,769 and $25,221				$	697,860			$	637,254
Unbilled contract receivables					855,895				676,604
Less: unliquidated progress payments					(233,879	)			(193,672	)
Unbilled contract receivables, net					622,016				482,932
Inventoried contract costs, gross					383,589				353,247
Less: unliquidated progress payments					(22,143	)			(17,624	)
Inventoried contract costs, net					361,446				335,623
Inventories at lower of cost or market					176,418				159,539
Total contracts in process				$	1,857,740			$	1,615,348

Unbilled contract receivables represent accumulated incurred costs and earned profits on contracts that have been recorded as sales, which have not yet been billed to customers. The majority of unbilled contract receivables arise from the cost-to-cost percentage-of-completion (POC) method, which is used to record sales on certain fixed-price contracts as costs are incurred at amounts equal to the ratio of cumulative costs incurred to total estimated costs at completion, multiplied by the total estimated contract revenue. Unbilled contract receivables from fixed price-type contracts are converted to billed receivables when amounts are invoiced to customers according to contractual billing terms, which generally occur when deliveries or other performance milestones are completed. To a lesser extent, unbilled contract receivables also arise from cost reimbursable-type contracts and time & material-type contracts, for revenue amounts that have not been billed by the end of the accounting period due to the timing of preparation of invoices for customers.

Unliquidated progress payments arise from fixed price-type contracts with the U.S. Government that contain progress payment clauses, and represent progress payment invoices which have been collected in

F-14

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

cash, but have not yet been liquidated. Progress payment invoices are billed to the customer as contract costs are incurred at an amount generally equal to 75% to 80% of incurred costs. Unliquidated progress payments are liquidated as deliveries or other contract performance milestones are completed, at an amount equal to a percentage of the contract sales price for the items delivered or work performed, based on a contractual liquidation rate. Therefore, unliquidated progress payments are a contra asset account, and are classified against unbilled contract receivables if revenue for the underlying contract is recorded using the cost-to-cost POC method, and against inventoried contract costs if revenue is recorded using the units-of-delivery POC method.

The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2003, provides additional information about the components of contracts in process (contained in Notes 2 and 4 to the Audited Consolidated Financial Statements) and contract revenue recognition (contained in Note 2 to the Audited Consolidated Financial Statements and in the Management's Discussion and Analysis of Results of Operations and Financial Condition — Critical Accounting Policies).

In accordance with SOP 81-1 and the AICPA Audit and Accounting Guide, Audits of Federal Government Contractors, the Company's inventoried contract costs for U.S. Government contracts, and contracts with prime contractors or subcontractors of the U.S. Government, also include allocated selling, general and administrative (SG&A) costs, independent research and development (IRAD) costs and bid and proposal (B&P) costs, because they are recoverable indirect contract costs under U.S. Government procurement regulations. The Company includes SG&A, IRAD and B&P costs allocated to U.S. Government contracts in inventoried contract costs, and charges them to costs of sales when the related contract sales are recognized as revenue.

The table below presents a summary of SG&A, IRAD and B&P costs included in inventoried contract costs and the changes to them, including amounts used in the determination of costs and expenses for "Contracts, primarily U.S. Government." The cost data in the table below does not include the SG&A and research and development expenses for the Company's businesses that are primarily not U.S. Government contractors, which are separately presented on the statements of operations under costs and expenses for "Commercial, primarily products" and are expensed as incurred.

				Three Months Ended September 30,
				2004				2003
Amounts included in inventoried contract costs at beginning of period				$	43,308			$	53,694
Add: Amounts incurred during the period(1)					148,653				115,853
Less: Amounts charged to costs and expenses during the period					(157,300	)			(128,257	)
Amounts included in inventoried contract costs at end of period				$	34,661			$	41,290

				Nine Months Ended September 30,
				2004				2003
Amounts included in inventoried contract costs at beginning of period				$	38,024			$	52,253
Add: Amounts incurred during the period(2)					433,325				354,686
Less: Amounts charged to costs and expenses during the period					(436,688	)			(365,649	)
Amounts included in inventoried contract costs at end of period				$	34,661			$	41,290

(1)	Incurred costs include IRAD and B&P costs of $35,198 for the three months ended September 30, 2004 and $33,170 for the three months ended September 30, 2003.

(2)	Incurred costs include IRAD and B&P costs of $107,962 for the nine months ended September 30, 2004 and $99,541 for the nine months ended September 30, 2003.

F-15

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

6.    Goodwill and Identifiable Intangible Assets

Goodwill.    During the first quarter of 2004, the Company completed its annual impairment test for the goodwill of each of its reporting units, which resulted in no impairment losses.

The table below presents the changes in goodwill allocated to the reportable segments during the nine months ended September 30, 2004. The Company reclassified the goodwill for the International Microwave Corporation (IMC) acquired business from the Specialized Products segment to the Training, Simulation & Government Services segment, in connection with the consolidation on January 1, 2004, of IMC into L-3 Government Services, Inc.

				Secure Communications & ISR				Training, Simulation & Government Services				Aircraft Modernization, O&M and Products				Specialized Products				Consolidated Total
Balance January 1, 2004				$	726,880			$	480,890			$	1,350,818			$	1,093,848			$	3,652,436
Acquisitions					9,563				34,439				27,577				38,890				110,469
Reclassifications					—				30,761				—				(30,761	)			—
Balance September 30, 2004				$	736,443			$	546,090			$	1,378,395			$	1,101,977			$	3,762,905

During the nine months ended September 30, 2004, goodwill was increased by a total of $110,469, which was comprised of (i) $74,282 for acquisitions completed during the nine months ended September 30, 2004, (ii) $33,251 for increases to purchase price payments for certain acquisitions completed prior to January 1, 2004, related to the final closing date net assets of acquired businesses and contingent purchase price adjustments or earnouts, which were resolved during the period, and (iii) $2,936 primarily related to final estimates of fair value for assets acquired and liabilities assumed in connection with acquisitions completed prior to January 1, 2004.

Identifiable Intangible Assets.    The gross carrying amount and accumulated amortization balances of the Company's identifiable intangible assets that are subject to amortization are presented in the tables below. The Company has no indefinite-lived identifiable intangible assets.

				September 30, 2004
				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
Identifiable intangible assets that are subject to amortization:
Customer relationships				$	158,060			$	15,127			$	142,933
Technology					15,597				4,559				11,038
Non-compete agreements					2,000				684				1,316
Total				$	175,657			$	20,370			$	155,287

				December 31, 2003
				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
Identifiable intangible assets that are subject to amortization:
Customer relationships				$	154,770			$	6,519			$	148,251
Technology					14,500				2,325				12,175
Non-compete agreements					2,000				270				1,730
Total				$	171,270			$	9,114			$	162,156

F-16

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

The Company recorded amortization expense for its identifiable intangible assets of $3,749 for the three months ended September 30, 2004 and $869 for the three months ended September 30, 2003. The Company recorded amortization expense for its identifiable intangible assets of $11,256 for the nine months ended September 30, 2004 and $4,405 for the nine months ended September 30, 2003, respectively. Based on the gross carrying amounts at September 30, 2004, the Company's estimates for identifiable intangible assets amortization expense for the years ending December 31, 2004 through 2008 are presented in the table below.

Year ending December 31,				Estimated Amortization Expense
2004				$	17,058
2005					18,953
2006					17,983
2007					17,086
2008					14,686

7.    Other Current Liabilities and Other Liabilities

The components of other current liabilities are presented in the table below.

				September 30, 2004				December 31, 2003
Accrued product warranty costs				$	43,013			$	41,184
Accrued interest					30,436				25,898
Billings and amounts in excess of costs incurred on contracts in process					94,396				71,235
Estimated costs in excess of estimated contract value to complete contracts in process in a loss position					46,761				52,063
Aggregate purchase price payable for acquired businesses					2,140				28,331
Notes payable and capital lease obligations					167				9,312
Deferred revenues					3,346				7,850
Current portion of deferred gains from terminated interest rate swap agreements					4,144				4,246
Other					48,105				47,738
Total other current liabilities				$	272,508			$	287,857

The components of other liabilities are presented in the table below.

				September 30, 2004				December 31, 2003
Non-current portion of deferred gains from terminated interest rate swap agreements				$	25,184			$	29,224
Accrued workers compensation					15,785				14,549
Fair value of interest rate swap agreements					2,309				—
Notes payable and capital lease obligations					5,944				1,485
Non-current portion of accrued product warranty costs					—				4,630
Other non-current liabilities					56,578				51,763
Total other liabilities				$	105,800			$	101,651

The table below presents the changes in the Company's accrued product warranty costs for the nine months ended September 30, 2004.

F-17

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

Balance at January 1, 2004				$	45,814
Acquisitions during the period					342
Accruals for product warranties issued during the period					11,987
Accruals for product warranties existing before January 1, 2004(1)					2,355
Settlements made during the period					(17,485	)
Balance at September 30, 2004				$	43,013

(1)	Represents changes to estimated product warranty costs related to sales recognized prior to January 1, 2004.

F-18

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

8.    Debt

The components of long-term debt and a reconciliation to the carrying amount of long-term debt are presented in the table below.

				September 30, 2004				December 31, 2003
L-3 Communications:
Borrowings under Senior Credit Facilities				$	—			$	—
8% Senior Subordinated Notes due 2008					200,000				200,000
7 5/8% Senior Subordinated Notes due 2012					750,000				750,000
6 1/8% Senior Subordinated Notes due 2013					400,000				400,000
6 1/8% Senior Subordinated Notes due 2014					400,000				400,000
					1,750,000				1,750,000
L-3 Holdings:
5¼% Convertible Senior Subordinated Notes due 2009					—				298,370
4% Senior Subordinated Convertible Contingent Debt Securities due 2011					420,000				420,000
Principal amount of long-term debt				$	2,170,000			$	2,468,370
Less: Unamortized discounts					(10,190	)			(11,070	)
Fair value of interest rate swap agreements					(2,309	)			—
Carrying amount of long-term debt				$	2,157,501			$	2,457,300

L-3 Communications

Available borrowings under the Company's senior credit facilities at September 30, 2004 were $671,518, after reductions for outstanding letters of credit of $78,482. There were no outstanding borrowings under the senior credit facilities at September 30, 2004. On February 24, 2004, the maturity date of the $250,000 364-day revolving credit facility was extended to February 22, 2005.

On November 1, 2004, L-3 Communications agreed to sell $650,000 aggregate principal amount of 5 7/8% Senior Subordinated Notes due 2015 through a private placement. The notes will mature on January 15, 2015, with interest payable semi-annually at a rate of 5 7/8% per annum. The Company expects to complete the offering, subject to certain conditions, on or about November 12, 2004. The notes are being offered within the United States only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, and, outside the United States, only to non-U.S. investors. The securities to be offered have not been registered under the Securities Act, or any state securities laws, and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Company intends to use the net proceeds to redeem the Company's outstanding $200,000 of 8% Senior Subordinated Notes due 2008 and for general corporate purposes, including payments for business acquisitions.

Depending on interest rate levels, the Company may enter into interest rate swap agreements to convert certain of its fixed interest rate debt obligations to variable interest rates, or terminate any existing interest rate swap agreements. The variable interest rate paid by the Company under the swap agreements is equal to (i) the variable rate basis, plus (ii) the variable rate spread. The table below presents the Company's interest rate swap agreement that is currently outstanding.

F-19

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

Inception Date

Fixed Rate Debt Obligation

Notional Amount

Variable Rate Basis

Average Variable Rate Spread

Interest Settlement Dates

March 2004

$400,000 of 6 1/8% Senior Subordinated Notes due 2014

$100,000

Six-Month USD LIBOR(1)

1.55%

January 15 and July 15

(1)	The six-month USD LIBOR interest rate was 2.20% on September 30, 2004, 1.94% on June 30, 2004 and 1.16% on March 31, 2004.

The table below presents the Company's terminated interest rate swap agreements activity through September 30, 2004.

																				Cash Proceeds Received at Termination(2)												September 30, 2004
Inception Date				Termination Date				Fixed Rate Debt Obligation				Notional Amount				Average Variable Rate Paid(1)				Interest Expense Reduction(3)				Deferred Gain (Loss)(4)				Total				Cumulative Recognized Deferred Gain (Loss)(5)				Balance of Unamortized Deferred Gain (Loss)(6)
April 2004				September 2004				$400,000 of 6 1/8% Senior Subordinated Notes due 2014				$	100,000				2.9	%		$	542			$	(542	)		$	—			$	—			$	(542	)
March 2004				September 2004				$400,000 of 6 1/8% Senior Subordinated Notes due 2014				$	100,000				3.6	%			415				(415	)			—				—				(415	)
July 2003				September 2003				$400,000 of 6 1/8% Senior Subordinated Notes due 2013				$	400,000				2.1	%			2,687				8,017				10,704				819				7,198
March 2003				June 2003				$750,000 of 7 5/8% Senior Subordinated Notes due 2012				$	200,000				4.4	%			1,578				6,727				8,305				965				5,762
January 2003				March 2003				$750,000 of 7 5/8% Senior Subordinated Notes due 2012				$	200,000				4.0	%			1,202				5,238				6,440				873				4,365
June 2002				September 2002				$750,000 of 7 5/8% Senior Subordinated Notes due 2012				$	200,000				4.1	%			1,762				12,173				13,935				2,508				9,665
November 2001				August 2002				$180,000 of 8½% Senior Subordinated Notes due 2008				$	180,000				5.3	%			1,186				(559	)			627				(559	)			—
July 2001				June 2002				$200,000 of 8% Senior Subordinated Notes due 2008				$	200,000				3.9	%			3,446				5,229				8,675				1,934				3,295
																				$	12,818			$	35,868			$	48,686			$	6,540			$	29,328

(1)	Represents the average variable interest rate L-3 paid for the interest payment period in which the interest rate swap agreements were terminated.

(2)	Cash proceeds received at termination are included in cash from operating activities on L-3's statement of cash flows in the period received.

(3)	Represents the interest expense reduction for the interest payment period in which the interest rate swap agreements were terminated.

(4)	Represents the mark-to market value of the interest rate swap agreements at termination date, which is being amortized over the remaining term of the underlying debt instrument.

(5)	Represents the cumulative amount of deferred gain recognized as a reduction to interest expense through September 30, 2004.

(6)	The current portion of unamortized deferred gains at September 30, 2004, aggregating $4,144, is included in other current liabilities. The remaining $25,184 is included in other liabilities.

F-20

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

L-3 Holdings

Convertible Notes.    On December 22, 2003, L-3 Holdings announced a full redemption of $300,000 of its 5.25% Convertible Senior Subordinated Notes due 2009 (Convertible Notes), which expired on January 9, 2004. At December 31, 2003, holders of approximately $1,630 of the Convertible Notes had exercised their conversion rights and converted such notes into 40,000 shares of L-3 Holdings common stock. On January 9, 2004, holders of $298,183 of the Convertible Notes exercised their conversion rights and converted such notes into 7,317,327 shares of L-3 Holdings common stock. The remaining $187 of Convertible Notes were redeemed for cash on January 12, 2004. As a result of the conversions and redemptions that occurred in January 2004, the principal amount of long-term debt decreased by $298,370 and shareholders' equity increased by $292,319, after the transfer of unamortized debt issuance costs of $5,849 from deferred debt issue costs related to the Convertible Notes.

Convertible Contingent Debt Securities.    On October 5, 2004, L-3 Holdings announced a full redemption of all the $420,000 of 4.00% Senior Subordinated Convertible Contingent Debt Securities (CODES) due 2011, which expired on Thursday, October 21, 2004. On October 21, 2004, holders of $419,785 of the principal amount of CODES exercised their conversion rights and converted such CODES into 7,800,797 shares of L-3 Holdings common stock. The remaining $215 of the CODES were redeemed for cash on October 25, 2004, at a redemption price of 102.0% of the principal amount, plus accrued and unpaid interest (including contingent interest) to October 25, 2004. As a result of the conversions and redemptions of the CODES that occurred in October 2004, the carrying amount of long-term debt decreased by $418,198, and shareholders' equity increased by $429,819, including the transfer of a deferred tax liability of $20,796 and unamortized debt issue costs of $8,960 related to the CODES.

9.    Comprehensive Income

Comprehensive income for the three and nine months ended September 30, 2004 and 2003 is presented in the tables below.

				Three Months Ended September 30,
				2004				2003
Net income				$	102,490			$	76,107
Other comprehensive income (loss):
Foreign currency translation adjustments, net of $1,047 income tax expense in 2004 and $1,376 income tax benefit in 2003					1,631				(2,161	)
Unrealized gains (losses) on hedging instruments, net of $486 income tax benefit in 2004 and $166 income tax benefit in 2003					(756	)			(261	)
Comprehensive income				$	103,365			$	73,685

F-21

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

				Nine Months Ended September 30,
				2004				2003
Net income				$	262,569			$	179,223
Other comprehensive income (loss):
Foreign currency translation adjustments, net of $195 tax expense in 2004 and $1,840 tax benefit in 2003					328				(2,914	)
Unrealized losses on hedging instruments, net of $531 tax benefit in 2004 and $813 tax benefit in 2003					(825	)			(1,278	)
Plus: reclassification adjustment for losses realized in net income, net of $154 tax expense					246				—
Comprehensive income				$	262,318			$	175,031

The changes in the Company's accumulated other comprehensive balances for the nine months ended September 30, 2004 and for the year ended December 31, 2003 are presented in the table below.

				Foreign currency translation adjustments				Unrealized losses on securities				Unrealized gains (losses) on hedging instruments				Minimum pension liability adjustments				Accumulated other comprehensive loss
September 30, 2004
Balance at January 1, 2004				$	(3,032	)		$	(246	)		$	619			$	(70,178	)		$	(72,837	)
Period change					328				246				(825	)			—				(251	)
Balance at September 30, 2004				$	(2,704	)		$	—			$	(206	)		$	(70,178	)		$	(73,088	)
December 31, 2003
Balance at January 1, 2003				$	(2,787	)		$	(246	)		$	(277	)		$	(65,989	)		$	(69,299	)
Period change					(245	)			—				896				(4,189	)			(3,538	)
Balance at December 31, 2003.				$	(3,032	)		$	(246	)		$	619			$	(70,178	)		$	(72,837	)

F-22

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

10.    L-3 Holdings Earnings Per Share

A reconciliation of basic and diluted EPS is presented in the table below.

				Three Months Ended September 30,								Nine Months Ended September 30,
				2004				2003				2004				2003
Basic:
Net income				$	102,490			$	76,107			$	262,569			$	179,223
Weighted average common shares outstanding					107,005				96,435				105,883				95,743
Basic earnings per share				$	0.96			$	0.79			$	2.48			$	1.87
Diluted:
Net income				$	102,490			$	76,107			$	262,569			$	179,223
After-tax interest expense savings on the assumed conversion of Convertible Notes					—				2,588				—				7,763
Net income, including assumed conversion of Convertible Notes				$	102,490			$	78,695			$	262,569			$	186,986
Common and potential common shares:
Weighted average common shares outstanding					107,005				96,435				105,883				95,743
Assumed exercise of stock options					9,847				8,077				9,464				7,629
Assumed purchase of common shares for treasury					(6,842	)			(5,299	)			(6,448	)			(4,979	)
Assumed conversion of Convertible Notes					—				7,362				214				7,362
Common and potential common shares					110,010				106,575				109,113				105,755
Diluted earnings per share				$	0.93			$	0.74			$	2.41			$	1.77

Non-Cash Reductions to Diluted EPS From New Accounting Rule.    On September 30, 2004, the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB) reached a consensus on EITF Issue No. 04-8, The Effect of Contingently Convertible Debt on Diluted Earnings Per Share, which addresses when the diluted effect of contingently convertible debt instruments should be included in diluted earnings per share (EPS). EITF 04-8 requires that contingently convertible debt instruments are to be included in the computation of diluted EPS regardless of whether the market price trigger has been met. EITF 04-8 also requires that prior period diluted EPS amounts presented for comparative purposes be restated. EITF 04-8 is expected to be effective for reporting periods ending after December 15, 2004. The Company expects to adopt the provisions of EITF 04-8 during the 2004 fourth quarter. The impact of applying EITF 04-8 to L-3 Holdings CODES will result in non-cash reductions to the Company's reported diluted EPS of $0.04 from $0.93 to $0.89 for the three months ended September 30, 2004, $0.03 from $0.74 to $0.71 for the three months ended September 30, 2003, $0.09 from $2.41 to $2.32 for the nine months ended September 30, 2004 and $0.05 from $1.77 to $1.72 for the nine months ended September 30, 2003. See Note 8 above for a discussion of the conversion and redemption of the CODES, which occurred during October 2004.

F-23

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

11.    Cash Dividends on L-3 Holdings Common Stock

In January of 2004, L-3 Holdings announced that its Board of Directors declared its first quarterly cash dividend of $0.10 per share. On March 15, 2004, L-3 Holdings paid cash dividends of $10,543 in aggregate to shareholders of record at the close of business on February 17, 2004.

In April of 2004, L-3 Holdings announced that its Board of Directors declared a regular quarterly dividend of $0.10 per share. On June 15, 2004, L-3 Holdings paid cash dividends of $10,624 in aggregate to shareholders of record at the close of business on May 17, 2004.

In July of 2004, L-3 Holdings announced that its Board of Directors declared a regular quarterly dividend of $0.10 per share. On September 15, 2004, L-3 Holdings paid cash dividends of $10,683 in aggregate to shareholders of record at the close of business on August 17, 2004.

On October 12, 2004, L-3 Holdings announced that its Board of Directors declared a regular quarterly dividend of $0.10 per share payable on December 15, 2004, to shareholders of record at the close of business on November 17, 2004.

12.    Contingencies

A substantial majority of the Company's revenues are generated from providing products and services under legally binding agreements, or contracts with U.S. Government customers. The U.S. Government contracts are subject to extensive legal and regulatory requirements, and, from time to time, agencies of the U.S. Government investigate whether such contracts were and are being conducted in accordance with these requirements. Under U.S. Government procurement regulations, an indictment of the Company by a federal grand jury could result in the Company being suspended for a period of time from eligibility for awards of new government contracts. A conviction could result in debarment from contracting with the federal government for a specified term. In addition, all of the Company's U.S. Government contracts are subject to audit and various pricing and cost controls, and include standard provisions for termination for the convenience of the U.S. Government. U.S. Government contracts and related orders are subject to cancellation if funds for contracts become unavailable or for termination for the convenience of the U.S. Government. Foreign government contracts generally include comparable provisions relating to termination for the convenience of the relevant foreign government.

Additionally, the Company has been periodically subject to litigation, claims or assessments and various contingent liabilities incidental to its businesses. Management continually assesses the Company's obligations with respect to applicable environmental protection laws. While it is difficult to determine the timing and ultimate cost to be incurred by the Company in order to comply with these laws, based upon available internal and external assessments, with respect to those environmental loss contingencies of which management is aware, the Company believes that even without considering potential insurance recoveries, if any, there are no environmental loss contingencies that, individually or in the aggregate, would be material to the Company's consolidated results of operations. The Company accrues for these contingencies when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated.

L-3 Integrated Systems and its predecessors have been involved in a litigation with Kalitta Air arising from a contract to convert Boeing 747 aircraft from passenger configuration to cargo freighters. The lawsuit was brought in the northern district of California on January 31, 1997. The aircraft were modified using Supplemental Type Certificates (STCs) issued in 1988 by the Federal Aviation Administration (FAA) to Hayes International, Inc. (Hayes/Pemco) as a subcontractor to GATX/Airlog Company (GATX). Between 1988 and 1990, Hayes/Pemco modified five aircraft as a subcontractor to GATX using the STCs. Between 1990 and 1994, Chrysler Technologies Airborne Systems, Inc. (CTAS), a predecessor

F-24

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

to L-3 Integrated Systems, performed as a subcontractor to GATX and modified an additional five aircraft using the STCs. Two of the aircraft modified by CTAS were owned by American International Airways, the predecessor to Kalitta Air. In 1996, the FAA determined that the engineering data provided by Hayes/Pemco supporting the STCs was inadequate and issued an Airworthiness Directive that effectively grounded the ten modified aircraft. The Kalitta Air aircraft have not been in revenue service since that date. The matter was tried in January 2001 against GATX and CTAS with the jury finding fault on the part of GATX, but rendering a unanimous defense verdict in favor of CTAS. Certain co-defendants had settled prior to trial. The U.S. Ninth Circuit Court of Appeals has reversed and remanded the trial court's summary judgment rulings in favor of CTAS regarding a negligence claim by Kalitta Air, which asserts that CTAS as an expert in aircraft modification should have known that the STCs were deficient, and excluding certain evidence at trial. In preparation for retrial, Kalitta Air has submitted to us an expert report on damages that calculated Kalitta Air's damages at either $232,000 or $602,000, depending on different factual assumptions. The Company has retained experts whose reports indicate that, even in the event of an adverse jury finding on the liability issues at trial, Kalitta Air has already recovered amounts from the other parties to the initial suit that more than fully compensated Kalitta Air for any damages it incurred. CTAS' insurance carrier has accepted defense of the matter with a reservation of its right to dispute its obligations under the applicable insurance policy in the event of an adverse jury finding. The trial began on January 18, 2005, and is expected to go to the jury for deliberation in mid-to late February 2005. The Company believes that it has meritorious defenses and intends to continue to vigorously defend this matter. However, litigation is inherently uncertain and it is possible that an adverse decision could be rendered, which could have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company.

On November 18, 2002, the Company initiated a proceeding against OSI Systems, Inc. (OSI) in the United States District Court sitting in the Southern District of New York seeking, among other things, a declaratory judgment that the Company had fulfilled all of its obligations under a letter of intent with OSI (the "OSI Letter of Intent"). Under the OSI Letter of Intent, the Company was to negotiate definitive agreements with OSI for the sale of certain businesses the Company acquired from PerkinElmer, Inc. on June 14, 2002. On February 7, 2003, OSI filed an answer and counterclaims alleging, among other things, that the Company defrauded OSI, breached obligations of fiduciary duty to OSI and breached its obligations under the OSI Letter of Intent. OSI seeks damages in excess of $100,000 not including punitive damages. Under the OSI Letter of Intent, the Company proposed selling to OSI the conventional detection business and the ARGUS business that the Company acquired from PerkinElmer, Inc. Negotiations with OSI lasted for almost one year and ultimately broke down over issues regarding, among other things, intellectual property, product-line definitions, allocation of employees and due diligence. Discovery on the matter is essentially complete. The Company believes that the claims asserted by OSI in its suit are without merit and intends to vigorously defend against the OSI claims.

L-3 Communications Vertex Aerospace LLC (formerly known as Vertex Aerospace LLC and acquired by the Company on December 1, 2003) (L-3 Vertex) is named as a defendant in one remaining wrongful death lawsuit in the United States District Court, Western District of North Carolina arising from the crash of Air Midwest Flight 5481 at Charlotte-Douglas International Airport in Charlotte, North Carolina on January 8, 2003. The crash resulted in the deaths of nineteen passengers and two crewmembers. Each of the lawsuits alleges contributing factors, including that the accident was caused by the improper maintenance of the aircraft by L-3 Vertex, and seeks to recover compensatory and punitive damages. No discovery has taken place in the lawsuits at this time. Twenty claims resulting from this incident have previously settled. The National Transportation Safety Board (NTSB) investigated the cause of the crash and has concluded that the crash was caused by the incorrect rigging of the elevator control system compounded by the airplane's center of gravity, which was substantially aft of the certified

F-25

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

limit, with several other contributing factors. L-3 Vertex believes that it has meritorious defenses to the pending lawsuits, and intends to defend the cases vigorously. The actions have been tendered to L-3 Vertex's insurance carrier, who has accepted the defense of each action served upon L-3 Vertex to date. L-3 Vertex was also indemnified by Air Midwest for losses L-3 Vertex incurred arising out of its provision of maintenance services to Air Midwest. Based on the availability of insurance and the indemnification from Air Midwest, the Company does not believe it will have a material liability in this matter.

On July 1, 2004, lawsuits were filed on behalf of the estates of 31 Russian children in the state courts of Washington, Arizona, California, Florida, New York and New Jersey against Honeywell, Honeywell TCAS, the Company, ACSS, Thales USA and Thales France. The suits are based on facts arising out of the crash over southern Germany of a Bashkirian Airways Tupelov TU 154M aircraft and a DHL Boeing 757 cargo aircraft. On-board the Tupelov aircraft were 12 crew members and 57 passengers, including 45 children. The Boeing aircraft carried a crew of 3. Both aircraft were equipped with a Honeywell/ACSS Model 2000, Change 7 Traffic Collision and Avoidance Systems. Sensing the other aircraft, the on-board DHL TCAS instructed the DHL pilot to climb, and the Tupelov on-board TCAS instructed the Tupelov pilot to descend. However, the Swiss air traffic controller ordered the Tupelov pilot to climb. The Tupelov pilot disregarded the onboard TCAS and put the Tupelov aircraft into a climb striking the DHL aircraft in midair at approximately 35,000 feet. All crew and passengers of both planes were lost. Investigations by the NTSB after the crash revealed that both TCAS units were performing as designed. The suits allege negligence and strict product liability based upon the design of the units and the training provided to resolve conflicting commands and seek compensatory damages. The Company's insurers have accepted defense of the matter and retained counsel. All parties subsequently agreed to litigate this matter in the Federal Court in New Jersey and to dismiss the actions brought in the state courts. Based on the defenses available to the Company and ACSS and the insurance coverage, we do not expect the Company or ACSS to incur a material liability in this matter.

With respect to those investigative actions, items of litigation, claims or assessments of which it is aware, management of the Company believes that, after taking into account certain provisions that have been made with respect to these matters, the ultimate resolution of any such investigative actions, items of litigation, claims or assessments will not have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company. However, as discussed above, the Company is a party to a number of material litigations, for which an adverse determination could have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company.

F-26

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS —
    
(Dollars in thousands, except per share data)

13.    Pension and Other Employee Benefits

The following tables summarize the components of net periodic benefit cost for the Company's pension and postretirement benefit plans.

				Three Months Ended September 30,
				2004				2003				2004				2003
				Pension Plans								Postretirement Benefit Plans
Components of net periodic benefit cost:
Service cost				$	14,009			$	11,930			$	759			$	551
Interest cost					15,143				12,970				1,718				1,657
Amortization of prior service cost					361				269				(985	)			(177	)
Expected return on plan assets					(14,143	)			(9,974	)			(316	)			(117	)
Recognized actuarial (gain) loss					2,390				4,014				(186	)			(469	)
Settlement loss (gain)					2,288				—				—				(66	)
Net periodic benefit cost				$	20,048			$	19,209			$	990			$	1,379

				Nine Months Ended September 30,
				2004				2003				2004				2003
				Pension Plans								Postretirement Benefit Plans
Components of net periodic benefit cost:
Service cost				$	43,241			$	34,087			$	3,255			$	2,975
Interest cost					43,406				36,924				6,055				5,951
Amortization of prior service cost					872				466				(2,148	)			(1,027	)
Expected return on plan assets					(40,316	)			(28,924	)			(854	)			(117	)
Recognized actuarial (gain) loss					9,137				10,181				192				(627	)
Settlement loss (gain)					2,288				—				—				(66	)
Net periodic benefit cost				$	58,628			$	52,734			$	6,500			$	7,089

The Company expects to contribute cash of approximately $59,000 to its pension plans in 2004, of which approximately $48,000 was contributed during the nine months ended September 30, 2004.

14.    Supplemental Cash Flow Information

				Nine Months Ended September 30,
				2004				2003
Interest paid				$	100,048			$	81,382
Income tax payments					34,598				21,961
Income tax refunds					3,232				4,985
Noncash transactions:
Conversion of 5¼% convertible senior subordinated notes to L-3 Holdings common stock					298,183				—

F-27

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS — (continued)
    
(Dollars in thousands, except per share data)

15.    Segment Information

The Company has four reportable segments: (1) Secure Communications & ISR, (2) Training, Simulation & Government Services, (3) Aircraft Modernization, O&M and Products and (4) Specialized Products, which are described in Note 1. The Company evaluates the performance of its operating segments and reportable segments based on their sales and operating income.

The tables below present sales, operating income, depreciation and amortization and total assets by reportable segment.

				Three Months Ended September 30,								Nine Months Ended September 30,
				2004				2003				2004				2003
Sales:
Secure Communications & ISR				$	443,387			$	375,803			$	1,243,170			$	1,056,487
Training, Simulation & Government Services					335,120				255,236	(2)			927,651				773,332	(2)
Aircraft Modernization, O&M and Products(1)					573,737				256,596				1,648,164				664,380
Specialized Products					451,876				395,079	(2)			1,226,642				1,144,295	(2)
Elimination of intersegment sales					(19,988	)			(18,103	)			(59,866	)			(57,955	)
Consolidated total				$	1,784,132			$	1,264,611			$	4,985,761			$	3,580,539
Operating Income:
Secure Communications & ISR				$	53,631			$	45,102			$	156,595			$	119,952
Training, Simulation & Government Services					33,702				25,146	(2)			100,938				85,554	(2)
Aircraft Modernization, O&M and Products(1)					79,846				38,239				183,830				92,714
Specialized Products					32,181				43,885	(2)			87,717				91,735	(2)
Consolidated total				$	199,360			$	152,372			$	529,080			$	389,955
Depreciation and Amortization:
Secure Communications & ISR				$	8,644			$	7,568			$	24,589			$	21,301
Training, Simulation & Government Services					1,831				1,879				5,465				5,857
Aircraft Modernization, O&M and Products(1)					8,368				4,309				24,880				13,322
Specialized Products					11,861				9,845				34,559				30,731
Consolidated total				$	30,704			$	23,601			$	89,493			$	71,211

				September 30, 2004				December 31, 2003
Total Assets:
Secure Communications & ISR				$	1,280,128			$	1,201,187
Training, Simulation & Government Services					897,011				781,186	(2)
Aircraft Modernization, O&M and Products					2,132,377				2,043,677
Specialized Products					2,066,596				1,961,754	(2)
Corporate					627,105				505,086
Consolidated total				$	7,003,217			$	6,492,890

(1)	During the three months ended September 30, 2004, the Company changed the name of the reportable segment from Aviation Products & Aircraft Modernization to Aircraft Modernization, O&M and Products. The businesses and reporting units that are included in this segment have not changed.

(2)

In 2004, the Company consolidated the IMC business into L-3 Government Services, Inc. As a result of this realignment, $4,314 of sales and $477 of operating loss was reclassified from the Specialized Products segment to the Training, Simulation & Government Services segment for the three months ended September 30, 2003. For the nine months ended September 30, 2003, $23,431 of sales and $2,188 of operating income was reclassified from the Specialized Products segment to the Training, Simulation & Government Services segment. At December 31, 2003, $40,127 of total assets were reclassified from the Specialized Products segment to the Training, Simulation & Government Services Segment.

F-28

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS — (continued)
    
(Dollars in thousands, except per share data)

16.    Recently Issued Accounting Standards

On September 30, 2004, the EITF reached a consensus on issue No. 04-8, The Effect of Contingently Convertible Debt on Diluted Earnings per Shares. See Note 10 above for a description of EITF No. 04-8 and a discussion of the impact on the Company's results of operations.

In December of 2003, the FASB revised its Interpretation No. 46, Consolidation of Variable InterestEntities (FIN 46R). FIN 46R clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements. FIN 46R requires that a business enterprise review all of its legal structures used to conduct its business activities, including those to hold assets, and its majority-owned subsidiaries, to determine whether those legal structures are variable interest entities (VIEs) required to be consolidated for financial reporting purposes by the business enterprise. Generally, a VIE is a legal structure for which the holders of a majority voting equity (ownership) interest may not have a controlling financial interest in the legal structure. Variable interests in a VIE are the contractual, ownership, creditor or other pecuniary interests in the VIE that change with changes in the fair value of the net assets exclusive of variable interests. FIN 46R provides guidance for identifying legal structures which are VIEs and the variable interests in a VIE, and also provides guidance for determining whether a business enterprise shall consolidate a VIE. FIN 46R requires that a business enterprise that holds a significant variable interest in a VIE make new disclosures in its financial statements. The Company adopted the provisions of FIN 46R during the interim period ended March 31, 2004. The Company does not hold any significant interests in VIEs that require consolidation or additional disclosures.

On December 8, 2003, President Bush signed the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the "Act"). This Act introduces a federal subsidy to employers who sponsor retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. In May of 2004, the FASB issued FASB Staff Position 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (FSP 106-2). FSP 106-2 provides guidance on the accounting for the effects of the Act and requires certain disclosures regarding the effect of the federal subsidy provided by the Act. The guidance in FSP 106-2 applies only if (i) the prescription drug benefits under the Company's defined benefit postretirement health care plan are considered actuarially equivalent to Medicare Part D and therefore qualify for the subsidy under the Act, and (ii) the expected subsidy will reduce the Company's share of the cost of the underlying postretirement prescription drug coverage. FSP 106-2 is effective for the first interim period beginning after June 15, 2004. The Company has determined that the benefits provided by certain of its postretirement benefit plans are actuarially equivalent to Medicare Part D, but has concluded that the effects of the Act do not constitute a significant event. Therefore, the amount of the accumulated postretirement benefit obligations or net periodic benefit cost recorded in the unaudited condensed consolidated financial statements and disclosed in the accompanying notes do not include the effects of the Act. The effects of the Act will be incorporated in the measurement of the Company's postretirement benefits liability and periodic benefit cost for the year ending December 31, 2005.

17.    Unaudited Financial Information of L-3 Communications and its Subsidiaries

L-3 Communications is a wholly-owned subsidiary of L-3 Holdings. The debt of L-3 Communications, including the Senior Subordinated Notes and borrowings under amounts drawn against the senior credit facilities, are guaranteed, on a joint and several, full and unconditional basis, by certain of its wholly-owned domestic subsidiaries (the "Guarantor Subsidiaries"). The foreign subsidiaries and certain domestic subsidiaries of L-3 Communications (the "Non-Guarantor Subsidiaries") do not guarantee the

F-29

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS — (continued)
    
(Dollars in thousands, except per share data)

debt of L-3 Communications. None of the debt of L-3 Communications has been issued by its subsidiaries. There are no restrictions on the payment of dividends from the Guarantor Subsidiaries to L-3 Communications.

The following unaudited condensed combining financial information present the results of operations, financial position and cash flows of (i) L-3 Holdings, excluding L-3 Communications, (ii) L-3 Communications, excluding its consolidated subsidiaries (the "Parent"), (iii) the Guarantor Subsidiaries, (iv) the Non-Guarantor Subsidiaries and (v) the eliminations to arrive at the information for L-3 Communications on a consolidated basis.

F-30

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

				L-3 Holdings				L-3 Communications (Parent)				Guarantor Subsidiaries				Non-Guarantor Subsidiaries				Eliminations				Consolidated L-3 Communications
Condensed Combining Balance Sheets:
At September 30, 2004:
Current assets:
Cash and cash equivalents				$	—			$	357,848			$	(36,570	)		$	46,060			$	—			$	367,338
Contracts in process					—				579,044				1,032,420				246,276				—				1,857,740
Other current assets					—				119,140				46,640				5,109				—				170,889
Total current assets					—				1,056,032				1,042,490				297,445				—				2,395,967
Goodwill					—				834,471				2,518,241				410,193				—				3,762,905
Other assets					—				301,088				429,798				113,459				—				844,345
Investment in and amounts due from consolidated subsidiaries					3,622,746				3,926,418				797,454				27,109				(8,373,727	)			—
Total assets				$	3,622,746			$	6,118,009			$	4,787,983			$	848,206			$	(8,373,727	)		$	7,003,217
Current liabilities				$	—			$	471,332			$	451,735			$	161,406			$	—			$	1,084,473
Other long-term liabilities					—				284,628				167,683				25,278				—				477,589
Long-term debt					418,198				2,157,501				—				—				(418,198	)			2,157,501
Minority interests					—				—				—				79,106				—				79,106
Shareholders' equity					3,204,548				3,204,548				4,168,565				582,416				(7,955,529	)			3,204,548
Total liabilities and shareholders' equity				$	3,622,746			$	6,118,009			$	4,787,983			$	848,206			$	(8,373,727	)		$	7,003,217
At December 31, 2003:
Current assets:
Cash and cash equivalents				$	—			$	155,375			$	(41,291	)		$	20,792			$	—			$	134,876
Contracts in process					—				528,056				817,547				269,745				—				1,615,348
Other current assets					—				159,194				21,928				6,356				—				187,478
Total current assets					—				842,625				798,184				296,893				—				1,937,702
Goodwill					—				805,388				2,425,591				421,457				—				3,652,436
Other assets					—				343,914				446,403				112,435				—				902,752
Investment in and amounts due from consolidated subsidiaries					3,290,873				3,708,989				596,696				21,052				(7,617,610	)			—
Total assets				$	3,290,873			$	5,700,916			$	4,266,874			$	851,837			$	(7,617,610	)		$	6,492,890
Current liabilities				$	—			$	396,868			$	370,468			$	156,876			$	—			$	924,212
Other long-term liabilities					—				272,252				167,275				21,144				—				460,671
Long-term debt					716,377				2,457,300				—				—				(716,377	)			2,457,300
Minority interests					—				—				—				76,211				—				76,211
Shareholders' equity					2,574,496				2,574,496				3,729,131				597,606				(6,901,233	)			2,574,496
Total liabilities and shareholders' equity				$	3,290,873			$	5,700,916			$	4,266,874			$	851,837			$	(7,617,610	)		$	6,492,890

F-31

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

				L-3 Holdings				L-3 Communications (Parent)				Guarantor Subsidiaries				Non-Guarantor Subsidiaries				Eliminations				Consolidated L-3 Communications
Condensed Combining Statements of Operations:
For the nine months ended September 30, 2004:
Sales				$	—			$	1,471,076			$	2,934,212			$	600,525			$	(20,052	)		$	4,985,761
Costs and expenses					—				1,290,523				2,660,095				526,115				(20,052	)			4,456,681
Operating income					—				180,553				274,117				74,410				—				529,080
Other expense (income), net					—				(11,738	)			783				3,545				9,138				1,728
Interest expense					13,630				106,030				410				9,477				(22,768	)			106,779
Minority interests in net income of consolidated subsidiaries					—				—				—				7,078				—				7,078
Provision (benefit) for income taxes					(4,975	)			31,486				99,617				19,823				4,975				150,926
Equity in net income of consolidated subsidiaries					271,224				207,794				—				—				(479,018	)			—
Net income				$	262,569			$	262,569			$	173,307			$	34,487			$	(470,363	)		$	262,569
For the nine months ended September 30, 2003:
Sales				$	—			$	1,371,589			$	1,949,595			$	273,778			$	(14,423	)		$	3,580,539
Costs and expenses					—				1,190,205				1,772,920				241,882				(14,423	)			3,190,584
Operating income					—				181,384				176,675				31,896				—				389,955
Other expense (income), net					—				(9,042	)			148				1,232				5,574				(2,088	)
Interest expense					24,763				97,369				396				6,041				(30,337	)			98,232
Minority interest in net income of consolidated subsidiaries					—				—				—				2,550				—				2,550
Loss on retirement of debt					—				11,225				—				—				—				11,225
Provision (benefit) for income taxes					(8,915	)			29,460				63,407				7,946				8,915				100,813
Equity in net income of consolidated subsidiaries					195,071				126,851				—				—				(321,922	)			—
Net income				$	179,223			$	179,223			$	112,724			$	14,127			$	(306,074	)		$	179,223
For the three months ended September 30, 2004:
Sales				$	—			$	532,908			$	1,041,919			$	215,674			$	(6,369	)		$	1,784,132
Costs and expenses					—				469,148				940,637				181,356				(6,369	)			1,584,772
Operating income					—				63,760				101,282				34,318				—				199,360
Other expense (income), net					—				(3,599	)			(25	)			(1,194	)			3,131				(1,687	)
Interest expense					4,590				34,629				153				3,203				(7,721	)			34,854
Minority interests in net income of consolidated subsidiaries					—				—				—				4,791				—				4,791
Provision (benefit) for income taxes					(1,675	)			11,947				36,921				10,044				1,675				58,912
Equity in net income of consolidated subsidiaries					105,405				81,707				—				—				(187,112	)			—
Net income				$	102,490			$	102,490			$	64,233			$	17,474			$	(184,197	)		$	102,490
For the three months ended September 30, 2003:
Sales				$	—			$	463,341			$	726,484			$	77,799			$	(3,013	)		$	1,264,611
Costs and expenses					—				392,084				657,630				65,538				(3,013	)			1,112,239
Operating income					—				71,257				68,854				12,261				—				152,372
Other expense (income), net					—				(2,966	)			22				247				1,930				(767	)
Interest expense					8,137				32,047				173				2,070				(10,067	)			32,360
Minority interest in net income of consolidated subsidiaries					—				—				—				1,862				—				1,862
Provision (benefit) for income taxes					(2,930	)			15,184				24,717				2,909				2,930				42,810
Equity in net income of consolidated subsidiaries					81,314				49,115				—				—				(130,429	)			—
Net income				$	76,107			$	76,107			$	43,942			$	5,173			$	(125,222	)		$	76,107

F-32

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

				L-3 Holdings				L-3 Communications (Parent)				Guarantor Subsidiaries				Non-Guarantor Subsidiaries				Eliminations				Consolidated L-3 Communications
Condensed Combining Statements of Cash Flows:
For the nine months ended September 30, 2004:
Operating activities:
Net cash from operating activities				$	—			$	113,509			$	239,724			$	54,732			$	—			$	407,965
Investing activities:
Acquisition of businesses, net of cash acquired					—				(57,483	)			(76,860	)			(223	)			—				(134,566	)
Other investing activities					(108,700	)			(93,546	)			(26,787	)			(6,109	)			185,783				(49,359	)
Net cash used in investing activities					(108,700	)			(151,029	)			(103,647	)			(6,332	)			185,783				(183,925	)
Financing activities:
Net cash from (used in) financing activities					108,700				239,993				(131,356	)			(23,132	)			(185,783	)			8,422
Net increase in cash					—				202,473				4,721				25,268				—				232,462
Cash and cash equivalents, beginning of period					—				155,375				(41,291	)			20,792				—				134,876
Cash and cash equivalents, end of period				$	—			$	357,848			$	(36,570	)		$	46,060			$	—			$	367,338
For the nine months ended September 30, 2003:
Operating activities:
Net cash from (used in) operating activities				$	—			$	186,011			$	157,035			$	(15,967	)		$	—			$	327,079
Investing activities:
Acquisition of businesses, net of cash acquired					—				(44,121	)			(215,103	)			(2,161	)			—				(261,385	)
Other investing activities					(67,810	)			(244,349	)			(21,441	)			(6,854	)			285,074				(55,380	)
Net cash used in investing activities					(67,810	)			(288,470	)			(236,544	)			(9,015	)			285,074				(316,765	)
Financing activities:
Proceeds from sale of senior subordinated notes					—				398,160				—				—				—				398,160
Redemption of senior subordinated notes					—				(187,650	)			—				—				—				(187,650	)
Other financing activities					67,810				153,716				62,080				23,054				(285,074	)			21,586
Net cash from financing activities					67,810				364,226				62,080				23,054				(285,074	)			232,096
Net increase (decrease) in cash					—				261,767				(17,429	)			(1,928	)			—				242,410
Cash and cash equivalents, beginning of period					—				126,421				(7,248	)			15,683				—				134,856
Cash and cash equivalents, end of period				$	—			$	388,188			$	(24,677	)		$	13,755			$	—			$	377,266

F-33

L-3 COMMUNICATIONS HOLDINGS, INC. AND L-3 COMMUNICATIONS CORPORATION

Consolidated Financial Statements as of December 31, 2003 and 2002
and for the Years Ended December 31, 2003, 2002 and 2001

F-34

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
    L-3 Communications Holdings, Inc.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, shareholders' equity and cash flows present fairly, in all material respects, the financial position of L-3 Communications Holdings, Inc. and L-3 Communications Corporation and subsidiaries (collectively, the "Company") at December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As indicated in Note 5 to the financial statements, in 2002 the Company adopted the provisions of Statement of Financial Accounting Standard No. 142, Goodwill and Other Intangible Assets.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
New York, New York
January 27, 2004, except for Note 18, as to which the date is November 11, 2004

F-35

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

				December 31,
				2003				2002
ASSETS
Current assets:
Cash and cash equivalents				$	134,876			$	134,856
Contracts in process					1,615,348				1,317,993
Deferred income taxes					152,785				143,634
Other current assets					34,693				42,891
Total current assets					1,937,702				1,639,374
Property, plant and equipment, net					519,749				458,639
Goodwill					3,652,436				2,794,548
Intangible assets					162,156				90,147
Deferred income taxes					100,482				147,190
Deferred debt issue costs					48,572				48,839
Other assets					71,793				63,571
Total assets				$	6,492,890			$	5,242,308
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade				$	195,548			$	167,240
Accrued employment costs					239,690				187,754
Accrued expenses					72,880				56,763
Customer advances					58,078				62,645
Accrued interest					25,898				18,395
Income taxes					70,159				33,729
Other current liabilities					261,959				183,416
Total current liabilities					924,212				709,942
Pension and postretirement benefits					359,020				343,527
Other liabilities					101,651				65,644
Long-term debt					2,457,300				1,847,752
Total liabilities					3,842,183				2,966,865
Commitments and contingencies
Minority interest					76,211				73,241
Shareholders' equity:
L-3 Holdings' common stock; $.01 par value; authorized 300,000,000 shares, issued and outstanding 97,077,495 and 94,577,331 shares (L-3 Communications' common stock; $.01 par value, 100 shares authorized, issued and outstanding)					1,893,488				1,794,976
Retained earnings					757,467				479,827
Unearned compensation					(3,622	)			(3,302	)
Accumulated other comprehensive loss					(72,837	)			(69,299	)
Total shareholders' equity					2,574,496				2,202,202
Total liabilities and shareholders' equity				$	6,492,890			$	5,242,308

See notes to consolidated financial statements.

F-36

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

				Year Ended December 31,
				2003				2002				2001
Sales:
Contracts, primarily U.S. Government				$	4,401,743			$	3,581,271			$	1,928,113
Commercial, primarily products					659,851				429,958				419,309
Total sales					5,061,594				4,011,229				2,347,422
Costs and expenses:
Contracts, primarily U.S. Government					3,863,805				3,139,013				1,697,740
Commercial, primarily products:
Cost of sales					416,980				270,584				257,218
Selling, general and administrative expenses					140,622				111,956				90,531
Research and development expenses					59,166				35,697				26,603
Total costs and expenses					4,480,573				3,557,250				2,072,092
Operating income					581,021				453,979				275,330
Interest and other income					215				4,921				1,739
Interest expense					132,683				122,492				86,390
Minority interest					3,515				6,198				4,457
Loss on retirement of debt					11,225				16,187				—
Income before income taxes and cumulative effect of a change in accounting principle					433,813				314,023				186,222
Provision for income taxes					156,173				111,556				70,764
Income before cumulative effect of a change in accounting principle					277,640				202,467				115,458
Cumulative effect of a change in accounting principle, net of income tax benefit of $6,428 (Note 5)					—				(24,370	)			—
Net income				$	277,640			$	178,097			$	115,458
L-3 Holdings' earnings per common share:
Basic:
Income before cumulative effect of a change in accounting principle				$	2.89			$	2.33			$	1.54
Cumulative effect of a change in accounting principle					—				(0.28	)			—
Net income				$	2.89			$	2.05			$	1.54
Diluted:
Income before cumulative effect of a change in accounting principle				$	2.71			$	2.18			$	1.47
Cumulative effect of a change in accounting principle					—				(0.25	)			—
Net income				$	2.71			$	1.93			$	1.47
L-3 Holdings' weighted average common shares outstanding:
Basic					96,022				86,943				74,880
Diluted					106,068				97,413				85,438

See notes to consolidated financial statements.

F-37

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

For the Years Ended December 31, 2003, 2002 and 2001

(in thousands)

				L-3 Holdings' Common Stock								Additional Paid-in Capital				Retained Earnings				Unearned Compensation				Accumulated Other Comprehensive Income (Loss)				Total
				Shares Issued				Par Value
Balance December 31, 2000					67,213			$	672			$	515,254			$	186,272			$	(2,457	)		$	(7,172	)		$	692,569
Comprehensive income:
Net income																	115,458												115,458
Minimum pension liability, net of $11,955 tax benefit																									(19,519	)			(19,519	)
Foreign currency translation adjustment, net of $164 tax benefit																									(268	)			(268	)
Unrealized loss on securities, net of $111 tax benefit																									(180	)			(180	)
Unrealized loss on securities reclassified to net income from other comprehensive loss, net of $2,274 tax expense																									3,632				3,632
Unrealized losses on hedging instruments, net of $100 tax benefit																									(163	)			(163	)
																													98,960
Shares issued:
Sale of common stock					9,150				92				353,530																353,622
Employee savings plans					418				4				16,864																16,868
Acquisition consideration					588				6				17,351																17,357
Exercise of stock options					1,128				11				28,253																28,264
Employee stock purchase plan													4,861																4,861
Grant of restricted stock													2,118								(2,118	)							—
Amortization of unearned compensation																					1,370								1,370
Other													21																21
Balance December 31, 2001					78,497				785				938,252				301,730				(3,205	)			(23,670	)			1,213,892
Comprehensive income:
Net income																	178,097												178,097
Minimum pension liability, net of $29,859 tax benefit																									(45,580	)			(45,580	)
Foreign currency translation adjustment, net of $1,626 tax benefit																									65				65
Unrealized losses on hedging instruments reclassified to net income from other comprehensive loss, net of $198 tax expense																									323				323
Unrealized losses on hedging instruments, net of $275 tax benefit																									(437	)			(437	)
																													132,468
Shares issued:
Sale of common stock					14,000				140				766,640																766,780
Employee savings plans					529				5				28,133																28,138
Acquisition consideration					229				2				10,605																10,607
Exercise of stock options					970				10				30,665																30,675
Employee stock purchase plan					352				4				17,474																17,478
Grant of restricted stock													2,231								(2,231	)							—
Amortization of unearned compensation																					2,134								2,134
Other													30																30
Balance December 31, 2002					94,577				946				1,794,030				479,827				(3,302	)			(69,299	)			2,202,202
Comprehensive income:
Net income																	277,640												277,640
Minimum pension liability, net of $2,313 tax benefit																									(4,189	)			(4,189	)
Foreign currency translation adjustment, net of $141 tax benefit																									(245	)			(245	)
Unrealized gains on hedging instruments, net of $571 tax expense																									896				896
																													274,102
Shares issued:
Employee savings plans					912				9				39,485																39,494
Acquisition consideration					110				1				4,968																4,969
Exercise of stock options					835				8				22,722																22,730
Employee stock purchase plan					603				6				26,378																26,384
Conversion of 5¼ % Convertible Senior Subordinated Notes					40				1				1,629																1,630
Grant of restricted stock													3,295								(3,295	)							—
Amortization of unearned compensation																					2,975								2,975
Other													10																10
Balance December 31, 2003					97,077			$	971			$	1,892,517			$	757,467			$	(3,622	)		$	(72,837	)		$	2,574,496

See notes to consolidated financial statements.

F-38

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

				Year Ended December 31,
				2003				2002				2001
Operating activities:
Net income				$	277,640			$	178,097			$	115,458
Cumulative effect of a change in accounting principle					—				24,370				—
Loss on retirement of debt					11,225				16,187				—
Goodwill amortization					—				—				42,356
Depreciation					77,340				66,230				40,362
Amortization of intangibles and other assets					18,083				9,630				4,233
Amortization of deferred debt issue costs (included in interest expense)					7,977				7,392				6,388
Deferred income tax provision					94,747				79,092				52,638
Minority interest					3,515				6,198				4,457
Other non-cash items, principally contributions to employee savings plans in L-3 Holdings' common stock					39,773				28,653				17,576
Subtotal					530,300				415,849				283,468
Changes in operating assets and liabilities, excluding acquired amounts:
Contracts in process					(120,397	)			(75,031	)			(40,652	)
Other current assets					(1,731	)			(15,257	)			1,643
Other assets					(15,861	)			(16,641	)			(12,033	)
Accounts payable					(19,503	)			(21,904	)			(43,165	)
Accrued employment costs					20,558				30,100				11,931
Accrued expenses					5,646				(2,581	)			(20,300	)
Customer advances					(4,773	)			(11,272	)			12,627
Accrued interest					7,503				7,199				(3,047	)
Income taxes					44,081				30,852				14,431
Other current liabilities					(25,384	)			(41,206	)			(37,555	)
Pension and postretirement benefits					5,088				(1,670	)			4,550
Other liabilities					19,008				20,517				1,423
All other operating activities, principally foreign currency translation					11,528				(495	)			(353	)
Subtotal					(74,237	)			(97,389	)			(110,500	)
Net cash from operating activities					456,063				318,460				172,968
Investing activities:
Acquisition of businesses, net of cash acquired					(1,014,439	)			(1,742,133	)			(446,911	)
Proceeds from sale of businesses					8,795				—				75,206
Capital expenditures					(82,874	)			(62,058	)			(48,121	)
Disposition of property, plant and equipment					3,854				3,548				1,237
Other investing activities					(3,393	)			(9,885	)			(6,301	)
Net cash used in investing activities					(1,088,057	)			(1,810,528	)			(424,890	)
Financing activities:
Borrowings under revolving credit facilities					295,000				566,000				316,400
Repayment of borrowings under revolving credit facilities					(295,000	)			(566,000	)			(506,400	)
Borrowings under bridge loan facility					—				500,000				—
Repayment of borrowings under bridge loan facility					—				(500,000	)			—
Proceeds from sale of senior subordinated notes					790,788				750,000				420,000
Redemption of senior subordinated notes					(187,650	)			(237,468	)			—
Proceeds from sale of L-3 Holdings' common stock, net					—				766,780				353,622
Debt issuance costs					(9,591	)			(19,759	)			(16,671	)
Proceeds from exercise of stock options					14,273				17,372				16,325
Proceeds from employee stock purchase plan					26,384				17,478				4,861
Distributions paid to minority interest					(1,975	)			(2,854	)			(2,530	)
Other financing activities					(215	)			(25,647	)			(5,343	)
Net cash from financing activities					632,014				1,265,902				580,264
Net increase (decrease) in cash					20				(226,166	)			328,342
Cash and cash equivalents, beginning of the period					134,856				361,022				32,680
Cash and cash equivalents, end of the period				$	134,876			$	134,856			$	361,022

See notes to consolidated financial statements.

F-39

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)

1.    Description of Business

L-3 Communications Holdings, Inc. conducts its operations and derives all its operating income and cash flow through its wholly owned subsidiary, L-3 Communications Corporation ("L-3 Communications"). L-3 Communications Holdings, Inc. ("L-3 Holdings" and together with its subsidiaries, "L-3" or the "Company") is a leading supplier of a broad range of products used in a substantial number of aerospace and defense platforms. L-3 also is a major supplier of subsystems on many platforms, including those for secure communication networks, mobile satellite communications, information security systems, shipboard communications, naval power systems, fuzes and safety and arming devices for missiles and munitions, microwave assemblies for radars and missiles, telemetry and instrumentation and airport security systems. The Company also is a prime system contractor for aircraft modernization and maintenance, Intelligence, Surveillance and Reconnaissance (ISR) collection platforms, simulation and training, and government systems support services. The Company's customers include the U.S. Department of Defense (DoD) and its prime contractors, certain U.S. Government intelligence agencies, major aerospace and defense contractors, foreign governments, commercial customers and certain other U.S. federal, state and local government agencies.

The Company has four reportable segments: (1) Secure Communications & ISR; (2) Training, Simulation & Government Services; (3) Aircraft Modernization, O&M and Products; and (4) Specialized Products.

Secure Communications & ISR.    The businesses in this segment provide products and services for the global ISR market, specializing in signals intelligence (SIGINT) and communications intelligence (COMINT) systems. These products and services provide to the warfighter in real-time the unique ability to collect and analyze unknown electronic signals from command centers, communication nodes and air defense systems for real-time situation awareness and response. The businesses in this segment also provide secure, high data rate communications systems for military and other U.S. Government and foreign government reconnaissance and surveillance applications. The Company believes that its systems and products are critical elements for a substantial number of major communication, command and control, intelligence gathering and space systems. The Company's systems and products are used to connect a variety of airborne, space, ground and sea-based communication systems and are used in the transmission, processing, recording, monitoring and dissemination functions of these communication systems. The major secure communications programs and systems include:

	•	secure data links that enable networked communications for airborne, satellite, ground and sea-based remote platforms, both manned and unmanned, for real-time information collection and dissemination to users;

	•	highly specialized fleet management and support, including procurement, systems integration, sensor development, modifications and maintenance for signals intelligence and ISR special mission aircraft and airborne surveillance systems;

	•	strategic and tactical signals intelligence systems that detect, collect, identify, analyze and disseminate information;

	•	secure terminal and communication network equipment and encryption management; and

	•	communication systems for surface and undersea vessels and manned space flights.

Training, Simulation & Government Services.    The businesses in this segment provide a full range of training, simulation and support services, including:

	•	services designed to meet customer training requirements for aircrews, navigators, mission operators, gunners and maintenance technicians for virtually any platform, including military fixed and rotary wing aircraft, air vehicles and various ground vehicles, and computer-based training systems;

F-40

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(continued)
(Dollars in thousands, except per share data)

	•	communication software support, information technology services and a wide range of engineering development services and integration support;

	•	high-end engineering and information support services used for command, control, communications and ISR architectures, as well as for air warfare modeling and simulation tools for applications used by the DoD, Department of Homeland Security and U.S. Government intelligence agencies, including missile and space systems, Unmanned Aerial Vehicles (UAVs) and military aircraft; and

	•	developing and managing extensive programs in the United States and internationally that focus on teaching, training and education, logistics, strategic planning, organizational design, democracy transition and leadership development.

Aircraft Modernization, Operations and Maintenance (O&M) and Products.    The businesses in this segment provide aircraft modernization and operations & maintenance services and aviation products, including:

	•	turnkey aviation life cycle management services that integrate custom developed and commercial off-the-shelf products for various military fixed and rotary wing aircraft, including heavy maintenance and structural modifications and interior modifications and constructions;

	•	engineering, modification, maintenance, logistics and upgrades for aircraft, vehicles and personnel equipment;

	•	aerospace and other technical services related to large fleet support, such as aircraft and vehicle modernization, maintenance, repair and overhaul, logistics support, and supply chain management, primarily for military training, tactical, cargo and utility aircraft, anti-missile defense systems and tanks;

	•	advanced cockpit avionics products and specialized avionics repair and overhaul services for various segments of the aviation market;

	•	airborne traffic and collision avoidance systems (TCAS) and terrain awareness warning systems for commercial and military applications;

	•	commercial, solid-state, crash-protected cockpit voice recorders, flight data recorders and cruise ship hardened voyage recorders; and

	•	ruggedized custom cockpit displays for military and high-end commercial applications.

Specialized Products.    The businesses in this segment supply products, including components, subsystems and systems to military and commercial customers in several niche markets. These products include:

	•	naval warfare products, including acoustic undersea warfare products for mine hunting, dipping and anti-submarine sonars and naval power distribution, conditioning, switching and protection equipment for surface and undersea platforms;

	•	ruggedization and integration of commercial off-the-shelf technology for displays, computers and electronic systems for military and commercial applications;

	•	security systems for aviation and port applications, including those for detection of explosives, concealed weapons, contraband and illegal narcotics, and to inspect agricultural products and to examine cargo;

	•	telemetry, instrumentation, space and navigation products, including products for tracking and flight termination;

F-41

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(continued)
(Dollars in thousands, except per share data)

	•	premium fuzing products and safety and arming devices for missiles and munitions;

	•	microwave components used in radar communication satellites, wireless communication equipment, electronic surveillance, communication and electronic warfare applications and countermeasure systems;

	•	high performance antennas and ground based radomes;

	•	training devices and motion simulators which produce advanced virtual reality simulation and high-fidelity representations of cockpits and mission stations for fixed and rotary wing aircraft and land vehicles; and

	•	precision stabilized electro-optic surveillance systems, including high magnification lowlight, daylight and forward looking infrared sensors, laser range finders, illuminators and designators, and digital and wireless communication systems.

2.    Summary of Significant Accounting Policies

Basis of Presentation:    The accompanying financial statements comprise the consolidated financial statements of L-3 Holdings and L-3 Communications. L-3 Holdings' only asset is its investment in the common stock of L-3 Communications, its wholly-owned subsidiary, and its only obligations are the 5¼% Convertible Senior Subordinated Notes due 2009, substantially all of which converted into L-3 Holdings' common stock in January 2004, and the 4% Senior Subordinated Convertible Contingent Debt Securities due 2011 (CODES). L-3 Holdings has also guaranteed the borrowings under the senior credit facilities of L-3 Communications. L-3 Holdings' obligations have been jointly, severally, fully and unconditionally guaranteed by L-3 Communications and certain of its domestic subsidiaries, and accordingly, such debt has been reflected as debt of L-3 Communications in its consolidated financial statements in accordance with the U.S. Securities and Exchange Commission's (SEC) Staff Accounting Bulletin (SAB) No. 54. In addition, all issuances of equity securities including grants of stock options and restricted stock by L-3 Holdings to employees of L-3 Communications have been reflected in the consolidated financial statements of L-3 Communications. As a result, the consolidated financial positions, results of operations and cash flows of L-3 Holdings and L-3 Communications are substantially the same. See Note 20 for additional information.

Principles of Consolidation:    The consolidated financial statements of the Company include all wholly-owned and significant majority-owned subsidiaries. All significant intercompany transactions are eliminated in consolidation. Investments over which the Company has significant influence but does not have voting control are accounted for by the equity method.

Sales and Costs and Expenses Presentation:    The Company presents its sales and costs and expenses in two categories on the statement of operations, "Contracts, primarily U.S. Government" and "Commercial, primarily products". Sales and costs and expenses for the Company's businesses that are primarily U.S. Government contractors are presented as "Contracts, primarily U.S. Government." The sales for the Company's U.S. Government contractor businesses are transacted using written revenue arrangements, or contracts, which primarily require the Company to design, develop, manufacture, modify, upgrade, test and integrate complex aerospace and electronic equipment, and to provide related engineering and technical services according to the buyer's specifications. Such buyers are predominantly the U.S. Department of Defense and other agencies of the U.S. Government, foreign government ministries of defense and defense prime contractors. These contracts are covered by the American Institute of Certified Public Accountants Statement of Position 81-1, Accounting for Performance of Construction – Type and certain Production-Type Contracts (SOP 81-1) and Accounting Research Bulletin No. 43, Chapter 11, Section A, Government Contracts, Cost-Plus-Fixed Fee Contracts (ARB 43) and Accounting Research Bulletin No. 45, Long-Term Construction Type Contracts (ARB 45). Sales reported

F-42

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(continued)
(Dollars in thousands, except per share data)

under "Contracts, primarily U.S. Government" also include certain sales from contracts with domestic and foreign commercial customers, which also are within the scope of SOP 81-1 and ARB 45. Additionally, certain fixed price contracts require the Company to perform services that are not related to the production of tangible assets, which are not covered by SOP 81-1, and these sales are recognized in accordance with SAB No. 104, Revenue Recognition. Sales and costs and expenses for the Company's businesses whose customers are primarily commercial business enterprises are presented as "Commercial, primarily products". Most of these sales are recognized in accordance with the SEC's SAB No. 104, Revenue Recognition and substantially all of the related revenue arrangements are not within the scope of SOP 81-1, ARB 43 or ARB 45. The Company's commercial businesses are substantially comprised of Aviation Communication & Surveillance Systems (ACSS), Aviation Recorders, Microwave Components, Security & Detection Systems and Avionics Systems.

Cash and Cash Equivalents:    Cash equivalents consist of highly liquid investments with a maturity of three months or less at time of purchase.

Revenue Recognition:    The substantial majority of the Company's direct and indirect sales to the U.S. Government and certain of the Company's sales to foreign governments and commercial customers are within the scope of SOP 81-1 and ARB 45 and sales and profits on them are recognized using percentage-of-completion methods of accounting. Sales and profits on fixed-price production contracts whose units are produced and delivered in a continuous or sequential process are recorded as units are delivered based on their selling prices (the "units-of-delivery" method). Sales and profits on other fixed-price type contracts are recorded based on the ratio of total actual incurred costs to date to the total estimated costs for each contract (the "cost-to-cost" method). Amounts representing contract change orders or claims are included in sales and estimated contract values only when they can be reliably estimated and their realization is reasonably assured. Losses on contracts are recognized in the period in which they are determined. The impact of revisions of contract estimates, which may result from contract modifications, performance or other reasons, are recognized on a cumulative catch-up basis in the period in which the revisions are made.

Sales and profits on cost-reimbursable type contracts that are within the scope of ARB 43 in addition to SOP 81-1 are recognized as allowable costs are incurred on the contract and become billable to the customer, in an amount equal to the allowable costs plus the profit on those costs, which is generally fixed or variable based on the contract fee arrangement. Incentive and award fees on these contracts are recorded as revenue when the conditions under which they are earned are reasonably assured of being met.

Sales and profits on time and material type contracts are recognized on the basis of direct labor hours incurred at a fixed negotiated rate per hour that covers the profit, cost of direct labor and indirect expenses, plus the cost of materials or other specified costs.

Sales on arrangements that are not within the scope of SOP 81-1, ARB 43 or ARB 45 are recognized in accordance with the SEC's SAB No. 104. Sales are recognized when there is persuasive evidence of an arrangement, delivery has occurred or services have been performed, the selling price to the buyer is fixed or determinable and collectibility is reasonably assured.

Contracts in Process:    Contracts in process include receivables and inventories for contracts that are within the scope of SOP 81-1, ARB 43 and ARB 45, as well as receivables and inventories related to other contractual arrangements. Billed Receivables represent the uncollected portion of amounts recorded as sales and billed to customers for all revenue arrangements, net of allowances for uncollectible accounts. Unbilled Contract Receivables represent accumulated incurred costs and earned profits or losses on contracts in process that have been recorded as sales, primarily using the cost-to-cost percentage of completion method, which have not yet been billed to customers. Inventoried Contract Costs represent incurred costs on contracts in process that have not yet been recognized as costs and expenses because the

F-43

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(continued)
(Dollars in thousands, except per share data)

related sales, which are primarily recorded using the units-of-delivery percentage of completion method, have not been recognized. Contract costs include direct costs and indirect costs, including overhead costs. In accordance with SOP 81-1 and the AICPA Audit and Accounting Guidelines, Audits of Federal Government Contractors, the Company's inventoried contract costs for U.S. Government contracts, and contracts with prime contractors or subcontractors of the U.S. Government, also include allocated general and administrative costs, independent research and development costs and bid and proposal costs. Contracts in Process contain amounts relating to contracts and programs with long performance cycles, a portion of which may not be realized within one year. For contracts in a loss position, the unrecoverable costs expected to be incurred in future periods are recorded in Estimated Costs in Excess of Estimated Contract Value to Complete Contracts in Process, which is a component of Other Current Liabilities. Under the contractual arrangements on certain contracts with the U.S. Government, the Company receives progress payments as it incurs costs. The U.S. Government has a security interest in the Unbilled Contract Receivables and Inventoried Contract Costs to which progress payments have been applied, and such progress payments are reflected as a reduction of the related Unbilled Contract Receivables and Inventoried Contract Costs. Customer Advances are classified as current liabilities.

Inventories other than Inventoried Contract Costs are stated at the lower of cost or market primarily using the average cost method.

The Company values its acquired contracts in process on the date of acquisition at contract value less the Company's estimated costs to complete the contract and a reasonable profit allowance on the Company's completion effort commensurate with the profit margin that the Company earns on similar contracts.

Derivative Financial Instruments:    The Company has entered into interest rate swap agreements and foreign currency forward contracts. Derivative financial instruments also include embedded derivatives. The Company's interest rate swap agreements have been accounted for as fair value hedges. The difference between the variable interest rates paid on the interest rate swap agreements and the fixed interest rate on the debt instrument underlying the swap agreements is recorded as increases or decreases to interest expense. Upon termination of an interest rate swap agreement, the cash received or paid that relates to the future value of the swap agreements at the termination date is a deferred gain or loss, which is recognized as a decrease or increase to interest expense over the remaining term of the underlying debt instrument. Foreign currency forward contracts are accounted for as cash flow hedges. Gains and losses on foreign currency forward contracts are reported as a component of the underlying transaction within contracts in process. The embedded derivatives related to the issuance of the Company's debt are recorded at fair value with changes reflected in the statement of operations.

Property, Plant and Equipment:     Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed by applying principally the straight-line method to the estimated useful lives of the related assets. Useful lives range substantially from 10 to 40 years for buildings and improvements and 3 to 10 years for machinery, equipment, furniture and fixtures. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements. When property or equipment is retired or otherwise disposed of, the net book value of the asset is removed from the Company's balance sheet and the net gain or loss is included in the determination of income.

Debt Issuance Costs:    Costs to issue debt are capitalized and deferred when incurred, and subsequently amortized to interest expense over the term of the related debt using a method that approximates the effective interest method.

Identifiable Intangible Assets:    Identifiable intangible assets represent assets acquired as part of the Company's business acquisitions and include customer relationships, technology and non-compete agreements. Effective January 1, 2002, the initial measurement of these intangible assets has been based

F-44

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(continued)
(Dollars in thousands, except per share data)

on their fair values. The values assigned to acquired identifiable intangible assets are determined, as of the date of acquisition, based on estimates and judgements regarding expectations for the estimated future after-tax cash flows from those assets over their lives, including the probability of expected future contract renewals and sales, less a cost-of-capital charge, all of which is discounted to present value. Identifiable intangible assets are amortized over their useful lives, which range from 5 to 20 years.

Goodwill:     Effective January 1, 2002, the Company accounts for goodwill in accordance with Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and other Intangible Assets. The carrying value of goodwill and indefinite lived identifiable intangible assets are not amortized, but are tested for impairment based on their estimated fair values using discounted cash flows valuation at the beginning of each year, and whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Prior to January 1, 2002, goodwill was amortized on a straight-line basis over periods ranging from 15 to 40 years except for goodwill related to acquisitions consummated after June 30, 2001. Prior to the adoption of SFAS No. 142, the Company evaluated the carrying amount of goodwill by reference to current and estimated profitability and undiscounted cash flows.

Income Taxes:    The Company provides for income taxes using the liability method. Deferred income tax assets and liabilities reflect tax carryforwards and the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes, as determined under enacted tax laws and rates. The effect of changes in tax laws or rates is accounted for in the period of enactment. Valuation allowances for deferred tax assets are provided when it is more likely than not that the assets will not be realized, considering, when appropriate, tax planning strategies.

Research and Development:    Independent research and development costs sponsored by the Company include bid and proposal costs, and relate to both U.S. Government products and services and those for commercial and foreign customers. The independent research and development (IRAD) and bid and proposal costs (B&P) for the Company's businesses that are U.S. Government contractors are allowable indirect contract costs that are allocated to our U.S. Government contracts in accordance with U.S. Government regulations, and are specifically excluded from the scope of SFAS No. 2, Accounting for Research and Development Costs (SFAS No. 2). In accordance with SOP 81-1 and the AICPA Audit and Accounting Guide, Audits of Federal Government Contractors, the Company reports IRAD and B&P costs allocated to U.S. Government contracts as costs of sales when the related contract sales are recognized, and are not accounted for as period expenses. Research and development costs for the Company's businesses that are not U.S. Government contractors are expensed as incurred in accordance with SFAS No. 2.

Customer-funded research and development costs are incurred pursuant to contracts to perform research and development activities according to customer specifications. These costs are not accounted for as research and development expenses in accordance with SFAS No. 2, and are also not indirect contract costs. Instead, these costs are direct contract costs and are expensed when the corresponding revenue is recognized, which is generally as the research and development services are performed. Customer-funded research and development costs are substantially all incurred under cost-reimbursable type contracts with the U.S. Government.

Computer Software Costs:    The Company's software development costs for computer software products to be sold, leased or marketed that are incurred after establishing technological feasibility for the computer software products are capitalized as other assets and amortized on a product by product basis using the amount that is the greater of the straight-line method over the useful life or the ratio of current revenues to total estimated revenues in accordance with SFAS No. 86, Accounting for the Costs of Computer Software to Be Sold, Leased or Otherwise Marketed. Substantially all of the capitalized software development costs pertain to products of the Company's commercial and civil businesses. Capitalized

F-45

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(continued)
(Dollars in thousands, except per share data)

software development costs, net of accumulated amortization, was $29,990 at December 31, 2003 and $25,724 at December 31, 2002, and is included in other assets on the consolidated balance sheets. Amortization expense for capitalized software development costs was $6,917 for 2003, $5,209 for 2002 and $1,567 for 2001.

Stock-Based Compensation:    The Company accounts for employee stock-based compensation under the recognition and measurement principles of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees. Compensation expense for employee stock-based compensation is recognized in income based on the excess, if any, of L-3 Holdings' fair value of the stock at the grant date of the award or other measurement date over the amount an employee must pay to acquire the stock. When the exercise price for stock-based compensation arrangements granted to employees equals or exceeds the fair value of the L-3 Holdings common stock at the date of grant, the Company does not recognize compensation expense. The Company elected not to adopt the fair value based method of accounting for stock-based employee compensation as permitted by the Financial Accounting Standards Board's (FASB) Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation (SFAS 123), as amended by SFAS No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of SFAS No. 123. Had the Company adopted the fair value based method provisions of SFAS 123, it would have recorded a non-cash expense for the estimated fair value of the stock-based compensation arrangements that the Company has granted to its employees amortized over the vesting period of the grants. The table below compares the "as reported" net income and L-3 Holdings earnings per share (EPS) to the "pro forma" net income and L-3 Holdings EPS that the Company would have reported if the Company had elected to recognize compensation expense in accordance with the fair value based method of accounting of SFAS 123.

				Year Ended December 31,
				2003				2002				2001
Net income:
As reported				$	277,640			$	178,097			$	115,458
Pro forma					259,997				160,079				107,573
L-3 Holdings Basic EPS:
As reported				$	2.89			$	2.05			$	1.54
Pro forma					2.71				1.84				1.44
L-3 Holdings Diluted EPS:
As reported				$	2.71			$	1.93			$	1.47
Pro forma					2.54				1.75				1.38

The assumptions used to calculate the fair value of stock options at their grant dates are presented in Note 14.

Product Warranties:    Product warranty costs are accrued when the covered products are shipped to customers. Product warranty expense is recognized based on the terms of the product warranty and the related estimated costs. Accrued warranty costs are reduced as these costs are incurred.

Use of Estimates:    The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and costs and expenses during the reporting period. The most significant of these estimates and assumptions relate to contract revenue and profit recognition, market values for inventories reported at lower of cost or market, pension and postretirement benefit obligations, recoverability and valuation of recorded amounts of long-lived assets, identifiable intangible assets, including goodwill, income taxes, including the valuations

F-46

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(continued)
(Dollars in thousands, except per share data)

of deferred tax assets, litigation reserves and environmental obligations. Changes in estimates are reflected in the periods during which they become known. Actual amounts will differ from these estimates.

Recently Issued Accounting Standards:     In December of 2003, the FASB revised its FASB Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46R). FIN 46R clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements. FIN 46R requires that a business enterprise review all of its legal structures used to conduct its business activities, including those to hold assets, and its majority-owned subsidiaries, to determine whether those legal structures are variable interest entities (VIEs) required to be consolidated for financial reporting purposes by the business enterprise. A VIE is a legal structure for which the holders of a majority voting interest may not have a controlling financial interest in the legal structure. FIN 46R provides guidance for identifying those legal structures and provides guidance for determining whether a business enterprise shall consolidate a VIE. FIN 46R requires that a business enterprise that holds a significant variable interest in a VIE make new disclosures in their financial statements. The Company is required to adopt the provisions of FIN 46R for its interim period ending March 31, 2004. The Company does not believe that it holds any significant interests in VIEs that would require consolidation or additional disclosures.

In March of 2003, the Emerging Issues Task Force (EITF) issued EITF No. 00-21, Accounting for Revenue Arrangements with Multiple Deliverables. EITF No. 00-21 addresses how to determine whether a revenue arrangement involving multiple deliverables contains more than one unit of accounting for revenue recognition purposes, and how consideration should be measured and allocated to the separate accounting units. EITF No. 00-21 applies to all deliverables within contractually binding arrangements in all industries, except to the extent that a deliverable in a contractual arrangement is subject to other existing higher-level authoritative literature. EITF 00-21 became effective for revenue arrangements entered into after July 1, 2003. The adoption of EITF No. 00-21 did not have a material effect on the Company's financial position or results of operations.

In May of 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This Statement applies to certain financial instruments, including mandatorily redeemable financial instruments that, prior to SFAS No. 150 could have been accounted for as a component of equity. SFAS No. 150 requires that those instruments be classified as liabilities in statements of financial position. SFAS No. 150 also requires disclosures about alternative ways of settling the instruments and the capital structure of entities whose shares are all mandatorily redeemable. SFAS No. 150 is effective for these financial instruments entered into or modified after May 31, 2003. For these financial instruments entered into before May 31, 2003, SFAS No. 150 became effective for the interim period beginning July 1, 2003. The Company does not hold any financial instruments that are within the scope of SFAS No. 150. Accordingly, SFAS No. 150 is not expected to have a material effect on the Company's consolidated results of operations or financial position.

On December 8, 2003, President Bush signed the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (DIMA). This Act introduces a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. In January of 2002, the FASB issued FASB Staff Position 106-1, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (FSP 106). In accordance with FSP 106, the Company is electing to defer recognition of any potential savings on the measure of the accumulated postretirement benefit or net periodic benefit cost as a result of DIMA until specific authoritative guidance on the accounting of the federal subsidy is issued. Therefore, the consolidated financial statements and accompanying notes do not reflect the effects of the Act on the Company's postretirement medical plans.

Reclassifications:     Effective January 1, 2004, the Company combined its explosives detection systems (EDS) business into L-3 Security and Detection Systems, its IMC business into L-3 Government

F-47

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(continued)
(Dollars in thousands, except per share data)

Services, Inc., the EMP business into its ESSCO business and the Apcom business into its Communication Systems-East business (2004 Business Realignments). As a result of the 2004 Business Realignments, reclassifications between "Contracts, primarily U.S. Government" and "Commercial, primarily products" have been made to the prior period sales and operating income amounts, however, since EDS was primarily a U.S. Government contracting business prior to 2003, the sales and operating income for EDS were not reclassified for 2002 and 2001. Specifically, $96,456 of 2003 sales, $9,070 of 2002 sales, $11,868 of 2001 sales, $26,293 of 2003 operating income, $6,149 of 2002 operating loss and $6,770 of 2001 operating loss was reclassified from "Contracts, primarily U.S. Government" to "Commercial, primarily products". Additionally, $30,645 of 2003 sales, $9,239 of 2002 sales, $7,776 of 2001 sales, $2,126 of 2003 operating income, $7,432 of 2002 operating loss and $8,985 of 2001 operating loss was reclassified from "Commercial, primarily products" to "Contracts, primarily U.S. Government". The 2004 Business Realignments and related reclassifications did not result in any changes to the Company's consolidated results of operations, financial position or cash flow.

3.    Acquisitions, Divestiture and Other Transactions

Acquisitions

Vertex Aerospace. On December 1, 2003, the Company acquired Vertex Aerospace LLC (Vertex) for $653,250 in cash, which includes $650,000 for the original contract purchase price, and a purchase price adjustment paid on the closing date of $3,250, plus acquisition costs. The acquisition was financed with cash on hand and approximately $285,000 of borrowings under the Company's senior credit facilities. Vertex is a leading provider of aerospace and other technical services to the U.S. Department of Defense and other U.S. Government agencies. Vertex's services include logistics support, modernization and maintenance for fixed and rotary wing aircraft, supply chain management and pilot training. Vertex's engineering and technical staff support tactical, cargo and utility aircraft and other defense-related platforms. The acquisition will expand L-3's market for aircraft modernization and maintenance when combined with Integrated Systems, Spar and MAS, and will also provide complementary service offerings for L-3's existing customers. Based on a preliminary purchase price allocation for Vertex, goodwill of $483,766 was assigned to the Aircraft Modernization, O&M and Products segment and goodwill of approximately $440,000 is expected to be deductible for income tax purposes.

The table below presents a summary of the Vertex preliminary estimates of fair values of the assets acquired and liabilities assumed on the closing date of the acquisition (December 1, 2003), including preliminary valuations of acquired contracts in process. Final valuations for the estimated fair values of the assets acquired and liabilities assumed are expected to be completed during 2004. The Company does not expect material differences betwen the preliminary and final purchase price allocation for Vertex. The purchase price for Vertex is subject to adjustment based on the closing date net assets of the business. The Company expects to determine the final purchase price with the seller during 2004, and the Company estimates that such determination will result in a decrease of up to approximately $14,000 to the purchase price because of adjustments to contracts in process and plant and equipment. Any adjustment to the purchase price will be recorded as an adjustment to the preliminary goodwill amount for Vertex.

F-48

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(continued)
(Dollars in thousands, except per share data)

Cash				$	2,187
Contracts in process					161,663
Deferred income taxes					14,096
Other current assets					1,621
Property, plant and equipment					31,050
Goodwill					483,766
Intangible assets					50,000
Deferred income taxes					2,397
Total assets acquired					746,780
Current liabilities					79,986
Long-term liabilities					12,894
Total liabilities assumed					92,880
Net assets acquired				$	653,900

Military Aviation Services, Klein Associates, Aeromet, Avionics Systems and certain defense and aerospace assets of IPICOM, Inc. During 2003, in separate transactions, the Company acquired five businesses for an aggregate consideration of $351,116 in cash, plus acquisition costs. These acquisitions were financed with cash on hand. The purchase prices for Military Aviation Services, Klein Associates, Aeromet and certain defense and aerospace assets of IPICOM, Inc. are subject to adjustment based on closing date net assets or net working capital of the acquired businesses. The Company acquired the following:

•

Certain defense and aerospace assets of IPICOM, Inc. (IPICOM) on December 10, 2003. The Company paid $8,676 of the purchase price on the closing date, and the balance of the purchase price of $18,824 was recorded in other current liabilities at December 31, 2003 and subsequently paid in January of 2004. This acquisition adds innovative optical networking technology to the Company's existing and growing ISR and secure communications businesses;

•

The net assets of the Military Aviation Services (MAS) business of Bombardier, Inc. on October 31, 2003. MAS provides a full range of technical services in the areas of aircraft maintenance, repair and upgrade for military aircraft, and the refurbishment and modernization of selected commercial aircraft. Its customers include the Canadian Armed Forces, the DoD, aerospace and defense prime contractors and foreign military organizations;

•

All of the outstanding common stock of Klein Associates, Inc. (Klein), a business unit of OYO Corporation of Japan, on September 30, 2003. Klein designs, manufactures and supports side-scan sonar, sub-bottom profilers and related instruments and accessories for undersea search and survey, including intrusion detection systems for port security applications. Klein provides complimentary product capabilities, which the Company intends to integrate into L-3's port and maritime security systems offerings. Klein is also synergistic with the Company's acoustic undersea warfare products;

•	All of the outstanding common stock of Aeromet, Inc. (Aeromet), on May 30, 2003. Aeromet designs, develops and integrates infrared and optical systems for airborne ISR. The acquisition advances the Company's strategy to expand its electro-optical and infrared product lines and provides the Company with the ability to apply Aeromet's technology to L-3's current ISR products; and

•	All of the outstanding common stock of the avionics systems (Avionics Systems) business of Goodrich Corporation, on March 28, 2003. Avionics Systems develops and manufactures innovative avionics solutions for substantially all segments of the aviation market, and sells its products to the military, business jet, general aviation, rotary wing aircraft and air transport

F-49

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(continued)
(Dollars in thousands, except per share data)

markets. The acquisition provides the Company with enhanced manufacturing capabilities, expanded marketing expertise, an expanded distribution network and increased efficiencies in research and development initiatives, which the Company expects to use to sell its avionics portfolio, including advanced displays, aviation recorders, transponders, collision avoidance and proximity awareness products. Avionics Systems also provides a unique set of products to add to the Company's existing product line for the commercial air transport, business jet and military aircraft markets.

Based on preliminary purchase price allocations, the goodwill recognized for the acquisitions of MAS, Klein, Aeromet, Avionics Systems and certain defense and aerospace assets of IPICOM was $311,901 and goodwill of approximately $281,000 is expected to be deductible for income tax purposes. Goodwill of $43,068 was assigned to the Secure Communication & ISR segment, $244,849 was assigned to the Aircraft Modernization, O&M and Products segment and $23,984 was assigned to the Specialized Products segment.

Aircraft Integration Systems.    On March 8, 2002, the Company acquired the assets of Aircraft Integration Systems (AIS), a division of Raytheon Company (Raytheon), for approximately $1,148,700 in cash, which includes $1,130,000 for the original contract purchase price, and an increase to the contract purchase price of approximately $18,700 related to additional net assets received at closing, plus acquisition costs. Following the acquisition, the Company changed AIS's name to L-3 Communications Integrated Systems (IS). The purchase price is subject to adjustment based on the IS closing date net tangible book value, as defined in the asset purchase agreement. The acquisition was financed using approximately $229,000 of cash on hand, borrowings under the Company's senior credit facilities of $420,000 and a $500,000 senior subordinated bridge loan (See Note 8). The Company acquired IS because it is a long-standing supplier of critical COMINT, SIGINT and unique sensor systems for special customers within the U.S. Government. The Company believes that IS has excellent operating prospects as its major customers increasingly focus on intelligence gathering and information distribution to the battlefield. The Company also believes there are significant opportunities to apply its proven business integration and cost control skills to further enhance IS's operating and financial performance. The Company also believes that IS creates significant opportunities for the sale of the Company's secure communications and aviation products, including communication links, signal processing, antennas, data recorders, displays and traffic control and collision avoidance systems.

The Company is continuing its discussions with Raytheon Company (Raytheon) regarding the adjustment of the purchase price for the acquisition of AIS. The AIS purchase price submitted by Raytheon to the Company amounted to approximately $1,163,000. The Company believes that, in accordance with the terms of the AIS asset purchase agreement concerning the closing date balance sheet, the purchase price for AIS submitted by Raytheon should be reduced by $100,000 to $1,063,000. In accordance with the asset purchase agreement, the Company and Raytheon have begun the formal process to settle the disagreement and engage a neutral accountant to arbitrate the final purchase price. Any amount received by the Company for a reduction to the AIS purchase price will be reported as a reduction to goodwill.

Detection Systems.    On June 14, 2002, the Company completed the acquisition of the detection systems business of PerkinElmer (Detection Systems) for $110,000 in cash, which includes $100,000 for the original contract purchase price, and an increase to the contract purchase price of $10,000 related to a preliminary purchase price adjustment, plus acquisition costs. The purchase price is subject to final adjustment based on closing date net working capital, as defined. Detection Systems offers X-ray screening for several major security applications, including: (1) aviation systems for checked and oversized baggage, break bulk cargo and air freight; (2) port and border applications including pallets, break bulk and air freight; and (3) facility protection such as parcels, mail and cargo. Detection Systems has a broad range of systems and technology, and an installed base of over 16,000 units. Detection

F-50

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(continued)
(Dollars in thousands, except per share data)

Systems' customer base includes major airlines and airports, a number of domestic agencies, such as the U.S. Customs Service, U.S. Marshals Service, U.S. Department of Agriculture and U.S. Department of State, and international authorities throughout Europe, Asia and South America. The acquisition broadens the Company's capabilities and product offerings in the rapidly growing areas of airport security and other homeland defense markets, including explosive detection systems (EDS). The acquisition provides the Company with enhanced manufacturing and marketing capabilities, which will be used as the Company works to meet growing demand for its EDS products. Based on the final purchase price allocation for Detection Systems, goodwill of $69,225 was assigned to the Specialized Products segment and is not expected to be deductible for income tax purposes.

Telos, ComCept and TMA.    During the third quarter of 2002, in separate transactions, the Company acquired three businesses for an aggregate purchase price of $105,824, which was comprised of $90,248 in cash, 339,008 shares of L-3 Holdings common stock for part of the ComCept purchase price valued at $15,576, plus acquisition costs. The aggregate purchase price includes net purchase price increases of $1,891 based on closing date balance sheets of the acquired businesses and $6,969 of additional purchase price based on the financial performance of the acquired businesses for various 12-month periods ending in 2003. The Company acquired:

	•	all of the outstanding common stock of Telos Corporation (Telos), a business incorporated in California, which provides software development for command, control and communications and other related services for military and national security requirements, on July 19, 2002;

	•	all of the outstanding common stock of ComCept, Inc. (ComCept), a company with network-centric warfare capabilities, including requirements development, modeling, simulation, communications and systems development and integration for ISR, on July 31, 2002. This acquisition is subject to additional consideration not to exceed 109,544 shares of L-3 Holdings common stock which is contingent upon the financial performance of ComCept for the fiscal year ending June 30, 2004; and which will be accounted for as goodwill; and

	•	all of the outstanding common stock of Technology, Management and Analysis Corporation (TMA), a provider of professional services to the DoD, primarily in support of the Naval surface and combat fleet, on September 23, 2002. The core competencies of TMA include engineering, logistics, ship test and trials, network engineering and support and hardware and software products.

Based on the final purchase price allocations, the goodwill recognized for the acquisitions of Telos, ComCept and TMA was $95,053, of which $41,771 is expected to be deductible for income tax purposes. Goodwill of $29,003 was assigned to the Secure Communications & ISR segment and $66,050 was assigned to the Training, Simulation & Government Services segment.

Northrop Grumman's Electron Devices and Displays-Navigation Systems-San Diego Businesses, Wolf Coach Inc., International Microwave Corporation, Westwood Corporation, Wescam Inc. and Ship Analytics, Inc.    During the fourth quarter of 2002, in separate transactions, the Company acquired seven businesses for an aggregate purchase price of $346,487 in cash plus acquisition costs. The aggregate purchase price includes net purchase price increases of $2,043 based on closing date balance sheets of the acquired businesses and $5,678 of additional purchase price based on the financial performance of the acquired businesses for the year ended December 31, 2003. The Company acquired:

•

the net assets of Northrop Grumman's Electron Devices and Displays-Navigation Systems-San Diego businesses on October 25, 2002. Electron Devices is a supplier of microwave power devices to all major prime contractors on key military programs, including missile seekers, aircraft navigation and landing systems, airborne and ground radar's and electronic warfare and communications systems. Following the acquisition, the Company changed Electron Devices

F-51

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(continued)
(Dollars in thousands, except per share data)

	name to L-3 Communications Electron Devices (Electron Devices). Displays-Navigation Systems is a supplier of ruggedized displays and computer and electronic systems for both military and commercial applications. Following the acquisition, the Company changed Displays-Navigation Systems' name to L-3 Communications Ruggedized Command and Control Solutions (Ruggedized Command & Control);

•

all of the outstanding common stock of Wolf Coach, Inc. (Wolf Coach), a producer of mobile communications vehicles, for customers in the television industry, the military and for the homeland defense market, on November 1, 2002. The acquisition is subject to additional purchase price not to exceed $2,700 which is contingent upon the financial performance of Wolf Coach for the years ending December 31, 2004 and 2005, and which will be accounted for as goodwill;

•	all of the outstanding common stock of International Microwave Corporation (IMC), a global communications company that provides wireless communications, network support services, information technology, defense communications and enhanced surveillance systems, on November 8, 2002;

•	all of the outstanding common stock of Westwood Corporation (Westwood), a supplier of shipboard power control, switchgear and power distribution systems to the United States Navy, Army, Air Force and Coast Guard, on November 13, 2002;

•	all of the outstanding common stock of Wescam Inc. (Wescam), a designer and manufacturer of systems for defense applications that capture images from mobile platforms and transmit them in real time to tactical command centers for interpretation and for commercial broadcast applications to production facilities; and

•

all of the outstanding common stock of Ship Analytics, Inc (Ship Analytics), a producer of crisis management software, providing command and control for homeland security applications, on December 19, 2002. Ship Analytics also designs, manufactures and operates real-time simulation systems for critical shipboard operations for commercial maritime and naval customers. The acquisition is subject to additional purchase price not to exceed $9,000 which is contingent upon the financial performance of Ship Analytics for the years ending December 31, 2004 and 2005, and which will be accounted for as goodwill.

Based on the final purchase price allocations, the goodwill recognized for the acquisitions of Electron Devices, Ruggedized Command & Control, Wolf Coach, IMC, Westwood, Wescam and Ship Analytics was $237,946, of which $40,606 is expected to be deductible for income tax purposes. Goodwill of $194,907 was assigned to the Specialized Products segment and $43,039 was assigned to the Training, Simulation & Government Services segment.

KDI, EER, Spar Aerospace, Emergent, BT Fuze and SY Technology.    During 2001, in separate transactions, the Company acquired six businesses for an aggregate purchase price of $501,694 in cash plus acquisition costs. The aggregate purchase price includes net purchase price increases of $9,551 based on closing date balance sheets of the acquired businesses and $9,800 of additional purchase price based on the financial performance of the acquired businesses for the years ended December 31, 2002 and 2003. The Company acquired:

•	all of the outstanding common stock of KDI Precision Products (KDI) on May 4, 2001;

•	all of the outstanding common stock of EER Systems (EER) on May 31, 2001;

•	all of the outstanding common stock of Spar Aerospace Limited (Spar), a leading provider of high-end aviation product modernization;

F-52

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(continued)
(Dollars in thousands, except per share data)

•	all of the outstanding common stock of Emergent Government Services Group (Emergent), a provider of engineering and information services to the U.S. Air Force, Army, Navy and intelligence agencies, on November 30, 2001. Following the acquisition, the Company changed Emergent's name to L-3 Communications Analytics (L-3 Analytics);

•	the net assets of Bulova Technologies, a producer of military fuzes that prevent the inadvertent firing and detonation of weapons during handling, on December 19, 2001. Bulova Technologies was later renamed BT Fuze Products (BT Fuze); and

•	the net assets of SY Technology, Inc. (SY), a provider of air warfare simulation services, on December 31, 2001.

Additionally, during the years ended December 31, 2003, 2002 and 2001, the Company purchased other businesses, which individually and in the aggregate were not material to the Company's consolidated results of operations, financial position or cash flows in the year acquired.

Substantially all of the acquisitions were initially financed with cash on hand or borrowings under the Company's bank credit facilities.

All of the Company's acquisitions have been accounted for as purchase business combinations and are included in the Company's results of operations from their respective effective dates. The assets and liabilities recorded in connection with the purchase price allocations for the acquisitions of Avionics Systems, Aeromet, Klein, MAS, Vertex and certain defense and aerospace assets of IPICOM are based upon preliminary estimates of fair values for contracts in process, inventories, estimated costs in excess of billings to complete contracts in process, identifiable intangibles, plant and equipment, litigation liabilities and deferred income taxes. Actual adjustments will be based on the final purchase prices and final appraisals and other analyses of fair values which are in process. The Company expects to complete the purchase price allocations in 2004. The Company does not expect the differences between the preliminary and final purchase price allocations for these acquisitions to be material.

Unaudited Pro Forma Statement of Operations Data

Assuming the business acquisitions the Company completed during 2003 and the related financing transactions occurred on January 1, 2003, the unaudited pro forma sales, net income and diluted earnings per share would have been approximately $5,817,700, $298,100 and $2.90, respectively, for the year ended December 31, 2003.

Assuming the business acquisitions the Company completed during 2003 and 2002 and the related financing transactions occurred on January 1, 2002, the unaudited pro forma sales, net income and diluted earnings per share would have been approximately $5,474,500, $174,100 and $1.77, respectively, for the year ended December 31, 2002.

Assuming the business acquisitions the Company completed during 2002 and the related financing transactions occurred on January 1, 2002, the unaudited pro forma sales, net income and diluted earnings per share would have been approximately $4,699,100, $167,800 and $1.71, respectively, for the year ended December 31, 2002.

Assuming the business acquisitions the Company completed during 2002 and 2001 and the related financing transactions occurred on January 1, 2001, the unaudited pro forma sales, net income and diluted earnings per share would have been approximately $4,139,600, $113,900 and $1.21, respectively, for the year ended December 31, 2001.

The pro forma results disclosed in the preceding paragraphs are based on various assumptions and are not necessarily indicative of the result of operations that would have occurred had the Company completed the acquisitions and the related financing transactions on January 1, 2001, January 1, 2002 and January 1, 2003.

F-53

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(continued)
(Dollars in thousands, except per share data)

Divestiture and Other Transactions

On May 31, 2001, the Company sold a 30% interest in Aviation Communications and Surveillance Systems LLC (ACSS) which comprised the Company's TCAS business to Thales Avionics, a wholly owned subsidiary of Thales (formerly Thomson-CSF), for $75,206 of cash. L-3 continues to consolidate the financial statements of ACSS.

Interest and other income for the year ended December 31, 2003 includes net losses of $1,292 from equity-method investments and a loss of $2,180 in connection with the sale of the commercial broadband test equipment assets of the Celerity business. The net proceeds from the sale were $8,795 and are included in Proceeds from Sale of Businesses in investing activities on the Statement of Cash Flows. Interest and other income for the year ended December 31, 2001 includes a gain of $6,966 from the sale of a 30% interest in ACSS which was largely offset by a $6,341 write-down in the carrying amount of an investment in common stock. Also included in interest and other income for 2001 is a charge of $515 to account for the increase, in accordance with SFAS No. 133, in the fair value assigned to the embedded derivatives in L-3 Holdings' $420,000 4% Senior Subordinated Contingent Debt Securities due 2011 sold in the fourth quarter of 2001, and a loss of $751 from an equity method investment.

In March 2001, the Company settled certain items with a third party provider related to an existing services agreement. In connection with the settlement, L-3 received a net cash payment of $14,200. The payment represents a credit for fees being paid over the term of the services agreement and incremental costs incurred by the Company over the same period arising from performance deficiencies under the services agreement. These incremental costs include additional operating costs for material management, vendor replacement, rework, warranty, manufacturing and engineering support, and administrative activities. The $14,200 cash receipt was recorded as a reduction of costs and expenses in 2001.

4.    Contracts in Process

The components of contracts in process are presented in the table below. The unbilled contract receivables, inventoried contract costs and unliquidated progress payments are principally related to contracts with the U.S. Government and prime contractors or subcontractors of the U.S. Government.

				December 31,
				2003				2002
Billed receivables, less allowances of $25,221 and $12,801				$	637,254			$	568,382
Unbilled contract receivables					676,604				490,678
Less: unliquidated progress payments					(193,672	)			(171,457	)
Unbilled contract receivables, net					482,932				319,221
Inventoried contract costs, gross					353,247				324,928
Less: unliquidated progress payments					(17,624	)			(13,507	)
Inventoried contract costs, net					335,623				311,421
Inventories at lower of cost or market					159,539				118,969
Total contracts in process				$	1,615,348			$	1,317,993

The Company believes that approximately 84% of the unbilled contract receivables at December 31, 2003 will be billed and collected within one year.

The table below presents a summary of SG&A, IRAD and B&P costs included in inventoried contract costs and the changes to them, including amounts used in the determination of cost and expenses for "Contracts, primarily U.S. Government." The cost data in the table below does not include the SG&A and research and development expenses for the Company's businesses that are primarily not U.S. Government contractors, which are separately presented on the statements of operations under costs and expenses for "Commercial, primarily products" and are expensed as incurred.

F-54

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(continued)
(Dollars in thousands, except per share data)

				Year Ended December 31,
				2003				2002				2001
Amounts included in inventoried contract costs at beginning of period				$	52,253			$	19,970			$	24,396
Add: Acquired inventoried contract costs					–				34,417				1,575
Amounts incurred during the period(1)					485,694				430,622				300,868
Less: Amounts charged to costs and expenses during the period					(499,923	)			(432,756	)			(306,869	)
Amounts included in inventoried contract costs at end of period				$	38,024			$	52,253			$	19,970

(1)	Incurred costs include IRAD and B&P costs of $129,366, $124,248, and $80,863 for the years ended December 31, 2003, 2002 and 2001, respectively.

F-55

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

5.    Goodwill and Other Intangible Assets

Effective January 1, 2002, the Company ceased recording goodwill amortization expense and began testing goodwill for impairment based on estimated fair values at the beginning of the year using a discounted cash flows valuation. Based on the estimated fair values of the Company's reporting units as of January 1, 2002, the goodwill for certain space and broadband commercial communications businesses included in the Specialized Products segment was impaired. In the first quarter of 2002, the Company completed its valuation of the assets and liabilities for these businesses and has recorded an impairment charge of $24,370, net of a $6,428 income tax benefit. The impairment charge was recorded as a cumulative effect of a change in accounting principle effective January 1, 2002, in accordance with the adoption provisions of SFAS No. 142.

The table below presents net income and basic and diluted EPS for the year ended December 31, 2003 and 2002 compared with those amounts for the same period in 2001, adjusted to exclude goodwill amortization, net of income taxes for 2001.

				Year ended December 31,
				2003				2002				2001
Reported income before cumulative effect of a change in accounting principle				$	277,640			$	202,467			$	115,458
Add: Goodwill amortization, net of income taxes and minority interest					—				—				33,899
Adjusted income before cumulative effect of a change in accounting principle				$	277,640			$	202,467			$	149,357
Adjusted net income				$	277,640			$	178,097			$	149,357
Basic EPS:
Reported before cumulative effect of a change in accounting principle				$	2.89			$	2.33			$	1.54
Goodwill amortization, net of income tax and minority interest					—				—				0.45
Adjusted before cumulative effect of a change in accounting principle				$	2.89			$	2.33			$	1.99
Adjusted net income				$	2.89			$	2.05			$	1.99
Diluted EPS:
Reported before cumulative effect of a change in accounting principle				$	2.71			$	2.18			$	1.47
Goodwill amortization, net of income tax and minority interest					—				—				0.40
Adjusted before cumulative effect of a change in accounting principle				$	2.71			$	2.18			$	1.87
Adjusted net income				$	2.71			$	1.93			$	1.87

F-56

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

Goodwill.    The table below presents the changes in goodwill allocated to the reportable segments during the year ended December 31, 2003. During 2003, the Company reclassified the goodwill from the Microdyne acquired businesses among its reportable segments to the reportable segments where the goodwill is tested for impairment.

				Secure Communications & ISR				Training Simulation & Government Services				Aircraft Modernization, O&M and Products				Specialized Products				Consolidated Total
Balance January 1, 2003				$	722,135			$	473,959			$	620,289			$	978,165			$	2,794,548
Acquisitions					50,724				14,823				730,529				65,987				862,063
Reclassifications					(45,979	)			22,869				—				23,110				—
Sale of businesses					—				—				—				(4,175	)			(4,175	)
Balance December 31, 2003				$	726,880			$	511,651			$	1,350,818			$	1,063,087			$	3,652,436

Identifiable Intangible Assets.    The gross carrying amount and accumulated amortization balances of the Company's identifiable intangible assets that are subject to amortization are presented in the tables below. The Company has no indefinite-lived identifiable intangible assets.

				December 31, 2003
				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
Identifiable intangible assets that are subject to amortization:
Customer relationships				$	154,770			$	6,519			$	148,251
Technology					14,500				2,325				12,175
Non-compete agreements					2,000				270				1,730
Total				$	171,270			$	9,114			$	162,156

				December 31, 2002
				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
Identifiable intangible assets that are subject to amortization:
Customer relationships				$	80,826			$	600			$	80,226
Technology					9,825				1,844				7,981
Non-compete agreements					2,000				60				1,940
Total				$	92,651			$	2,504			$	90,147

The Company recorded amortization expense for its identifiable intangible assets of $6,610 for 2003 and $1,337 for 2002. Based on gross carrying amounts at December 31, 2003, the Company's estimate for identifiable intangible assets amortization expense for the years ending December 31, 2004 through 2008 are presented in the table below.

F-57

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

Year Ending December 31,				Estimated Amortization Expense
2004				$	17,007
2005				$	18,678
2006				$	17,543
2007				$	16,647
2008				$	14,247

6.    Other Current Liabilities and Other Liabilities

The components of other current liabilities are presented in the table below.

				December 31,
				2003				2002
Accrued product warranty costs				$	41,184			$	56,487
Billings and amounts in excess of costs incurred on contracts in process					71,235				45,947
Estimated cost in excess of estimated contract value to complete contracts in process					52,063				25,754
Aggregate purchase price payable for acquired businesses					28,331				13,329
Notes payable and capital lease obligations					9,312				3,380
Deferred revenues					5,826				3,581
Current portion of net deferred gains from terminated interest rate swap agreements					4,246				2,114
Other					49,762				32,824
Total other current liabilities				$	261,959			$	183,416

The table below presents the changes in the Company's accrued product warranty costs for the year ended December 31, 2003.

Balance January 1, 2003				$	56,487
Acquisitions during this period					2,886
Accruals for product warranties issued during the period					21,092
Accruals for product warranties existing before January 1, 2003					8,590
Settlements made during the period					(47,871	)
Balance December 31, 2003				$	41,184

The components of other liabilities are presented in the table below.

				December 31,
				2003				2002
Non-current portion of net deferred gains from terminated interest rate swap agreements				$	29,224			$	14,026
Accrued workers compensation					14,549				8,615
Notes payable and capital lease obligations					1,485				8,631
Other non-current liabilities					56,393				34,372
Total other liabilities				$	101,651			$	65,644

F-58

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

7.    Property, Plant and Equipment

				December 31,
				2003				2002
Land				$	35,668			$	33,876
Buildings and improvements					147,860				121,830
Machinery, equipment, furniture and fixtures					417,978				372,602
Leasehold improvements					138,654				121,814
Gross property, plant and equipment					740,160				650,122
Less: accumulated depreciation and amortization					(220,411	)			(191,483	)
Property, plant and equipment, net				$	519,749			$	458,639

Depreciation expense for property, plant and equipment was $77,340 for 2003, $66,230 for 2002, and $40,362 for 2001.

8.    Debt

The components of long-term debt and a reconciliation to the carrying amount of long-term debt are presented in the table below.

				December 31,
				2003				2002
L-3 Communications:
Borrowings under Senior Credit Facilities				$	—			$	—
8½% Senior Subordinated Notes due 2008					—				180,000
8% Senior Subordinated Notes due 2008					200,000				200,000
7 5/8% Senior Subordinated Notes due 2012					750,000				750,000
6 1/8% Senior Subordinated Notes due 2013					400,000				—
6 1/8% Senior Subordinated Notes due 2014					400,000				—
					1,750,000				1,130,000
L-3 Holdings:
5¼% Convertible Senior Subordinated Notes due 2009					298,370				300,000
4% Senior Subordinated Convertible Contingent Debt Securities due 2011 (CODES)					420,000				420,000
Principal amount of long-term debt					2,468,370				1,850,000
Less: Unamortized discounts					(11,070	)			(2,248	)
Carrying amount of long-term debt				$	2,457,300			$	1,847,752

L-3 Communications

At December 31, 2003, the Company's Senior Credit Facilities were comprised of a $500,000 five-year revolving credit facility maturing on May 15, 2006 and a $250,000 364-day revolving facility. On February 24, 2004, the maturity date of the 364-day revolving credit facility was extended to February 22, 2005.

At December 31, 2003, available borrowings under the Company's Senior Credit Facilities were $665,933, after reductions for outstanding letters of credit of $84,067. There were no outstanding borrowings under the Senior Credit Facilities at December 31, 2003.

Borrowings under the Senior Credit Facilities bear interest, at L-3 Communications' option, at either: (i) a "base rate" equal to the higher of 0.50% per annum above the latest federal funds rate and the Bank

F-59

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

of America "reference rate" (as defined) plus a spread ranging from 2.00% to 0.50% per annum depending on L-3 Communications' Debt Ratio at the time of determination or (ii) a "LIBOR rate" (as defined) plus a spread ranging from 3.00% to 1.50% per annum depending on L-3 Communications' Debt Ratio at the time of determination. The Debt Ratio is defined as the ratio of Consolidated Total Debt to Consolidated EBITDA. Consolidated Total Debt is equal to outstanding debt plus capitalized lease obligations and the outstanding amount of permitted convertible securities of L-3 Holdings guaranteed by L-3 Communications or its subsidiaries minus the lesser of actual unrestricted cash or $50,000. Consolidated EBITDA is equal to consolidated net income (excluding (i) impairment losses incurred on goodwill and identifiable intangible assets or debt and equity investments, (ii) gains or losses incurred on the retirement of debt, (iii) extraordinary gains or losses, (iv) gains or losses in connection with asset dispositions, and (v) gains or losses from discontinued operations) for the most recent four quarters, plus consolidated interest expense, income taxes, depreciation and amortization minus depreciation and amortization related to minority interest. At December 31, 2003, there were no borrowings outstanding under the Senior Credit Facilities. L-3 Communications pays commitment fees calculated on the daily amounts of the available unused commitments under the Senior Credit Facilities at a rate ranging from 0.50% to 0.30% per annum, depending on L-3 Communications' Debt Ratio in effect at the time of determination. L-3 Communications pays letter of credit fees calculated at a rate ranging from 1.50% to 0.75% per annum for performance letters of credit and 3.00% to 1.50% for all other letters of credit, in each case depending on L-3 Communications' Debt Ratio at the time of determination.

On December 22, 2003, L-3 Communications sold $400,000 of 6 1/8% Senior Subordinated Notes due January 15, 2014 (December 2003 Notes) at a discount of $7,372. The discount was recorded as a reduction to the principal amount of the notes and will be amortized as interest expense over the term of the notes. The effective interest rate of the December 2003 Notes is 6.31% per annum. Interest is payable semi-annually on January 15 and July 15 of each year commencing July 15, 2004. The net cash proceeds from this offering amounted to approximately $391,000 after deducting the discounts, commissions and other offering expenses. The net proceeds from this offering were used to repay $275,000 of borrowings outstanding under the Senior Credit Facilities and to increase cash and cash equivalents. The December 2003 Notes are general unsecured obligations of L-3 Communications and are subordinated in right of payment to all existing and future senior debt of L-3 Communications. On or after January 15, 2009, the December 2003 Notes are subject to redemption at any time, at the option of L-3 Communications, in whole or in part, at redemption prices (plus accrued and unpaid interest) starting at 103.063% of the principal amount (plus accrued and unpaid interest) during the 12-month period beginning January 15, 2009 and declining annually to 100% of principal (plus accrued and unpaid interest) on January 15, 2012 and thereafter. Prior to January 15, 2007, L-3 Communications may redeem up to 35% of the December 2003 Notes with the proceeds of certain equity offerings at a redemption price of 106.125% of the principal amount (plus accrued and unpaid interest).

On May 21, 2003, L-3 Communications sold $400,000 of 6 1/8% Senior Subordinated Notes due July 15, 2013 (May 2003 Notes) at a discount of $1,840. The discount was recorded as a reduction to the principal amount of the notes and will be amortized as interest expense over the term of the notes. The effective interest rate of the May 2003 Notes is 6.17% per annum. Interest is payable semi-annually on January 15 and July 15 of each year, commencing July 15, 2003. The net cash proceeds from this offering amounted to approximately $391,100 after deducting discounts, commissions and other offering expenses. The net proceeds from this offering were used to redeem the 8½% Senior Subordinated Notes due 2008 and to increase cash and cash equivalents. The May 2003 Notes are general unsecured obligations of L-3 Communications and are subordinated in right of payment to all existing and future senior debt of L-3 Communications. On or after July 15, 2008, the May 2003 Notes are subject to redemption at any time, at the option of L-3 Communications, in whole or in part, at redemption prices (plus accrued and unpaid interest) starting at 103.063% of the principal amount (plus accrued and unpaid interest) during the

F-60

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

12-month period beginning July 15, 2008 and declining annually to 100% of principal (plus accrued and unpaid interest) on July 15, 2011 and thereafter. Prior to July 15, 2006, L-3 Communications may redeem up to 35% of the May 2003 Notes with the proceeds of certain equity offerings at a redemption price of 106.125% of the principal amount (plus accrued and unpaid interest).

On May 21, 2003, L-3 Communications initiated a full redemption of all its outstanding $180,000 aggregate principal amount of 8½% Senior Subordinated Notes due 2008 (May 1998 Notes). On June 20, 2003, L-3 Communications purchased and paid cash for all the outstanding May 1998 Notes, including accrued interest. During 2003, L-3 Communications recorded a pre-tax charge of $11,225, comprising of premiums and other transaction costs of $7,795 and $3,430 to write-off the unamortized balance of debt issue costs and the deferred loss on the terminated interest rate swap agreements related to the May 1998 Notes.

In June of 2002, L-3 Communications sold $750,000 of 7 5/8% Senior Subordinated Notes due June 15, 2012 (June 2002 Notes) with interest payable semi-annually on June 15 and December 15 of each year commencing December 15, 2002. The net proceeds from this offering and the concurrent sale of common stock by L-3 Holdings (see Note 10) were used to (i) repay $500,000 borrowed on March 8, 2002, under the Company's senior subordinated bridge loan facility, (ii) repay the indebtedness outstanding under the Company's senior credit facilities, (iii) repurchase and redeem the 10 3/8% Senior Subordinated Notes due 2007 and (iv) increase cash and cash equivalents. The June 2002 Notes are general unsecured obligations of L-3 Communications and are subordinated in right of payment to all existing and future senior debt of L-3 Communications. The June 2002 Notes are subject to redemption at any time, at the option of L-3 Communications, in whole or in part, on or after June 15, 2007 at redemption prices (plus accrued and unpaid interest) starting at 103.813% of the principal amount (plus accrued and unpaid interest) during the 12-month period beginning June 15, 2007 and declining annually to 100% of principal (plus accrued and unpaid interest) on June 15, 2010 and thereafter. Prior to June 15, 2005, L-3 Communications may redeem up to 35% of the June 2002 Notes with the proceeds of certain equity offerings at a redemption price of 107.625% of the principal amount (plus accrued and unpaid interest).

In June of 2002, L-3 Communications commenced a tender offer to purchase any and all of its $225,000 aggregate principal amount of 10 3/8% Senior Subordinated Notes due 2007. The tender offer expired on July 3, 2002. On June 25, 2002, L-3 Communications sent a notice of redemption for all of its 10 3/8% Senior Subordinated Notes due 2007 that remained outstanding after the expiration of the tender offer. Upon sending the notice, the remaining notes became due and payable at the redemption price as of July 25, 2002. During 2002, the Company recorded a pre-tax charge of $16,187 ($9,858 after-tax), comprised of premiums, fees and other transaction costs of $12,469 and $3,718 to write-off the remaining balance of unamortized debt issue costs relating to these notes.

In December of 1998, L-3 Communications sold $200,000 of 8% Senior Subordinated Notes due August 1, 2008 (December 1998 Notes) with interest payable semi-annually on February 1 and August 1 of each year commencing February 1, 1999. The December 1998 Notes are general unsecured obligations of L-3 Communications and are subordinated in right of payment to all existing and future senior debt of L-3 Communications. The December 1998 Notes are subject to redemption at any time, at the option of L-3 Communications, in whole or in part, on or after August 1, 2003 at redemption prices (plus accrued and unpaid interest) starting at 104% of principal (plus accrued and unpaid interest) during the 12-month period beginning August 1, 2003 and declining annually to 100% of principal (plus accrued and unpaid interest) on August 1, 2006 and thereafter.

Depending on the interest rate environment the Company may enter into interest rate swap agreements to convert the fixed interest rates on the Company's fixed rate debt obligations to variable interest rates or terminate any existing interest rate swap agreements. At December 31, 2003, the Company does not have any interest rate swap agreements in place. The table below presents the Company's interest rate swap agreements activity through December 31, 2003.

F-61

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

																				Cash Proceeds Received at Termination(2)												December 31, 2003
Inception Date				Fixed Rate Debt Obligation				Notional Amount				Average Variable Rate Paid(1)				Termination Date				Interest Expense Reduction(3)				Deferred Gain (Loss)(4)				Total				Cumulative Recognized Deferred Gain (Loss)(5)				Balance of Unamortized Deferred Gain (Loss)(6)
July 2003				$400,000 of 6 1/8 % Senior Subordinated Notes due 2013				$	400,000				2.1	%		September 2003				$	2,687			$	8,017			$	10,704			$	205			$	7,812
March 2003				$750,000 of 7 5/8 % Senior Subordinated Notes due 2012				$	200,000				4.4	%		June 2003					1,578				6,727				8,305				405				6,322
January 2003				$750,000 of 7 5/8 % Senior Subordinated Notes due 2012				$	200,000				4.0	%		March 2003					1,202				5,238				6,440				448				4,790
June 2002				$750,000 of 7 5/8 % Senior Subordinated Notes due 2012				$	200,000				4.1	%		September 2002					1,762				12,173				13,935				1,567				10,606
November 2001				$180,000 of 8½ % Senior Subordinated Notes due 2008				$	180,000				5.3	%		August 2002					1,186				(559	)			627				(559	)			—
July 2001				$200,000 of 8% Senior Subordinated Notes due 2008				$	200,000				3.9	%		June 2002					3,446				5,229				8,675				1,289				3,940
																				$	11,861			$	36,825			$	48,686			$	3,355			$	33,470

(1)	Represents the average variable interest rate L-3 paid prior to the termination of the interest rate swap agreement.

(2)	Cash proceeds received at termination are included in cash from operating activities on L-3's statement of cash flows in the period received.

(3)	Represents interest savings earned for the period prior to the termination of the interest rate swap agreements.

(4)	Represents the future value of the interest rate swap agreements at termination date, which is being amortized over the remaining term of the underlying debt instrument.

(5)	Represents the cumulative amount of deferred gain recognized as a reduction to interest expense through December 31, 2003.

(6)	The current portion of unamortized deferred gains at December 31, 2003, aggregating $4,246, is included in other current liabilities. The remaining $29,224 is included in other liabilities.

L-3 Holdings

On December 22, 2003, L-3 Holdings announced a full redemption of $300,000 of its 5.25% Convertible Senior Subordinated Notes due 2009 (Convertible Notes), which expired on January 9, 2004. At December 31, 2003, holders of approximately $1,630 of the Convertible Notes had exercised their conversion rights and converted such notes into 40,000 shares of L-3 Holdings common stock. On January 9, 2004, holders of $298,183 of the Convertible Notes exercised their conversion rights and converted such notes into 7,317,327 shares of L-3 Holdings common stock. The remaining $187 of Convertible Notes were redeemed on January 12, 2004 for cash. As a result of these conversions and redemptions, L-3's principal amount of long-term debt decreased by $298,370 and shareholders' equity increased by $292,334 in January 2004 compared to December 31, 2003.

In the fourth quarter of 2001, L-3 Holdings sold $420,000 of 4% Senior Subordinated Convertible Contingent Debt Securities (CODES) due September 15, 2011. The net proceeds from this offering amounted to approximately $407,200 after underwriting discounts and commissions and other offering expenses. Interest is payable semi-annually on March 15 and September 15 of each year commencing March 15, 2002. The CODES are convertible into L-3 Holdings' common stock at a conversion price of $53.813 per share (7,804,878 shares) under any of the following circumstances: (i) during any Conversion Period (defined below) if the closing sales price of the common stock of L-3 Holdings is more than 120% of the conversion price ($64.58) for at least 20 trading days in the 30 consecutive trading-day period ending on the first day of the respective Conversion Period; (ii) during the five business day period following any 10 consecutive trading-day period in which the average of the trading prices for the CODES was less than 105% of the conversion value; (iii) if the credit ratings assigned to the CODES by either Moody's or Standard & Poor's are below certain specified ratings, (iv) if they have been called for redemption by the Company, or (v) upon the occurrence of certain specified corporate transactions. A

F-62

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

Conversion Period is the period from and including the thirtieth trading day in a fiscal quarter to, but not including, the thirtieth trading day of the immediately following fiscal quarter. There are four Conversion Periods in each fiscal year. The CODES are subject to redemption at any time at the option of L-3 Holdings, in whole or in part, on or after October 24, 2004 at redemption prices (plus accrued and unpaid interest — including contingent interest) starting at 102% of principal (plus accrued and unpaid interest — including contingent interest) during the 12 month period beginning October 24, 2004 and declining annually to 100% of principal (plus accrued and unpaid interest — including contingent interest) on September 15, 2006. The CODES are general unsecured obligations of L-3 Holdings and are subordinated in right of payment to all existing and future senior debt of L-3.

Additionally, holders of the CODES have a right to receive contingent interest payments, not to exceed a per annum rate of 0.5% of the outstanding principal amount of the CODES, which will be paid on the CODES during any six-month period following a six-month period in which the average trading price of the CODES exceeds 120% of the principal amount of the CODES. The contingent interest payment provision was triggered for the period beginning September 15, 2002 to March 14, 2003 and resulted in additional interest for that period of $840.

The contingent interest payment provision as well as the ability of the holders of the CODES to exercise the conversion features as a result of changes in the credit ratings assigned to the CODES have been accounted for as embedded derivatives. The initial aggregate fair values assigned to the embedded derivatives was $2,544, which was also recorded as a discount to the CODES. The carrying values assigned to the embedded derivatives were recorded in other liabilities and are adjusted periodically through other income (expense) for changes in their fair values.

Covenants

The Senior Credit Facilities, Senior Subordinated Notes and CODES agreements contain financial and other restrictive covenants that limit, among other things, the ability of the Company to borrow additional funds, dispose of assets, or pay cash dividends. The Company's most restrictive covenants are contained in the Senior Credit Facilities, as amended. The covenants require that (i) the Company's Debt Ratio be less than or equal to 4.25 for quarters ending September 30, 2003 through June 30, 2004, 4.00 for quarters ending September 30, 2004 through June 30, 2005 and 3.50 for quarters ending September 30, 2005 and thereafter, (ii) the Company's Senior Debt Ratio be less than or equal to 2.50 to 1.0 and (iii) the Company's Interest Coverage Ratio be greater than or equal to 3.00. The Senior Debt Ratio is defined as the ratio of Consolidated Senior Debt to Consolidated EBITDA. Consolidated Senior Debt is defined as Consolidated Total Debt other than subordinated debt. The Interest Coverage Ratio is equal to the ratio of Consolidated EBITDA to Consolidated Cash Interest Expense. Consolidated Cash Interest Expense is equal to interest expense less the amortization of deferred debt issue costs included in interest expense. For purposes of calculating the financial covenants under the Senior Credit Facilities, the CODES are considered debt of L-3 Communications. The Senior Credit Facilities also limit the payment of dividends by L-3 Communications to L-3 Holdings except for payment of franchise taxes, fees to maintain L-3 Holdings' legal existence, income taxes up to certain amounts, interest accrued on the CODES or to provide for operating costs of up to $1,000 annually. Under the covenant, L-3 Communications may also pay permitted dividends to L-3 Holdings:

•	in an amount not to exceed $25,000 in any fiscal quarter, so long as no default or event of default has occurred and is continuing;

•	in an amount not to exceed $200,000 to permit L-3 Holdings to repurchase its common stock, so long as those dividends are paid with the net proceeds of additional subordinated indebtedness issued by L-3 Communications after January 1, 2004. L-3 Holdings may repurchase its common

F-63

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

	stock in an amount not to exceed $200,000, whether from the proceeds of dividends from L-3 Communications or of issuances of permitted convertible securities or capital stock of L-3 Holdings; and

•	in an amount not to exceed $10,000 in any fiscal year to fund certain repurchases of common stock of L-3 Holdings from beneficiaries of equity compensation plans of L-3 Communications, L-3 Holdings or their subsidiaries. L-3 Holdings may make further payments of up to $2,000 from the proceeds of issuances of its common stock to repurchase common stock held by management.

The Senior Credit Facilities contain cross default provisions that are triggered when a payment default occurs or certain other defaults occur that would allow the acceleration of indebtedness, guarantee obligations or certain other agreements of L-3 Communications or its subsidiaries in an aggregate amount of at least $15,000 and those defaults have not been cured after 10 days. The Senior Subordinated Notes and CODES indentures contain cross acceleration provisions that are triggered when holders of the indebtedness of L-3 Holdings, L-3 Communications or their restricted subsidiaries (or the payment of which is guaranteed by such entities) accelerate at least $10,000 in aggregate principal amount of those obligations.

Subordination and Guarantees

In connection with the Senior Credit Facilities, the Company has granted the lenders a first priority lien on the stock of L-3 Communications and substantially all of its material domestic subsidiaries. The Company is also required to grant the lenders a first priority lien on up to 65% of the stock of any material foreign subsidiary that is directly held by L-3 Communications or its domestic subsidiaries. The borrowings under the Senior Credit Facilities are guaranteed by L-3 Holdings and by substantially all of the material domestic subsidiaries of L-3 Communications on a senior basis. The payment of principal and premium, if any, and interest on the Senior Subordinated Notes are unconditionally guaranteed, on an unsecured senior subordinated basis, jointly and severally, by substantially all of L-3 Communications' restricted subsidiaries other than its foreign subsidiaries. The guarantees of the Senior Subordinated Notes are junior to the guarantees of the Senior Credit Facilities and rank pari passu with each other and the guarantees of the CODES. The CODES are unconditionally guaranteed, on an unsecured senior subordinated basis, jointly and severally, by L-3 Communications and substantially all of its restricted subsidiaries other than its foreign subsidiaries. These guarantees rank junior to the guarantees of the Senior Credit Facilities and rank pari passu with each other and the guarantees of the Senior Subordinated Notes.

9.    Financial Instruments

Fair Value of Financial Instruments.    The Company's financial instruments consist primarily of cash and cash equivalents, billed receivables, debt securities, equity securities, trade accounts payable, customer advances, Senior Credit Facilities, Senior Subordinated Notes, Convertible Notes, CODES, foreign currency forward contracts, interest rate swap agreements and embedded derivatives related to the issuance of the CODES. The carrying amounts of cash and cash equivalents, billed receivables, trade accounts payable, Senior Credit Facilities, and customer advances are representative of their respective fair values because of the short-term maturities or expected settlement dates of these instruments. The Company's investments are stated at fair value, which is based on quoted market prices for investments which are readily marketable securities, and estimated fair value for nonreadily marketable securities which is generally equal to historical cost, except for those that have experienced other-than-temporary impairments. Adjustments to the fair value of investments, which are classified as available-for-sale, are recorded, as an increase or decrease in shareholders' equity and are included as a component of accumulated other comprehensive income, except for other-than-temporary impairment losses, which are

F-64

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

included in income from continuing operations. The Senior Subordinated Notes are registered, unlisted public debt which are traded in the over-the-counter market and their fair values are based on quoted trading activity. The fair values of the Convertible Notes and CODES are based on quoted prices for the same or similar issues. The fair values of foreign currency forward contracts were estimated based on exchange rates at December 31, 2003 and 2002. The fair values of the embedded derivatives were estimated by discounting expected cash flows using quoted market interest rates. The carrying amounts and estimated fair values of the Company's financial instruments are presented in the table below.

				December 31,
				2003								2002
				Carrying Amount				Estimated Fair Value				Carrying Amount				Estimated Fair Value
Investments in equity securities accounted for using the equity method				$	15,780			$	15,780			$	8,481			$	8,481
Investments in equity securities accounted for using the cost method					4,133				4,133				16,140				16,140
Securities available-for-sale					100				100				100				100
Senior Subordinated Notes					1,740,923				1,775,375				1,130,000				1,170,500
Convertible Notes					298,370				375,946				300,000				385,500
CODES					418,007				460,950				417,752				469,350
Foreign currency forward contracts					1,153				1,153				(454	)			(454	)
Embedded derivatives					(2,666	)			(2,666	)			(3,087	)			(3,087	)

Interest Rate Risk Management.    The Company had previously entered into interest rate swap agreements on certain of its Senior Subordinated Notes to take advantage of variable interest rates, which were lower than the fixed rates on those notes. These swap agreements exchanged the fixed interest rate for a variable interest rate on a notional amount equal to either a portion or the entire principal amount of the related notes, were denominated in U.S. dollars and had designated maturities which occurred on the interest payment dates of the related Senior Subordinated Notes. Cash payments received from or paid to the counterparties on the interest rate swap agreements are the difference between the amount that the fixed interest rates are greater than or less than the variable contract rates on the designated maturity dates, multiplied by the notional amounts underlying the respective interest rate swap agreements. Cash payments or receipts between the Company and counterparties were recorded as a component of interest expense. The Company manages exposure to counterparty credit risk by entering into the interest rate swap agreements only with major financial institutions that are expected to fully perform under the terms of such agreements. The notional amounts are used to measure the volume of these agreements and do not represent exposure to credit loss. There were no outstanding interest rate swap agreements at December 31, 2003 and 2002.

Foreign Currency Exchange Risk Management.    Some of the Company's U.S. and foreign operations have contracts with customers which are denominated in currencies other than the functional currencies of those operations. To mitigate the risk associated with certain of these contracts denominated in foreign currency, the Company has entered into foreign currency forward contracts. The Company's activities involving foreign currency forward contracts are designed to hedge the foreign denominated cash paid or received, primarily Euro, British Pound and U.S. dollar. The Company manages exposure to counterparty credit risk by entering into foreign currency forward contracts only with major financial institutions that are expected to fully perform under the terms of such contracts. The notional amounts are used to measure the volume of these contracts and do not represent exposure to foreign currency losses.

F-65

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

Information with respect to foreign currency forward contracts is presented in the table below.

				December 31,
				2003								2002
				Notional Amount				Unrealized Gain				Notional Amount				Unrealized (Loss)
Foreign currency forward contracts				$	71,390			$	1,153			$	6,048			$	(454	)

10.    L-3 Holdings Common Stock

On January 26, 2004, L-3 Holdings announced that its Board of Directors had declared its first quarterly cash dividend of $0.10 per share, payable March 15, 2004, to shareholders of record at the close of business on February 17, 2004. On February 17, 2004, L-3 Holdings had 105,227,879 shares of common stock outstanding.

On June 28, 2002, L-3 Holdings sold 14,000,000 shares of its common stock in a public offering for $56.60 per share. Upon closing, L-3 Holdings received net proceeds after deducting discounts, commissions and other offering expenses of $766,780. The net proceeds from this sale, which were contributed to L-3 Communications, and the concurrent sale of senior subordinated notes by L-3 Communications (See Note 8) were used to (i) repay $500,000 borrowed on March 8, 2002, under the Company's senior subordinated bridge loan facility, (ii) repay the indebtedness outstanding under the Company's Senior Credit Facilities, (iii) repurchase and redeem the 10 3/8% Senior Subordinated Notes due 2007 and (iv) increase cash and cash equivalents.

On April 23, 2002, the Company announced that its Board of Directors authorized a two-for-one stock split on all shares of L-3 Holdings common stock. The stock split entitled all shareholders of record at the close of business on May 6, 2002 to receive one additional share of L-3 Holdings common stock for every share held on that date. The additional shares were distributed to shareholders in the form of a stock dividend on May 20, 2002. Upon completion of the stock split, L-3 Holdings had approximately 80 million shares of common stock outstanding. All of L-3 Holdings' historical share and earnings per share (EPS) data have been restated to give effect to the stock split.

On April 23, 2002, the Company's shareholders approved an increase in the number of authorized shares of L-3 Holdings common stock from 100,000,000 to 300,000,000 and an increase in the number of authorized shares of L-3 Holdings preferred stock from 25,000,000 to 50,000,000.

On June 29, 2001, the Company established the L-3 Communications Corporation Employee Stock Purchase Plan (ESPP) and registered 3,000,000 shares of L-3 Holdings common stock, which may be purchased by employees of L-3 Communications Corporation, its U.S. subsidiaries and certain of its foreign subsidiaries through payroll deductions. In general, an eligible employee who participates in the ESPP may purchase L-3 Holdings' common stock at a fifteen percent discount. The ESPP is not subject to the Employment Retirement Income Security Act of 1974, as amended. The Company received $26,384, $17,478 and $4,861 of employee contributions for the ESPP in 2003, 2002 and 2001, respectively. These contributions were recorded as a component of shareholders' equity in the consolidated balance sheet. L-3 Holdings issued 603,599 shares in 2003 and 352,054 shares in 2002 of its common stock to the trustee of the ESPP. In January 2004, the Company issued 365,019 shares of L-3 Holdings' common stock to the trustee of the ESPP relating to contributions received during the period July 1, 2003 to December 31, 2003.

On May 2, 2001, L-3 Holdings sold 13,800,000 shares of common stock in a public offering for $40.00 per share. L-3 Holdings sold 9,150,000 shares and other selling stockholders, including affiliates of Lehman Brothers Inc., sold 4,650,000 secondary shares. Upon closing, L-3 Holdings received net proceeds after underwriting discounts and commissions and other offering expenses of $353,622. The net proceeds

F-66

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

were contributed to L-3 Communications and were used to repay borrowings under the Senior Credit Facilities, pay for the KDI and EER acquisitions and to increase cash and cash equivalents.

11.    Accumulated Other Comprehensive Loss

The changes in the Company's accumulated other comprehensive balances for each of the three years ended December 31, 2003 are presented in the table below.

				Foreign currency translation adjustments				Unrealized gains (losses) on securities				Unrealized gains (losses) on hedging instruments				Minimum pension liability adjustments				Accumulated other comprehensive loss
Balance at January 1, 2001				$	(2,584	)		$	(3,698	)		$	—			$	(890	)		$	(7,172	)
Period change					(268	)			3,452				(163	)			(19,519	)			(16,498	)
Balance at December 31, 2001					(2,852	)			(246	)			(163	)			(20,409	)			(23,670	)
Period change					65				—				(114	)			(45,580	)			(45,629	)
Balance at December 31, 2002					(2,787	)			(246	)			(277	)			(65,989	)			(69,299	)
Period change					(245	)			—				896				(4,189	)			(3,538	)
Balance at December 31, 2003				$	(3,032	)		$	(246	)		$	619			$	(70,178	)		$	(72,837	)

12.    L- 3 Holdings Earnings Per Share

A reconciliation of basic and diluted earnings per share (EPS) is presented in the table below.

				Year Ended December 31,
				2003				2002				2001
Basic:
Income before cumulative effect of a change in accounting principle				$	277,640			$	202,467			$	115,458
Cumulative effect of a change in accounting principle, net of income taxes					—				(24,370	)			—
Net income				$	277,640			$	178,097			$	115,458
Weighted average common shares outstanding					96,022				86,943				74,880
Basic earnings per share before cumulative effect of a change in accounting principle				$	2.89			$	2.33			$	1.54
Basic earnings per share				$	2.89			$	2.05			$	1.54
Diluted:
Income before cumulative effect of a change in accounting principle				$	277,640			$	202,467			$	115,458
After-tax interest expense savings on the assumed conversion of Convertible Notes					9,549				10,316				10,502
Income before cumulative effect of a change in accounting principle, including assumed conversion of Convertible Notes					287,189				212,783				125,960
Cumulative effect of a change in accounting principle, net of income taxes					—				(24,370	)			—
Net income, including assumed conversion of Convertible Notes				$	287,189			$	188,413			$	125,960
Common and potential common shares:
Weighted average common shares outstanding					96,022				86,943				74,880

F-67

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

				Year Ended December 31,
				2003				2002				2001
Assumed exercise of stock options					7,573				7,750				7,692
Assumed purchase of common shares for treasury					(4,888	)			(4,642	)			(4,496	)
Assumed conversion of Convertible Notes					7,361				7,362				7,362
Common and potential common shares					106,068				97,413				85,438
Diluted earnings per share before cumulative effect of a change in accounting principle				$	2.71			$	2.18			$	1.47
Diluted earnings per share				$	2.71			$	1.93			$	1.47

The 7,804,878 shares of L-3 Holdings' common stock that are issuable upon conversion of the $420,000 of 4% Senior Subordinated Convertible Contingent Debt Securities (CODES) were not included in the computation of diluted EPS for the years ended December 31, 2003 and 2002 because the conditions required for them to become convertible were not satisfied.

F-68

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

(Dollars in thousands, except per share data)

13.    Income Taxes

Income before income taxes and cumulative effect of a change in accounting principle is summarized in the table below.

				Year Ended December 31,
				2003				2002				2001
Domestic				$	404,340			$	295,405			$	179,498
Foreign					29,473				18,618				6,724
Income before income taxes and cumulative effect of a change in accounting principle				$	433,813			$	314,023			$	186,222

The components of the Company's current and deferred portions of the provision for income taxes are presented in the table below.

				Year Ended December 31,
				2003				2002				2001
Current income tax provision:
Federal				$	36,251			$	26,759			$	14,727
State and local					11,966				1,254				1,253
Foreign					13,209				4,451				2,146
Subtotal				$	61,426			$	32,464			$	18,126
Deferred income tax provision (benefit):
Federal					87,343				63,593				43,333
State and local					9,301				11,568				8,673
Foreign					(1,897	)			3,931				632
Subtotal					94,747				79,092				52,638
Total provision for income taxes				$	156,173			$	111,556			$	70,764

A reconciliation of the statutory federal income tax rate to the effective income tax rate of the Company is presented in the table below.

				Year Ended December 31,
				2003				2002				2001
Statutory federal income tax rate					35.0	%			35.0	%			35.0	%
State and local income taxes, net of federal income tax benefit					3.4				3.8				5.3
Foreign income taxes					0.7				0.2				0.6
Foreign sales corporation and extraterritorial income exclusion benefits					(1.5	)			(1.9	)			(3.6	)
Nondeductible goodwill amortization and other expenses					—				—				4.8
Research and experimentation and other tax credits					(1.9	)			(2.1	)			(5.0	)
Other, net					0.3				0.5				0.9
Effective income tax rate					36.0	%			35.5	%			38.0	%

The provision for income taxes excludes current tax benefits related to compensation expense deductions for income tax purposes arising from the exercise of stock options by the Company's

F-69

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

(Dollars in thousands, except per share data)

employees, which were credited directly to shareholders' equity of $8,457 for 2003, $13,303 for 2002, and $11,939 for 2001. These tax benefits reduced current income taxes payable.

The significant components of the Company's net deferred tax assets and liabilities are presented in the table below.

				December 31,
				2003				2002
Deferred tax assets:
Inventoried costs				$	29,036			$	43,678
Compensation and benefits					36,173				15,796
Pension and postretirement benefits					139,308				136,699
Property, plant and equipment					6.347				33,669
Income recognition on contracts in process					48,621				59,663
Loss carryforwards					17,184				6,579
Tax credit carryforwards					36,066				38,385
Other, net					25,094				24,533
Total deferred tax assets					337,829				359,002
Deferred tax liabilities:
Goodwill					84,476				49,317
Other, net					86				18,861
Total deferred tax liabilities					84,562				68,178
Net deferred tax assets				$	253,267			$	290,824

The following table presents the classification of the Company's net deferred tax assets.

Current deferred tax assets				$	152,785			$	143,634
Long-term deferred tax assets					100,482				147,190
Total net deferred tax assets				$	253,267			$	290,824

At December 31, 2003, the Company's loss carryforwards included, $9,580 of federal net operating loss carryforwards, most of which are subject to limitations, which will expire if unused between 2011 and 2021, $18,086 of capital loss carryforwards that will expire, if unused, in 2007 and $46,474 of state net operating losses that will expire, if unused, between 2005 and 2021. The Company also has $36,066 of tax credit carryforwards primarily related to U.S. state research and experimentation credits and state investment tax credits that will expire, if unused, primarily beginning in 2012. The Company believes that it will generate sufficient taxable income, of the appropriate character, to utilize these loss and credit carryforwards before they expire.

The Company is subject to ongoing tax examinations in various jurisdictions, which may result in challenges to tax positions taken and, accordingly, the Company may record adjustments to provisions based on the probable outcomes of such matters. However, the Company believes that the resolution of these matters will not have a material effect on its financial position, results of operations or cash flows.

14.    Stock Options

In April 1999, the Company adopted the 1999 Long Term Performance Plan (1999 Plan). Awards under the 1999 Plan may be granted to any employee or to any other individual who provides services to or on behalf of the Company or any of its subsidiaries, subject to the discretion of the Compensation Committee of the Board of Directors. Awards under the 1999 Plan may be in the form of non-qualified

F-70

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

(Dollars in thousands, except per share data)

stock options, incentive stock options, stock appreciation rights (SARs), restricted stock and other incentive awards, consistent with the 1999 Plan. In April 1997, the Company adopted the 1997 Stock Option Plan (1997 Plan). The 1997 Plan authorizes the Compensation Committee of the Board of Directors to grant non-qualified stock options to key employees of the Company and its subsidiaries. Awards under both plans are in the form of L-3 Holdings common stock. At December 31, 2003, the number of shares of L-3 Holdings' common stock authorized for grant under the 1999 Plan and 1997 Plan was 16,611,630, of which 954,914 shares were available for awards under these plans. The price at which non-qualified and incentive stock options may be granted shall not be less than 100% of the fair market value of L-3 Holdings' common stock on the date of grant. In general, options expire after 10 years and are exercisable ratably over a three year period. All the awards under the 1999 Plan and 1997 Plan that have been granted to employees by the Company are non-qualified stock options under U.S. income tax regulations.

At December 31, 2003, the Company has granted restricted stock awards of 371,181 shares, of which 55,637 shares have been forfeited. The Company awarded 88,245 shares on January 1, 2003, 54,958 shares on January 1, 2002, and 60,928 shares on January 1, 2001. The aggregate fair values of the restricted stock awards on their grant dates were $3,963 in 2003, $2,473 in 2002 and $2,346 in 2001. The restricted stock awards granted on January 1, 2003, January 1, 2002 and January 1, 2001 vest over three years. Compensation expense charged against earnings for these restricted stock awards was $2,975 in 2003, $2,134 in 2002 and $1,370 in 2001. Shareholders' Equity has been reduced by $3,622 at December 31, 2003 for unearned compensation on these restricted stock awards.

The table below presents the Company's stock option activity over the past three years under the 1999 Plan and 1997 Plan.

				Number of Options				Weighted Average Exercise Price
				(in thousands)
Outstanding at January 1, 2001 (3,858 exercisable)					7,256			$	10.71
Options granted					2,214				35.81
Options exercised					(1,128	)			14.57
Options cancelled					(362	)			21.23
Outstanding at January 1, 2002 (4,216 exercisable)					7,980				16.68
Options granted					2,169				52.02
Options exercised					(970	)			17.99
Options cancelled					(155	)			35.62
Outstanding at January 1, 2003 (5,216 exercisable)					9,024				24.71
Options granted					2,301				40.92
Options exercised					(835	)			17.24
Options cancelled					(406	)			39.95
Outstanding at December 31, 2003 (5,919 exercisable)					10,084			$	28.41

F-71

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

(Dollars in thousands, except per share data)

The table below summarizes information about the Company's stock options outstanding at December 31, 2003.

				Outstanding												Exercisable
Range of Exercise Prices				Number of Options				Weighted Average Remaining Contractual Life (Years)				Weighted Average Exercise Price				Number of Options				Weighted Average Remaining Contractual Life (Years)				Weighted Average Exercise Price
$3.24					3,174				3.5			$	3.24				3,174				3.5			$	3.24
$11.00					89				4.3				11.00				89				4.3				11.00
$16.38 – $19.84					372				5.7				18.76				372				5.7				18.76
$20.25 – $23.13					376				5.5				20.79				376				5.5				20.79
$29.00					211				6.6				29.00				211				6.6				29.00
$32.50 – $35.00					918				7.3				33.28				547				7.3				33.28
$35.60					1,031				9.2				35.60				—				—				—
$39.19 – $39.70					755				7.9				39.69				481				7.9				39.70
$45.11 – $45.80					1,152				9.7				45.48				—				—				—
$49.00 – $53.75					1,976				8.4				52.10				659				8.4				52.10
$60.83					30				8.3				60.83				10				8.3				60.83
Total					10,084				6.7			$	28.41				5,919				5.1			$	17.64

The weighted average estimated fair values of stock options at their grant date was $13.22 for 2003, $18.75 for 2002 and $14.87 for 2001. The Company elected not to adopt the fair value based method of accounting for stock-based employee compensation as permitted by the Financial Accounting Standards Board's (FASB) Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation (SFAS 123), as amended by SFAS No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of SFAS No. 123. As such, no compensation expense was recognized.

For purposes of determining the impact of the fair value provisions of SFAS No. 123, the Company estimates the fair value of its stock options at the date of grant using the Black-Scholes option-pricing valuation model. The weighted average assumptions used in the valuation models are presented in the table below.

				Year Ended December 31,
				2003				2002				2001
Expected holding period (in years)					4.0				4.0				5.0
Expected volatility					38.3	%			39.2	%			39.5	%
Expected dividend yield					0.2	%			—				—
Risk-free interest rate					2.5	%			4.0	%			4.5	%

15.    Commitments and Contingencies

The Company leases certain facilities and equipment under agreements expiring at various dates through 2028. The following table presents future minimum payments under non-cancelable operating leases with initial or remaining terms in excess of one year at December 31, 2003.

F-72

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

(Dollars in thousands, except per share data)

				Real Estate				Equipment				Total
2004				$	62,892			$	19,713			$	82,605
2005					79,897				15,927				95,824
2006					50,173				12,336				62,509
2007					44,606				9,070				53,676
2008					45,745				7,226				52,971
Thereafter					168,207				59,053				227,260
Total				$	451,520			$	123,325			$	574,845

Real estate lease commitments have been reduced by minimum sublease rental income of $1,613 due in the future under non-cancelable subleases. Leases covering major items of real estate and equipment contain renewal and/or purchase options. Rent expense, net of sublease income was $71,779 for 2003, $65,277 for 2002 and $41,370 for 2001.

On December 31, 2002, the Company entered into two real estate lease agreements, as lessee, with a third-party lessor, which expire on December 31, 2005 and are accounted for as operating leases. On or before the lease expiration date, the Company can exercise options under the lease agreements to either renew the leases, purchase both properties for $28,000, or sell both properties on behalf of the lessor (the "Sale Option"). If the Company elects the Sale Option, the Company must pay the lessor a residual guarantee amount of $22,673 for both properties, on or before the lease expiration date, and at the time both properties are sold, the Company must pay the lessor a supplemental rent equal to the gross sales proceeds in excess of the residual guarantee amount not to exceed $5,327. For these real estate lease agreements, if the gross sales proceeds are less than the sum of the residual guarantee amount and the supplemental rent, the Company is required to pay a supplemental rent to the extent the reduction in the fair value of the properties are demonstrated by an independent appraisal to have been caused by the Company's failure to properly maintain the properties. The aggregate residual guarantee amounts of $22,673 has been included in the non-cancelable real estate operating lease payments relating to the expiration of such leases.

The Company has a contract to provide and operate for the U.S. Air Force (USAF) a full-service training facility, including simulator systems near a USAF base. The Company acted as the construction agent on behalf of the third-party owner-lessors for procurement and construction for the simulator systems, which were completed and delivered in August 2002. On December 31, 2002, the Company, as lessee, entered into an operating lease agreement for a term of 15 years for one of the simulator systems with the owner-lessor. At the end of the lease term, the Company may elect to purchase the simulator system at fair market value, which can be no less than $2,552 and no greater than $6,422. If the Company does not elect to purchase the simulator system then on the date of expiration, the Company shall pay to the lessor, as additional rent, $2,552 and return the simulator system to the lessor. The aggregate non-cancelable rental payments under this operating lease are $32,480 including the additional rent of $2,552. On February 27, 2003, the Company, as lessee, entered into an operating lease agreement for a term of 15 years for the remaining simulation systems with the owner-lessor. At the end of the lease term, the Company may elect to purchase the simulator systems at fair market value, which can be no less than $4,146 and no greater than $14,544. If the Company does not elect to purchase the simulator systems, then on the date of expiration, the Company shall return the simulator systems to the lessor. The aggregate non-cancelable rental payments under this operating lease are $53,254.

The Company is engaged in providing products and services under contracts with the U.S. Government and to a lesser degree, under foreign government contracts, some of which are funded by the U.S. Government. All such contracts are subject to extensive legal and regulatory requirements, and, from time to time, agencies of the U.S. Government investigate whether such contracts were and are being conducted in accordance with these requirements. Under U.S. Government procurement regulations, an indictment of the Company by a federal grand jury could result in the Company being suspended for a

F-73

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

(Dollars in thousands, except per share data)

period of time from eligibility for awards of new government contracts. A conviction could result in debarment from contracting with the federal government for a specified term. Additionally, in the event that U.S. Government expenditures for products and services of the type manufactured and provided by the Company are reduced, and not offset by greater commercial sales or other new programs or products, or acquisitions, there may be a reduction in the volume of contracts or subcontracts awarded to the Company.

In connection with the acquisition on March 8, 2002 of the Aircraft Integration Systems business from Raytheon, the Company assumed responsibility for implementing certain corrective actions, required under federal law to remediate the Greenville, Texas site location, and to pay a portion of those remediation costs. The hazardous substances requiring remediation have been substantially characterized, and the remediation system has been partially implemented. The Company has estimated that its share of the remediation cost will not exceed $2,500, and will be incurred over a period of 25 years. The Company has established adequate reserves for these costs in the purchase price allocation for this acquisition.

The Company has been periodically subject to litigation, claims or assessments and various contingent liabilities incidental to its business. Management continually assesses the Company's obligations with respect to applicable environmental protection laws. While it is difficult to determine the timing and ultimate cost to be incurred by the Company in order to comply with these laws, based upon available internal and external assessments, with respect to those environmental loss contingencies of which management is aware, the Company believes that even without considering potential insurance recoveries, if any, there are no environmental loss contingencies that, individually or in the aggregate, would be material to the Company's consolidated results of operations. The Company accrues for these contingencies when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

On August 6, 2002, Aviation Communications & Surveillance Systems, LLC (ACSS), a subsidiary of L-3 Communications Corporation, was sued by Honeywell International Inc. and Honeywell Intellectual Properties, Inc. (collectively, "Honeywell") for alleged infringement of patents that relate to terrain awareness avionics. The lawsuit was filed in the United States District Court for the District of Delaware. In December of 2002, Honeywell withdrew without prejudice the lawsuit against ACSS and agreed to proceed with non-binding arbitration. We had previously investigated the Honeywell patents and believe that ACSS has valid defenses against Honeywell's patent infringement suit. In addition, ACSS has been indemnified to a certain extent by Thales Avionics, which provided ACSS with the alleged infringing technology. Thales Avionics owns 30% of ACSS. In the opinion of management, the ultimate disposition of Honeywell's pending claim will not result in a material liability to us.

L-3 Integrated Systems and its predecessors have been involved in a litigation with Kalitta Air (Kalitta Air) arising from a contract to convert Boeing 747 aircraft from passenger configuration to cargo freighters. The lawsuit was brought in the northern district of California on January 31, 1997. The aircraft were modified using Supplemental Type Certificates (STCs) issued in 1988 by the Federal Aviation Administration (FAA) to Hayes International, Inc. (Hayes/Pemco) as a subcontractor to GATX/Airlog Company (GATX). Between 1988 and 1990, Hayes/Pemco modified five aircraft as a subcontractor to GATX using the STCs. Between 1990 and 1994, Chrysler Technologies Airborne Systems, Inc. (CTAS), a predecessor to L-3 Integrated Systems, performed as a subcontractor to GATX and modified an additional five aircraft using the STCs. Two of the aircraft modified by CTAS were owned by American International Airways, the predecessor to Kalitta Air. In 1996, the FAA determined that the engineering data provided by Hayes/Pemco supporting the STCs was inadequate and issued an Airworthiness Directive that effectively grounded the ten modified aircraft. The Kalitta Air aircraft have not been in revenue service since that date. The matter was tried in January 2001 against GATX and CTAS with the

F-74

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

(Dollars in thousands, except per share data)

jury finding fault on the part of GATX but rendering a unanimous defense verdict in favor of CTAS. Certain co-defendants had settled prior to trial. The Ninth Circuit Court of Appeals has reversed and remanded the trial court's summary judgment rulings in favor of CTAS regarding a negligence claim by Kalitta Air, which asserts that CTAS as an expert in aircraft modification should have known that the STCs were deficient, and excluding certain evidence at trial. Based on this ruling, it appears likely that the matter will have to be retried. In August of 2003, Kalitta Air has recalculated its damages based on consequential damage theories of lost revenues and income and diminution in value of the business and is asserting damages in excess of $500,000. CTAS' insurance carrier has accepted defense of the matter with a reservation of rights. The Company continues to believe that it has meritorious defenses and intends to vigorously defend this matter.

The Company and L-3 Communications Security and Detection Systems (L-3 SDS) have been named, along with many other defendants, including other security screening systems manufacturers, as defendants in a number of lawsuits brought in the Southern District of New York by or on behalf of the victims of the terrorist attacks on September 11, 2001. Counsel for the plaintiffs have represented to the court that they intend to amend some or all of their complaints to delete certain of the defendants, including the Company and L-3 SDS, and to date, approximately 60 of the complaints have been amended to drop the Company and L-3 SDS as a defendant. In addition, the court has ruled that the plaintiffs who complete their applications for relief under a federal fund may not pursue judicial action. The court has ordered that the plaintiffs file final amended complaints by March 31, 2004, at which time the Company and L-3 SDS will know how many, if any, actions will be pending against them. The complaints allege various causes of action, including claims of wrongful death, negligence, strict liability and breach of contract, and seek compensatory and punitive damages. The Company and L-3 SDS believe that they have meritorious defenses to these actions and intend to vigorously defend the lawsuits. The Company purchased L-3 SDS from PerkinElmer, Inc. (PerkinElmer) on June 14, 2002. The actions have been tendered to the Company's and PerkinElmer's insurance carriers, who have accepted the defense of the these matters.

On November 18, 2002, we initiated a proceeding against OSI Systems, Inc. (OSI) in the United States District Court sitting in the Southern District of New York seeking, among other things, a declaratory judgment that we had fulfilled all of our obligations under a letter of intent with OSI (the "OSI Letter of Intent"). Under the OSI Letter of Intent, we were to negotiate definitive agreements with OSI for the sale of certain businesses we acquired from PerkinElmer, Inc. on June 14, 2002. On February 7, 2003, OSI filed an answer and counterclaims in the New York action alleging, among other things, that we breached our obligations under the OSI Letter of Intent and seeking damages in excess of $100,000, not including punitive damages. Under the OSI Letter of Intent, we proposed selling to OSI the conventional detection business and the ARGUS business that we acquired from PerkinElmer, Inc. Negotiations with OSI lasted for almost one year and ultimately broke down over issues regarding, among other things, intellectual property, product-line definitions, allocation of employees and due diligence. We believe that the claims asserted by OSI in its suit are without merit and intend to defend against the OSI claims vigorously.

L-3 Communications Vertex Aerospace LLC (formerly known as Vertex Aerospace LLC and acquired by the Company on December 1, 2003) (L-3 Vertex) is named as a defendant in nine wrongful death lawsuits in the District Court, 17th Judicial District, Tarrant County, Texas; in the Circuit Court of the 17th Judicial Circuit, Broward County, Florida; and in the United States District Court, Western District of North Carolina arising from the crash of Air Midwest Flight 5481 at Charlotte-Douglas International Airport in Charlotte, North Carolina on January 8, 2003. The crash resulted in the deaths of nineteen passengers and two crewmembers. Each of the lawsuits alleges contributing factors including that the accident was caused by the improper maintenance of the aircraft by L-3 Vertex, and seeks to recover compensatory and punitive damages. No discovery has taken place in the lawsuits at this time.

F-75

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

(Dollars in thousands, except per share data)

Eight claims resulting from this incident have previously settled. The National Transportation Safety Board (NTSB) investigated the cause of the crash and has concluded that the crash was caused by the incorrect rigging of the elevator control system compounded by the airplane's center of gravity, which was substantially aft of the certified limit, with several other contributing factors. L-3 Vertex believes that it has meritorious defenses to the pending lawsuits, and intends to defend the cases vigorously. The actions have been tendered to L-3 Vertex's insurance carrier, who has accepted the defense of each action served upon L-3 Vertex to date. L-3 Vertex was also indemnified by Air Midwest for losses L-3 Vertex incurred arising out of its provision of maintenance services to Air Midwest. Based on the availability of insurance and the indemnification from Air Midwest, we do not believe we will have a material liability in this matter.

With respect to those investigative actions, items of litigation, claims or assessments of which it is aware, management of the Company is of the opinion that the probability is remote that, after taking into account certain provisions that have been made with respect to these matters, the ultimate resolution of any such investigative actions, items of litigation, claims or assessments will have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company.

16. Pensions and Other Employee Benefits

The Company maintains multiple pension plans, both contributory and non-contributory, covering employees at certain locations. Eligibility for participation in these plans varies and benefits are generally based on the participant's compensation and/or years of service. The Company's funding policy is generally to contribute in accordance with cost accounting standards that affect government contractors, subject to the Internal Revenue Code and regulations thereon. Plan assets are invested primarily in listed stocks, mutual funds and bonds and U.S. Government and U.S. Government agency obligations.

The Company also provides postretirement medical and life insurance benefits for retired employees and dependents at certain locations. Participants are eligible for these benefits when they retire from active service and meet the eligibility requirements for the Company's pension plans. These benefits are funded primarily on a pay-as-you-go basis with the retiree generally paying a portion of the cost through contributions, deductibles and coinsurance provisions.

F-76

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

(Dollars in thousands, except per share data)

The following table summarizes the aggregate balance sheet impact, as well as the benefit obligations, assets and funded status for all of the Company's pension and postretirement benefit plans. The Company uses a November 30 measurement date to calculate its end of year (December 31) benefit obligations, fair value of plan assets and annual net periodic benefit cost.

				Pension Plans								Postretirement Benefit Plans
				2003				2002				2003				2002
Change in benefit obligation:
Benefit obligation at beginning of year				$	713,925			$	533,451			$	129,406			$	87,143
Service cost					45,901				35,825				3,803				3,777
Interest cost					49,789				43,108				7,781				7,779
Participants' contributions					246				260				1,006				720
Amendments					9,657				(2,554	)			(6,796	)			(10,032	)
Actuarial loss					76,863				49,990				6,972				4,411
Acquisitions					25,754				77,066				2,272				41,639
Settlement					—				—				(107	)			—
Foreign currency exchange rate changes					8,452				—				2,965				—
Benefits paid					(28,455	)			(23,221	)			(6,149	)			(6,031	)
Benefit obligation at end of year				$	902,132			$	713,925			$	141,153			$	129,406
Change in plan assets:
Fair value of plan assets at beginning of year				$	431,771			$	430,915			$	—			$	—
Actual return on plan assets					64,043				(27,819	)			121				—
Acquisitions					24,122				4,250				—				—
Employer contributions					60,846				47,386				13,761				5,311
Participants' contributions					246				260				1,006				720
Foreign currency exchange rate changes					9,180				—				—				—
Benefits paid					(28,455	)			(23,221	)			(6,149	)			(6,031	)
Fair value of plan assets at end of year				$	561,753			$	431,771			$	8,739			$	—
Funded status of the plans				$	(340,379	)		$	(282,154	)		$	(132,414	)		$	(129,406	)
Unrecognized actuarial loss (gain)					224,641				184,894				7,706				(188	)
Unrecognized prior service cost					9,631				560				(13,347	)			(8,877	)
Net amount recognized				$	(106,107	)		$	(96,700	)		$	(138,055	)		$	(138,471	)
Amounts recognized in the balance sheets consist of:
Net amount recognized				$	(106,107	)		$	(96,700	)		$	(138,055	)		$	(138,471	)
Additional minimum liability					(114,858	)			(108,356	)			—				—
Accrued benefit liability				$	(220,965	)		$	(205,056	)		$	(138,055	)		$	(138,471	)

The aggregate accumulated benefit obligation (ABO) for all of the Company's pension plans combined was $721,123 at year end 2003 and $582,861 at year end 2002. The table below presents the aggregate ABO and fair value of plan assets for those pension plans with ABO in excess of the fair value of plan assets at year end 2003 and 2002.

				2003				2002
Accumulated benefit obligation				$	701,855			$	565,904
Fair value of plan assets					534,338				406,809

F-77

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

(Dollars in thousands, except per share data)

The table below summarizes the weighted average assumptions used to determine the benefit obligations for the Company's pension and postretirement plans recorded at December 31, 2003 and 2002.

				Pension Plans								Postretirement Benefit Plans
				2003				2002				2003				2002
Benefit obligations
Discount rate					6.25	%			6.75	%			6.25	%			6.75	%
Rate of compensation increase					4.50	%			4.50	%			4.50	%			4.50	%

The following table summarizes the components of net periodic benefit cost for the Company's pension and postretirement benefit plans for the years ended 2003, 2002 and 2001.

				Pension Plans												Postretirement Benefit Plans
				2003				2002				2001				2003				2002				2001
Components of net periodic benefit cost:
Service cost				$	45,901			$	35,825			$	18,516			$	3,803			$	3,777			$	1,709
Interest cost					49,789				43,108				31,428				7,781				7,779				4,746
Amortization of prior service cost					625				312				351				(2,326	)			(1,701	)			(99	)
Expected return on plan assets					(39,357	)			(40,663	)			(37,716	)			(155	)			—				—
Recognized actuarial (gain) loss					13,591				3,246				(424	)			(743	)			(530	)			(887	)
Recognition due to settlement					—				62				—				(155	)			—				—
Net periodic benefit cost				$	70,549			$	41,890			$	12,155			$	8,205			$	9,325			$	5,469

The table below summarizes the weighted average assumptions used to determine the net periodic benefit cost for the years ended 2003, 2002 and 2001.

				Pension Plans												Postretirement Benefit Plans
				2003				2002				2001				2003				2002				2001
Net periodic benefit cost
Discount rate					6.75	%			7.25	%			7.50	%			6.75	%			7.25	%			7.50	%
Expected long-term return on plan assets					9.00	%			9.50	%			9.50	%			9.00	%			n.a.				n.a.
Rate of compensation increase					4.50	%			4.50	%			4.50	%			4.50	%			4.50	%			4.50	%

The expected long-term return on plan asset assumption at year-end 2003 and 2002 is 9.00%. This assumption represents the average rate that the Company expects to earn over the long-term on the assets of the Company's benefit plans, including those from dividends, interest income and capital appreciation. The assumption has been determined based on expectations regarding future rates of return for the plans' investment portfolio, with consideration given to the allocation of investments by asset class and historical rates of return for each individual asset class.

The annual increase in cost of benefits (health care cost trend rate) is assumed to be an average of 11.50% in 2004 and is assumed to gradually decrease to a rate of 5.0% thereafter. Assumed health care cost trend rates have a significant effect on amounts reported for postretirement medical benefit plans. A one percentage point decrease in the assumed health care cost trend rates would have the effect of decreasing the aggregate service and interest cost by $577 and the postretirement medical obligations by $7,345. A one percentage point increase in the assumed health care cost trend rate would have the effect of increasing the aggregate service and interest cost by $711 and the postretirement medical obligations by $8,977.

Plan Assets.    The Company's Benefit Plan Committee (Committee) has the responsibility to formulate the investment policies and strategies for the plans' assets. These policies and strategies are: (1) invest assets of the plans in a manner consistent with the fiduciary standards of ERISA; (2) preserve the plans' assets; (3) maintain sufficient liquidity to fund benefit payments and pay expenses; (4) evaluate the

F-78

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

(Dollars in thousands, except per share data)

performance of investment managers; and (5) achieve, on average, a minimum total rate of return equal to the established benchmarks for each asset category.

The Committee retains a professional investment consultant to advise and help ensure that the above policies and strategies are met. The Committee does not involve itself with the day to day operations and selection process of individual securities and investments, and, accordingly, has retained the professional services of investment management organizations to fulfill those tasks. The investment management organizations have investment discretion over the assets placed under their management. The Committee provides each investment manager with specific investment guidelines relevant to its asset class.

The Committee has established the allowable range that plans' assets may be invested in for each major asset category and regularly monitors each to make sure that the actual investment allocation remains within guidelines. The table below presents the range for each major category of the plans' assets at December 31, 2003.

Asset Category				Range
Domestic equity				40%-60%
International equity				5%-15%
Fixed income				25%-35%
Real estate securities				5%-15%
Cash and cash equivalents				0%-20%

The following table presents the Company's pension plan and postretirement benefit plan weighted-average asset allocations at year-end 2003 and 2002, by asset category.

Asset Category				2003				2002
Domestic equity					44	%			38	%
International equity					7				7
Fixed income					25				31
Real estate securities					7				7
Other, primarily cash and cash equivalents					17				17
Total					100	%			100	%

Contributions.    During 2002 and 2003, U.S. Congress had granted plan sponsors an interest rate reduction for calculating minimum pension plan contributions. For 2004, the Company expects to contribute approximately $55,000 to its pension plans, assuming the extension of such interest rate reduction, or $75,000 if the interest rate reduction is not extended and $13,000 to its postretirement benefit plans.

In connection with the Company's acquisition in 1997 of the ten business units from Lockheed Martin and the formation of the Company, the Company assumed certain defined benefit pension plan liabilities for present and former employees and retirees of certain businesses, which were transferred from Lockheed Martin to the Company. Lockheed Martin also has provided the Pension Benefit Guaranty Corporation (PBGC) with commitments to assume sponsorship or other forms of financial support under certain circumstances with respect to the Company's pension plans for Communication Systems West and Aviation Recorders (the "Subject Plans"). Upon the occurrence of certain events, Lockheed Martin, at its option, has the right to decide whether to cause the Company to transfer sponsorship of any or all of the Subject Plans to Lockheed Martin, even if the PBGC has not sought to terminate the Subject Plans. If Lockheed Martin did assume sponsorship of these plans, it would be primarily liable for the costs associated with funding the Subject Plans or any costs associated with the termination of the Subject Plans

F-79

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)

(Dollars in thousands, except per share data)

but the Company would be required to reimburse Lockheed Martin for these costs. To date, there has been no impact on pension expense and funding requirements resulting from this arrangement. However, should Lockheed Martin assume sponsorship of the Subject Plans or if these plans were terminated, the impact of any increased pension expenses or funding requirements could be material to the Company. For the year ended December 31, 2003, the Company contributed $4,808 to the Subject Plans. The Company has performed its obligations under the letter agreement with Lockheed Martin and the Lockheed Martin Commitment and has not received any communications from the PBGC concerning actions which the PBGC contemplates taking in respect of the Subject Plans.

Employee Savings Plans.    Under its various employee savings plans, the Company matches the contributions of participating employees up to a designated level. The extent of the match, vesting terms and the form of the matching contributions vary among the plans. Under these plans, the Company's matching contributions in L-3 Holdings' common stock and cash were $43,262 for 2003, $36,120 for 2002 and $21,462 for 2001.

17.    Supplemental Cash Flow Information

				Year Ended December 31,
				2003				2002				2001
Interest paid				$	119,940			$	109,301			$	81,552
Income tax payments, net of refunds					17,298				2,127				4,904
Noncash transactions:
Common stock issued for acquisition consideration					4,969				10,607				17,357
Company's employer contribution to savings plans paid in common stock					39,494				28,138				16,868
Conversion of 5¼% convertible senior subordinated notes to equity					1,630				—				—

F-80

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

18.    Segment Information

Effective January 1, 2004, the Company combined its IMC business into L-3 Government Services, Inc. As a result of this realignment of management responsibilities, a reclassification has been made between the Specialized Products segment and the Training, Simulation & Government Services segment. The table below and amounts in Notes 3 and 5 have been adjusted, as appropriate, for the reclassification.

The Company has four reportable segments: (1) Secure Communications & ISR, (2) Training, Simulation & Government Services, (3) Aircraft Modernization, O&M and Products⁽¹⁾ and (4) Specialized Products, which are described in Note 1. The Company evaluates the performance of its operating segments and reportable segments based on their sales and operating income. All corporate expenses are allocated to the Company's divisions using an allocation methodology prescribed by U.S. Government regulations for government contractors. Accordingly, all costs and expenses are included in the Company's measure of segment profitability.

				Secure Communications & ISR				Training Simulation & Government Services				Aircraft Modernization, O&M and Products(1)				Specialized Products				Corporate				Elimination of Intersegment Sales				Consolidated Total
2003
Sales				$	1,440,596			$	1,037,354			$	1,021,861			$	1,634,517			$	—			$	(72,734	)		$	5,061,594
Operating income					172,903				115,487				147,834				144,797				—				—				581,021
Total assets					1,201,187				781,186				2,043,677				1,961,754				505,086				—				6,492,890
Capital expenditures					25,982				3,082				10,281				43,206				323				—				82,874
Depreciation and amortization					29,169				7,977				18,720				39,557				—				—				95,423
2002
Sales				$	1,054,297			$	828,627			$	677,846			$	1,477,655			$	—			$	(27,196	)		$	4,011,229
Operating income					103,449				96,843				105,680				148,007				—				—				453,979
Total assets					1,149,016				690,564				965,038				1,898,972				538,718				—				5,242,308
Capital expenditures					19,350				4,957				14,035				23,542				174				—				62,058
Depreciation and amortization					23,692				6,857				15,513				29,798				—				—				75,860
2001
Sales				$	452,152			$	597,029			$	263,450			$	1,040,753			$	—			$	(5,962	)		$	2,347,422
Operating income					31,975				65,715				85,602				92,038				—				—				275,330
Total assets					366,482				497,368				545,517				1,382,010				547,872				—				3,339,249
Capital expenditures					11,561				2,999				9,625				23,657				279				—				48,121
Depreciation and amortization					13,839				13,207				12,064				47,841				—				—				86,951

Corporate assets not allocated to the reportable segments primarily include cash and cash equivalents, corporate office fixed assets, deferred income tax assets and deferred debt issuance costs.

(1)	During 2004, the Company changed the name of the reportable segment from Aviation Products & Aircraft Modernization to Aircraft Modernization, O&M and Products. The businesses and reporting units that are included in this segment have not changed.

F-81

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

The Company's sales attributable to U.S. customers and foreign customers is summarized in the table below.

				Year Ended December 31,
				2003				2002				2001
U.S.				$	4,208,273			$	3,436,219			$	1,927,538
Foreign:
United Kindgom					158,836				115,910				49,244
Canada					127,936				63,447				26,020
Germany					60,763				61,024				50,089
Australia					51,949				62,103				2,392
Japan					46,868				60,074				42,541
Other					406,969				212,452				249,598
Total foreign					853,321				575,010				419,884
Consolidated				$	5,061,594			$	4,011,229			$	2,347,422

Sales to principal customers are summarized in the table below.

				Year Ended December 31,
				2003				2002				2001
U.S. Government agencies				$	3,843,025			$	3,107,271			$	1,614,858
Foreign governments					506,508				395,062				200,913
Commercial export					346,813				179,948				218,971
Other (principally U.S. commercial)					365,248				328,948				312,680
Consolidated				$	5,061,594			$	4,011,229			$	2,347,422

F-82

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

The Company's sales by product and services are summarized in the table below.

				Year Ended December 31,
				2003				2002				2001
Intelligence, surveillance and reconnaissance products				$	817,909			$	410,412			$	—
Aircraft modification, maintenance and technical services					733,744				517,309				15,067
Naval warfare products					418,019				280,564				299,684
Communication systems for intelligence collection and imagery processing					396,383				306,650				231,895
Avionics products					305,726				229,734				254,983
Security and detection systems					282,261				431,325				18,058
Information security systems					232,728				201,934				140,153
Space and commercial communications, satellite control and tactical sensor systems					210,701				155,578				136,023
Telemetry and instrumentation					181,631				193,926				206,866
Microwave components					164,952				93,365				112,896
Training devices and motion simulators					160,718				144,310				160,549
Guidance and navigation products					151,916				141,778				128,690
Fuzing products					111,719				142,135				62,973
Subtotal products					4,168,407				3,249,020				1,767,837
Simulation, engineering and support services					705,974				569,351				378,186
Training services					302,622				256,935				218,843
Subtotal Services					1,008,596				826,286				597,029
Intercompany eliminations					(115,409	)			(64,077	)			(17,444	)
Consolidated				$	5,061,594			$	4,011,229			$	2,347,422

F-83

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

19.    Unaudited Quarterly Financial Data

Unaudited summarized financial data by quarter for the years ended December 31, 2003 and 2002 is presented in the table below.

				March 31				June 30				September 30				December 31
2003
Sales				$	1,089,047			$	1,226,881			$	1,264,611			$	1,481,055
Operating income					108,837				128,746				152,372				191,066
Net income					49,737				53,379				76,107				98,417
Basic EPS				$	0.52			$	0.56			$	0.79			$	1.02
Diluted EPS				$	0.50			$	0.53			$	0.74			$	0.94
2002
Sales				$	696,840			$	955,189			$	1,053,613			$	1,305,587
Operating income				$	71,307			$	97,688			$	127,387			$	157,597
Income before cumulative effect of a change in accounting principle				$	29,279			$	31,640			$	61,760			$	79,788
Cumulative effect of a change in accounting principle, net of income taxes					(24,370	)			—				—				—
Net income				$	4,909			$	31,640			$	61,760			$	79,788
Basic EPS:
Income before cumulative effect of a change in accounting principle				$	0.37			$	0.40			$	0.66			$	0.84
Cumulative effect of a change in accounting principle					(0.31	)			—				—				—
Net income				$	0.06			$	0.40			$	0.66			$	0.84
Diluted EPS:
Income before cumulative effect of a change in accounting principle				$	0.36			$	0.38			$	0.62			$	0.79
Cumulative effect of a change in accounting principle					(0.30	)			—				—				—
Net income				$	0.06			$	0.38			$	0.62			$	0.79

20.    Financial Information of L-3 Communications and Its Subsidiaries

Total shareholders' equity for L-3 Communications equals that of L-3 Holdings, but the components, common stock and additional paid-in capital, are different. The table below presents information regarding the balances and changes in common stock and additional paid-in capital of L-3 Communications for each of the three years ended December 31, 2003.

F-84

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

				L-3 Communications Common Stock
				Shares Issued				Par Value				Additional Paid-in Capital				Total
Balance at December 31, 2000					100			$	—			$	515,926			$	515,926
Contributions from L-3 Holdings													830,561				830,561
Push down of CODES													(407,450	)			(407,450	)
Balance at December 31, 2001					100				—				939,037				939,037
Contributions from L-3 Holdings													855,939				855,939
Balance at December 31, 2002					100				—				1,794,976				1,794,976
Contributions from L-3 Holdings					—				—				98,512				98,512
Balance at December 31, 2003					100			$	—			$	1,893,488			$	1,893,488

The net proceeds received by L-3 Holdings from the sale of its common stock, exercise of L-3 Holdings employee stock options and L-3 Holdings common stock contributed to the Company's savings plans are contributed to L-3 Communications. The net proceeds from the sale of the Convertible Notes and CODES by L-3 Holdings were also contributed to L-3 Communications and are reflected as indebtedness of L-3 Communications. See Notes 2 and 8.

The debt of L-3 Communications, including the Senior Subordinated Notes and borrowings under amounts drawn against the Senior Credit Facilities are guaranteed, on a joint and several, full and unconditional basis, by certain of its wholly-owned domestic subsidiaries (the "Guarantor Subsidiaries"). See Note 8. The foreign subsidiaries and certain domestic subsidiaries of L-3 Communications (the "Non-Guarantor Subsidiaries") do not guarantee the debt of L-3 Communications. None of the debt of L-3 Communications has been issued by its subsidiaries. There are no restrictions on the payment of dividends from the Guarantor Subsidiaries to L-3 Communications.

In lieu of providing separate audited financial statements for the Guarantor Subsidiaries, the Company has included the accompanying condensed combining financial statements based on Rule 3-10 of SEC Regulation S-X. The Company does not believe that separate financial statements of the Guarantor Subsidiaries are material to users of the financial statements.

The following condensed combining financial information present the results of operations, financial position and cash flows of (i) L-3 Holdings excluding L-3 Communications, (ii) L-3 Communications excluding its consolidated subsidiaries (the "Parent") (iii) the Guarantor Subsidiaries, (iv) the Non-Guarantor Subsidiaries and (v) the eliminations to arrive at the information for L-3 Communications on a consolidated basis.

F-85

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

				L-3 Holdings				L-3 Communications (Parent)				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated L-3 Communications
Condensed Combining Balance Sheets:
At December 31, 2003:
Current assets:
Cash and cash equivalents				$	—			$	155,375			$	(41,291	)		$	20,792			$	—			$	134,876
Contracts in process					—				528,056				817,547				269,745				—				1,615,348
Other current assets					—				159,194				21,928				6,356				—				187,478
Total current assets					—				842,625				798,184				296,893				—				1,937,702
Goodwill					—				805,388				2,425,591				421,457				—				3,652,436
Other assets					—				343,914				446,403				112,435				—				902,752
Investment in and amounts due from consolidated subsidiaries					3,290,873				3,708,989				596,696				21,052				(7,617,610	)			—
Total assets				$	3,290,873			$	5,700,916			$	4,266,874			$	851,837			$	(7,617,610	)		$	6,492,890
Current liabilities				$	—			$	396,868			$	370,468			$	156,876			$	—			$	924,212
Other long-term liabilities					—				272,252				167,275				21,144				—				460,671
Long-term debt					716,377				2,457,300				—				—				(716,377	)			2,457,300
Minority interest					—				—				—				76,211				—				76,211
Shareholders' equity					2,574,496				2,574,496				3,729,131				597,606				(6,901,233	)			2,574,496
Total liabilities and shareholders' equity				$	3,290,873			$	5,700,916			$	4,266,874			$	851,837			$	(7,617,610	)		$	6,492,890
At December 31, 2002:
Current assets:
Cash and cash equivalents				$	—			$	126,421			$	(7,248	)		$	15,683			$	—			$	134,856
Contracts in process					—				524,500				630,351				163,142				—				1,317,993
Other current assets					—				155,387				28,319				2,819				—				186,525
Total current assets					—				806,308				651,422				181,644				—				1,639,374
Goodwill					—				753,672				1,702,384				338,492				—				2,794,548
Other assets					—				372,207				355,866				80,313				—				808,386
Investment in and amounts due from consolidated subsidiaries					2,919,954				2,688,750				398,282				53,779				(6,060,765	)			—
Total assets				$	2,919,954			$	4,620,937			$	3,107,954			$	654,228			$	(6,060,765	)		$	5,242,308
Current liabilities				$	—			$	336,050			$	298,646			$	75,246			$	—			$	709,942
Other long-term liabilities					—				234,933				166,188				8,050				—				409,171
Long-term debt					717,752				1,847,752				—				—				(717,752	)			1,847,752
Minority interest					—				—				—				73,241				—				73,241
Shareholders' equity					2,202,202				2,202,202				2,643,120				497,691				(5,343,013	)			2,202,202
Total liabilities and shareholders' equity				$	2,919,954			$	4,620,937			$	3,107,954			$	654,228			$	(6,060,765	)		$	5,242,308

F-86

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

				L-3 Holdings				L-3 Communications (Parent)				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated L-3 Communications
Condensed Combining Statements of Operations:
For the year ended December 31, 2003:
Sales				$	—			$	1,918,288			$	2,715,558			$	445,485			$	(17,737	)		$	5,061,594
Costs and expenses					—				1,635,998				2,464,534				397,778				(17,737	)			4,480,573
Operating income					—				282,290				251,024				47,707				—				581,021
Interest and other income (expense)									9,575				(92	)			(784	)			(8,484	)			215
Interest expense					34,058				131,734				501				8,932				(42,542	)			132,683
Minority interest					—				—				—				3,515				—				3,515
Loss on retirement of debt									11,225				—				—				—				11,225
Provision (benefit) for income taxes					(12,261	)			53,607				90,155				12,411				12,261				156,173
Equity in net income of consolidated subsidiaries					299,437				182,341				—				—				(481,778	)			—
Net income				$	277,640			$	277,640			$	160,276			$	22,065			$	(459,981	)		$	277,640
For the year ended December 31, 2002:
Sales				$	—			$	1,875,389			$	1,895,410			$	260,799			$	(20,369	)		$	4,011,229
Costs and expenses					—				1,622,200				1,736,233				219,186				(20,369	)			3,557,250
Operating income					—				253,189				159,177				41,613				—				453,979
Interest and other income (expense)					—				11,202				(286	)			262				(6,257	)			4,921
Interest expense					35,499				120,774				1,622				6,353				(41,756	)			122,492
Minority interest					—				—				—				6,198				—				6,198
Loss on retirement of debt					—				16,187				—				—				—				16,187
Provision (benefit) for income taxes					(13,880	)			44,942				56,145				10,469				13,880				111,556
Cumulative effect of a change in accounting principle					—				(14,749	)			—				(9,621	)			—				(24,370	)
Equity in net income of consolidated subsidiaries					199,716				110,358				—				—				(310,074	)			—
Net income				$	178,097			$	178,097			$	101,124			$	9,234			$	(288,455	)		$	178,097
For the year ended December 31, 2001:
Sales				$	—			$	1,328,702			$	854,094			$	168,558			$	(3,932	)		$	2,347,422
Costs and expenses					—				1,109,329				823,857				142,838				(3,932	)			2,072,092
Operating income					—				219,373				30,237				25,720				—				275,330
Interest and other income (expense)					—				8,335				(515	)			(6,081	)			—				1,739
Interest expense					20,400				86,024				51				315				(20,400	)			86,390
Minority interest					—				—				—				4,457				—				4,457
Provision (benefit) for income taxes					(7,976	)			53,840				11,275				5,649				7,976				70,764
Equity in net income of consolidated subsidiaries					127,882				27,614				—				—				(155,496	)			—
Net income				$	115,458			$	115,458			$	18,396			$	9,218			$	(143,072	)		$	115,458

F-87

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

				L-3 Holdings				L-3 Communications (Parent)				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated L-3 Communications
Condensed Combining Statements of Cash Flows:
For the year ended December 31, 2003:
Operating activities:
Net cash from (used in) operating activities				$	—			$	219,890			$	240,672			$	(4,499	)		$	—			$	456,063
Investing activities:
Acquisition of businesses, net of cash acquired					—				(53,626	)			(869,863	)			(90,950	)							(1,014,439	)
Other investing activities					(98,512	)			(1,000,542	)			(23,530	)			(10,359	)			1,059,325				(73,618	)
Net cash used in investing activities					(98,512	)			(1,054,168	)			(893,393	)			(101,309	)			1,059,325				(1,088,057	)
Financing activities:
Proceeds from sale of senior subordinated notes					—				790,788				—				—				—				790,788
Redemption of senior subordinated notes					—				(187,650	)							—				—				(187,650	)
Other financing activities net					98,512				260,094				618,678				110,917				(1,059,325	)			28,876
Net cash from financing activities					98,512				863,232				618,678				110,917				(1,059,325	)			632,014
Net increase (decrease) in cash					—				28,954				(34,043	)			5,109				—				20
Cash and cash equivalents, beginning of the period					—				126,421				(7,248	)			15,683				—				134,856
Cash and cash equivalents, end of the period				$	—			$	155,375			$	(41,291	)		$	20,792			$	—			$	134,876
For the year ended December 31, 2002:
Operating activities:
Net cash from operating activities				$	—			$	137,837			$	169,221			$	11,402			$	—			$	318,460
Investing activities:
Acquisition of businesses, net of cash acquired					—				(146,913	)			(1,499,891	)			(95,329	)			—				(1,742,133	)
Other investing activities					(855,939	)			(1,627,853	)			(27,130	)			(8,632	)			2,451,159				(68,395	)
Net cash used in investing activities					(855,939	)			(1,774,766	)			(1,527,021	)			(103,961	)			2,451,159				(1,810,528	)
Financing activities:
Proceeds from sale of senior subordinated notes					—				750,000				—				—				—				750,000
Redemption of senior subordinated notes					—				(237,468	)			—				—				—				(237,468	)
Proceeds from sale of L-3 Holdings' common stock, net					766,780				—				—				—				—				766,780
Other financing activities					89,159				930,608				1,354,964				63,018				(2,451,159	)			(13,410	)
Net cash from financing activities					855,939				1,443,140				1,354,964				63,018				(2,451,159	)			1,265,902
Net decrease in cash					—				(193,789	)			(2,836	)			(29,541	)			—				(226,166	)
Cash and cash equivalents, beginning of the period					—				320,210				(4,412	)			45,224				—				361,022
Cash and cash equivalents, end of the period				$	—			$	126,421			$	(7,248	)		$	15,683			$	—			$	134,856

F-88

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(Dollars in thousands, except per share data)

				L-3 Holdings				L-3 Communications (Parent)				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated L-3 Communications
For the year ended December 31, 2001:
Operating activities:
Net cash from operating activities				$	—			$	104,169			$	30,014			$	38,785			$	—			$	172,968
Investing activities:
Acquisition of businesses, net of cash acquired					—				(112,691	)			(212,556	)			(121,664	)			—				(446,911	)
Other investing activities					(830,561	)			(357,400	)			(14,643	)			59,844				1,164,781				22,021
Net cash used in investing activities					(830,561	)			(470,091	)			(227,199	)			(61,820	)			1,164,781				(424,890	)
Financing activities:
Repayment of borrowings under revolving credit facilities, net					—				(190,000	)			—				—				—				(190,000	)
Proceeds from sale of senior subordinated notes					420,000				—				—				—				—				420,000
Proceeds from sale of L-3 Holdings' common stock, net					353,622				—				—				—				—				353,622
Other financing activities					56,939				857,424				187,862				59,198				(1,164,781	)			(3,358	)
Net cash from financing activities					830,561				667,424				187,862				59,198				(1,164,781	)			580,264
Net increase (decrease) in cash					—				301,502				(9,323	)			36,163				—				328,342
Cash and cash equivalents, beginning of the period					—				18,708				4,911				9,061				—				32,680
Cash and cash equivalents, end of the period				$	—			$	320,210			$	(4,412	)		$	45,224			$	—			$	361,022

F-89

OFFER TO EXCHANGE ALL OUTSTANDING 5 7/8% SENIOR SUBORDINATED NOTES DUE 2015 FOR 5 7/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2015, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933

PROSPECTUS

UNTIL                 , 2005 ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

                , 2005

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.    Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law (the "DGCL") provides for, among other things:

a.    permissive indemnification for expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by designated persons, including directors and officers of a corporation, in the event such persons are parties to litigation other than stockholder derivative actions if certain conditions are met;

b.    permissive indemnification for expenses (including attorneys' fees) actually and reasonably incurred by designated persons, including directors and officers of a corporation, in the event such persons are parties to stockholder derivative actions if certain conditions are met;

c.    mandatory indemnification for expenses (including attorneys' fees) actually and reasonably incurred by designated persons, including directors and officers of a corporation, in the event such persons are successful on the merits or otherwise in defense of litigation covered by a. and b. above; and

d.    that the indemnification provided for by Section 145 is not deemed exclusive of any other rights which may be provided under any by-law, agreement, stockholder or disinterested director vote, or otherwise.

In addition to the indemnification provisions of the DGCL described above, the Registrant's certificate of incorporation (the "Certificate of Incorporation") authorizes indemnification of the Registrant's officers and directors, subject to a case-by-case determination that they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the Company, and in the case of any criminal proceeding, they had no reasonable cause to believe their conduct was unlawful. In the event that a Change in Control (as defined in the Certificate of Incorporation) shall have occurred, the proposed indemnitee director or officer may require that the determination of whether he met the standard of conduct be made by special legal counsel selected by him. In addition, whereas the DGCL would require court-ordered indemnification, if any, in cases in which a person has been adjudged to be liable to the Registrant, the Certificate of Incorporation also permits indemnification in such cases if and to the extent that the reviewing party determines that such indemnity is fair and reasonable under the circumstances.

The Certificate of Incorporation requires the advancement of expenses to an officer or director (without a determination as to his conduct) in advance of the final disposition of a proceeding if such person furnishes a written affirmation of his good faith belief that he has met the applicable standard of conduct and furnishes a written undertaking to repay any advances if it is ultimately determined that he is not entitled to indemnification. In connection with proceedings by or in the right of the Registrant, the Certificate of Incorporation provides that indemnification shall include not only reasonable expenses, but also penalties, fines and amounts paid in settlement. Unless ordered by a court, such indemnification shall not include judgments. Under the Certificate of Incorporation, no officer or director is entitled to indemnification or advancement of expenses with respect to a proceeding brought by him against the Registrant other than a proceeding seeking or defending such officer's or director's right to indemnification or advancement of expenses. Finally, the Certificate of Incorporation provides that the Company may, subject to authorization on a case by case basis, indemnify and advance expenses to employees or agents to the same extent as a director or to a lesser extent (or greater, as permitted by law) as determined by the Board of Directors.

The Certificate of Incorporation purports to confer upon officers and directors contractual rights to indemnification and advancement of expenses as provided therein. In addition, as permitted by the DGCL, the Registrant has entered into indemnity agreements with its directors and selected officers that provide contract rights substantially identical to the rights to indemnification and advancement of expenses set forth in the Certificate of Incorporation, as described above.

II-1

The Certificate of Incorporation limits the personal liability of directors to the Registrant or its stockholders for monetary damages for breach of the duty as a director, other than liability as a director (i) for breach of duty of loyalty to the Registrant or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL (certain illegal distributions), or (iv) for any transaction for which the director derived an improper personal benefit.

The Registrant maintains officers' and directors' insurance covering certain liabilities that may be incurred by officers and directors in the performance of their duties.

Item 21.    Exhibits and Financial Statement Schedules.

The following exhibits are filed pursuant to Item 601 of Regulation S-K.

Exhibit No.				Description of Exhibit
3.1				Certificate of Incorporation of L-3 Communications Corporation (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-4 No. 333-31649).
3.2				By-Laws of L-3 Communications Corporation (incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Form S-4 No. 333- 31649).
3.3				Certificate of Incorporation of Hygienetics Environmental Services, Inc. (incorporated by reference to Exhibit 3.3 to the Company's Registration Statement on Form S-1 No. 333-46983).
3.4				By-laws of Hygienetics Environmental Services, Inc. (incorporated by reference to Exhibit 3.4 to the Company's Registration Statement on Form S-1 No. 333- 46983).
3.5				Certificate of Incorporation of L-3 Communications ILEX Systems, Inc. (incorporated by reference to Exhibit 3.5 to the Company's Registration Statement on Form S-1 (No. 333-46983).
3.6				By-laws of L-3 Communications ILEX Systems, Inc. (incorporated by reference to Exhibit 3.6 to the Company's Registration Statement on Form S-1 No. 333- 46983).
3.7				Certificate of Incorporation of L-3 Communications ESSCO, Inc. (incorporated by reference to Exhibit 3.11 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.8				By-laws of L-3 Communications ESSCO, Inc. (incorporated by reference to Exhibit 3.12 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.9				Certificate of Incorporation of L-3 Communications Storm Control Systems, Inc. (incorporated by reference to Exhibit 3.13 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.10				By-laws of L-3 Communications Storm Control Systems, Inc. (incorporated by reference to Exhibit 3.14 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.11				Certificate of Incorporation of SPD Electrical Systems, Inc. (incorporated by reference to Exhibit 3.17 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.12				By-laws of SPD Electrical Systems, Inc. (incorporated by reference to Exhibit 3.18 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.13				Certificate of Incorporation of SPD Switchgear Inc. (incorporated by reference to Exhibit 3.19 to the Company's Registration Statement on Form S-4 No. 333-70199).

II-2

Exhibit No.				Description of Exhibit
3.14				By-laws of SPD Switchgear Inc. (incorporated by reference to Exhibit 3.20 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.15				Certificate of Incorporation of Pac Ord Inc. (incorporated by reference to Exhibit 3.21 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.16				By-laws of Pac Ord Inc. (incorporated by reference to Exhibit 3.22 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.17				Certificate of Incorporation of Henschel Inc. (incorporated by reference to Exhibit 3.23 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.18				By-laws of Henschel Inc. (incorporated by reference to Exhibit 3.24 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.19				Certificate of Incorporation of Power Paragon, Inc. (incorporated by reference to Exhibit 3.25 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.20				By-laws of Power Paragon, Inc. (incorporated by reference to Exhibit 3.26 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.21				Certificate of Incorporation of Apcom, Inc. (incorporated by reference to Exhibit 3.31 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.22				By-laws of Apcom, Inc. (incorporated by reference to Exhibit 3.32 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.23				Certificate of Incorporation of L-3 Communications CSI, Inc. (incorporated by reference to Exhibit 3.34 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.24				By-laws of L-3 Communications CSI, Inc. (incorporated by reference to Exhibit 3.34 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.25				Certificate of Incorporation of L-3 Communications Government Services, Inc. (incorporated by reference to Exhibit 3.37 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.26				By-laws of L-3 Communications Government Services, Inc. (incorporated by reference to Exhibit 3.38 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.27				Certificate of Incorporation of Electrodynamics, Inc. (incorporated by reference to Exhibit 3.39 to the Company's Registration Statement on Form S-4 No. 333-99757)
3.28				By-laws of Electrodynamics, Inc. (incorporated by reference to Exhibit 3.40 to the Company's Registration Statement on Form S-4 No. 333-99757)
3.29				Certificate of Incorporation of Interstate Electronics Corporation (incorporated by reference to Exhibit 3.41 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.30				By-laws of Interstate Electronics Corporation (incorporated by reference to Exhibit 3.42 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.31				Certificate of Incorporation of KDI Precision Products, Inc. (incorporated by reference to Exhibit 3.43 to the Company's Registration Statement on Form S-4 No. 333-99757)
3.32				By-laws of KDI Precision Products, Inc. (incorporated by reference to Exhibit 3.44 to the Company's Registration Statement on Form S-4 No. 333-99757)

II-3

Exhibit No.				Description of Exhibit
3.33				Certificate of Incorporation of L-3 Communications AIS GP Corporation (incorporated by reference to Exhibit 3.45 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.34				By-laws of L-3 Communications AIS GP Corporation (incorporated by reference to Exhibit 3.46 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.35				Certificate of Incorporation of L-3 Communications Aydin Corporation (incorporated by reference to Exhibit 3.51 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.36				By-laws of L-3 Communications Aydin Corporation (incorporated by reference to Exhibit 3.52 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.37				Certificate of Limited Partnership of L-3 Communications Integrated Systems L.P (incorporated by reference to Exhibit 3.53 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.38				Limited Partnership Agreement of L-3 Communications Integrated Systems L.P. (incorporated by reference to Exhibit 3.54 to the Company's Registration Statement on Form S-4 No. 333-99757)
3.39				Certificate of Incorporation of L-3 Communications Investments Inc. (incorporated by reference to Exhibit 3.55 to the Company's Registration Statement on Form S-4 No. 333-99757)
3.40				By-laws of L-3 Communications Investments Inc. (incorporated by reference to Exhibit 3.56 to the Company's Registration Statement on Form S-4 No. 333-99757)
3.41				Certificate of Incorporation of Microdyne Communications Technologies Incorporated (incorporated by reference to Exhibit 3.57 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.42				By-laws of Microdyne Communications Technologies Incorporated (incorporated by reference to Exhibit 3.58 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.43				Certificate of Incorporation of Microdyne Corporation (incorporated by reference to Exhibit 3.59 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.44				By-laws of Microdyne Corporation (incorporated by reference to Exhibit 3.60 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.45				Certificate of Incorporation of Microdyne Outsourcing Incorporated (incorporated by reference to Exhibit 3.61 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.46				By-laws of Microdyne Outsourcing Incorporated (incorporated by reference to Exhibit 3.62 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.47				Certificate of Incorporation of MPRI, Inc. (incorporated by reference to Exhibit 3.63 to the Company's Registration Statement on Form S-4 No. 333-99757)
3.48				By-laws of MPRI, Inc. (incorporated by reference to Exhibit 3.64 to the Company's Registration Statement on Form S-4 No. 333-99757)
3.49				Certificate of Incorporation of MCTI Acquisition Corporation (incorporated by reference to Exhibit 3.65 to the Company's Registration Statement on Form S-4 No. 333-99757).

II-4

Exhibit No.				Description of Exhibit
3.50				Bylaws of MCTI Acquisition Corporation (incorporated by reference to Exhibit 3.66 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.51				Certificate of Incorporation of L-3 Communications Security and Detection Systems, Inc. (incorporated by reference to Exhibit 3.67 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.52				Bylaws of L-3 Communications Security and Detection Systems, Inc. (incorporated by reference to Exhibit 3.68 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.53				Certificate of Incorporation of Broadcast Sports, Inc. (incorporated by reference to Exhibit 3.69 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.54				Bylaws of Broadcast Sports, Inc. (incorporated by reference to Exhibit 3.70 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.55				Certificate of Incorporation of L-3 Communications Avionics Systems, Inc. (incorporated by reference to Exhibit 3.73 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.56				Bylaws of L-3 Communications Avionics Systems, Inc. (incorporated by reference to Exhibit 3.74 to the Company's Registration Statement on Form S-4 No. 333-106106).
**3.57				Certificate of Incorporation of D.P. Associates Inc.
**3.58				Bylaws of D.P. Associates Inc.
3.59				Certificate of Restated and Amended Articles of Incorporation of L-3 Communications Westwood Corporation (incorporated by reference to Exhibit 3.83 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.60				Bylaws of L-3 Communications Westwood Corporation (incorporated by reference to Exhibit 3.84 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.61				Certificate of Incorporation of Ship Analytics, Inc. (incorporated by reference to Exhibit 3.85 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.62				Bylaws of Ship Analytics, Inc. (incorporated by reference to Exhibit 3.86 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.63				Certificate of Incorporation Ship Analytics International, Inc. (incorporated by reference to Exhibit 3.87 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.64				Bylaws of Ship Analytics International, Inc. (incorporated by reference to Exhibit 3.88 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.65				Certificate of Incorporation of Ship Analytics USA, Inc. (incorporated by reference to Exhibit 3.89 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.66				Bylaws of Ship Analytics USA, Inc. (incorporated by reference to Exhibit 3.90 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.67				Certificate of Incorporation of SYColeman Corporation (incorporated by reference to Exhibit 3.91 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.68				Bylaws of SYColeman Corporation (incorporated by reference to Exhibit 3.92 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.69				Certificate of Incorporation of Troll Technology Corporation (incorporated by reference to Exhibit 3.95 to the Company's Registration Statement on Form S-4 No. 333-106106)

II-5

Exhibit No.				Description of Exhibit
3.70				Bylaws of Troll Technology Corporation (incorporated by reference to Exhibit 3.96 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.71				Certificate of Incorporation of Wescam Air Ops Inc. (incorporated by reference to Exhibit 3.97 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.72				Bylaws of Wescam Air Ops Inc. (incorporated by reference to Exhibit 3.98 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.73				Certificate of Formation of Wescam Air Ops LLC (incorporated by reference to Exhibit 3.99 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.74				Limited Liability Company Agreement of Wescam Air Ops LLC (incorporated by reference to Exhibit 3.100 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.75				Articles of Incorporation of Wescam Incorporated (incorporated by reference to Exhibit 3.101 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.76				Bylaws of Wescam Incorporated (incorporated by reference to Exhibit 3.102 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.77				Certificate of Formation of Wescam LLC (incorporated by reference to Exhibit 3.103 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.78				Limited Liability Company Agreement of Wescam LLC (incorporated by reference to Exhibit 3.104 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.79				Articles of Incorporation of Wescam Sonoma Inc. (incorporated by reference to Exhibit 3.105 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.80				Bylaws of Wescam Sonoma Inc. (incorporated by reference to Exhibit 3.106 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.81				Certificate of Incorporation of Wescam Holdings (US) Inc. (incorporated by reference to Exhibit 3.107 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.82				Bylaws of Wescam Holdings (US) Inc. (incorporated by reference to Exhibit 3.108 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.83				Articles of Organization of Wolf Coach, Inc. (incorporated by reference to Exhibit 3.109 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.84				Bylaws of Wolf Coach, Inc. (incorporated by reference to Exhibit 3.110 to the Company's Registration Statement on Form S-4 No. 333-106106)
3.85				Certificate of Formation of L-3 Communications Vertex Aerospace LLC (incorporated by reference to Exhibit 3.85 to the Company's Registration Statement on Form S-4 No. 333-113802)
3.86				Limited Liability Company Agreement of L-3 Communications Vertex Aerospace LLC (incorporated by reference to Exhibit 3.86 to the Company's Registration Statement on Form S-4 No. 333-113802)
3.87				Certificate of Formation of L-3 Communications Flight International Aviation LLC (incorporated by reference to Exhibit 3.87 to the Company's Registration Statement on Form S-4 No. 333-113802)
3.88				Limited Liability Company Agreement of L-3 Communications Flight International Aviation LLC (incorporated by reference to Exhibit 3.88 to the Company's Registration Statement on Form S-4 No. 333-113802)

II-6

Exhibit No.				Description of Exhibit
3.89				Certificate of Formation of L-3 Communications Flight Capital LLC (incorporated by reference to Exhibit 3.89 to the Company's Registration Statement on Form S-4 No. 333-113802)
3.90				Limited Liability Company Agreement of L-3 Communications Flight Capital LLC (incorporated by reference to Exhibit 3.90 to the Company's Registration Statement on Form S-4 No. 333-113802)
3.91				Certificate of Formation of L-3 Communications Vector International Aviation LLC (incorporated by reference to Exhibit 3.91 to the Company's Registration Statement on Form S-4 No. 333-113802)
3.92				Limited Liability Company Agreement of L-3 Communications Vector International Aviation LLC (incorporated by reference to Exhibit 3.92 to the Company's Registration Statement on Form S-4 No. 333-113802)
3.93				Certificate of Incorporation of L-3 Communications Klein Associates, Inc. (incorporated by reference to Exhibit 3.93 to the Company's Registration Statement on Form S-4 No. 333-113802)
3.94				Bylaws of L-3 Communications Klein Associates, Inc. (incorporated by reference to Exhibit 3.94 to the Company's Registration Statement on Form S-4 No. 333-113802)
3.95				Certificate of Incorporation of L-3 Communications MAS (US) Corporation (incorporated by reference to Exhibit 3.95 to the Company's Registration Statement on Form S-4 No. 333-113802)
3.96				Bylaws of L-3 Communications MAS (US) Corporation (incorporated by reference to Exhibit 3.96 to the Company's Registration Statement on Form S-4 No. 333-113802)
3.97				Articles of Incorporation of L-3 Communications Aeromet, Inc. (incorporated by reference to Exhibit 3.97 to the Company's Registration Statement on Form S-4 No. 333-113802)
3.98				Bylaws of L-3 Communications Aeromet, Inc. (incorporated by reference to Exhibit 3.98 to the Company's Registration Statement on Form S-4 No. 333-113802)
**3.99				Certificate of Incorporation of L-3 Communications Avysis Corporation.
**3.100				Bylaws of L-3 Communications Avysis Corporation.
**3.101				Certificate of Incorporation of L-3 Communications CE Holdings, Inc.
**3.102				Bylaws of L-3 Communications CE Holdings, Inc.
**3.103				Certificate of Incorporation of L-3 Communications Cincinnati Electronics Corporation.
**3.104				Bylaws of L-3 Communications Cincinnati Electronics Corporation.
**4.1				Indenture dated as of November 12, 2004 (the "2004 Indenture") among L-3 Communications Corporation, the Guarantors and The Bank of New York, as Trustee.
**4.2				Form of 5 7/8% Senior Subordinated Note due 2015 (attached as Exhibit A to Exhibit 4.1).
**4.3				Form of 5 7/8% Series B Senior Subordinated Note due 2015 (attached as Exhibit A to Exhibit 4.1).
**4.4				Registration Rights Agreement, dated as of November 12, 2004, among L-3 Communications Corporation, the Guarantors, Lehman Brothers Inc., Morgan Stanley & Co. Incorporated, Banc of America Securities LLC, SG Americas Securities LLC and Wachovia Capital Markets, LLC, as representatives of the initial purchasers.
**5				Opinion of Simpson Thacher and Bartlett LLP.

II-7

Exhibit No.				Description of Exhibit
10.6				Employment Agreement dated April 30, 1997 between Frank C. Lanza and L-3 Communications Holdings, Inc. (incorporated by reference to Exhibit 10.5 to L-3 Communications Holdings' Registration Statement on Form S-1 No. 333-46975).
10.11				1997 Stock Option Plan for Key Employees (incorporated by reference to Exhibit 10.11 to L-3 Communications Holdings' Registration Statement on Form S-1, No. 333-70125).
10.12				Non-Qualified Stock Option Agreement dated as of April 30, 1997 by and between L-3 Communications Holdings, Inc. and Frank C. Lanza (incorporated by reference to Exhibit 10.12 to L-3 Communications Holdings' Registration Statement on Form S-1, No. 333-70125).
10.13				Non-Qualified Stock Option Agreement dated as of April 30, 1997 by and between L-3 Communications Holdings, Inc. and Robert V. LaPenta (incorporated by reference to Exhibit 10.13 to L-3 Communications Holdings' Registration Statement on Form S-1, No. 333-70125).
10.15				Option Plan for Non-Employee Directors of L-3 Communications Holdings, Inc. (incorporated by reference to Exhibit 10.15 to the Registrant's Annual Report on Form 10-K filed on March 31, 1999).
10.16				1999 Long Term Performance Plan dated as of April 27, 1999 (incorporated by reference to Exhibit 10.16 to the Registrant's annual report on Form 10-K filed on March 30, 2000).
10.20				L-3 Communications Corporation Pension Plan (incorporated by reference to Exhibit 10.10 to L-3 Communications Holdings' Registration Statement on Form S-1 No. 333-46975).
10.25				L-3 Communications Corporation Employee Stock Purchase Plan (incorporated by reference to Appendix A of L-3 Communications Holdings' Definitive Proxy Statement filed April 2, 2001).
10.32				Indenture dated as of December 22, 2003 ("December 2003 Indenture") among L-3 Communications Corporation, the Guarantors named therein and The Bank of New York, as Trustee (incorporated by reference to Exhibit 10.33 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2003).
10.33				Indenture dated as of May 21, 2003 ("May 2003 Indenture") among L-3 Communications Corporation, the Guarantors named therein and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-4, No. 333-106106).
10.40				Third Amended and Restated Credit Agreement dated as of May 16, 2001 among L-3 Communications Corporation, the lenders named therein and the other parties thereto (incorporated by reference to Exhibit 10.40 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).
10.41				Second Amended and Restated 364-Day Credit Agreement dated as of May 16, 2001 among L-3 Communications Corporation, the lenders named therein and the other parties thereto (incorporated by reference to Exhibit 10.41 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).
10.42				First Amendment to Third Amended and Restated Credit Agreement dated as of October 17, 2001 among L-3 Communications Corporation, the lenders named therein and the other parties thereto (incorporated by reference to Exhibit 10.42 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).
10.43				First Amendment to Second Amended and Restated 364-Day Credit Agreement dated as of October 17, 2001 among L-3 Communications Corporation, the lenders named therein and the other parties thereto (incorporated by reference to Exhibit 10.43 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).

II-8

Exhibit No.				Description of Exhibit
10.44				Second Amendment to Third Amended and Restated Credit Agreement dated as of February 25, 2002 among L-3 Communications Corporation, the lenders named therein and the other parties thereto (incorporated by reference to Exhibit 10.44 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).
10.45				Consent and Second Amendment to Second Amended and Restated 364-Day Credit Agreement dated as of February 25, 2002 among L-3 Communications Corporation, the lenders named herein and the other parties thereto (incorporated by reference to Exhibit 10.45 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).
10.46				Consent, Waiver and Omnibus Amendment Regarding Third Amended and Restated Credit Agreement dated as of February 25, 2003 among L-3 Communications Corporation, the lenders named therein and the other parties thereto (incorporated by reference to Exhibit 10.46 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2002).
10.47				Consent, Waiver and Omnibus Amendment Regarding Second Amended and Restated 364-Day Credit Agreement dated as of February 25, 2003 among L-3 Communications Corporation, the lenders named therein and the other parties thereto (incorporated by reference to Exhibit 10.47 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2002).
10.48				Second Omnibus Amendment Regarding Third Amended and Restated Credit Agreement dated as of January 23, 2004 among L-3 Communications Corporation, the lenders named therein and the other parties thereto (incorporated by reference to Exhibit 10.48 to the Registrant's Annual Report on Form 10-K for the year ending December 31, 2003).
10.49				Second Omnibus Amendment Regarding Second Amended and Restated 364-Day Credit Agreement dated as of January 23, 2004 among L-3 Communications Corporation, the lenders named therein and the other parties thereto (incorporated by reference to Exhibit 10.49 to the Registrant's Annual Report on Form 10-K for the year ending December 31, 2003).
10.50				Consent, Waiver and Third Omnibus Amendment Regarding Second Amended and Restated 364 Day Credit Agreement dated as of February 24, 2004 among L-3 Communications Corporation, the lenders named therein and the other parties thereto (incorporated by reference to Exhibit 10.50 to the Registrant's Annual Report on Form 10-K for the year ending December 31, 2003).
10.51				Third Omnibus Amendment Regarding Third Amended and Restated Credit Agreement dated as of February 24, 2004 among L-3 Communications Corporation, the lenders named therein and the other parties thereto (incorporated by reference to Exhibit 10.51 to the Registrant's Annual Report on Form 10-K for the year ending December 31, 2003).
**10.55				Supplemental Indenture dated as of January 14, 2005 among L-3 Communications Corporation, The Bank of New York, as trustee, and the guarantors named therein to the May 2003 Indenture.
10.58				Asset Purchase Agreement dated as of January 11, 2002 among Raytheon Company, Raytheon Australia Pty Ltd. and L-3 Communications Corporation (incorporated by reference to Exhibit 10.59 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).
10.59				Amendment dated as of March 8, 2002 among Raytheon Company, Raytheon Australia Pty Ltd., L-3 Communications Corporation, L-3 Communications Integrated Systems L.P. and L-3 Communications Australia Pty Ltd to the Asset Purchase Agreement dated as of January 11, 2002 (incorporated by reference to Exhibit 10.60 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).

II-9

Exhibit No.				Description of Exhibit
10.62				Indenture dated as of June 28, 2002, ("2002 Indenture") among L-3 Communications Corporation, the guarantors named therein and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 of the Registrant's Registration Statement on Form S-4, No. 333-99757).
**10.63				Supplemental Indenture dated as of January 14, 2005 among L-3 Communications Corporation, The Bank of New York, as trustee, and the guarantors named therein to the June 2002 Indenture.
10.64				Transaction Agreement dated as of October 21, 2003 by and among L-3 Communications Corporation, RAAH I, LLC and Vertex Aerospace LLC (incorporated by reference to Exhibit 10.95 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2003).
**10.65				Supplemental Indenture dated as of January 14, 2005 among L-3 Communications Corporation, The Bank of New York, as trustee, and the guarantors named therein to the December 2003 Indenture.
10.66				Amendment to the L-3 Communications Holdings, Inc. 1999 Long Term Performance Plan (incorporated by reference to Exhibit 4.4 of L-3 Holdings' registration statement on Form S-8, No. 333-120393)
10.67				Amendment to the L-3 Communications Holdings, Inc. 1999 Long Term Performance Plan (incorporated by reference to Exhibit 4.5 of L-3 Holdings' registration statement on Form S-8, No. 333-120393)
**10.68				Supplemental Indenture dated as of January 14, 2005 among L-3 Communications Corporation, The Bank of New York, as trustee, and the guarantors named therein to the 2004 Indenture.
*11				L-3 Communications Holdings, Inc. Computation of Basic Earnings Per Share and Diluted Earnings Per Share.
12				Ratio of Earnings to Fixed Charges (incorporated by reference to Exhibit 12 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2003 and Exhibit 12.1 to the Registrant's Quarterly Report on Form 10-Q for the three months ended September 30, 2004).
**21				Subsidiaries of the Registrant.
**23				Consent of PricewaterhouseCoopers LLP.
24				Powers of Attorney L-3 Communications Corporation and the Additional Registrants (included on the signature pages hereto).
**25				Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as Trustee.
**99.1				Letter of Transmittal.
**99.2				Notice of Guaranteed Delivery.

*	The information required in this exhibit is presented on Note 12 to the Consolidated Financial Statements as of December 31, 2003 and Note 10 to the Unaudited Condensed Consolidated Financial Statements as of September 30, 2004, in each case in accordance with the provisions of SFAS No. 128, Earnings Per Share.

**	Filed herewith

II-10

Item 22.    Undertakings.

The undersigned registrants hereby undertake:

(1)    To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)    To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii)    To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.

(iii)    To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2)    That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)    To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by the director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

II-11

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on February 2, 2005.

L-3 COMMUNICATIONS CORPORATION

By:    /s/ Christopher C. Cambria

Christopher C. Cambria, Senior Vice President –
General Counsel and Secretary

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Michael T. Strianese, Frank C. Lanza, Robert V. LaPenta, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462 (b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza ________________________ Frank C. Lanza				Chairman, Chief Executive Officer and Director				February 2, 2005
/s/ Robert V. LaPenta ________________________ Robert V. LaPenta				President, Chief Financial Officer and Director				February 2, 2005
/s/ Michael T. Strianese ________________________ Michael T. Strianese				Senior Vice President – Finance				February 2, 2005
/s/ Claude R. Canizares ________________________ Claude R. Canizares				Director				February 2, 2005
/s/ Thomas A. Corcoran ________________________ Thomas A. Corcoran				Director				February 2, 2005
/s/ Robert B. Millard ________________________ Robert B. Millard				Director				February 2, 2005
________________________ John M. Shalikashvili				Director				February 2, 2005
/s/ Arthur L. Simon ________________________ Arthur L. Simon				Director				February 2, 2005
/s/ Alan H. Washkowitz ________________________ Alan H. Washkowitz				Director				February 2, 2005
/s/ John P. White ________________________ John P. White				Director				February 2, 2005

II-12

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on February 2, 2005.

ELECTRODYNAMICS, INC.
MICRODYNE CORPORATION

By:    /s/ Christopher C. Cambria

Christopher C. Cambria, Vice President
and Secretary

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Frank C. Lanza, Robert V. LaPenta, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462 (b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrants to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza ________________________ Frank C. Lanza				Chief Executive Officer and Director				February 2, 2005
/s/ Robert V. LaPenta ________________________ Robert V. LaPenta				Chief Financial Officer and Director				February 2, 2005
/s/ Christopher C. Cambria ________________________ Christopher C. Cambria				Vice President, Secretary and Director				February 2, 2005

II-13

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants certifies has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on February 2, 2005.

APCOM, INC.
BROADCAST SPORTS, INC.
D.P. ASSOCIATES INC.
HENSCHEL INC.
HYGIENETICS ENVIRONMENTAL SERVICES, INC.
INTERSTATE ELECTRONICS CORPORATION
KDI PRECISION PRODUCTS, INC.
L-3 COMMUNICATIONS AEROMET CORPORATION
L-3 COMMUNICATIONS AIS GP CORPORATION
L-3 COMMUNICATIONS AVIONICS SYSTEMS, INC.
L-3 COMMUNICATIONS AVYSIS CORPORATION
L-3 COMMUNICATIONS AYDIN CORPORATION
L-3 COMMUNICATIONS CSI, INC.
L-3 COMMUNICATIONS CE HOLDINGS, INC.
L-3 COMMUNICATIONS CINCINNATI ELECTRONICS     CORPORATION
L-3 COMMUNICATIONS ESSCO, INC.
L-3 COMMUNICATIONS GOVERNMENT SERVICES, INC.
L-3 COMMUNICATIONS KLEIN ASSOCIATES, INC.
L-3 COMMUNICATIONS ILEX SYSTEMS, INC.
L-3 COMMUNICATIONS INVESTMENTS INC.
L-3 COMMUNICATIONS SECURITY AND DETECTION     SYSTEMS, INC.
L-3 COMMUNICATIONS STORM CONTROL SYSTEMS,
    INC.
L-3 COMMUNICATIONS WESTWOOD CORPORATION
MCTI ACQUISITION CORPORATION
MICRODYNE COMMUNICATIONS TECHNOLOGIES     INCORPORATED
MICRODYNE OUTSOURCING INCORPORATED
MPRI, INC.
PAC ORD INC.
POWER PARAGON, INC.
SHIP ANALYTICS, INC.
SHIP ANALYTICS INTERNATIONAL, INC.
SHIP ANALYTICS USA, INC.
SPD ELECTRICAL SYSTEMS, INC.
SPD SWITCHGEAR INC.
SYCOLEMAN CORPORATION
TROLL TECHNOLOGY CORPORATION
WESCAM AIR OPS INC.
WESCAM INCORPORATED
WESCAM HOLDINGS (US) INC.
WESCAM SONOMA, INC.

By:    /s/ Christopher C. Cambria

Christopher C. Cambria, Vice President
and Secretary

II-14

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Frank C. Lanza, Robert V. LaPenta, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462 (b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrants to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza ________________________ Frank C. Lanza				Chief Executive Officer				February 2, 2005
/s/ Robert V. LaPenta ________________________ Robert V. LaPenta				Chief Financial Officer				February 2, 2005
/s/ Christopher C. Cambria ________________________ Christopher C. Cambria				Vice President and Director				February 2, 2005

II-15

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on February 2, 2005.

L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P.

By:   L-3 COMMUNICATIONS AIS GP CORPORATION,
as General Partner

By:    /s/ Christopher C. Cambria

Name: Christopher C. Cambria
Title: Vice President and Secretary

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Frank C. Lanza, Robert V. LaPenta, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462 (b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrants to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza ________________________ Frank C. Lanza				Chief Executive Officer				February 2, 2005
/s/ Robert V. LaPenta ________________________ Robert V. LaPenta				Chief Financial Officer				February 2, 2005
/s/ Christopher C. Cambria ________________________ Christopher C. Cambria				Vice President, Secretary and Director of L-3 Communications AIS GP Corporation				February 2, 2005

II-16

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on February 2, 2005.

L-3 COMMUNICATIONS VERTEX AEROSPACE LLC

By:   L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P., as Sole Member

By:   L-3 COMMUNICATIONS AIS GP CORPORATION,
as General Partner

By:    /s/ Christopher C. Cambria

Name: Christopher C. Cambria
Title: Vice President and Secretary

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Frank C. Lanza, Robert V. LaPenta, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462 (b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrants to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza ________________________ Frank C. Lanza				Chief Executive Officer				February 2, 2005
/s/ Robert V. LaPenta ________________________ Robert V. LaPenta				Chief Financial Officer				February 2, 2005
/s/ Christopher C. Cambria ________________________ Christopher C. Cambria				Vice President, Secretary and Director of L-3 Communications AIS GP Corporation				February 2, 2005

II-17

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on February 2, 2005.

L-3 COMMUNICATIONS FLIGHT INTERNATIONAL     AVIATION LLC
L-3 COMMUNICATIONS FLIGHT CAPITAL LLC
L-3 COMMUNICATIONS VECTOR INTERNATIONAL     AVIATION LLC

By:   L-3 COMMUNICATIONS VERTEX AEROSPACE LLC

By:   L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P., as Sole Member

By:   L-3 COMMUNICATIONS AIS GP CORPORATION, as General Partner

By:    /s/ Christopher C. Cambria

Name: Christopher C. Cambria

Title: Vice President and Secretary

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Frank C. Lanza, Robert V. LaPenta, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462 (b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrants to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza ________________________ Frank C. Lanza				Chief Executive Officer				February 2, 2005
/s/ Robert V. LaPenta ________________________ Robert V. LaPenta				Chief Financial Officer				February 2, 2005
/s/ Christopher C. Cambria ________________________ Christopher C. Cambria				Vice President, Secretary and Director of L-3 Communications AIS GP Corporation				February 2, 2005

II-18

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on February 2, 2005.

L-3 COMMUNICATIONS MAS (US) CORPORATION

By:    /s/ Christopher C. Cambria

Name: Christopher C. Cambria

Title: Vice President and Secretary

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Frank C. Lanza, Robert V. LaPenta, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462 (b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrants to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza ________________________ Frank C. Lanza				Chief Executive Officer				February 2, 2005
/s/ Robert V. LaPenta ________________________ Robert V. LaPenta				Chief Financial Officer				February 2, 2005
/s/ Christopher C. Cambria ________________________ Christopher C. Cambria				Vice President, Secretary and Director				February 2, 2005

II-19

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on February 2, 2005.

WOLF COACH, INC.

By:    /s/ Christopher C. Cambria

Name: Christopher C. Cambria
Title: Vice President and Secretary

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Frank C. Lanza, Robert V. LaPenta, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462 (b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrants to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza ________________________ Frank C. Lanza				Chief Executive Officer				February 2, 2005
/s/ Robert V. LaPenta ________________________ Robert V. LaPenta				Chief Financial Officer				February 2, 2005
/s/ Christopher C. Cambria ________________________ Christopher C. Cambria				Vice President, Secretary and Director				February 2, 2005
/s/ David M. Reilly ________________________ David M. Reilly				Director				February 2, 2005
/s/ Michael T. Strianese ________________________ Michael T. Strianese				Director				February 2, 2005

II-20

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on February 2, 2005.

WESCAM AIR OPS LLC

By:   WESCAM INCORPORATED,
as Sole Member

By:    /s/ Christopher C. Cambria

Name: Christopher C. Cambria
Title: Vice President and Secretary

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Frank C. Lanza, Robert V. LaPenta, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462 (b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrants to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza ________________________ Frank C. Lanza				Chief Executive Officer				February 2, 2005
/s/ Robert V. LaPenta ________________________ Robert V. LaPenta				Chief Financial Officer				February 2, 2005
/s/ Christopher C. Cambria ________________________ Christopher C. Cambria				Vice President, Secretary and Director of Wescam Incorporated				February 2, 2005

II-21

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on February 2, 2005.

WESCAM LLC

By:   L-3 COMMUNICATIONS CORPORATION,
as Sole Member

By:    /s/ Christopher C. Cambria

Name: Christopher C. Cambria
Title: Vice President and Secretary

II-22

EX-3.57

                                                                   EXHIBIT 3.57

                            Commonwealth of Virginia

                 [GRAPHIC OMITTED] State Corporation Commission

I Certify the Following from the Records of the Commission:

D.P. ASSOCIATES INC. is a corporation existing under and by virtue of the laws
of Virginia, and is in good standing.

The date of incorporation is October 16, 1986.

Nothing more is hereby certified.











[GRAPHIC OMITTED]              Signed and Seal at Richmond on this Date:
                               September 22, 2004






                               --------------------------------------------
                                      Joel H. Peck, Clerk of the Commission







                                                                   EXHIBIT 3.57


                              ARTICLES OF AMENDMENT

                                       OF

                              D.P. ASSOCIATES, INC.

         1. Name. The name of the corporation is D.P. Associates, Inc.

         2. Amendment. The following Article VI is hereby added to the articles
of incorporation of the Corporation:

                  Article V1. No Preemptive Rights. No holder of any shares of
         any class of stock of the Corporation shall have any preemptive or
         other preferential right to purchase or subscribe to (i) any shares of
         any class of stock of the Corporation, whether now or hereafter
         authorized, (ii) any warrants, rights or options to purchase any such
         stock, or (iii) any obligations convertible into any such stock or into
         warrants, rights or options to purchase any such stock.

         3. Date of Adoption. This amendment was adopted on December 31, 1987.

         4. Approval by Shareholders. This amendment was adopted by unanimous
written consent of the shareholders of the Corporation.

         IN WITNESS WHEREOF, these Articles of Amendment are executed in the
name of the Corporation by its President who certifies that the facts stated
herein are true as of December 31, 1987.

                         D.P. ASSOCIATES, INC.

                         By
                              ------------------------------------------------
                              Its
                                 ---------------------------------------------




















                                                                  EXHIBIT 3.57


                            COMMONWEALTH OF VIRGINIA
                          STATE CORPORATION COMMISSION

                            RICHMOND, March 28, 1988

The accompanying articles having been delivered to the State Corporation
Commission on behalf of

D.P. ASSOCIATES INC.

and the Commission having found that the articles comply with the requirements
of law and that all required fees have been paid, it is

ORDERED that this CERTIFICATE OF AMENDMENT

be issued, and that this order, together with the articles, be admitted to
record in this office of the Commission; and that the corporation have the
authority conferred on it by law in accordance with the articles, subject to the
conditions and restrictions imposed by law, effective March 28, 1988.

Upon the completion of such recordation, this order and the articles shall be
forwarded for recordation in the office of the Clerk of the Circuit Court,
Fairfax County.

                          STATE CORPORATION COMMISSION


                          By
                             ---------------------------------------------
                                             Commissioner








                                                                  EXHIBIT 3.57

                            ARTICLES OF INCORPORATION

                                       OF

                              D.P. ASSOCIATES INC.

                  The undersigned incorporator hereby forms a stock corporation
under the provisions of the Virginia Stock Corporation Act and to that end sets
forth the following:

                  Article I. Name, The name of the corporation is D.P.
Associates Inc.

                  Article II. Capital Stock. The aggregate number of shares,
which the corporation shall have authority to issue is as follows:

                 Class                             Number of Shares
                 -----                             ----------------
                Common                                   5,000

                  Article III. Registered Office and Agent. The initial
registered office is established at 31 5 Northwood Road, Fairfax, Virginia, in
the County of Fairfax. The initial registered agent is Donald Jay Patterson,
Jr., who is a resident of Virginia and a director of the Corporation, and whose
business address is the same as the address of the initial registered office of
the Corporation.

                  Article IV. Indemnification.

                  A. Definitions. For purposes of this Article: (i) a "legal
entity" is a corporation, partnership, joint venture, trust, or other
enterprise; (ii) a "proceeding" is any action, suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative, including an
action or suit by or in the right of the Corporation to procure a judgment in
its favor; and (iii) a "qualified position" with respect to any legal entity is
a position held by a director, officer or employee of such legal entity which
does or might constitute him a fiduciary with respect to any employee benefit
plan for the employees of such legal entity under any federal or state law
regulating employee benefit plans.

                  B. Mandatory Indemnification. The Corporation shall indemnify
each person who was or is a party or is threatened to be made a party to any
proceeding by reason of the fact that he is serving in a qualified position with
respect to the Corporation or is serving in a similar capacity with respect to
any other legal entity at the request of the Corporation, against expenses
(including attorneys' fees and costs of investigation and litigation),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with any such proceeding unless such person has been guilty
of gross negligence or willful misconduct in performing the duties of his office
or rendering the services required of him in his qualified position. The
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contondere or its equivalent, shall not of itself create a
presumption that such person acted in such a manner as to make hip ineligible
for indemnification.

                  C. Permissive indemnification. In addition to the
indemnification provided for in paragraph B, the Corporation shall have the
power to indemnify or contract in advance to



indemnify, to a lesser or the same extent that indemnification is requited under
paragraph B, any person who was or is a party or is threatened to be made a
party to any proceeding by reason of the fact that he is serving in any capacity
with respect to the Corporation or, with respect to any other legal entity at
the request of the Corporation.

                  D. Determination that Indemnification is Proper. Any
indemnification under this Article (unless ordered by a court) shall be made by
the Corporation only as authorized in the specific case upon a determination
that indemnification is proper in the circumstances because the person seeking
indemnification has met the applicable standard of conduct required of him by or
pursuant to this Article. In any case where indemnification is sought pursuant
to the terms of a written agreement, plan or trust, such determination shall be
made as provided in such agreement, plan or trust, or in the absence of
applicable provisions, in any manner approved by the Board of Directors. In all
other cases, such determination shall be made (i) by the Board of Directors by a
majority vote of a quorum consisting of directors who neither are nor were
parties to the proceeding, or (ii) if such a quorum is not obtainable, or even
though obtainable, a majority of disinterested directors so directs, by
independent legal counsel in a written opinion, or (iii) by the shareholders. In
making a determination the directors may rely, as to all questions of law, on
the advice of independent legal counsel.

                  E. Advances. Expenses (including attorneys' fees and costs of
investigation and litigation) incurred in defending a proceeding by any person
claiming indemnification under this Article may be paid by the Corporation in
advance of the final disposition of the proceeding upon receipt of an
undertaking by or on behalf of the recipient to repay such amount unless it
shall ultimately be determined that he is entitled to be indemnified.

                  F. Miscellaneous. Every reference in this Article to persons
who are entitled to indemnification shall include all person who formerly
occupies any of the positions hereinabove set forth in this Article, to the
extent they would have been entitled to indemnification under the provisions of
the Article if they still held such positions and their respective heirs,
executors and administrators. Indemnification provided pursuant to the foregoing
provisions of this Article shall not be exclusive of any other rights of
indemnification to which any person may be entitled, including any rights under
policies of insurance that may be purchased and maintained by the Corporation or
others, whether or not the Corporation would have the power to indemnify such
person in the particular instance under the provisions of this Article, but no
person shall be entitled to any indemnification by the Corporation to the extent
he is indemnified by any other party, including an insurer.

                  Article V. Initial Director. The name and address of the
person who is to serve as the initial director of the Corporation; as follows;



                           Name                                                      Address
                           ----                                                      -------

Donald Jay Patterson, Jr.                                    3105 Northwood Road
                                                             Fairfax, Virginia 22301

Dated: October 14, 1986
                                                             ---------------------------------------------------------
                                                                                         John V. Little, Incorporator


                                       2




                                                                 EXHIBIT 3.57


                            COMMONWEALTH OF VIRGINIA
                          STATE CORPORATION COMMISSION
                                October 16, 1986

                          CERTIFICATE OF INCORPORATION

The State Corporation Commission has found the accompanying articles submitted
on behalf of

D.P. ASSOCIATES INC.

to comply with the requirements of law, and confirms payment of all related
fees.

Therefore, it is ordered that this

CERTIFICATE OF INCORPORATION

be issued, and admitted to record with the articles in this office of the
Commission, effective October 16, 1986.

This order and its accompanying articles will be forwarded for filing in the
office of the Clerk of the Circuit Court of Fairfax County following admission
to the records of the Commission.

                          STATE CORPORATION COMMISSION


                          By
                             ----------------------------------------------
                                             Commissioner






                                                                   EXHIBIT 3.57

                            Commonwealth of Virginia

                 [GRAPHIC OMITTED] State Corporation Commission


I Certify the Following from the Records of the Commission:

The foregoing is a true copy of all documents constituting the charter of D.P.
ASSOCIATES INC. on file in the Clerk's Office of the Commission.

Nothing more is hereby certified.


















[GRAPHIC OMITTED]                      Signed and Seal at Richmond on this Date:
                                       September 22, 2004





                                        ----------------------------------------
                                           Joel H. Peck, Clerk of the Commission

EX-3.58

                                                                   EXHIBIT 3.58



- --------------------------------------------------------------------------------


                                     BYLAWS
                                       OF
                              D.P. ASSOCIATES INC.


- --------------------------------------------------------------------------------








                                                                                                       EXHIBIT 3.58

                                      INDEX

                                                                                                               Page

ARTICLE I.   OFFICES..............................................................................................1

         Section 1.01      Principal Office.......................................................................1
         Section 1.02      Registered Office......................................................................1
         Section 1.03      Other Offices..........................................................................1

ARTICLE II.   SHAREHOLDERS' MEETING...............................................................................1

         Section 2.01      Annual Meetings........................................................................1
         Section 2.02      Special Meeting........................................................................1
         Section 2.03      Place of Meeting.......................................................................1
         Section 2.04      Notice of Meetings.....................................................................2
         Section 2.05      Waiver of Notice; Attendance at Meeting................................................2
         Section 2.06      Organization...........................................................................2
         Section 2.07      Business and Order of Business.........................................................2
         Section 2.08      Quorum.................................................................................2
         Section 2.09      Proxies................................................................................3
         Section 2.10      Voting Entitlement.....................................................................3
         Section 2.11      Shareholders' List.....................................................................4
         Section 2.12      Action by Shareholders Without a Meeting...............................................4

ARTICLE III.   DIRECTORS..........................................................................................4

         Section 3.01      General Powers.........................................................................4
         Section 3.02      Number and Term........................................................................4
         Section 3.03      Election of Directors..................................................................5
         Section 3.04      Removal of Directors...................................................................5
         Section 3.05      Organization...........................................................................5
         Section 3.06      Meetings Generally.....................................................................5
         Section 3.07      Annual Meeting.........................................................................5
         Section 3.08      Regular Meetings.......................................................................5
         Section 3.09      Special Meetings.......................................................................6
         Section 3.10      Notice of Meetings.....................................................................6
         Section 3.11      Waiver of Notice.......................................................................6
         Section 3.12      Quorum; Voting.........................................................................6
         Section 3.13      Committees of Directors................................................................6
         Section 3.14      Resignations...........................................................................7
         Section 3.15      Vacancies..............................................................................7
         Section 3.16      Compensation...........................................................................7
         Section 3.17      Action by Directors Without a Meeting..................................................7


                                       i






ARTICLE IV.   OFFICERS............................................................................................8

         Section 4.01      Officers...............................................................................8
         Section 4.02      Election, Term of Office and Qualifications............................................8
         Section 4.03      Subordinate Officers...................................................................8
         Section 4.04      Removal................................................................................8
         Section 4.05      Resignations...........................................................................8
         Section 4.06      Vacancies..............................................................................8
         Section 4.07      Compensation...........................................................................8
         Section 4.08      President..............................................................................8
         Section 4.09      Vice President(s)......................................................................9
         Section 4.10      Treasurer..............................................................................9
         Section 4.11      Secretary..............................................................................9
         Section 4.12      Certain Officers to Give Bonds.........................................................9

ARTICLE V.   CONTRACTS, CHECKS; DRAFTS, BANK ACCOUNTS, ETC........................................................9

         Section 5.01      Execution of Contracts and other Documents.............................................9
         Section 5.02      Loans.................................................................................10
         Section 5.03      Checks, Drafts, Etc...................................................................10
         Section 5.04      Deposits..............................................................................10

ARTICLE VI.   CAPITAL STOCK......................................................................................10

         Section 6.01      Stock Certificates....................................................................10
         Section 6.02      Scrip.................................................................................10
         Section 6.03      Record Dates..........................................................................11
         Section 6.04      Transfer of Stock.....................................................................11
         Section 6.05      Registered Shareholders...............................................................11
         Section 6.06      Lost Certificates.....................................................................11
         Section 6.07      Dividends.............................................................................12

ARTICLE VII.   MISCELLANEOUS.....................................................................................12

         Section 7.01      Seal..................................................................................12
         Section 7.02      Fiscal Year...........................................................................12
         Section 7.03      Inspection of Books...................................................................12
         Section 7.04      Indemnification.......................................................................13

ARTICLE VIII.   AMENDMENTS.......................................................................................13

         Section 8.01      By the Directors......................................................................13
         Section 8.02      By the Shareholders...................................................................13


                                       ii



                                                                   EXHIBIT 3.58

                                     BYLAWS

                                       OF

                              D.P. ASSOCIATES INC.

                        (herein called the "Corporation")


                               ARTICLE I. OFFICES

                  Section 1.01 Principal Office. The principal office of the
Corporation shall be at 3105 Northwood Road, Fairfax, Virginia 22031.

                  Section 1.02 Registered Office. The registered office of the
Corporation in Virginia (as required by law) shall be at such place as the Board
of Directors shall from time to time by resolution determine, and may, but need
not be at the principal office of the Corporation.

                  Section 1.03 Other Offices. The Corporation may, in addition
to its principal office, have offices at such other places either within or
without the Commonwealth of Virginia as the business of the Corporation may
require from time to time.

                       ARTICLE II. SHAREHOLDERS' MEETING

                  Section 2.01 Annual Meetings. The annual meeting of the
shareholders of the Corporation, for the purpose of electing directors for the
ensuing year and for the transaction of such other business as may properly come
before the meeting, shall be held at 10:00 a.m. on the first Monday in October
of each year, or, if such date is a legal holiday in the Commonwealth of
Virginia, then at the same hour on the next succeeding business day.

                  Section 2.02 Special Meeting. A special meeting of the
shareholders may be called at any time by the President, by the Board of
Directors, or by the holders of not less than twenty percent of all the shares
entitled to vote at such meeting.

                  Section 2.03 Place of Meeting. Each annual meeting of the
shareholders shall be held at the principal office of the Corporation, or at
such other place, within or without the Commonwealth of Virginia, as the person
or persons authorized to call such meeting may designate.

                  Section 2.04 Notice of Meetings. Written notices stating the
place, date and time of the meeting and, in case of a special meeting the
purpose or purposes for which the meeting is called, shall be given not less
than ten {10) nor more than sixty (60) days before the date of the meeting
(except as a different time is specified by law) either personally or by mail,
by or at the direction of the person(s) calling the meeting, to each shareholder
of record entitled to vote at such meeting and to such nonvoting shareholders as
may be required by law. If mailed, such notice shall be deemed to be given when
deposited in the United States mail with postage thereon prepaid, addressed to
the shareholder at his address as it appears on the share transfer books of the
Corporation.




                  Section 2.05 Waiver of Notice; Attendance at Meeting. A
shareholder may waive any notice required by law, the Articles of Incorporation
or these Bylaws before or after the date and time of the meeting that is the
subject of such notice. The waiver shall be in writing, be signed by the
shareholder entitled to the notice, and be delivered to the Secretary of the
Corporation for inclusion in the minutes or filing with the corporate records.

                  A shareholder's attendance at a meeting (i) waives objection
to lack of notice or defective notice of the meeting, unless the shareholder at
the beginning of the meeting objects to holding the meeting or transacting
business at the meeting, and (ii) waives objection to consideration of a
particular matter at the meeting that is not within the purpose or purposes
described in the meeting notice, unless the shareholder objects to considering
the matter when it is presented.

                  Section 2.06 Organization. At every meeting of the
shareholders, the President, or some person appointed by him, or, in the absence
of the President, a person chosen by a majority vote of the shareholders present
in person or by proxy and entitled to vote, shall act as Chairman of the
meeting. The Secretary, or, in the discretion of the Chairman, any person
designated by him, shall act as Secretary of the meeting.

                  Section 2.07 Business and Order of Business. At each meeting
of the shareholders such business may be transacted as may properly be brought
before such meeting, whether or not such business is stated in the notice of
meeting or in the waiver of notice thereof, except as otherwise by law or by
these Bylaws expressly provided. The order of business of all meetings of
shareholders shall be as determined by the Chairman, but such order of business
may be changed by a majority in voting power of the shareholders present in
person or by proxy and entitled to vote at the meeting.

                  Section 2.08 Quorum. Shares entitled to vote as a separate
voting group may take action on a matter at a meeting only if a quorum of those
shares exist with respect to that matter. Unless otherwise required by law or by
the Articles of Incorporation, a majority of the votes entitled to be cast on a
matter by a voting group constitutes a quorum of that voting group for action on
that matter. Once a share is represented for any purpose at a meeting, it is
deemed present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or shall be set for,
that adjourned meeting. If a quorum exists, action on a matter, other than the
election of directors, by a voting group is approved if the votes cast within
the voting group favoring the action exceed the votes cast opposing the action,
unless a greater number of affirmative votes is required by law or by the
Articles of Incorporation. Less than a quorum may adjourn a meeting.

                  Section 2.09 Proxies. A shareholder may vote his or her shares
in person or by proxy. A shareholder may appoint a proxy to vote or otherwise
act for such shareholder by signing an appointment form, either personally or by
his or her attorney-in-fact. An appointment of a proxy is effective when
received by the Secretary or other officer or agent authorized to tabulate votes
and is valid for eleven (11) months unless a longer period is expressly provided
in the appointment form. An appointment of a proxy is revocable by the
shareholder unless the appointment form conspicuously states that is irrevocable
and the appointment is coupled with an interest.

                                       2


                  The death or incapacity of a shareholder appointing a proxy
does not affect the right of the Corporation to accept the proxy's authority
unless notice of the death or incapacity is received by the Secretary or other
officer or agent authorized to tabulate votes before the proxy exercises his or
her authority under the appointment. An appointment made irrevocable under this
Section is revoked when the interest with which it is coupled is extinguished. A
transferee for value of shares subject to an irrevocable appointment may revoke
the appointment if such transferee did not know of its existence when such
transferee acquired the shares and the existence of the irrevocable appointment
was not noted conspicuously on the certificate representing the shares. Subject
to any legal limitations on the right of a Corporation to accept the vote or
other action of a proxy and to any express limitation on the proxy's authority
appearing on the face of the appointment form, a corporation is entitled to
accept the proxy's vote or other action as that of the shareholder making the
appointment. Any fiduciary who is entitled to vote any shares may vote such
shares by proxy.

                  Section 2.10 Voting Entitlement. Except as otherwise provided
by law, only the holders of shares given voting power by and as provided in the
Articles of Incorporation shall be entitled to vote upon matters voted upon by
shareholders. At all meetings of shareholders, each shareholder of record of
shares entitled to vote thereat shall be entitled to vote the shares of such
stock standing in his name on the books of the Corporation on the date
determined in accordance with Section 2.11 of these Bylaws, each such share
entitling him to one vote. Voting on any question or in any election shall be
viva voce, unless the Chairman shall order, or any shareholder or his proxy
present and entitled to vote on such question or election shall demand, that
voting be by ballot.

                  Unless otherwise provided by the Articles of Incorporation, in
the election of directors, each outstanding share, regardless of class, is
entitled to one vote for as many persons as there are directors to be elected at
that time and for whose election the shareholder has a right to vote. Shares
standing in the name of another corporation, domestic or foreign, may be voted
by such officer, agent or proxy as the Bylaws of such corporation may prescribe,
or, in the absence of such provision, as the board of directors of such
corporation may determine. Shares standing in the name of a partnership may be
voted by any partner. Shares held by two or more persons as joint tenants or
tenants in common or tenants by the entirety may be voted by any of such
persons. If more than one of such tenants votes such shares, the votes shall be
divided among them in proportion to the number of such tenants voting. Shares
held by an administrator, executor, guardian, committee, or curator representing
the shareholder may be voted by him without a transfer of such shares into his
name. Shares standing in the name of a trustee may be voted by him, but no
trustee is entitled to vote shares by him without a transfer of such shares into
his name.

                  Nothing contained in these Bylaws shall prevent trustees or
other fiduciaries holding shares registered in the name of a nominee pursuant to
Va. Code ss.6.1-31 (1950, as amended) from causing such share to be voted by
such nominee as the trustee or other fiduciary may direct. Such nominee may vote
shares as directed by a trustee or other fiduciary without the necessity of
transferring the shares to the name of the trustee or other fiduciary.

                                       3



                  A shareholder whose shares are pledged is entitled to vote
such shares until such shares have been transferred into the name of the
pledgee, and thereafter the pledgee is entitled to vote the shares so
transferred.

                  Section 2.11 Shareholders' List. The Secretary of the
Corporation shall make, at least ten (10) days before each meeting of
shareholders, a complete list of the shareholders entitled to vote at any such
meeting or any adjournment thereof, with the address of and the number of shares
held by each. The List shall be arranged by voting group and within each voting
group by class or series of shares. Such list shall be kept on file at the
registered office of the Corporation for a period of ten (10) days prior to such
meeting and shall be subject to inspection by any shareholder at any time during
usual business hours for such ten day period. Such list shall also be produced
and kept open at the time and place of the meeting and shall be subject to
inspection by any shareholder during the whole time of the meeting. The original
stock transfer books shall be prima facie evidence as to who are the
shareholders entitled to examine such list or transfer books or to vote at any
meeting of shareholders.

                  If the requirements of this section have not been
substantially complied with, the meeting shall, on the demand of any shareholder
in person or by proxy, be adjourned until such requirements are complied with.
Refusal or failure to prepare or make available the Shareholders' list does not
affect the validity of action taken at the meeting prior to the making of any
such demand but any action taken by the shareholders after the making of any
such demand shall be invalid and of no effect.

                  Section 2.12 Action by Shareholders Without a Meeting. Any
action required or permitted to be taken at a meeting of the shareholders of the
Corporation, may be taken without a meeting. if one or more consents in writing,
describing the action taken, shall be signed by all of the shareholders entitled
to vote on the action and delivered to the Secretary of the Corporation for
filing with the corporate records. Any action taken by unanimous written consent
shall be effective according to its terms when all consents are in possession of
the Corporation. A shareholder may withdraw consent only by delivering a written
notice of withdrawal to the Corporation prior to the time that all consents are
in possession of the Corporation. The action taken shall be effective as of the
date specified in the consent provided the consent states the date of execution
by each shareholder. Such consent shall have the same force and effect as a
unanimous vote of shareholders and may be described as such in any document
filed with the State Corporation Commission of Virginia.

                             ARTICLE III. DIRECTORS

                  Section 3.01 General Powers. The Corporation shall have a
Board of Directors. All corporate powers shall be exercised by or under the
authority of, and the business and affairs of the Corporation managed under the
direction of, the Board of Directors, subject to any limitation set forth in the
Articles of Incorporation.

                  Section 3.02 Number and Term. The number of directors of the
Corporation shall be one. The Board of Directors shall be elected annually in
the manner provided by these Bylaws, and each director shall hold office until
the next annual meeting of shareholders and until his successor shall have been
elected, or until his death, resignation, or removal. The

                                       4


number of directors may be changed by amendment to these Bylaws, provided,
however, the Board of Directors may amend these Bylaws to increase or decrease
by 30 percent or less the number of directors last elected by the shareholders,
but only the shareholders may increase or decrease the number by more than 30
percent. No decrease in the number of directors by such amendment shall have the
effect of shortening the term of any incumbent director. Directors need not be
shareholders of the Corporation.

                  Section 3.03 Election of Directors. At each meeting of the
shareholders for the election of d-directors, a quorum being present, the
persons receiving the greatest number of votes shall be the directors. If the
election of directors shall not be held on the day designated for any annual
meeting or at any adjournment of such meeting, the Board of Directors shall
cause the election to be held at a special meeting of the shareholders as soon
as convenient thereafter.

                  Section 3.04 Removal of Directors. Any director may be removed
at any time, either with or without cause, by the affirmative vote of a majority
in voting power of the shareholders of record of the Corporation entitled to
elect a successor, given in person or by proxy at a special meeting of such
shareholders called expressly for that purpose, at which a quorum shall be
present.

                  Section 3.05 Organization. At each meeting of the Board of
Directors, the President of the Corporation, or, in his absence, a director
chosen by the majority of the directors present, shall act as Chairman. The
Secretary of the Corporation, or, in the discretion of the Chairman, any person
appointed by him, shall act as secretary of the meeting.

                  Section 3.06 Meetings Generally. The Board of Directors may
hold its meetings at such place or places within or without the Commonwealth of
Virginia as the Board of Directors may from time to time by resolution
determine, or (unless contrary to resolution of the Board of Directors), at such
place as shall be specified in the respective notices or waivers of notice
thereof. Unless the Articles of Incorporation provide otherwise, the Board of
Directors may permit any or all directors to participate in a regular or special
meeting, or conduct the meeting through the use of, any means of communication
by which all directors participating may simultaneously hear each other during
the meeting. A director participating in a meeting by these means is deemed to
be present in person at the meeting.

                  Section 3.07 Annual Meeting. The annual meeting of the Board
of Directors, for the purpose of reorganization, the election of officers and
the transaction of other business, may, be held without other notice than this
Bylaw, immediately after, and at the same place as, the annual meeting of
shareholders. Such annual meeting may be held at any other time or place
specified in a notice given as hereinafter provided for special meetings of the
Board of Directors, or in a waiver of notice thereof.

                  Section 3.08 Regular Meetings. Regular meetings of the Board
of Directors may be held at such times and places as may be fixed from time to
time by action of the Board of Directors.

                                       5


                  Section 3.09 Special Meetings. Special meetings of the Board
of Directors shall be held whenever called by the President or by any one or
more directors or, at the direction of any of the foregoing, by the Secretary.

                  Section 3.10 Notice of Meetings. Unless required by resolution
of the Board of Directors, notice of any regular meeting of the Board need not
be given. Notice of each special meeting shall be mailed to each director,
addressed to him at his residence or usual place of business, at least three (3)
days before the date on which the meeting is to be held; or such notice shall be
sent to each director at such place by telegram, telecopier or other means of
written communication, or be delivered to him personally or by telephone not
less than twenty-four (24) hours before the time at which the meeting is to be
held. Every such notice shall state the time and place of the meeting, but need
not state the purposes of the meeting. No notice of the reconvening of any
adjourned or recessed meeting need be given except as contained in the
resolution or ruling directing the adjournment or recess.

                  Section 3.11 Waiver of Notice. A director may waive any notice
required by law, the Articles of Incorporation, or these Bylaws before or after
the date and time stated in the notice, and such waiver shall be equivalent to
the giving of such notice. Except as provided in the next paragraph of this
section, the waiver shall be in writing, signed by the director entitled to the
notice, and filed with the minutes or corporate records.

                  A director's attendance at or participation in a meeting
waives any required notice to such director of the meeting unless the director
at the beginning of the meeting or promptly upon his or her arrival objects to
holding the meeting or transacting business at the meeting and does not
thereafter vote for or assent to action taken at the meeting.

                  Section 3.12 Quorum; Voting. A majority of the number of
directors fixed in these Bylaws shall constitute a quorum for the transaction of
business at a meeting of the Board of Directors. The affirmative vote of a
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors. A director who is present at a
meeting of the Board of Directors or a committee of the Board of Directors when
corporate action is taken is deemed to have assented to the action taken unless
(i) such director objects at the beginning of the meeting, or promptly upon his
arrival to holding the meeting or transacting specified business at the meeting;
or (ii) such director votes against, or abstains from, the action taken.

                  Section 3.13 Committees of Directors. The Board of Directors
may create one or more committees and appoint members of the Board of Directors
to serve on them. Each committee shall have two or more members who serve at the
pleasure of the Board of Directors. The creation of a committee and appointment
of members to it shall be approved by the number of directors required to take
action under Section 3.12 of these Bylaws.

                  To the extent specified by the Board of Directors, each
committee shall exercise the authority of the Board of Directors under these
Bylaws except that a committee may not (i) approve or recommended to
shareholders action that is required by law to be approved by shareholders; (ii)
fill vacancies on the Board of Directors or any of its committees; (iii) amend
the Articles of Incorporation (iv) adopt, amend, or repeal these Bylaws; (v)
approve a plan of


                                       6





merger not requiring shareholder approval; (vi) authorize or approve a
distribution, except according to a general formula or method prescribed by the
Board of Directors; or (vii) authorize or approve the issuance or sale or
contract for sale of shares, or determine that the designation and relative
rights, preferences, and limitations of a class or series of shares, except that
the Board of Directors may authorize a committee, or a senior executive officer
of the Corporation, to do so within limits specifically prescribed by the Board
of Directors.

                  The creation of, delegation of authority to, or action by a
committee does not alone constitute compliance by a director with the standards
of conduct required of a director.

                  The provisions of these By-Laws relating to meetings, notice
and waiver of notice, quorum and voting, and consents shall apply to committees
of directors and their members.

                  Section 3.14 Resignations. Any director of the Corporation may
resign at any time by delivering written notice to the Board of Directors, the
President or the Secretary. A resignation is effective when the notice is
delivered unless the notice specifies a later effective date. If a resignation
is made effective at a later date, the Board of Directors may fill the pending
vacancy before the effective date of the Board of Directors provides that the
successor does not take office until the effective date.

                  Section 3.15 Vacancies. Any vacancy in the Board of Directors,
including a vacancy resulting from an increase in the number of directors, may
be filled by the majority vote of the remaining directors then in office, though
less than a quorum, at any regular or special meeting of the Board of Directors,
or by the shareholders at any annual or special meeting of the shareholders
called for that purpose. The term of a director elected by the Board of
Directors to fill a vacancy shall expire at the next shareholders' meeting at
which directors are elected. A director elected by the shareholders to fill a
vacancy shall hold office for the unexpired portion of the term.

                  Section 3.16 Compensation. Each director who is not a salaried
employee of the Corporation shall be entitled to receive from the Corporation
such amount per annum or such fees for attendance at directors' meetings, or
both, and such additional amounts for service upon committees, as the Board of
Directors shall from time to time determine, together with reimbursement for the
reasonable expenses incurred by him in connection with the performance of his
duties. Nothing in this section shall preclude any director from serving the
Corporation or its subsidiaries in any other capacity and receiving proper
compensation therefor.

                  Section 3.17 Action by Directors Without a Meeting. Any action
required or permitted to be taken at a meeting of the Board of Directors may be
taken without a meeting if one or more consents in writing, describing the
action to be taken, shall be signed by all of the directors and filed with the
corporate records of the Corporation. The action taken shall be effective when
the last director signs the consent unless the consent specifies a different
effective date, in which event the action is effective as the date specified in
the consent provided the consent states the date of execution by each director.
Such consent shall have the same force and effect as an unanimous vote.

                                       7


                              ARTICLE IV. OFFICERS

                  Section 4.01 Officers. The officers of the Corporation shall
be a President, a Vice-President, a Treasurer, and a Secretary, and such other
officers as may be elected or appointed by the Board of Directors. Any two or
more offices may be held by the same person.

                  Section 4.02 Election, Term of Office and Qualifications. The
officers shall be elected annually by the Board of Directors, as soon as
practicable after the annual election of directors in each year. Each officer
shall hold office until his successor shall have been duly elected and shall
qualify, or until his death, resignation or removal in the manner hereinafter
provided. The President shall be chosen from among the directors, but no other
officer need be a director.

                  Section 4.03 Subordinate Officers. The Board of Directors may
from time to time establish offices in addition to those expressly designated in
Section 4.01 with such duties as are provided in these Bylaws, or as they may
from time to time determine.

                  Section 4.04 Removal. Any officer may be removed, either with
or without cause, by resolution declaring such removal to be in the best
interests of the Corporation and adopted by any regular or special meeting of
the Board of Directors by a majority of the directors then in office. Any such
removal shall be without prejudice to the recovery of damages for breach of the
contract rights, if any, of the person removed. Election or appointment of an
officer or agent shall not of itself, however, create contract rights.

                  Section 4.05 Resignations. Any officer may resign at any time
by giving oral or written notice to the Board of Directors, the President or the
Secretary of the Corporation. Any such resignation shall take effect when the
notice is delivered unless the notice specifies a later effective date. If a
resignation is made effective at a later date and the Corporation accepts the
future effective date, it may fill the pending vacancy before the effective date
if the successor does not take office until the effective date. No resignation
hereunder, however, or the acceptance thereof by the Board of Directors, shall
prejudice the contract or other rights, if any, of the Corporation with respect
to the person resigning.

                  Section 4.06 Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification or any other cause shall be filled
for the unexpired portion of the term by the Board of Directors.

                  Section 4.07 Compensation. Salaries or other compensation of
the officers may be fixed from time to time by the Board of Directors. No
officer shall be prevented from receiving his salary by reason of the fact that
he is also a director of the Corporation.

                  Section 4.08 President. The President shall be the chief
executive and administrative officer of the Corporation and have general
supervision of the business of the Corporation, subject, however, to the control
of the Board of Directors. In general, he shall perform all duties incident to
the office of President and such other duties as may from time to time be
assigned to him by the Board of Directors.

                                       8


                  Section 4.09 Vice President(s). The Vice President or Vice
Presidents shall perform such duties as from time to time as may be assigned to
them by the Board of Directors or by the President.

                  Section 4.10 Treasurer. Except as may otherwise be
specifically provided by the Board of Directors, the Treasurer shall have the
custody of, and be responsible for, all funds and securities of the Corporation
from any source whatsoever; shall deposit all such monies in the name of the
Corporation in such banks, trust companies, or other depositories as shall be
selected in accordance with the provisions of these Bylaws; against proper
vouchers, shall cause such funds to be disbursed by check or draft on the
authorized depositories of the Corporation signed in such manner as shall be
determined in accordance with the provisions of these Bylaws; shall regularly
enter or cause to be entered in books to be kept by him or under his direction,
full and accurate accounts of all money received and paid by him for account of
the Corporation; and, shall in general, perform all the duties incident to the
office of Treasurer and such other duties as from time to time may be assigned
to him by the Board of Directors or by the President.

                  Section 4.11 Secretary. The Secretary shall act as Secretary
of all meetings of shareholders and of the Board of Directors of the
Corporation; shall keep the minutes thereof in the proper book or books to be
provided for that purpose; shall see that all notices required to be given by
the Corporation are duly given and served; shall be the custodian of the seal of
the Corporation and shall affix the seal or cause it to be affixed to all
documents the execution of which on behalf of the Corporation under its
corporate seal is duly authorized in accordance with the provisions of these
Bylaws; shall have charge of the books, records and papers of the Corporation
relating to its organization and management as a corporation, and shall see that
any reports or statements relating thereto, required by law or otherwise, are
properly kept and filed; and shall, in general, perform all the duties incident
to the office of Secretary and such other duties as from time to time may be
assigned to him by the Board of Directors or by the President.

                  Section 4.12 Certain Officers to Give Bonds. Every officer,
agent or employee of the Corporation, who may receive, handle or disburse money
for its account or who may have any of the Corporation's property in his custody
or be responsible for its safety or preservation,- may be required, in the
discretion of the Board of Directors, to give bond, in such sum and with such
sureties and in such form as shall be satisfactory to the Board of Directors,
for the faithful performance of the duties of his office and for the restoration
to the Corporation, in the event of his death, resignation, or removal from
office, of all books, papers, vouchers, monies and other property of whatsoever
kind in his custody belonging to the Corporation.

           ARTICLE V. CONTRACTS, CHECKS; DRAFTS, BANK ACCOUNTS, ETC.

                  Section 5.01 Execution of Contracts and other Documents. The
Board of Directors, except as otherwise required by law or by these By-Laws, may
authorize any officer or officers, agent or agents, in the name of and on behalf
of the Corporation to enter into any contract or execute and deliver any
instrument, and such authority may be general or confined to specific instances.
Whenever the Board of Directors, in authorizing or directing the execution of
any contract or other instrument, shall fail to specify the officer or officers
or other agent or agents who are to execute the same, such contract or other
instrument shall be executed on behalf


                                       9





of the Corporation by the President or any Vice President and, where necessary
or appropriate, the corporate seal shall be affixed thereto and attested by the
Secretary.

                  Section 5.02 Loans. Any officer or officers, or agent or
agents of the Corporation thereunto authorized by the Board of Directors, may
effect loans or advances at any time for the Corporation, in the ordinary course
of the Corporation's business from any bank, trust company or other institution
or from any firm, corporation, or individual, and for such loans and advances
may make, execute and deliver promissory notes, bonds or other certificates or
evidence of indebtedness of the Corporation, and when authorized so to do may
pledge or transfer any securities or other property of the Corporation as
security for any such loans or advances. Such authority conferred by the Board
of Directors may be general or confined to specific instances.

                  Section 5.03 Checks, Drafts, Etc. All checks, drafts, and
other orders for payment of money out of the funds of the Corporation shall be
signed on behalf of the Corporation in such manner as shall from time to time be
determined by resolution of the Board of Directors.

                  Section 5.04 Deposits. The funds of the Corporation not
otherwise employed shall be deposited from time to time to the order of the
Corporation in such banks, trust companies or other depositories as the Board of
Directors may from time to time select, or as may be selected by an officer or
officers, or agent or agents of the Corporation to whom such power may from time
to time be delegated by the Board of Directors.

                           ARTICLE VI. CAPITAL STOCK

                  Section 6.01 Stock Certificates. Every shareholder of the
Corporation shall be entitled to a certificate or certificates in form approved
by the Board of Directors, certifying the number and class of shares of the
stock of the Corporation owned by him. The President or any Vice President and
either the Treasurer or the Secretary, or any two officers of the Corporation
designated by the Board of Directors, shall sign such certificates. If any stock
certificate is countersigned by either a transfer agent {other than the
Corporation or its employee} or a registrar (other than the Corporation or its
employee), any other signature thereon may be a facsimile. If any officer,
transfer agent or registrar who has signed or whose facsimile signature has been
placed upon a stock certificate shall cease to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer, transfer agent or
registrar at the date of issue. All stock certificates of the Corporation shall
be numbered and shall be entered in the books of the Corporation as they are
issued. All certificates surrendered to the Corporation for transfer shall be
cancelled and no new certificate shall be issued until the former certificate
for a like number of shares shall have been surrendered and cancelled, except
that in case of a lost, destroyed or mutilated certificate a new one may be
issued therefor in accordance with Section 6.06. Fractional shares may be
issued.

                  Section 6.02 Scrip. In lieu of fractional shares the Board of
Directors may issue scrip in registered or bearer form which shall entitle the
holder to receive a certificate for a full share upon the surrender of such
scrip aggregating a full share. Scrip shall not entitle the holder to exercise
voting rights and, except as otherwise provided therein, shall not entitle the
holder to




                                       10




receive dividends thereon or to participate in any of the assets of the
Corporation in the event of liquidation. The Board of Directors may cause
scrip to be issued subject to the condition that it shall become void if not
exchanged for certificates representing full shares before a specified date, or
subject to the condition that the shares for which such scrip is exchangeable
may be sold by the Corporation and the proceeds thereof held for the holders of
such scrip, or subject to any other conditions that the Board of Directors may
deem advisable. When a shareholder would otherwise be entitled to a fractional
share upon a conversion of shares or a dividend payable in shares, the Board of
Directors may, in lieu of issuing scrip, authorize payments in cash based on the
fair value of the shares as determined by the Board of Directors and their
determination, in the absence of fraud, shall be final.

                  Section 6.03 Record Dates. The Board of Directors may fix in
advance a date not exceeding seventy (70) days preceding the date of any meeting
of shareholders, or the date for payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, or in connection with obtaining the consent
of shareholders for any purpose, as a record date for the determination of the
shareholders entitled to notice of, and to vote at any such meeting and any
adjournment thereof, or entitled to receive payment of any such dividend, or to
receive such allotment of rights, or to exercise such rights, or give such
consent, as the case may be, notwithstanding any transfer of any stock on the
books of the Corporation after such record date fixed as aforesaid.

                  If no record date is fixed for the determination of
shareholders entitled to notice of or to vote at any meeting of shareholders, or
shareholders entitled to receive payment of a dividend, the date on which notice
of the meeting is mailed or the date on which the resolution of the Board of
Directors declaring such dividend is adopted, as the case may be, shall be the
record date for such determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
herein provided, such determination shall apply to any adjournment thereof.

                  Section 6.04 Transfer of Stock. The Board of Directors may by
resolution make such regulations as it may deem expedient concerning the issue,
transfer and registration of stock.

                  Section 6.05 Registered Shareholders. The Corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof, and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, except as
expressly provided by the laws of Virginia.

                  Section 6.06 Lost Certificates. Any person claiming a
certificate of stock to be lost, stolen or destroyed shall furnish proof of that
fact satisfactory to an officer of the Corporation, and shall agree to indemnify
the Corporation from and against all liabilities, damages, costs and expenses
arising out of the loss, theft or destruction, whereupon a new certificate may
be. issued for a like number of shares as the one alleged to be lost, stolen or
destroyed. The Board of Directors may at any time authorize the issuance of a
new certificate to replace a certificate alleged to be lost, stolen or destroyed
upon such other terms and conditions as it may prescribe.

                                       11


                  Section 6.07 Dividends. The Board of Directors may from time
to time declare, and the Corporation may pay, dividends on the outstanding
capital shares of the Corporation's capital stock as provided by the laws of
Virginia and the Articles of Incorporation.

                  Before payment of any dividend or making any distribution of
profits, there may be set aside out of the surplus or net profits of the
Corporation such sum or sums as the Board of Directors from time to time, in
their absolute discretion, deem proper as a reserve fund to meet contingencies,
or for equalizing dividends, or for repairing or maintaining any property of the
Corporation, or for such other purposes as the Board of Directors shall deem in
the best interests of the Corporation.

                           ARTICLE VII. MISCELLANEOUS

                  Section 7.01 Seal. The corporate seal of the Corporation shall
contain the name of the Corporation, the year of its creation, and the words
"Corporate Seal, Virginia", and shall be in such form as may be approved by the
Board of Directors.

                  Section 7.02 Fiscal Year. The books of account of the
Corporation shall be kept and annual financial statements shall be prepared on
the basis of a fiscal year ending on the last day of December.

                  Section 7.03 Inspection of Books. Any shareholder of the
Corporation shall be entitled to inspect and copy, during regular business hours
at the Corporation's principal place of business, and upon written demand made
at least five (5) business days beforehand, (i) the articles of incorporation of
the Corporation and all amendments thereto, (ii) the bylaws of the Corporation
and all amendments thereto, (iii) all resolutions adopted by the Board of
Directors creating one or more classes or series of shares, and fixing their
relative rights, preferences and limitations, if shares issued pursuant to those
resolutions are outstanding, (iv) the minutes of all shareholders' meetings and
records of all actions taken by shareholders without a meeting for the past
three years, (v) all written communications to shareholders from the Corporation
within the last three years, including but not limited to all financial
statements furnished within the last three years, (vi) a list of the names and
business addresses of the officers and directors of the Corporation, and (vii)
the most recent annual report of the Corporation.

                  Any person who shall have been a shareholder of record for at
least six (6) months immediately preceding his demand or shall be the holder of
record of at least five (5) percent of all the outstanding shares of the
Corporation stock shall upon written notice of demand, made in good faith and
for proper purpose describing with reasonable particularity the records for
which inspection is requested and the purpose for which such request is made,
given at least five (5) business days beforehand, be entitled to inspect and
copy, during regular business hours at a reasonable location specified by the
Corporation, (i) excerpts from minutes of any meeting of the Board of Directors,
(ii) records of any action of a committee of the Board of Directors which was
acting in place of the Board of Directors on behalf of the Corporation, (iii)
minutes of any meeting of the shareholders, (iv) records of action taken by the
stockholders or Board of Directors, (v) accounting records of the Corporation,
and, (vi) the record of shareholders.

                                       12


                  This section does not affect the right of a shareholder to
inspect any voting list required to be kept according to law or under Section
2.09 hereof, or, if the shareholder is in litigation with the Corporation, the
right of a shareholder to inspect records to the same extent as any other
litigant, or the power of a court to compel the production of corporate records
for examination.

                  Section 7.04 Indemnification. The Corporation shall indemnify
any director, officer, employee or agent as provided by the laws of Virginia and
the Articles of Incorporation.

                            ARTICLE VIII. AMENDMENTS

                  Section 8.01 By the Directors. The Board of Directors may
later, amend or repeal these Bylaws or adopt new Bylaws of the Corporation at
any meeting of the Board by a majority vote of the directors present at the
meeting.

                  Section 8.02 By the Shareholders. All Bylaws shall be subject
to amendment, alteration or repeal by the shareholders entitled to vote at any
annual or at any special meeting. The shareholders, at any annual or special
meeting, may provide that certain Bylaws by them adopted, approved or designated
may not be amended, altered or repealed, except by a certain specified
percentage in interest of the shareholders or by a certain specified percentage
in interest of a particular class of shareholders.


                                       13

EX-3.99

                                                                  EXHIBIT 3.99

Corporations Section                                         Geoffrey S. Connor
P.O. Box 13697                                               Secretary of State
Austin, Texas 78711-3697

                               [GRAPHIC OMITTED]

                        Office of the Secretary of State

The undersigned, as Secretary of State of Texas, does hereby certify that the
attached is a true and correct copy of each document on file in this office as
described below:

                              AVISYS, INCORPORATED
                            Filing Number: 117804700

Articles Of Incorporation                                      January 04, 1991
Articles Of Amendment                                            March 15, 1999
Articles Of Amendment                                            April 05, 2000

                                              In testimony whereof, I have
                                              hereunto signed my name officially
                                              and caused to be impressed hereon
                                              the Seal of State at my office in
                                              Austin, Texas on June 11, 2004.



[GRAPHIC OMITTED]




                                                     Secretary of State











          Come visit us on the internet at http://.www.sos.state.tx.us/
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                                                                   EXHIBIT 3.99

                            ARTICLES OF INCORPORATION
                                       OF
                              AVISYS, INCORPORATED

                                  ARTICLE ONE

The name of the corporation is AVISYS, Incorporated.

                                  ARTICLE TWO

The period of its duration is perpetual.

                                 ARTICLE THREE

The purpose for which the corporation is organized is the transaction of any and
all lawful business for which corporations may be incorporated under the Texas
Business Corporation Act.

                                  ARTICLE FOUR

The aggregate number of shares which the corporation shall have authority to
issue is Ten Thousand (10,000) shares of the par value of Twenty dollars
($20.00) per share

                                  ARTICLE FIVE

The corporation will not commence business until it has received for the
issuance of its shares consideration of the value of not less than One Thousand
Dollars ($1,000.00) consisting of money, labor done or property actually
received

                                  ARTICLE SIX

The street address of its initial registered office is RR 1, Box 353 McQueeney,
Texas 78123-9801. The name of its initial registered agent at such address is
Ronald Austin Gates

                                 ARTICLE SEVEN

The number of directors constituting the initial board of directors is one (1)
and the name and address of the person who is co serve as director until the
first annual meeting of the shareholders or until their successors are elected
and qualified is

Name                                         Address

Ronald A. Gates                              RR 1, Box 353
- ----------------------------------------     -----------------------------------
                                             McQueeney, Texas 78123
                                             -----------------------------------

- ----------------------------------------
Incorporator



                                 ARTICLE EIGHT

The name and address of the Incorporator are

Name                                         Address

Ronald A. Gates                              RR 1, Box 353
- ----------------------------------------     -----------------------------------
                                             McQueeney, Texas 78123
                                             -----------------------------------

- ----------------------------------------
Incorporator


                                       2


                                                                   EXHIBIT 3.99

                          ARTICLE OF AMENDMENT TO THE

                          ARTICLES OF INCORPORATION OF

                              AVISYS, INCORPORATED

         Pursuant to the provisions of Article 4.04 of the Texas Business Act,
AVISYS, INCORPORATED, a Texas corporation (the "Corporation") adopts the
following Articles of Amendment to its Articles of Incorporation.

                                  ARTICLE ONE

         The name of the Corporation is AVISYS, INCORPORATED.

                                  ARTICLE TWO

         ARTICLE FOUR of the original Articles of Incorporation is hereby
amended to read in its entirety as follows.

                                  "ARTICLE FOUR

                  The aggregate number of shares that the corporation shall have
         the authority to issue is One Million (1,000,000) shares of common
         stock, with no par value.

                  The corporation shall have the authority to purchase, directly
         or indirectly, its own shares to the extent of the aggregate of
         unrestricted capital surplus available therefor and unrestricted
         reduction surplus available therefor.

                  No shareholder of the corporation shall have the right of
         cumulative voting at any election of directors or upon any other matter

                  No holder of securities of the corporation shall be entitled
         as a matter of right, preemptive or otherwise, to subscribe for or
         purchase any securities of the corporation now or hereafter authorized
         to be issued, or securities held in the treasury of the corporation,
         whether issued or sold for cash or other consideration or as a dividend
         or otherwise. Any such securities maybe issued or disposed of by the
         Board of Directors to such persons and on such terms as in its
         discretion it shall deem advisable "

                                 ARTICLE THREE

         ARTICLE NINE is hereby added to read in its entirety as follows.

                                  "ARTICLE NINE

                  No director shall be liable to the corporation or its
         shareholders for monetary damages for an act or omission hi the
         director's capacity as a director,








         except that this Article does not eliminate or limit the Liability of
         a director to the extent the director is found liable for

                    a.     a breach of the director's duty of loyalty to the
                           corporation or its shareholders,
                    b.     an act or omission not in good faith that constitutes
                           a breach of duty of the director to the corporation
                           or an act or omission that involves intentional
                           misconduct or a knowing violation of the law;
                    c.     a transaction from which the director received an
                           improper benefit, whether or not the benefit resulted
                           from an action taken within the scope of the
                           director's office, or
                    d.     an act or omission for which the liability of the
                           director is expressly provided by an applicable
                           statute,

                  Any repeal or modification of this Article by the shareholders
         of the corporation shall be prospective only and shall not adversely
         affect any limitation on the liability of a director of the corporation
         existing at the time of such repeal or modification."

                                  ARTICLE FOUR

         ARTICLE TEN is hereby added to read in its entirety as follows:

                                  "ARTICLE TEN

                  Any action required by the Texas Business Corporation Act to
         be taken at any annual or special meeting of shareholders, or any
         action which may be taken at any annual or special meeting of
         shareholders, may be taken without a meeting, without prior notice, and
         without a vote, if a consent or consents in writing, setting forth the
         action so taken, shall be signed by the holder or holders of shares
         having not less than the minimum number of votes that would be
         necessary to take such action at a meeting at which the holders of all
         shares entitled to vote on the action were present and voted Any such
         written consents shall be executed, dated and filed with the
         corporation in the manner required by Article 9.10A of the Texas
         Business Corporation Act "

                                  ARTICLE FIVE

         The foregoing amendment was adopted by the shareholders of the
Corporation on March 4, 1999.

                                  ARTICLE SIX

         The number of shares of the Corporation outstanding at the time of such
adoption was Fifty (50); and the number of shares entitled to vote thereon was
Fifty (50).

                                       2


                                 ARTICLE SEVEN

         The holders of all of the shares outstanding and entitled to vote on
said amendment have signed a consent in writing adopting said amendment.

                                 ARTICLE EIGHT

         The manner in which any exchange, reclassification or cancellation of
issued shares provided for in these Articles of Amendment shall be effected is
as follows: each one (1) of the Fifty (50) currently issued outstanding shares
of the Corporation's $20.00 par value common stock (the "Prior Common Stock")
shall be, and is hereby, changed and reclassified into Ten Thousand Two Hundred
(10,200) shares of the Corporation's no par value Common Stock (the "New Common
Stock") without any further act of the Corporation or its shareholders, and each
holder of a certificate evidencing any of the issued and outstanding shares of
Prior Common Stock shall be entitled, upon surrender of such certificate, to
receive a new certificate evidencing the number of Bally paid and non assessable
shares of the New Common Stock into which the shares of Prior Common Stock are
changed and reclassified by these Articles of Amendment.

                                  ARTICLE NINE

         The manner in which these Articles of Amendment effect a change in the
amount of stated capital, and the amount of stated capital, as changed by these
Articles of Amendment, are as follows the One Thousand Dollars ($1,000) of
stated capital an the books of the Corporation as a result of the Issuance of
Fifty (50) shares of Prior Common Stock is transferred to the surplus account of
the Corporation as a result of the New Common Stock being without par value, and
the amount of stated capital of the Corporation after these Articles of
Amendment are effective shall be Zero Dollars ($0.00)

Dated March 4, 1999.

                                           AVISYS, INCORPORATED


                                           By:
                                               --------------------------------
                                                     Ronald A. Gates
                                                     President

                                       3


                                                                   EXHIBIT 3.99

                           ARTICLE OF AMENDMENT TO THE

                          ARTICLES OF INCORPORATION OF

                              AVISYS, INCORPORATED

         Pursuant to the provisions of Article 4.04 of the Texas Business Act,
AVISYS, INCORPORATED, a Texas corporation (the "Corporation") adopts the
following Articles of Amendment to its Articles of Incorporation.

                                  ARTICLE ONE

         The name of the Corporation is AVISYS, INCORPORATED.

                                  ARTICLE TWO

         Article Four of the original Articles of Incorporation is hereby
amended to read in its entirety as follows.

         "The aggregate number of shares that the corporation shall have the
authority to issue is Twenty Million (20,000,000), of which Ten Million
(10,000,000) shall be designated Voting Common Stock, with no par value, Five
Million (5,000,000) shall be designated Non Voting Common Stock with no per
value, and Five Million (5,000,000) shall be designated Preferred Stock, with no
par value Voting Common Stock and Non Voting Common Stock are sometimes referred
to collectively in these Articles of Incorporation as "Common Stock"

         Except as otherwise provided by law or by resolution or resolutions
providing for the issue of any series of shares of Preferred Stock, the holders
of the Voting Common Stock shall exclusively possess voting power for the
election of directors and for all other purposes, and the holders of Non Voting
Common Stock shall have no right to vote with respect to any matter except to
the extent such right to vote is expressly required by statute notwithstanding
any provisions of the Articles of Incorporation of the Corporation.

         Except as otherwise provided by the resolution or resolutions providing
for the issue of any series of shares of Preferred Stock, the holders of shares
of Common Stock shall be entitled to the exclusion of the holders of shares of
Preferred Stock of any and all series, to receive such dividends and
distributions, out of funds legally available therefore, when, as and if they
may be declared by the Board of Directors.

         Except as otherwise provided by the resolution or resolutions providing
for the issue of any series of shares of Preferred Stock, to the event of any
liquidation, dissolution or winding up of the corporation, whether voluntary or
involuntary, the holders of shares of Common Stock shall be entitled, to the
exclusion of the holders of shares of Preferred Stock of any and all series, to
share ratably according to the number of shares of Common Stock held by them, in
all assets of the corporation available for distribution to its shareholders

         The Board of Directors is hereby authorized, at its option, from time
to time, to divide all or part of the Preferred Stock into series thereof, to
fix and determine the designations,













preferences, limitations, and relative rights, including without limitation
voting rights, of each series and to increase or decrease the number of shares
within each such series; provided, however, that the Board of Directors may not
decrease the number of shares within a series to less than the number of shares
within such series that are then Issued. Designations, preferences, limitations
and relative rights of shares of Preferred Stock may vary between series in any
and all respects, but all shares of the same series shall be identical in all
respects

         No shareholder of the corporation shall have the right of cumulative
voting at any election of directors or upon any other matter.

         Except as may be provided by resolution or resolutions providing for
the issue of any series of shares of Preferred Stock, no holder of securities of
the corporation shall be entitled as a matter of right, preemptive or otherwise,
to subscribe for or purchase any securities of the corporation now or hereafter
authorized to be issued, or securities held in the treasury of the corporation,
whether issued or sold for cash or other consideration or as a dividend or
otherwise Any such securities may be Issued or disposed of by the Board of
Directors to such persons and on such terms as in its discretion it shall deem
advisable."

                                 ARTICLE THREE

         The foregoing amendment was adopted by the shareholders of the
Corporation on March 28, 2000

                                  ARTICLE FOUR

         The number of shares of the Corporation outstanding at the time of such
adoption was Five Hundred Thirteen Thousand (513,000), and the number of shares
entitled to vote thereon was Five Hundred Thirteen Thousand (513,000)

                                  ARTICLE FIVE

         The holders of alt of the shares outstanding and entitled to vote on
said amendment have signed a consent in writing adopting said amendment

                                  ARTICLE SIX

         The manner in which any exchange, reclassification or cancellation of
issued shares provided for in these Articles of Amendment shall be effected is
as follows each one (l) of the Five Hundred Thirteen Thousand (513,000)
currently issued outstanding shares of the Corporation's no par value common
stock (the "Prior Common Stock") shall be, and is hereby, changed and
reclassified into One (1) share of the Corporation's no par value Voting Common
Stock (the "New Common Stock") without any further at of the Corporation or its
shareholders, and each holder of a certificate evidencing any of the issued and
outstanding shares of Prior Common Stock shall be entitled, upon surrender of
such certificate, to receive a new certificate evidencing the number of fully
paid and non assessable shares of the New Common Stock into which the shares of
Prior Common Stock are changed and reclassified by these Articles of Amendment.

                                       2


                                 ARTICLE SEVEN

         These Articles of Amendment do not effect a change in the amount of
stated capital of the Corporation.

Dated                April 5              , 2000
         ---------------------------------

                         AVISYS, INCORPORATED
                         a Texas corporation

                         By:
                              ------------------------------------------------
                                  Ronald A. Gates
                                  President




                                                                   EXHIBIT 3.99


Corporations Section                                         Geoffrey S. Connor
P.O. Box 13697                                               Secretary of State
Austin, Texas 78711-3697

                               [GRAPHIC OMITTED]

                        Office of the Secretary of State

June 16, 2004

Oliver Sandlin
3409 Executive Center Drive, Suite 205
Austin, TX 78731 USA

RE:

It has been our pleasure to approve and place on record your articles of merger.
The appropriate evidence is attached for your files. Payment of the filing fee
is acknowledged by this letter.

If we can be of further service at any time, please let us know.

Sincerely,



Corporations Section
Statutory Filings Division

Enclosure








          Come visit us on the internet at http://.www.sos.state.tx.us/
                                          ----------------------------
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Prepared by: Katy Blaylock




                                                                   EXHIBIT 3.99

Corporations Section                                         Geoffrey S. Connor
P.O. Box 13697                                               Secretary of State
Austin, Texas 78711-3697

                               [GRAPHIC OMITTED]

                        Office of the Secretary of State


                              CERTIFICATE OF MERGER

The undersigned, as Secretary of State of Texas, hereby certifies that the
attached articles of merger of

                                 L3C CORPORATION
                          Foreign Business Corporation
                                     DE, USA
               [Entity not of Record, Filing Number Not Available]

                                      Into

                      L-3 Communications Avisys Corporation
                          Domestic Business Corporation
                           [Filing Number: 117804700]
                                          [formerly: AVISYS, INCORPORATED

have been filed in this office as of the date of this certificate.

Accordingly, the undersigned, as Secretary of State, and by the virtue of the
authority vested in the secretary by law, hereby issues this certificate of
merger.

Dated: 06/16/2004

Effective: 06/16/2004

[GRAPHIC OMITTED]
                                                  Geoffrey S. Connor
                                                  Secretary of State


          Come visit us on the internet at http://.www.sos.state.tx.us/
                                          ----------------------------
PHONE (512) 463-5555            FAX(512) 463-5709                      TTY7-1-1
Prepared by: Katy Blaylock




                                                                  EXHIBIT 3.99

                               ARTICLES OF MERGER

                                       OF

                                 L3C CORPORATION
                            (a Delaware corporation)

                                      INTO

                              AVISYS, INCORPORATED
                              (a Texas corporation)

         Pursuant to Articles 5.01 and 5.04 of the Texas Business Corporation
Act (the "MCA"), the undersigned domestic corporations adopt the following
Articles of Merger for the purpose of merging Newco into the Surviving
Corporation (each as defined herein):

         1. The names of the merging corporations are:

            (a) L3C Corporation, Inc., a Delaware corporation ("Newco"), the
         existence of which will cease following the merger contemplated herein;
         and

            (b) AVISYS, Incorporated, a Texas corporation ("Surviving
         Corporation"), which shall be the surviving corporation of such merger.

         2. The Plan of Merger attached as Exhibit A hereto (the "Plan") was
unanimously approved by the directors of each of the undersigned corporations in
the manner prescribed by the TBCA.

         3. The name of the Surviving Corporation shall be amended to be "L-3
Communications Avisys Corporation" upon effectiveness of the merger.

         4. An executed copy of the Plan is on file at the principal place of
business of the Surviving Corporation located at 8801 Wall Street, Building
8-800; Austin, Texas 78754.

         5. A copy of the Plan will be furnished by each surviving and acquiring
corporation, on written request and without cost, to any shareholder of each
domestic corporation that is a party to the Plan and, to the extent required by
the TBCA, to any creditor or obligee of any party to the Plan.

         6. The Plan was approved and unanimously adopted by written consent of
the shareholders of the Surviving Corporation dated effective June 14, 2004.
Only those shareholders possessing shares of the Surviving Corporation's Voting
Common Stock were entitled to participate in the vote to approve and adopt the
Plan: The number of shares of the Surviving Corporation's Voting Common Stock
outstanding as of the date of Plan approval and the number of shares of such
class voted for and against the Plan, respectively, was as follows;








======================================================================================================================
     Designation of
    Class or Series         Number of Shares       Number of Votes        Number of Votes        Number of Votes
         Shaves               Outstanding        Entitled to Be Cast         Cast for              Cast Against
- ----------------------------------------------------------------------------------------------------------------------

     Voting Common              417,000                417,000                417,000                   0
         Stock
======================================================================================================================


         7. The Plan was approved and adopted by, vote of the sole shareholder
of Newco on June 14, 2004. The number of shares of Newco's Common Stock
outstanding as of the date of Plan approval and the number of shares of such
class voted for and against the Plan, respectively, was as follows:



======================================================================================================================
    Class or Series        Number of Shares        Number of Votes        Number of Votes        Number of Votes
         Shares               Outstanding        Entitled to Be Cast         Cast for              Cast Against
- ----------------------------------------------------------------------------------------------------------------------

         Common                   100                    100                    100                     0
======================================================================================================================


         8. The Plan and performance of its terms were duly authorized by all
action required by the laws udder which L3C Corporation was incorporated and by
its constituent documents.

                            [EXECUTION PAGE FOLLOWS]


                                       2



IN WITNESS WHEREOF, the parties to the aforementioned merger have duly executed
these Articles of Merger as of this 15th day of June, 2004.

               L3C CORPORATION


               By:
                    ------------------------------------------------
                        Name:  Christopher C. Cambria
                        Title:  President and Secretary


               AVISYS, INCORPORATED


               By:
                    ------------------------------------------------
                        Name:
                        Title:


                                       3




IN WITNESS WHEREOF, the parties to the aforementioned merger have duly executed
these Articles of Merger as of this 15th day of June, 2004.

                 L3C CORPORATION


                 By:
                      ------------------------------------------------
                          Name:
                          Title:


                 AVISYS, INCORPORATED


                 By:
                      ------------------------------------------------
                          Name:  Ronald A. Gates
                          Title:  President

                                       4


                                                                  EXHIBIT 3.99


                                   EXHIBIT A

                                 PLAN OF MERGER





                                                                  EXHIBIT 3.99



                                 PLAN OF MERGER

                                       OF

                                 L3C CORPORATION
                            (a Delaware corporation)

                                      INTO

                              AVISYS, INCORPORATED
                              (a Texas corporation)

         THIS AGREEMENT AND PLAN OF MERGER (this "Plan") is entered into on this
15th day of line, 2004 by and between AVISYS, Incorporated, a Texas corporation
("Corporation"), and L3C Corporation, a Delaware corporation ("Newco").

                                   ARTICLE I
                                 PLAN OF MERGER

1.01 A plan of merger under the provisions of Articles 5.01 and 5.03 of the
Texas Business Corporation Act (the "MCA"), and Section 252 of the Delaware
General Corporation Law (the "DGCL") is adopted as follows:

           (a)    At the Effective Time, Newco will be merged into the
                  Corporation (the "Merger"). The Corporation, as it exists from
                  and after the Effective Time, is sometimes referred to herein
                  as the "Surviving Corporation". The Surviving Corporation
                  shall do business in accordance with and be governed by the
                  laws of the State of Texas.

           (b)    Surviving Corporation's name will be "L-3 Communications
                  Avisys Corporation".

1.02 The Effective Time of the Merger shall be 11:59 pm, prevailing local time
in New York City, New York, on June 16th, 2004.

                                   ARTICLE II
                              TERMS AND CONDITIONS

2.01 At the Effective Time, the existence of Newco as a distinct entity will
cease. Thereafter, Surviving Corporation will succeed to the rights, title and
interest in and to all assets and property owned by Newco, without reversion or
impairment, without any further act, and without any transfer or assignment
having occurred, but subject to any liens or other encumbrances upon such assets
and property, Surviving Corporation will also be subject to all the debts and
obligations of Newco as the primary obligor, except as otherwise provided by law
or contract, and only Surviving Corporation shall be liable for such debts or
obligations.

2.02 Surviving Corporation will carry on business with the assets of the parties
to the Merger as in existence immediately prior to the Merger.


2.03 Pursuant to Article 5.04C of the Texas Business Corporation Act ("TBCA"),
the Surviving Corporation shall be responsible and obligated to pay all fees and
franchise taxes of Newco, if any.

                                  ARTICLE III
                                CONVERTING SHARES

3.01 At the Effective Time, each full share of the issued and outstanding common
stock of the Corporation will be cancelled and extinguished and automatically
converted into the right to receive (i) a sum per share of cash determined in
accordance with that certain Merger Agreement between L-3 Communications
Corporation, a Delaware corporation, Newco and the Corporation executed June 7,
2004 ("Merger Agreement"), and (ii) a pro-rata share of any contingent
consideration, if any, as more fully described in the Merger Agreement.

3.02 All shares of capital stock of the Corporation that are owned directly or
indirectly by the Corporation or by Newco immediately prior to the Effective
Time shall be canceled as of the Effective Time without conversion, and no
consideration shall be delivered in exchange therefor.

3.03 Shares of capital stock of the Corporation issued and outstanding
immediately prior to the Effective Time that are held by any holder who is
entitled to demand and properly demands appraisal of such shares pursuant to,
and who complies in all respects with, the provisions of Articles 5.11, 5.12,
and 5.13 of the TBCA (such statutory provisions, the "Appraisal Rights
Sections", and such shares, "Dissenting Shares") shall not be converted into the
right to receive consideration, but instead the holder of such Dissenting Shares
shall be entitled solely to payment by Corporation of the fair value of such
Dissenting Shares in accordance with the provisions of the Appraisal Rights
Sections. At the Effective Time, the Dissenting Shares shall no longer be
outstanding and shall automatically be cancelled and shall cease to exist, and
each holder of Dissenting Shares shall cease to have any rights with respect
thereto, except the right to receive the fair value of such shares in accordance
with the provisions of the Appraisal Rights Sections. Notwithstanding the
foregoing, if any holder fails to perfect or otherwise waives, withdraws or
loses the right to appraisal under the Appraisal Rights Sections, or a court of
competent jurisdiction determines that such holder is not entitled to the relief
provided by the Appraisal Rights Sections, then the right of such holder to be
paid the fair value of such Dissenting $hares under the Appraisal Rights
Sections shall cease and such Dissenting Shares shall be deemed to have been
converted at the Effective Time into, and shall have become, the right to
receive cash and, subject to the terms and conditions hereof, a pro-rata share
of any contingent consideration, if any, all as more fully described in the
Merger Agreement.

3.04 Also at the Effective Time, each share of common stock, par value $0.0001
per share, of Newco issued and outstanding immediately prior to the consummation
of the Merger contemplated herein shall be converted into one validly issued,
fully paid and nonassessable share of common stock, par value $0.01 per share,
of the Surviving Corporation. Each certificate evidencing ownership of shares'
of the common stock of Newco will thereafter evidence ownership of such shares
of capital stock of the Surviving Corporation.

                                       2



                                   ARTICLE IV
              ARTICLES OF INCORPORATION AND BYLAWS OF THE SURVIVING
                                   CORPORATION

4.01 The Articles of Incorporation of the Corporation, as in effect immediately
prior to the Effective Time, shall be the Articles of Incorporation of the
Surviving Corporation until thereafter amended in accordance with the provisions
therein and as provided by the Texas Statute.

4.02 Upon the Effective Date, the name of the Surviving Corporation shall be
amended to be "L-3 Communications Avisys Corporation".

4.03 The Bylaws of Newco, as in effect immediately prior to the Effective Time,
shall be the Bylaws of the Surviving Corporation until thereafter amended.

                                   ARTICLE V
                                    DIRECTORS

5.01 The following person shall serve as the sole director of Surviving
Corporation until the next annual meeting or until his successors have been
elected and qualified:

                             Christopher C. Cambria

                                      * * *


                                       3



IN WITNESS WHEREOF, each of the undersigned has caused this Plan of Merger to be
executed this 15th day of June, 2004.

              L3C CORPORATION
              a Delaware corporation


              By:
                   ------------------------------------------------
                       Name:  Christopher C. Cambria
                       Title:  President and Secretary


              AVISYS, INCORPORATED
              a Texas corporation


              By:
                   ------------------------------------------------
                       Ronald Gates, President



                                       4




IN WITNESS WHEREOF, each of the undersigned has caused this Plan of Merger to be
executed this 15th day of June, 2004.

               L3C CORPORATION
               a Delaware corporation


               By:
                    ------------------------------------------------
                        Name:
                        Title:


               AVISYS, INCORPORATED
               a Texas corporation


               By:
                    ------------------------------------------------
                        Ronald Gates, President



                                       5

EX-3.100

                                                                   EXHIBIT 3.100









                                    LC3 CORP.




                                     BY-LAWS































                                     BY-LAWS

                                       OF

                                    L3C CORP.



                                    ARTICLE I

                                     OFFICES

                  SECTION 1. Registered Office. The registered office of L3C
Corp. (the "Corporation") in the State of Delaware shall be at such place in the
State of Delaware as shall be designated by the Board of Directors (hereinafter
called the "Board").

                  SECTION 2. Principal Office. The principal office for the
transaction of the business of the Corporation shall be at such location, within
or without the State of Delaware, as shall be designated by the Board.

                  SECTION 3. Other Offices. The Corporation may also have
offices at other places, either within or without the State of Delaware, as the
Board of Directors may from time to time determine or as the business of the
Corporation may require.


                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS

                  SECTION 1. Annual Meetings. The annual meeting of the
stockholders for the election of directors and for the transaction of such other
business as may properly come before the meeting shall be held at such time,
date and place as shall be designated in the notice thereof.

                  SECTION 2. Special Meetings. Special meetings of the
stockholders, for any purpose or purposes (unless otherwise prescribed by law),
may be called at any time by the Chief Executive Officer and shall be called, at
the request of a majority of the directors, by the Secretary.

                  SECTION 3. Notice of Meetings and Adjournments of Meetings;
Waivers of Notice. Except as otherwise expressly required by law, notice of each
meeting of the stockholders shall be given not less than 10 or more than 60
calendar days before the date of the meeting to each stockholder entitled to
vote at such meeting by mailing such notice first class, postage prepaid,
directed to each stockholder at the address of such stockholder as it appears on
the records of the Corporation.

                  Every such notice shall state the place, date and hour of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called. Except as provided in the immediately succeeding sentence
or as otherwise expressly required by law, notice of any adjourned meeting of
the stockholders need not be given if the time and place thereof are announced
at the meeting at which the adjournment is taken (whether or not a quorum is
present). If the adjournment is for more than 30 calendar days, or if after the
adjournment a new record date is fixed for the adjourned meeting, notice of the
adjourned meeting shall be given to each stockholder entitled to vote at such
adjourned meeting.

                  A written waiver of notice, signed by a stockholder entitled
to notice, whether signed before, at or after the time set for a given meeting,
shall be deemed to satisfy the notice requirements set forth in the preceding
paragraph for such stockholder with respect to such meeting. Attendance of a
stockholder in person or by proxy at a stockholders' meeting shall constitute
the equivalent of a written waiver of notice by such stockholder for such
meeting, except when such stockholder attends the meeting for the express
purpose of objecting at the beginning of the meeting to the transaction of any
business because the meeting is not lawfully called or convened.

                  Whenever notice is required to be given to any stockholder to
whom notice of two consecutive annual meetings, and all notices of meetings or
of the taking of action by written consent without a meeting to such person
during the period between such two, payments (if sent by first class mail) of
dividends or interest on securities during a twelve month period, have been
mailed addressed to such person at his address as shown on the records of the
corporation and have been returned undeliverable, the giving of such notice to
such person shall not be required. Any action or meeting which shall have been
taken or held without notice had been taken or held without notice to such
person shall the same force and effect as if such notice had been duly given. If
any such person shall deliver to the corporation, a written notice setting forth
his then current address, the requirement that notice be given to such person
shall be reinstated.

                  No notice need be given to any person with whom communication
is unlawful, nor shall there be any duty to apply for any permit or license to
give notice to any such person.

                  SECTION 4. List of Stockholders. It shall be the duty of the
Secretary or other officer of the Corporation who shall have charge of its stock
ledger to prepare and make, at least 10 calendar days before every meeting of
the stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
10 calendar days prior to the meeting either at a place specified in the notice
of the meeting within the city where the meeting is to be held, or, if not so
specified, at the place where the meeting is to be held. Such list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.

                  SECTION 5. Quorum. At each meeting of the stockholders, except
as expressly


required by law, stockholders holding a majority of the shares of stock of the
Corporation issued, outstanding and entitled to be voted at the meeting shall be
present in person or by proxy in order to constitute a quorum for the
transaction of business, except that as to any action required to be taken by
stockholders voting separately as a class or classes a majority of the shares
entitled to vote separately as one class shall constitute a quorum of that class
and may act separately whether or not a quorum of another class or classes be
present. In the absence of a quorum at any such meeting or any adjournment or
adjournments thereof, a majority in voting interest of those present in person
or by proxy and entitled to vote thereat, or, in the absence therefrom of all
the stockholders, any officer entitled to preside at, or to act as secretary of,
such meeting may adjourn such meeting from time to time until stockholders
holding the amount of stock requisite for a quorum shall be present in person or
by proxy. At any such adjourned meeting at which a quorum may be present, any
business may be transacted that might have been transacted at the meeting as
originally called.

                  SECTION 6. Organization. At each meeting of the stockholders,
one of the following shall act as chairman of the meeting and preside thereat,
in the following order of precedence:

                  (a) the Chairman of the Board; or

                  (b) if the Chairman of the Board shall be absent from such
         meeting, any other officer or director of the Corporation designated by
         the Board to act as chairman of such meeting and to preside thereat.

The Secretary or, if the Secretary shall be absent from such meeting, the person
(who shall be an Assistant Secretary, if an Assistant Secretary shall be present
thereat) whom the chairman of such meeting shall appoint, shall act as secretary
of such meeting and keep the minutes thereof.

                  SECTION 7. Order of Business. The order of business at each
meeting of the stockholders shall be determined by the chairman of such meeting,
but such order of business may be changed by a majority in voting interest of
those present or by proxy at such meeting and entitled to vote thereat.

                  SECTION 8. Voting. Unless otherwise provided in the
Certificate of Incorporation, by law or by these By-Laws, each holder of voting
stock of the Corporation shall, at each meeting of the stockholders, be entitled
to one vote in person or by proxy for each share of stock of the Corporation
held by him or her and registered in his or her name on the books of the
Corporation

                  (a) on the date fixed pursuant to the provisions of Section 4
                  of Article VIII of these By-Laws as the record date for the
                  determination of stockholders who shall be entitled to receive
                  notice of and to vote at such meeting; or

                  (b) if no record date shall have been so fixed, then at the
                  close of business on the day next preceding the day on which
                  notice of the meeting shall be given or, if

                  notice shall be waived, at the close of business on the day
                  next preceding the day on which the meeting shall be held.

                  Any such voting rights may be exercised by the stockholder
entitled thereto in person or by his proxy appointed by an instrument in
writing, subscribed by such stockholder or by his attorney thereunto authorized
and delivered to the secretary of the meeting; provided, however, that no proxy
shall be voted or acted upon after three years from its date unless said proxy
shall provide for a longer period.

                  Shares of its own stock belonging to the Corporation or to
another corporation, if a majority of the shares entitled to vote in the
election of directors of such other corporation is held by the Corporation,
shall neither be entitled to vote nor be counted for quorum purposes. Any vote
of stock of the Corporation may be given at any meeting of the stockholders by
the stockholders entitled to vote thereon either in person or by proxy appointed
by an instrument in writing delivered to the Secretary or an Assistant Secretary
of the Corporation or the secretary of the meeting. The attendance at any
meeting of a stockholder who may previously have given a proxy shall not have
the effect of revoking the same unless he shall in writing so notify the
secretary of the meeting prior to the voting of the proxy. At all meetings of
the stockholders, all matters, except as otherwise provided by law or in the
Certificate of Incorporation or these By-Laws, shall be decided by the vote of a
majority of the votes cast by stockholders present in person or by proxy and
entitled to vote thereat. The stockholders present at a duly called or held
meeting at which a quorum is present may continue to do business until
adjournment, notwithstanding the withdrawal of enough stockholders to leave less
than a quorum. Except as otherwise expressly required by law, the vote at any
meeting of the stockholders on any question need not be by ballot, unless so
directed by the chairman of the meeting. On a vote by ballot, each ballot shall
be signed by the stockholder voting, or by his proxy, if there be such proxy,
and shall state the number of shares voted. Persons holding stock of the
Corporation in a fiduciary capacity shall be entitled to vote such stock.
Persons whose stock is pledged shall be entitled to vote, unless in the transfer
by the pledgor on the books of the corporation he shall have expressly empowered
the pledgee to vote thereon, in which case only the pledgee, or his proxy, may
represent such stock and vote thereon. Stock having voting power standing of
record in the names of two or more persons, whether fiduciaries, members of a
partnership, joint tenants, tenants in common, tenants by the entirety or
otherwise, or with respect to which two or more persons have the same fiduciary
relationship, shall be voted in accordance with the provisions of the Delaware
General Corporation Law.

                  SECTION 9. Action by Written Consent. Except as otherwise
provided by law or by the Certificate of Incorporation, any action required or
permitted to be taken at any annual or special meeting of the stockholders may
be taken without a meeting, without prior notice and without a vote if a consent
or consents in writing, setting forth the action so taken, shall be signed by
the holders of all of the outstanding stock of the Corporation having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares of stock of the Corporation
entitled to vote thereon were present and voted, provided that prompt notice (in
the manner provided in Section 3 of this Article II) of the taking of the action
without a meeting by less than unanimous written consent shall be given to those

stockholders who have not consented in writing.

                  SECTION 10. Stockholder Proposals. (a) Annual Meetings. (i)
Nominations of persons for election to the Board of Directors and the proposal
of business to be considered by the stockholders shall be made at an annual
meeting of stockholders (A) pursuant to the Corporation's notice of such
meeting, (B) by or at the direction of the Board of Directors or (C) by any
stockholder of the Corporation who was a stockholder of record at the time of
giving notice provided for in this Section 10, who is entitled to vote at such
meeting and who complies with the notice procedures set forth in this Section
10.

                  (ii) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (C) of subparagraph
(a)(i) of this Section 10, the stockholder must have given timely notice thereof
in writing to the Secretary of the Corporation and such other business must
otherwise be a proper matter for stockholder action. To be timely, a
stockholder's notice must be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of business on the
60th day nor earlier than the close of business on the 90th day prior to the
first anniversary of the preceding year's annual meeting, provided that in the
event that the date of the annual meeting is more than 30 days before or more
than 60 days after such anniversary date, notice by the stockholder to be timely
must be so delivered not earlier than the close of business on the 90th day
prior to such annual meeting and not later than the close of business on the
later of (x) the 60th day prior to such annual meeting and (y) the close of
business on the 10th day following the date on which public announcement of the
date of such meeting is first made by the Corporation. Such stockholder's notice
shall set forth (A) as to each person whom the stockholder proposes to nominate
for election as a director, all information relating to such person that is
required to be disclosed in solicitations of proxies for election of directors,
or is otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), including such
person's written consent to being named in the proxy statement as a nominee and
to serving as a director if elected, (B) as to any other business that the
stockholder proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the reasons for conducting
such business at the meeting and any material interest in such business of such
stockholder and the beneficial owner, if any, on whose behalf the proposal is
made and (C) as to the stockholder giving the notice and the beneficial owner,
if any, on whose behalf the proposal is made, (1) the name and address of such
stockholder, as they appear on the Corporation's books, and of such beneficial
owner and (2) the class and number of shares of the Corporation that are
beneficially owned and held of record by such stockholder and such beneficial
owner.

                  (iii) Notwithstanding anything in the second sentence of
subparagraph (a)(ii) of this Section 10 to the contrary, in the event that the
number of directors to be elected to the Board of Directors of the Corporation
is increased and there is no public announcement by the Corporation naming all
of the nominees for director or specifying the size of the increased board of
directors at least 70 days prior to the first anniversary of the preceding
year's annual meeting (or, if the annual meeting is held more than 30 days
before or more than 60 days after such anniversary date, at least 70 days prior
to such annual meeting), a stockholder's notice required by this Section 10
shall also be considered timely, but only with respect to nominees for any new

positions created by such increase, if it shall be delivered to the Secretary of
the Corporation at the principal executive office of the Corporation not later
than the close of business on the 10th day following the date on which such
public announcement is first made by the Corporation.

                  (b) Special Meetings of Stockholders. Only such business shall
be conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Corporation's notice of such meeting.
Nominations of persons for election to the Board of Directors may be made at a
special meeting of stockholders at which directors are to be elected pursuant to
the Corporation's notice of such meeting (i) by or at the direction of the board
of directors or (ii) provided that the board of directors has determined that
directors shall be elected at such meting, by any stockholder of the Corporation
who is a stockholder of record at the time of giving of notice of the special
meeting, who shall be entitled to vote at the meeting and who complies with the
notice procedures set forth in this Section 10. In the event the Corporation
calls a special meeting of stockholders for the purpose of electing one or more
directors to the Board of Directors, any such stockholder may nominate a person
or persons (as the case may be), for election to such position(s) as specified
in the Corporation's notice of meeting, if the stockholder's notice required by
subparagraph (a)(ii) of this Section 10 shall be delivered to the Secretary of
the Corporation at the principal executive offices of the Corporation not
earlier than the 90th day prior to such special meeting and not later than the
close of business on the later of (x) the 60th day prior to such special meeting
and (y) the close of business on the 10th day following the date on which public
announcement of the date of such special meeting and of the nominees proposed by
the Board of Directors to be elected at such meeting is first made by the
Corporation.

                  (c) General. (i) Only such persons whoa re nominated in
accordance with the procedures set forth in this Section 10 shall be eligible to
serve as directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in this Section 10. Except as otherwise provided by law
or these By-Laws, the chairman of the meeting shall have the power and duty to
determine whether a nomination or any business proposed to be brought before the
meeting was made or proposed, as the case may be, in accordance with the
procedures set forth in this Section 10, and if any proposed nomination or
business is not in compliance with this Section 10, to declare that such
defective proposal or nomination shall be disregarded.

                  (ii) Notwithstanding the foregoing provisions of this Section
10, a stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth herein. Nothing in this Section 10 shall be deemed to affect
any rights of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act.

                                   ARTICLE III

                               BOARD OF DIRECTORS

                  SECTION 1. General Powers. The property business and affairs
of the Corporation shall be managed by or under the direction of the Board of
Directors which may exercise all of the powers of the Corporation, except such
powers as are, by the Certificate of Incorporation, by these By-laws or by law,
conferred upon or reserved to the stockholders.

                  SECTION 2. Number and Term of Office. The Board shall consist
of one or more members increased or decreased from time to time thereafter by
resolution adopted by a majority of the whole Board. Each of the directors of
the Corporation shall hold office until the annual meeting of the stockholders
held next after his or her election at which his or her term expires and until
his or her successor is elected and qualified or until his or her earlier death
or until his or her earlier resignation or removal in the manner hereinafter
provided.

                  SECTION 3. Election. At each meeting of the stockholders for
the election of directors at which a quorum is present, the person or persons
receiving a plurality of the votes cast at such meeting shall be elected.

                  SECTION 4. Resignation, Removal and Vacancies. Any director of
the Corporation may resign at any time by giving written notice of his or her
resignation to the Chairman of the Board, the Chief Executive Officer or the
Secretary of the Corporation. Any such resignation shall take effect after the
giving of such notice at the time specified therein, or, if the time when it
shall become effective shall not be specified therein, when accepted by action
of the Board. Except as aforesaid, the acceptance of such resignation shall not
be necessary to make it effective.

                  A director may be removed, either with or without cause, at
any time by the written action of holders of not less than a majority in voting
interest of the stockholders or by the vote of stockholders at a meeting of
stockholders of the Corporation duly held.

                  Any vacancy occurring on the Board for any reason may be
filled by a majority of the directors then in office, though less than a quorum,
or by a sole remaining director. The director elected to fill such vacancy shall
hold office until his successor shall have been elected and shall qualify or
until he shall resign or shall have been removed. No reduction of the authorized
number of directors shall have the effect of removing any director prior to the
expiration of his term of office.

                  SECTION 5. Meetings. (a) Annual Meetings. As soon as
practicable after each annual election of directors, the Board shall meet for
the purpose of organization and the transaction of other business.

                  (b) Regular Meetings. Regular meetings of the Board shall be
held at such times and places as the Board shall from time to time by resolution
determine. If any day fixed for a


meeting shall be a legal holiday at the place where the meeting is to be held,
then the meeting shall be held at the same hour and place on the next succeeding
business day which is not a legal holiday. Except as provided by law, notice of
regular meetings need not be given.

                  (c) Special Meetings. Special meetings of the Board shall be
held whenever called by the Chairman of the Board, the Chief Executive Officer
or a majority of the directors then in office. Any and all business may be
transacted at a special meeting that may be transacted at a regular meeting of
the Board.

                  (d) Place of Meeting. The Board may hold its meetings at such
place or places within or without the State of Delaware as the Board may from
time to time by resolution determine or as shall be designated in the respective
notices or waivers of notice thereof.

                  (e) Notice of Meetings. Notices of regular meetings of the
Board or of any adjourned meeting need not be given.

                  Notices of special meetings of the Board, or of any meeting of
any committee of the Board that has not been fixed in advance as to time and
place by such committee, shall be mailed by the Secretary or an Assistant
Secretary to each director or member of such committee, addressed to him at his
residence or usual place of business, so as to be received at least two calendar
days before the day on which such meeting is to be held, or shall be sent to him
by telegraph, cable or other form of recorded communication or be delivered
personally or by telephone not later than one calendar day before the day on
which such meeting is to be held. Such notice shall include the time and place
of such meeting. However, notice of any such meeting need not be given to any
director or member of any committee if such notice is waived by him in writing
or by telegraph, cable or other form of recorded communication, whether before,
at or after the time at which such meeting is held, or if he or she shall be
present at such meeting.

                  (f) Quorum and Action. Except as otherwise provided in these
By-Laws or by law, a majority of the authorized number of directors shall be
present in person at any meeting of the Board in order to constitute a quorum
for the transaction of business at such meeting. In each case the vote of a
majority of those directors present at any such meeting at which a quorum is
present shall be necessary for the passage of any resolution or any act of the
Board, except as otherwise expressly required by law, the Certificate of
Incorporation or these By-Laws. Notice of any adjourned meeting need not be
given. The directors shall act only as a Board, and the individual directors
shall have no power as such.

                  (g) Action by Communication Equipment. The directors, or the
members of any committee of the Board, may participate in a meeting of the
Board, or of such committee, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation shall constitute presence in
person at such meeting.

                  (h) Action by Consent. Any action required or permitted to be
taken at any

meeting of the Board, or of any committee thereof, may be taken
without a meeting if all members of the Board or committee, as the case may be,
consent thereto in writing and such writing is filed with the minutes of the
proceedings of the Board or such committee. Such action by written consent shall
have the same force and effect as the unanimous vote of such directors.

                  (i) Organization. At each meeting of the Board, one of the
following shall act as chairman of the meeting and preside thereat, in the
following order of precedence: (a) the Chairman of the Board; or (b) any
director chosen by a majority of the directors present thereat. The Secretary
or, in case of his or her absence, any person (who shall be an Assistant
Secretary, if an Assistant Secretary shall be present thereat) whom the chairman
of the meeting shall appoint, shall act as secretary of such meeting and keep
the minutes thereof.

                  SECTION 6. Compensation. Directors, as such, shall not receive
any stated salary for their services, but by resolution of the Board may receive
a fixed sum and expenses incurred in performing the functions of director and
member of any committee of the Board. Nothing herein contained shall be
construed so as to preclude any director from serving the Corporation in any
other capacity and receiving compensation therefor.


                                   ARTICLE IV

                                   COMMITTEES

                  (a) The Board may, by resolution passed by a majority of the
whole Board, designate one or more committees, each such committee to consist of
one or more of the directors of the Corporation. The Board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of the committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any such absent or disqualified
member. Any such committee, to the extent permitted by law and provided in the
resolution of the Board, shall have and may exercise all the powers and
authority of the Board in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it. Each committee shall keep minutes of its
proceedings and shall report such minutes to the Board when required. All such
proceedings shall be subject to revision or alteration by the Board; provided,
however, that third parties shall not be prejudiced by such revision or
alteration.

                  (b) Unless the Board otherwise provides, each committee
designated by the Board may make, alter and repeal rules for conducting its
business. In the absence of such rules each committee shall conduct its business
in the same manner as the Board conducts its business pursuant to these Bylaws.

                                    ARTICLE V

                                    OFFICERS

                  SECTION 1. Election, Appointment and Term of Office. The
officers of the Corporation shall include a Chairman of the Board (which office
shall be held by the Chief Executive Officer if no separate election of the
Chairman of the Board has occurred), a Chief Executive Officer, a Chief
Financial Officer, a President, a Secretary and a Treasurer. The Corporation may
also have at the discretion of the Board such Vice Presidents, Assistant
Treasurers, Assistant Secretaries and other officers as the Board may deem
appropriate. Officers shall be elected or appointed as required from time to
time by the Board and each such officer shall hold office until his or her
successor is elected or until his or her earlier death or until his or her
earlier resignation or removal in the manner hereinafter provided. Each such
officer shall have such authority and shall perform such duties as may be
provided herein or as the Board or any Committee appointed by the Board may
prescribe. Officers need not be stockholders of the Corporation or citizens or
residents of the United States of America.

                  SECTION 2. Resignation, Removal and Vacancies. Any officer may
resign at any time by giving written notice to the Chief Executive Officer or
the Secretary of the Corporation, and such resignation shall take effect after
the giving of such notice at the time specified therein or, if the time when it
shall become effective shall not be specified therein, when accepted by action
of the Board. Except as aforesaid, the acceptance of such resignation shall not
be necessary to make it effective.

                  All officers and agents elected or appointed by the Board
shall be subject to removal at any time by the Board, with or without cause.

                  A vacancy in any office may be filled for the unexpired
portion of the term by the Board.

                                   ARTICLE VI

                           CONTRACTS, CHECKS, DRAFTS,
                          BANK ACCOUNTS, PROXIES, ETC.

                  SECTION 1. Execution of Documents. The Chief Executive Officer
or any other officer, employee or agent of the Corporation designated by the
Board, or designated in accordance with corporate policy as approved by the
Board, shall have power to execute and deliver deeds, leases, contracts,
mortgages, bonds, debentures, checks, drafts and other orders for the payment of
money and other documents for and in the name of the Corporation, and such power
may be delegated (including power to redelegate) by written instrument to other
officers, employees or agents of the Corporation.

                  SECTION 2. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the credit of the
Corporation or otherwise in accordance with corporate policy as approved by the
Board.

                  SECTION 3. Proxies in Respect of Stock or Other Securities of
Other Corporations. The Chief Executive Officer or any other officer of the
Corporation designated by the Board shall have the authority (a) to exercise or
appoint from time to time an agent or agents of the Corporation to exercise in
the name and on behalf of the Corporation the powers and rights which the
Corporation may have as the holder of stock or other securities in any other
corporation, (b) to vote or consent in respect of such stock or securities and
(c) to execute or cause to be executed in the name and on behalf of the
Corporation and under its corporate seal, or otherwise, such written proxies,
powers of attorney or other instruments as he or she may deem necessary or
proper in order that the Corporation may exercise such powers and rights. The
Chief Executive Officer or any such designated officer may instruct any person
or persons appointed as aforesaid as to the manner of exercising such powers and
rights.

                  SECTION 4. General and Special Bank Accounts. The Board from
time to time may authorize the opening and keeping of general and special bank
accounts with such banks, trust companies or other depositories as the Board may
select or as may be selected by an officer or officers, assistant or assistants,
agent or agents, or attorney or attorneys of the corporation to whom such power
shall have been delegated by the Board. The Board may make such special rules
and regulations with respect to such bank accounts, not inconsistent with the
provisions of these Bylaws, as it may deem expedient.

                  SECTION 5. Accounting Policy. The Corporation shall maintain
accounting records, accounts and related financial statements in accordance with
United States generally accepted accounting principles applied on a consistent
basis.

                  SECTION 6. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property, or in shares of the capital
stock. Before payment of any dividend, there may be set aside out of any funds
of the Corporation available for dividends such sum or sums as the Board of
Directors from time to time, in its absolute discretion, deems proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
preparing or maintaining any property of the Corporation, or for any proper
purpose, and the Board of Directors may modify or abolish any such reserve.


                                   ARTICLE VII

                                BOOKS AND RECORDS

                  Subject to applicable law, the books and records of the
Corporation may be kept at such places within or without the State of Delaware
as the Board may from time to time determine.

                                  ARTICLE VIII

                  SHARES AND THEIR TRANSFER; FIXING RECORD DATE

                  SECTION 1. Stock Certificates. Every owner of stock of the
Corporation shall be entitled to have a certificate certifying the number of
shares owned by him or her in the Corporation and designating the class of stock
to which such shares belong, which shall otherwise be in such form not
inconsistent with the Certificate of Incorporation as the Board shall prescribe.
Each such certificate shall be signed by, or in the name of the Corporation by,
the Chairman of the Board, the Chief Executive Officer, the President or a Vice
President and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Corporation. In case any officer who has signed or
whose facsimile signature has been placed upon a certificate shall thereafter
have ceased to be such officer before such certificate is issued, it may
nevertheless be issued by the Corporation with the same effect as if he or she
were such officer at the date of issue.

                  SECTION 2. Record; Restrictions on Transfer. A record shall be
kept of the name of the person, firm or corporation owning the stock represented
by each certificate for stock of the Corporation issued, the number of shares
represented by each such certificate and the date thereof, and, in the case of
cancellation, the date of cancellation. Except as otherwise expressly required
by law, the person in whose name shares of stock stand on the books of the
Corporation shall be deemed the owner thereof for all purposes as regards the
Corporation.

                  SECTION 3. Lost, Stolen, Destroyed or Mutilated Certificates.
The holder of any stock of the Corporation shall promptly notify the Corporation
of any loss, theft, destruction or mutilation of the certificate therefor. The
Corporation may issue a new certificate for stock in the place of any
certificate theretofore issued by it and alleged to have been lost, stolen,
destroyed or mutilated, and the Board or the Chief Executive Officer or the
Secretary may, in its or his or her discretion, require the owner of the lost,
stolen, mutilated or destroyed certificate or his or her legal representatives
to give the Corporation a bond in such sum, limited or unlimited, in such form
and with such surety or sureties as the Board or the Chief Executive Officer or
the Secretary shall in its or his or her discretion determine, to indemnify the
Corporation against any claim that may be made against it on account of the
alleged loss, theft, mutilation or destruction of any such certificate or the
issuance of any such new certificate.

                  SECTION 4. Fixing Date for Determination of Stockholders of
Record. (a) In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board may fix a record date, which shall not precede
the date upon which the resolution fixing the record date is adopted by the
Board, and which shall not be more than 60 nor less than 10 calendar days before
the date of such meeting. If no record date is fixed by the Board, the record
date for determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the day next preceding the
day on which notice of such meeting is given, or, if no notice is given, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board, in its discretion, may fix a new record date
for the adjourned meeting if it so elects to do so.

                  (b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the Board may fix a record date, which record date shall not precede
the date upon which the resolution fixing the record date is adopted by the
Board and which date shall not be more than 10 calendar days after the date upon
which the resolution fixing the record date is adopted by the Board. If no
record date has been fixed by the Board, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board is otherwise required, shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation by delivery to its
registered office in the State of Delaware, its principal place of business, or
an officer or agent of the Corporation having custody of the book in which
proceedings of the meetings of stockholders are recorded. Delivery made to the
registered office of the Corporation shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the Board and prior action by the Board is required, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on which the
Board adopts the resolution taking such prior action.

                  (c) Subject to the provisions of the Certificate of
Incorporation, in order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than 60 calendar days prior to such
action. Subject to the provisions of the Certificate of Incorporation, if no
record date is fixed, the record date for determining stockholders for any such
purpose shall be at the close of business on the day on which the Board adopts
the resolution relating thereto.


                                   ARTICLE IX

                                      SEAL

                  The Board shall provide a corporate seal, which shall be in
the form of a circle and shall bear the full name of the Corporation, the words
"Corporate Seal Delaware" and figures showing that the Corporation was
incorporated in the State of its Delaware and showing the year of incorporation.


                                    ARTICLE X

                                   FISCAL YEAR

                  The fiscal year of the Corporation shall end on December 31
each year, or on such other date as the Board of Directors shall determine.


                                   ARTICLE XI

                                 INDEMNIFICATION

                  SECTION 1. Indemnification of Directors and Officers. (a) (i)
The Corporation shall indemnify, to the full extent and under the circumstances
permitted by the General Corporation Law of the State of Delaware in effect from
time to time, any past, present or future director or officer of the Corporation
or any subsidiary of the Corporation (collectively, for purposes of this Article
XI, "persons"), made or threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that such person is or was a director or
officer of the Corporation or a subsidiary of the Corporation, or is or was an
employee or agent of the Corporation, or is or was serving at the specific
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, or by reason
of any action alleged to have been taken or omitted in such capacity, against
costs, charges, expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person or on
such person's behalf in connection with such action, suit or proceeding and any
appeal therefrom, if such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his or her conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he or she reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that such conduct was unlawful.

                  (ii) The Corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that such person is or was a
director or officer of the Corporation or a subsidiary thereof, or is or was
serving at the specific request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, against costs, charges and expenses (including
attorneys' fees) actually and reasonably incurred by such person or on such
person's behalf in connection with the defense or settlement of such action or
suit and any appeal therefrom, if such person acted in good faith and in a
manner that such person reasonably believed to be in or not opposed to the best
interests of the Corporation except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Corporation unless and only to the extent that the
Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of such
liability but in view of all the

circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such costs, charges and expenses which the Court of Chancery or
such other court shall deem proper.

                  (b) The Corporation may indemnify any other individual or
entity made or threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such individual or entity is or was a
director or officer of the Corporation or a subsidiary of the Corporation, or is
or was an employee or agent of the Corporation, or is or was serving at the
specific request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action alleged to have been taken or omitted in such capacity,
against costs, charges, expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such
individual or entity or on such individual or entity's behalf in connection with
such action, suit or proceeding and any appeal therefrom, provided that the
applicable standards set forth in paragraph (a) are satisfied.

                  (c) To the extent that a present or former director or officer
of the Corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in paragraph (a) of this Article XI,
or in defense of any claim, issue or matter therein, such person shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection therewith.

                  (d) Any indemnification under paragraph (a) of this Article XI
(unless ordered by a court), with respect to a person who is a director or
officer of the Corporation at the time of the determination, shall be paid by
the Corporation only after a determination has been made (1) by a majority vote
of the directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (2) by a committee of such directors designated by
majority vote of such directors, even though less than a quorum, or (3) if there
are no such directors, or if such directors so direct, by independent legal
counsel in a written opinion, or (4) by the stockholders that indemnification of
such person is proper in the circumstances of the specific case because such
person has met the applicable standard of conduct set forth in paragraph (a) of
this Article XI.

                  (e) Expenses incurred by an officer, director, employee or
agent in defending or testifying in a civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that such director or officer is not
entitled to be indemnified by the Corporation against such expenses as
authorized by this Article. Such expenses (including attorneys' fees) incurred
by a former director or officer or other employee or agent may be paid upon such
terms and conditions, if any, as the Corporation deems appropriate.

                  (f) The indemnification permitted by this Article shall not be
deemed exclusive of any other rights to which any person may be entitled under
any agreement, vote of stockholders

or disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding an office,
and shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such person.

                  (g) The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, employee benefit plan trust or other enterprise against any
liability asserted against such person and incurred by such person in any such
capacity, or arising out of such person's status as such, whether or not the
Corporation would have the power to indemnify such person against such liability
under the provisions of this Article or otherwise.

                  SECTION 2. Survival. Neither amendment nor repeal of this
Article XI nor the adoption of any provision of the By-Laws of the Corporation
inconsistent with this Article XI shall eliminate or reduce the effect of this
Article XI in respect of any matter existing or occurring at the time of or
prior to such amendment, repeal or adoption of an inconsistent provision or
adversely affect any right or protection of any indemnitee or potential
indemnitee.


                                   ARTICLE XII

                                   AMENDMENTS

                  These By-Laws may be rescinded, altered, amended or repealed
(subject to the restrictions, if any, contained herein) and new By-Laws may be
made by the Board at any regular or special meeting thereof or by consent in
accordance with the provisions of Section 5(h) of Article III of these By-Laws,
subject to the power of the holders of a majority of the outstanding stock of
the Corporation entitled to vote in respect thereof, by their vote given at an
annual meeting or at any special meeting, to amend or repeal any By-law.


                                  ARTICLE XIII

                                  MISCELLANEOUS

                  SECTION 1. Interested directors. No contract or transaction
between the Corporation and one or more of its directors or officers, or between
the Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction so long as (i) the material facts as to
his or her relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee,

and the Board of Directors or committee in good faith authorizes the contract or
transaction by the affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum; or
(ii) the material facts as to his or their relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the disinterested stockholders; or (iii) the
contract or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified, by the Board of Directors, a committee thereof
or the stockholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorizes the contract or transaction.

                  SECTION 2. Ratification. Any transaction questioned in any
stockholders' derivative suit on the grounds of lack of authority, defective or
irregular execution, adverse interest of director, officer or stockholder,
nondisclosure, miscomputation or the application of improper principles or
practices of accounting, may be ratified before or after judgment, by the Board
of Directors or by the stockholders in case less than a quorum of directors are
qualified, and, if so ratified, shall have the same force and effect as if the
questioned transaction had been originally duly authorized, and said
ratification shall be binding upon the Corporation and its stockholders, and
shall constitute a bar to any claim or execution of any judgment in respect of
such questioned transaction.

EX-3.101

                                                                   Exhibit 3.101

                          CERTIFICATE OF INCORPORATION

                                       OF

                              CMC ELECTRONICS, INC.

     FIRST: The name of the Corporation is CMC ELECTRONICS, INC.

     SECOND: The address of the Corporation's registered office in the State of
Delaware is 306 South State Street, in the City of Dover, County of Rent. The
name of its registered agent at such address is United States Corporation
Company.

     THIRD: The nature of the business or purposes to be conducted or promoted
is to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.

     FOURTH: The total number of shares of stock that the Corporation shall have
authority to issue is 1,000, and the par value of each of such shares is $1.00.

     FIFTH: The name and mailing address of the sole incorporator is, as
follows:

              Name                         Mailing Address
              ----                         ---------------
     Dirk K. Barrett, Jr.                  c/o Chadbourne, Parke,
                                             Whiteside & Wolff
                                           30 Rockefeller Plaza
                                           New York, New York  10020

     SIXTH: The Board of Directors is authorized to adopt, amend or repeal the
By-Laws of the Corporation.

     SEVENTH: Any one or more directors may be removed, with or without cause,
by the vote or written consent of the holders of a majority of the shares
entitled to vote at an election of directors.

     EIGHTH: Meetings of stockholders shall be held at such place, within or
without the State of Delaware, as may be designated by or in the manner provided
in the By-Laws, or, if not so designated, at the registered office of the
Corporation in the State of Delaware. Elections of directors need not be by
ballot unless and to the extent that the By-Laws so provide.

     NINTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of then and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this



                                                                               2


Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this Corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this Corporation, as the case
may be, and also on this Corporation.

     TENTH: The Corporation reserves the right to amend, alter or repeal any
provision contained in this Certificate of Incorporation in the manner now or
hereafter prescribed by statute, and all rights of stockholders herein are
subject to this reservation.

     THE UNDERSIGNED, being the sole incorporator above named, for the purpose
of forming a corporation pursuant to the General Corporation Law of the State of
Delaware, has signed this instrument on the 7th day of December 1978 and does
thereby acknowledge that it is his act and deed and that the facts stated
therein are true.

                                       /s/
                                       -----------------------------------------
                                       Dirk K. Barrett, Jr.
                                       Sole Incorporator



                            CERTIFICATE OF AMENDMENT

                                       OF

                          CERTIFICATE OF INCORPORATION

                                       OF

                              CMC ELECTRONICS, INC.

                             ----------------------

                         Adopted in Accordance with the
                            Provisions of Section 242
                         of the General Corporation Law
                            of the State of Delaware

                             ----------------------

     The undersigned President and Secretary of CMC Electronics, Inc., a
corporation existing under the laws of the State of Delaware, do hereby certify
that:

     FIRST: CMC Electronics, Inc. is a corporation formed under the laws of the
State of Delaware, and its Certificate of Incorporation was filed in the office
of the Secretary of State on the 8th of December, 1978.

     SECOND: The Certificate of Incorporation of said corporation has been
amended as follows:

     By striking out Article FIRST thereof as it presently exists and
substituting in lieu thereof a new Article FIRST, reading as follows:

     "FIRST: The name of the Corporation is CMC HOLDINGS, INC."

     THIRD: Such amendment has been duly adopted by the written consent of the
sole stockholder of CMC Electronics, Inc., in accordance with the provisions of
Section 228 of the General Corporation Law of the State of Delaware.

     FOURTH: Such amendment shall be effective immediately.


                                                                               2


     IN WITNESS WHEREOF, we have signed this certificate this First day of
January, 1986.

                                       /s/
                                       -----------------------------------------
                                                    President
                                                  James E. Soos

Attest: /s/
        -------------------------------
                 Secretary
            Harold N. Hardman




                            CERTIFICATE OF AMENDMENT

                                       OF

                          CERTIFICATE OF INCORPORATION

                                       OF

                               CMC HOLDINGS, INC.

                   ------------------------------------------

                     Pursuant to Section 242 of the General
                    Corporation Law of the State of Delaware

                   ------------------------------------------

     CMC Holdings, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), does hereby
certify as follows:

     FIRST: Resolutions setting forth a proposed amendment to the Certificate of
Incorporation of the Corporation, declaring said amendment to be advisable and
directing that said amendment be considered by the sole stockholder of the
Corporation were duly adopted by the unanimous written consent of the Board of
Directors of the Corporation dated September 2, 1988.

     SECOND: Thereafter said amendment was approved in accordance with Section
228 of the General Corporation Law of the State of Delaware by the written
consent dated September 2, 1989 of the sole stockholder of the Corporation.

     THIRD: Said amendment would amend the Certificate of Incorporation of the
Corporation by deleting Article FOURTH and substituting in lieu thereof the new
Article FOURTH as set forth in Exhibit A attached hereto.

     FOURTH: Said amendment was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of the State of Delaware.


                                                                               2


     IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this certificate to be signed by its President and attested
by its Secretary this 6th day of September , 1988.

                                       CMC HOLDINGS. INC.


                                       By  /s/
                                           -------------------------------------
                                                    P.E. Wheatley
                                                      President

[Corporate Seal]

Attest:

By  /s/
    -----------------------------------
           C. Filiatrault
              Secretary



                                                                       EXHIBIT A
                                                                       ---------

     FOURTH: The total number of shares of all classes of capital stock which
the Corporation has the authority to issue is 40,000 shares, of which 1,000
shares shall be Common Stock, par value $1.00 per share, and 39,000 shares shall
be Preferred Stock, par value $1,000 per share. The powers, designations,
preferences and relative, participating, optional or other special rights of
such capital stock, and the qualifications, limitations and restrictions
thereof, are as follows:

A.   Preferred Stock

     1. Designation. The designation of the Preferred Stock of the Corporation
shall be "9% Preferred Stock."

     2. Dividends. The holders of 9% Preferred Stock shall be entitled to
receive, out of any funds of the Corporation at the time legally available for
the declaration of dividends, when and as declared by the Board of Directors,
cumulative cash dividends at the rate of $90.00 per annum per share, and no
more. Such dividends shall commence to accrue, whether or not earned or
declared, as of the day of the month in which such shares shall have been issued
and shall be payable pro rata on the quarterly dividend payment dates,
commencing with the quarterly dividend payment date next succeeding such date of
issuance. No dividend shall be declared or paid on or set apart for the Common
Stock of the Corporation until the full cumulative preferential dividend on the
9% Preferred Stock shall have been paid. After full cumulative dividends at the
rate of $90.00 per annum per share shall have been paid, or declared and a sum
sufficient set apart for payment thereof, upon the outstanding 9% Preferred
Stock to the end of the then current year, and after making any such further
provision for working capital and for reserves for any purpose as the Board of
Directors of the Corporation may deem advisable, the holders of Common Stock of
the Corporation shall be entitled to receive, pro rata to the exclusion of the
holders of 9% Preferred Stock, such dividends as, from time to time, may be
declared by the Board of Directors.

     3. Rights on Dissolution, Liquidation, Winding Up. In the event of any
dissolution, liquidation, or winding up of the Corporation, whether voluntary or
involuntary, the holders of 9% Preferred Stock shall be entitled to receive out
of the assets of the Corporation available for distribution to its stockholders,
whether from capital, surplus, or earnings, an amount equal to $1,000 per share,
plus an amount equivalent to all cash dividends (whether or not earned or
declared) accrued and unpaid on the shares of 9% Preferred stock to the date of
final distribution or payment, before any distribution of such assets shall be
made to the holders of Common Stock of the Corporation, but shall be entitled to
no further distribution. If, upon any such dissolution, liquidation, or winding
up of the Corporation, the dividends and the amounts payable to the holders of
9% Preferred Stock in the event of any distribution, liquidation, or winding up
of the Corporation are not paid in full, the entire assets of the Corporation
shall be distributed ratably among the holders of 9% Preferred Stock.

     4. Voting. (a) Except as provided by applicable law and this paragraph, 9%
Preferred Stock shall be non-voting stock and the holders of 9% Preferred Stock
shall not he entitled to any voting rights with respect thereto.


                                                                               2


     (b) So long as any of the 9% Preferred Stock remains outstanding, the
Corporation will not, without the affirmative vote at a meeting, or the, written
consent with or without a meeting, of the holders of at least sixty-six and
two-thirds percent (66 2/3%) in number of the shares of the 9% Preferred Stock
then outstanding voting as a class,

          (1) merge or consolidate with any other corporation or sell, lease,
     transfer, exchange or dispose of in any manner all or substantially all at
     the assets of the Corporation;

          (2) amend, alter or repeal any of the preferences, special rights or
     powers of the shares of 9% Preferred stock or any of the provisions of the
     Certificate of Incorporation or any Certificate of Designation so as to
     affect them adversely;

          (3) authorize any reclassification of the 9% preferred Stock; or

          (4) issue any class or classes of stock ranking on a parity with or
     prior to the 9% Preferred Stock either as to dividends or assets.

     5. Redemption. (a) At any time on or after August 31, 1993, all but not
less than all the shares of 9% Preferred Stock held, beneficially or of record,
by any holder thereof may be redeemed by such holder in his/her/its discretion
upon the notice as provided in subparagraph (b) hereof, by the payment by the
Corporation therefor of the par value of such shares, plus an amount equal to
all cash dividends (whether or not earned or declared) accrued and unpaid on the
shares of the 9% Preferred Stock being redeemed to the date of payment. Shares
of 9% Preferred Stock so redeemed shah be held as treasury shares (and may be
sold or disposed of) or shall be reclassified or retired and cancelled as may be
determined by the Board of Directors of the Corporation.

     (b) Notice of redemption with respect to any shares of 9% Preferred Stock
may be mailed by the holder thereof to the Corporation at any time on or after
August 31, 1993 and shall be accompanied by the certificates representing the
shares of 9% Preferred Stock. No later than 30 days from the receipt of such
notice, the Corporation shall send to the holder of the shares to be redeemed, a
certified or bank cashier's check in an amount equal to the redemption price
determined in accordance with the immediately preceding subparagraph (a) at such
address as may be designated in the notice of redemption. Upon the delivery of
such certified or bank cashier's check, all shares with respect to the
redemption of which such check shall have been issued, shall be deemed to be no
longer outstanding for any purpose and all rights with respect to such shares
shall thereupon cease and terminate.

     (c) At any time after December 31, 1992, all or any portion of the
outstanding shares of 9% Preferred Stock may be redeemed by the Corporation in
its discretion in accordance with the procedure provided in subparagraph (d)
hereof. Any partial redemption of the 9% Preferred Stock shall be ratably
apportioned among the holders thereof. The redemption price for each share of 9%
Preferred Stock so redeemed shall be an amount equal to the par value thereof,
plus an amount equal to all cash dividends (whether or not earned or declared)
accrued and unpaid on the shares of the 9% Preferred Stock being redeemed
through the Redemption Date (as hereinafter defined). Shares of 9% Preferred
Stock so redeemed shall be held as


                                                                               3


treasury shares (and may be sold or disposed of) or shall be reclassified or
retired and cancelled as may be determined by the Board of Directors of the
Corporation.

     (d) Notice of call for redemption of shares of 9% Preferred Stock shall be
given by mail to the holders of record thereof at least 30 days but not more
than 60 days prior to the date fixed for redemption (the "Redemption Date"),
such notice to be addressed to each such holder at his post office address as
shown by the records of the Corporation. On or after the Redemption Date stated
in the notice of call for redemption, each holder of 9% Preferred Stock called
for redemption shall surrender his certificate(s) for such shares to the
Corporation at the place designated in such notice and shall as soon as
reasonably practicable thereafter be entitled to receive payment of the
redemption price determined in accordance with the immediately preceding
subparagraph (c), by certified or bank cashier's check. If such notice of call
for redemption shall have been duly given, and if on the Redemption Date funds
necessary for the redemption shall be available therefor, then notwithstanding
that the certificates evidencing any 9% Preferred Stock so called for redemption
shall not have been surrendered, dividends shall cease to accrue with respect to
the shares of 9% Preferred Stock so called for redemption, and all rights with
respect to the shares so called for redemption shall forthwith after the
Redemption Date cease and terminate, except only the rights of the holders to
receive the redemption price thereof, without interest, upon surrender of their
certificate therefor.

B.   Common Stock

     1. Rights on Dissolution, Liquidation, Winding Up. The rights of holders of
Common Stock to receive dividends or to share in the distribution of assets in
the event of liquidation, dissolution or winding up of the affairs of the
Corporation shall be subject to the preferences and other rights of the
Preferred Stock fixed in this Certificate of Incorporation.

     2. Voting. The holders of Common Stock shall be entitled to one vote for
each share of Common Stock held by them of record at the time for determining
the holders thereof entitled to vote.



                            CERTIFICATE OF AMENDMENT
                                       OF
                          CERTIFICATE OF INCORPORATION
                                       OF
                               CMC HOLDINGS, INC.

     CMC Holdings, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:

     FIRST: That the Board of Directors of the Corporation by the unanimous
written consent of its members, filed with the minutes of the Board, adopted the
following resolution:

     "RESOLVED:   That the board of Directors hereby declares it advisable and
                  in the best interests of the Corporation that the first
                  sentence of the first paragraph of Article FOURTH of the
                  Certificate of Incorporation be amended in its entirety to
                  read in the form attached hereto as Exhibit A."

     SECOND: That such amendment has been consented to and authorized by the
holders of all of the issued and outstanding stock entitled to vote by written
consent given in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware.

     THIRD: That the aforesaid amendment was duly adopted in accordance with the
applicable provisions of Section 242 of the General Corporation Law of the State
of Delaware.

     IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Gregory A. Yeldon, its Vice President and Treasurer, this 13 day of
December, 2002.

                                       CMC HOLDINGS, INC.


                                       By:  /s/
                                            ------------------------------------
                                            Gregory A. Yeldon
                                            Vice President and Treasurer



                                    EXHIBIT A
                                    ---------

     FOURTH: The total number of shares of all classes of capital stock which
the Corporation, has to authority to issue is 74,334 shares, of which 35,334
shares shall be Common Stock, par value $1.00 per share, and 39,000 shares shall
be Preferred Stock, par value $1,000.00 per share.



                            CERTIFICATE OF AMENDMENT
                                       OF
                          CERTIFICATE OF INCORPORATION
                               CMC HOLDINGS, INC.

     CMC Holdings, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation" DOES HEREBY CERTIFY:

     FIRST: That the Board of Directors of the Corporation by the unanimous
written consent of its members, filed with the minutes of the Board, adopted the
following resolution:

     "RESOLVED:   That the Board of Directors hereby declares it advisable and
                  in the best interests of the Corporation that the first
                  sentence of the first paragraph of Article FOURTH of the
                  Certificate of incorporation be amended in its entirety to
                  read in the form attached hereto as Exhibit A."

     SECOND: That such amendment has been consented to and authorized by the
holders of all of the issued and outstanding stock entitled to vote by written
consent given in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware.

     THIRD: That the aforesaid amendment was duly adopted in accordance with the
applicable provisions of Section 242 of the General Corporation Law of the State
of Delaware.


                                                                               2


     IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Jean-Denis Roy, its General Counsel and Corporate Secretary, this 4th
day of March, 2003.

                                   CMC HOLDINGS, INC.


                                   By: /s/
                                       -------------------------------------
                                       Jean-Denis Roy
                                       General Counsel and Corporate Secretary



                                    EXHIBIT A
                                    ---------

     FOURTH: The total number of shares of all classes of capital stock which
the Corporation bas the authority to issue is 74,834 shares, of which 35,834
shares shall be Common Stock, par value $1.00 per share, and 39,000 shares shall
be Preferred Stock, par value $1,000.00 per share.

EX-3.102

                                                                   Exhibit 3.102

                              CMC ELECTRONICS, INC.

                                   (Delaware)

                                     BY-LAWS
                                     -------

                                   ARTICLE ONE

                                  STOCKHOLDERS

     SECTION 1.1. Annual Meetings. An annual meeting of stockholders to elect
directors and transact such other business as may properly be presented to the
meeting shall be held at such place as the Board of Directors may from time to
time fix, at 10:00 A.M. on the first day of September in each year or, if that
day shall be a legal holiday in the jurisdiction in which the meeting is to be
held, then on the next day not a legal holiday.

     SECTION 1.2. Special Meetings. A special meeting of stockholders may be
called at any time by the Board of Directors, the Executive Committee, if any,
or the President and shall be called by any of them or by the Secretary upon
receipt of a written request to do so specifying the matter or matters
appropriate for action at such a meeting which are proposed to be presented at
the meeting, signed by holders of record of a majority of the shares of stock
which would be entitled to be voted on such matter or matters if the meeting
were held on the day such request is received and the record date for such
meeting were the close of business on the preceding day. Any such meeting shall
be held at such time and at such place, within or without the State of Delaware,
as shall be determined by the body or person calling such meeting and as shall
be stated in the notice of such meeting.

     SECTION 1.3. Notice of Meeting. For each meeting of stockholders written
notice shall be given stating the place, date and hour and, in the case of a
special meeting, the purpose or purposes for which the meeting is called and, if
the list of stockholders required by Section 1.9 is not to be at such place at
least 10 days prior to the meeting, the place where such list will be. Except as
otherwise provided by Delaware law, the written notice of any meeting shall be
given not less than 10 or more than 60 days before the date of the meeting to
each stockholder entitled to vote at such meeting. If mailed, notice shall be
deemed to be given when deposited in the United States mail, postage prepaid,
directed to the stockholder at his address as it appears on the records of the
Corporation.

     SECTION 1.4. Quorum. Except as otherwise required by law or the Certificate
of Incorporation, the holders of record of a majority of the shares of stock
entitled to be voted present in person or represented by proxy at a meeting
shall constitute a quorum for the transaction of business at the meeting, but in
the absence of a quorum the holders of record present or represented by proxy at
such meeting may vote to adjourn the meeting from time to tine, without notice
other than announcement at the meeting, until a quorum is obtained. At any such
adjourned session of the meeting at which there shall be present or represented
the holders of record of the requisite number of shares, any business may be
transacted that might have been transacted at the meeting as originally called.



     SECTION 1.5. Chairman and Secretary at Meeting. At each meeting of
stockholders the President, or in his absence the person designated in writing
by the President, or if no person is so designated, then a person designated by
the Board of Directors, shall preside as chairman of the meeting; if no person
is so designated, then the meeting shall choose a chairman by plurality vote.
The Secretary, or in his absence a person designated by the chairman of the
meeting, shall act as secretary of the meeting.

     SECTION 1.6. Voting; Proxies. Except as otherwise provided by law or the
Certificate of Incorporation, and subject to the provisions of Section 1.10:

          (a) Each stockholder shall at every meeting of stockholders be
     entitled to one vote for each share of capital stock held by him.

          (b) Each stockholder entitled to vote at a meeting of stockholders or
     to express consent or dissent to corporate action in writing without a
     meeting may authorize another person or persons to act for him by proxy,
     but no such proxy shall be voted or acted upon after three years from its
     date, unless the proxy provides for a longer period.

          (c) Directors shall be elected by a plurality vote.

          (d) Each matter, other than election of directors, properly presented
     to any meeting shall be decided by a majority of the votes cast on the
     matter.

          (e) Election of directors and the vote on any other matter presented
     to a meeting shall be by written ballot only if so ordered by the chairmen
     of the meeting or if so requested by any stockholder present or represented
     by proxy at the meeting entitled to vote in such election or on such
     matter, as the case may be.

     SECTION 1.7. Adjourned Meetings. A meeting of stockholders may be adjourned
to another time or place as provided in Section 1.4 or 1.6(d). Unless the Board
of Directors fixes a new record date, stockholders of record for an adjourned
meeting shall be as originally determined for the meeting from which the
adjournment was taken. If the adjournment is for more than 30 days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote. At the adjourned meeting any business may be transacted that might have
been transacted at the meeting as originally called.

     SECTION 1.8. Consent of Stockholders in Lieu of Meeting. Any action that
may be taken at any annual or special meeting of stockholders may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Notice of the taking of such
action shall be given promptly to each stockholder that would have been entitled
to vote thereon at a meeting of stockholders and that did not consent thereto in
writing.

     SECTION 1.9. List of Stockholder Entitled to Vote. At least 10 days before
every meeting of stockholders a complete list of the stockholders entitled to
vote at the meeting,


                                       2


arranged in alphabetical order and showing the address of each stockholder and
the number of shares registered in the name of each stockholder, shall be
prepared and shall be open to the examination of any stockholder for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
10 days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
Such list shall be produced and kept at the time and place of the meeting during
the whole time thereof and may be inspected by any stockholder who is present.

     SECTION 1.10. Fixing of Record Date. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than 60 or less than 10 days
before the date of such meeting, nor more than 60 days prior to any other
action. If no record date is fixed, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the day next preceding the
day on which the meeting is held; the record date for determining stockholders
entitled to express consent to corporate action in writing without a meeting,
when no prior action by the Board of Directors is necessary, shall be the day on
which the first written consent is expressed; and the record date for any other
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.

                                  ARTICLE TWO
                                   DIRECTORS

     SECTION 2.1. Number; Term of Office; Qualifications; Vacancies. The number
of directors that shall constitute the whole Board of Directors shall be two or
such number as shall be determined by action of the Board of Directors taken by
the affirmative vote of a majority of the whole Board of Directors. Directors
shall be elected at the annual meeting of stockholders to hold office, subject
to Sections 2.2 and 2.3, until the next annual meeting of stockholders and until
their respective successors are elected and qualified. Vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, although
less than a quorum, or by the sole remaining director, and the directors so
chosen shall hold office, subject to Sections 2.2 and 2.3, until the next annual
meeting of stockholders and until their respective successors are elected and
qualified.

     SECTION 2.2. Resignation. Any director of the Corporation may resign at any
time by giving written notice of such resignation to the Board of Directors, the
President or the Secretary of the Corporation. Any such resignation shall take
effect at the time specified therein or, if no time be specified, upon receipt
thereof by the Board of Directors or one of the above-named officers; and,
unless specified therein, the acceptance of such resignation shall not be


                                       3


necessary to make it effective. When one or more directors shall resign from the
Board of Directors effective at a future date, a majority of the directors then
in office, including those who have so resigned, shall have power to fill such
vacancy or vacancies, the vote thereon to take effect when such resignation or
resignations shall become effective, and each director so chosen shall hold
office as provided in these By-Laws in the filling of other vacancies.

     SECTION 2.3. Removal. Any one or more directors may be removed, with or
without cause, by the vote or written consent of the holders of a majority of
the shares entitled to vote at an election of directors.

     SECTION 2.4. Regular and Annual Meetings; Notice. Regular meetings of the
Board of Directors shall be held at such time and at such place, within or
without the State of Delaware, as the Board of Directors may from time to time
prescribe. No notice need be given of any regular meeting, and a notice, it
given, need not specify the purposes thereof. A meeting of the Board of
Directors may be held without notice immediately after an annual meeting of
stockholders at the same place as that at which such meeting was held.

     SECTION 2.5. Special Meetings; Notice. A special meeting of the Board of
Directors may be called at any time by the Board of Directors, the Executive
Committee, if any, the President or any person acting in the place of the
President and shall be called by any one of them or by the Secretary upon
receipt of a written request to do so specifying the matter or matters,
appropriate for action at such a meeting, proposed to be presented at the
meeting and signed by at least two directors. Any such meeting shall be held at
such time and at such place, within or without the State of Delaware, as shall
be determined by the body or person calling such meeting. Notice of such meeting
stating the time and place thereof shall be given (a) by deposit of the notice
in the mail, first class, postage prepaid, at least two days before the day
fixed for the meeting addressed to each director at his address as it appears on
the Corporation's records or at such other address as the director nay have
furnished the Corporation for that purpose, or (b) by delivery of the notice
similarly addressed for dispatch by telegraph, cable or radio or by delivery of
the notice by telephone or in person, in each case at least 24 hours before the
time fixed for the meeting.

     SECTION 2.6. Presiding Officer and Secretary at Meetings. Each meeting of
the Board of Directors shall be presided over by the President, if a director,
or if he is not a director or is not present by such member of the Board of
Directors as shall be chosen by the meeting. The Secretary, or in his absence an
Assistant Secretary, shall act as secretary of the meeting, or if no such
officer is present, a secretary of the meeting shall be designated by the person
presiding over the meeting.

     SECTION 2.7. Quorum. A majority of the whole Board of Directors shall
constitute a quorum for the transaction of business, but in the absence of a
quorum a majority of those present (or if only one be present, then that one)
may adjourn the meeting, without notice other than announcement at the meeting,
until such time as a quorum is present. Except as otherwise required by the
Certificate of Incorporation or the By-Laws, the vote of the majority of the
directors present at a meeting at which a quorum is present shall be the act, of
the Board of Directors.


                                       4


     SECTION 2.8. Meeting by Telephone. Members of the Board of Directors or of
any committee thereof may participate in meetings of the Board of Directors or
of such Committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation shall constitute presence in person at such
meeting.

     SECTION 2.9. Action Without Meeting. Unless otherwise restricted by the
Certificate of Incorporation, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting if all members of the Board of Directors or of such committee,
as the case may be, consent thereto in writing and the writing or writings are
filed with the minutes of proceedings of the Board of Directors or of such
committee.

     SECTION 2.10. Executive and Other Committees. The Board of Directors may,
by resolution passed by a majority of the whole Board of Directors, designate an
Executive Committee and one or more other committees, each such committee to
consist of one or more directors as the Board of Directors may from time to time
determine. Any such committee, to the extent provided in such resolution or
resolutions, shall have and may exercise all the powers and authority of the
Board of Directors in the management of the business and affairs of the
Corporation, including the power to authorize the seal of the Corporation to be
affixed to all papers that may require it; but no such committee shall have such
power or authority in reference to amending the Certificate of Incorporation,
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
Corporation's property and assets, recommending to the stockholders a
dissolution of the Corporation or a revocation of a dissolution, or amending the
By-Laws; and unless the resolution shall expressly so provide, no such committee
shall have the power or authority to declare a dividend or to authorize the
issuance of stock. In the absence or disqualification of a member of a
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Each such
committee other than the Executive Committee shall have such name as may be
determined from time to time by the Board of Directors.

     SECTION 2.11. Compensation. A director shall receive such compensation, if
any, for his services as a director as may from time to time be fixed by the
Board of Directors, which compensation may be based, in whole or in part, upon
his attendance at meetings of the Board of Directors or of its committees. He
may also be reimbursed for his expenses in attending any meeting.

                                 ARTICLE THREE

                                    OFFICERS

     SECTION 3.1. Election; Qualification. The officers of the Corporation shall
be a President, one or more Vice Presidents, a Secretary and a Treasurer, each
of whom shall be elected by the Board of Directors. The Board of Directors may
elect a Controller, one or more Assistant Secretaries, one or more Assistant
Treasurers, one or more Assistant Controllers and


                                       5


such other officers as it may from time to time determine. Two or more offices
may be held by the same person.

     SECTION 3.2. Term of Office. Each officer shall hold office from the time
of his elective and qualification to the time at which his successor is elected
and qualified, unless sooner he shall die or resign or shall be removed pursuant
to Section 3.4.

     SECTION 3.3. Resignation. Any officer of the Corporation may resign at any
time by giving written notice of such resignation to the Board of Directors, the
President or the Secretary of the Corporation. Any such resignation shall take
effect at the time specified therein or, if no time be specified, upon receipt
thereof by the Board of Directors or one of the above-named officers; and,
unless specified therein, the acceptance of such resignation shall not be
necessary to make it effective.

     SECTION 3.4. Removal. Any officer may be removed at any time, with or
without cause, by the vote of a majority of the whole Board of Directors.

     SECTION 3.5. Vacancies. Any vacancy, however caused, in any office of the
Corporation may be filled by the Board of Directors.

     SECTION 3.6. Compensation. The compensation of each officer shall be such
as the Board of Directors may from time to time determine.

     SECTION 3.7. President. The President shall be chief executive officer of
the Corporation and shall have charge of the general business and affairs of the
Corporation, subject to the right of the Board of Directors to confer specified
powers on officers and subject generally to the direction of the Board of
Directors and the Executive Committee, if any.

     SECTION 3.8. Vice President. Each Vice President shall have such powers and
duties as generally pertain to the office of Vice President and as the Board of
Directors or the President may from time to time prescribe. During the absence
of the President or his inability to act or during a vacancy in the office of
President, the Vice President, or if there shall be more than one Vice
President, then that one designated by the Board of Directors, shall exercise
the powers and shall perform the duties of the President, subject to the
direction of the Board of Directors and the Executive Committee, if any.

     SECTION 3.9. Secretary. The Secretary shall keep the minutes of all
meetings of stockholders and of the Board of Directors. He shall be custodian of
the corporate seal and shall affix it or cause it to be affixed to such
instruments as require such seal and attest the same and shall exercise the
powers and shall perform the duties incident to the office of Secretary, subject
to the direction of the Board of Directors and the Executive Committee, if any.

     SECTION 3.10. Treasurer. The Treasurer shall have care of all funds and
securities of the Corporation and shall exercise the powers and shall perform
the duties incident to the office of Treasurer, subject to the direction of the
Board of Directors and the Executive Committee, if any.


                                       6


     SECTION 3.11. Other Officers. Each other officer of the Corporation shall
exercise the powers and shall perform the duties incident to his office, subject
to the direction of the Board of Directors and the Executive Committee, if any.

                                  ARTICLE FOUR

                                  CAPITAL STOCK

     SECTION 4.1. Stock Certificates. The interest of each holder of stock of
the Corporation shall be evidenced by a certificate or certificates in such form
as the Board of Directors may from time to time prescribe. Each certificate
shall be signed by or in the name of the Corporation by the President or a Vice
President and by the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary. Any of or all the signatures appearing on any such
certificate or certificates may be a facsimile. If any officer, transfer agent
or registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.

     SECTION 4.2. Transfer of Stock. Shares of stock shall be transferable on
the books of the Corporation pursuant to applicable law and such rules and
regulations as the Board of Directors shall from time to time prescribe.

     SECTION 4.3. Holders of Record. Prior to due presentment for registration
of transfer the Corporation may treat the holder of record of a share of its
stock as the complete owner thereof exclusively entitled to vote, to receive
notifications and otherwise entitled to all the rights and powers of a complete
owner thereof, notwithstanding notice to the contrary.

     SECTION 4.4. Lost, Stolen, Destroyed or Mutilated Certificates. The
Corporation shall issue a new certificate of stock to replace a certificate
theretofore issued by it alleged to have been lost, destroyed or wrongfully
taken, if the owner or his legal representative (i) requests replacement before
the Corporation has notice that the stock certificate has been acquired by a
bona fide purchaser; (ii) files with the Corporation a bond sufficient to
indemnify the Corporation against any claim that may be made against it on
account of the alleged loss or destruction of any such stock certificate or the
issuance of any such new stock certificate; and (iii) satisfies such other terms
and conditions as the Board of Directors may from time to time prescribe.

                                  ARTICLE FIVE

                                  MISCELLANEOUS

     SECTION 5.1. Indemnity. (a) The Corporation shall indemnify, subject to the
requirements of subsection (d) of this Section, any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation), by
reason of the fact that he is or was a director, officer, employee or agent of
the


                                       7


Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

     (b) The Corporation shall indemnify, subject to the requirements of
subsection (d) of this Section, any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the Court of Chancery of the
State of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for beach expenses which the Court of Chancery of the
State of Delaware or such other court shall deem proper.

     (c) To the extent that a director, officer, employee or agent of the
Corporation, or a person serving in any other enterprise at the request of the
Corporation, has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
Section, or in defense of any claim, issue or matter therein, the Corporation
shall indemnify him against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.

     (d) Any indemnification under subsections (a) and (b) of this Section
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
Section. Such determination shall be made (1) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) it such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.


                                       8


     (e) Expenses incurred by a director, officer, employee or agent in
defending a civil or criminal action, suit or proceeding may be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding as authorized by the Board of Directors in the specific case upon
receipt of an undertaking by or on behalf of the director, officer, employee or
agent to repay such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation as authorized in this Section.

     (f) The indemnification provided by this Section shall not limit the
Corporation from providing any other indemnification permitted by law nor shall
it be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent, and shall inure to the benefit of the heirs,
executors and administrators of such a person.

     (g) The Corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Section.

     (h) For the purposes of this Section, references to "the Corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees or agents, so that any
person who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position under
the provisions of this Section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.

     SECTION 5.2. Waiver of Notice. Whenever notice is required by the
Certificate of Incorporation, the By-Laws or any provisions of the General
Corporation Law of the State of Delaware, a written waiver thereof, signed by
the person entitled to notice, whether before or after the time required for
such notice, shall be deemed equivalent to notice. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the stockholders, directors or
members of a committee of directors need be specified in any written waiver of
notice.

     SECTION 5.3. The fiscal year of the Corporation shall start on such date as
the Board of Directors shall from time to time prescribe.


                                       9


     SECTION 5.4. Corporate Seal. The corporate seal shall be in such form as
the Board of Directors may from time to time prescribe, and the same may be used
by causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced.

                                  ARTICLE SIX

                              AMENDMENT OF BY-LAWS

     SECTION 6.1. Amendment. The By-Laws may be adopted, amended or repealed by
the stockholders or by the Board of Directors by a majority vote of the whole
Board of Directors.


                                       10

EX-3.103

                                                                   Exhibit 3.103

                             CERTIFICATE OF AMENDED
                          ARTICLES OF INCORPORATION OF
                       CINCINNATI ELECTRONICS CORPORATION

     G. J. Mealey, President and John E. McDowell, Assistant Secretary of
Cincinnati Electronics Corporation, an Ohio corporation, with its principal
office located at 2630 Glendale-Milford Road, Cincinnati, Onio, do hereby
certify that a meeting of the holders of the shares of Class A Common Stock and
Class B Common Stock of said corporation entitling them to vote on the proposal
to amend the Articles of Incorporation thereof, as contained in the following
resolution, was duly called and held on the 9th day of October, 1972, at which
meeting a quorum of such shareholders and each class thereof was present in
person, and that by the affirmative vote of the holders of shares entitling them
to exercise two-thirds of the voting power of the corporation on such proposal
and in addition thereto by the affirmative vote of the holders of two-thirds of
each class of shares entitled to vote thereon the following resolution was
adopted to amend the Articles:

               RESOLVED, that the following Amended Articles of
          Incorporation are hereby adopted to supersede and take the
          place of the existing Articles of Incorporation and all
          amendments thereto:

                        AMENDED ARTICLES OF INCORPORATION

                                       OF

                       CINCINNATI ELECTRONICS CORPORATION

     Cincinnati Electronics Corporation, a corporation under the laws of the
State of Ohio, adopts these Amended Articles of Incorporation to supersede and
take the place of its existing Articles of Incorporation and all amendments
thereto as follows:

     FIRST: The name of this corporation shall be CINCINNATI ELECTRONICS
CORPORATION.

     SECOND: The place in Ohio where its principal office is to be located is
Cincinnati, Hamilton County, Ohio.

     THIRD: The purpose or purposes for which the corporation is formed are to
engage in any lawful act or activity for which corporations may be formed under
Sections 1701.01 to 1701.98, inclusive, of the Ohio Revised Code.

     FOURTH: The number of shares which the corporation is authorized to have
outstanding is Two Hundred Thousand (200,000) shares, all of which shall be
without par value and designated as common stock. The common stock shall be
divided into two classes; One Hundred Forty-Six Thousand (146,000) shares
thereof shall be designated as Class A Common Stock, and Fifty-Four Thousand
(54,000) shares of common stock shall be designated as Class B Common Stock.


                                                                               2


     The rights, preferences, privileges and restrictions granted to or imposed
upon the respective classes of shares or the holders thereof are as follows:

     (a) Voting: The holders of shares of Class A Common Stock and the holders
of shares of Class B Common Stock, issued and outstanding, shall have and
possess exclusive and equal rights to notice of shareholders' meetings and the
exclusive voting rights and powers in all matters. Each holder of Class A Common
Stock and each holder of Class B Common Stock shall be entitled to cast one vote
for each share of record of either class of stock held by him. The holders of
each class of stock shall not vote separately as a class except where voting
separately as a class is provided by law or by Article Fourth (b) or elsewhere
in these Amended Articles of Incorporation.

     (b) Restrictions on Voting: As long as any shares of Class B Common Stock
shall be outstanding, the Corporation shall not, without first obtaining the
approval (by vote or written consent, as provided by law) of the holders of at
least a majority of the total number of shares of Class A Common Stock
outstanding and of the holders of at least a majority of the total number of
shares of Class B Common Stock outstanding:

          (i) alter or change the rights, preferences, privileges, or
     restrictions granted to or imposed on the Class A Common Stock or the
     rights, preferences, privileges, or restrictions granted to or imposed on
     the Class B Common Stock if such alteration or change would have a
     materially adverse effect on the Class A Common Stock or the Class B Common
     Stock; or

          (ii) alter or change the conversion rights of the Class B Common Stock
     or the basis of conversion; or

          (iii) alter or change the restrictions on the payment of dividends to
     the holders of Class A Common Stock or Class B Common Stock; or

          (iv) consolidate or merge the Corporation with or into another
     corporation, or agree to merge another corporation into or with this
     Corporation, except with a wholly-owned subsidiary; or

          (v) increase the number of shares of Class B Common Stock which the
     Corporation is authorized to have outstanding unless such increase is a
     result of a stock split or reclassification as provided in or permitted
     under subparagraph (e) below.

     (c) Dividends Payable in Cash: Dividends payable in cash may be declared
and paid only on shares of Class A Common Stock and the holders of Class B
Common Stock shall not be entitled to dividends declared and payable in cash.

     (d) Dividends Payable in Shares: Dividends payable in shares of Class A
Common Stock may be paid only on shares of Class A Common Stock, and dividends
payable in shares of Class B Common Stock may be paid only on shares of Class B
Common Stock, in each case only if at the same time the same kind of dividend
payable in shares of the other class, at the same rate per share, is paid on the
shares of such other class.


                                                                               3


     (e) Stock Split or Reclassification: This Corporation shall not, without
the approval (by vote or written consent as provided by law) of the holders of
at least a majority of the total number of shares of Class B Common Stock
outstanding and at least a majority of the total number of shares of Class A
Common Stock outstanding, combine or split up the shares of the Class A Common
Stock or the shares of Class B Common Stock unless at the same time the same per
share combination or split-up is made of both the shares of Class A Common Stock
and the shares of Class B Common Stock, or reclassify the shares of Class A
Common Stock or the shares of Class B Common Stock unless at the same time a
substantially identical reclassification is made of both the shares of Class A
Common Stock and the shares of Class B Common Stock.

     (f) Liquidation: Upon the dissolution or liquidation of the Corporation, or
upon a sale of all of its assets, whether voluntary or involuntary, or upon any
distribution of its capital, the holders of record of the Class A Common Stock
shall be entitled to receive Thirty-Five ($35.00) Dollars for each share of
Class A Common Stock held by them before any distribution shall be paid or made
to the holders of Class B Common Stock, and all assets, if any, remaining for
distribution to holders after the receipt by the holders of Class A Common Stock
of Thirty-Five Dollars per share, shall then be distributed ratably among all of
the holders of the shares of Class A Common Stock and all of the holders of
Class B Common Stock.

     (g) Conversion: Each holder of Class B Common Stock shall have the right to
convert all of the shares of Class B Common Stock owned by him into fully paid
and non-assessable shares of Class A Common Stock, at the rate of one share of
Class A Common Stock for one share of Class B Common Stock at the times and in
the manner and subject to the conditions herein provided:

          (i) In the event that the after tax earnings of the Corporation for
     the initial fiscal year of the Corporation ending November 30, 1973 equals
     or exceeds Four Hundred Thousand ($400,000.00) Dollars as reflected in the
     financial statements of the Company following examination, audit and
     certification of such financial statements by the independent public
     accountants then employed by the Company, each holder of Class B Common
     Stock shall be entitled to convert fifty (50%) per cent of the shares (to
     the nearest whole share) of Class B Common Stock then owned by him.

               In the event said earnings of the Corporation at the end of the
     initial fiscal year shall be less than Four Hundred Thousand ($400,000.00)
     Dollars, each such holder of Class B Common Stock shall be entitled to
     convert that part of the total shares of Class D Common Stock owned by him
     equal to fifty (50%) per cent of the product of a fraction, the numerator
     of which is the certified after tax earnings for such period and the
     denominator of which is Four Hundred Thousand ($400,000.00) Dollars.

          (ii) At the conclusion of the second fiscal year of the Corporation
     ending November 30, 1974 (and at the end of subsequent fiscal years of the
     Corporation, if required, until all issued and outstanding shares of Class
     B Common Stock have been converted), the after tax earnings of the
     Corporation shall be determined in the manner and as defined in
     Subparagraph (i) above and added to the earnings achieved by the
     Corporation in the previous fiscal year or years (hereinafter "Cumulative
     Earnings"), and each Class B holder shall be entitled to convert at the end
     of the second fiscal year (and at


                                                                               4


     the end of subsequent fiscal years of the Corporation, if required to
     complete conversion of all shares of Class B Common Stock) that number of
     shares, which when added to the shares converted in the previous fiscal
     year or years, shall equal the original total shares (as adjusted, if
     applicable) of Class B Common Stock held of record by such person, or his
     assignee, times a fraction the numerator of which is the certified
     Cumulative Earnings and the denominator of which is Eight Hundred Thousand
     ($800,000.00) Dollars.

          Determination of Cumulative Earnings shall be made at the next
     succeeding fiscal year end, and fiscal year ends thereafter, if required,
     until Cumulative Earnings equal or exceed Eight Hundred Thousand
     ($800,000.00) Dollars, and all shares of Class B Common Stock have been
     converted to Class A Common Stock.

     (h) Determination of Cumulative Earnings and Conversion Date: At the
conclusion of the initial fiscal year ending November 30, 1973 and at the
conclusion of each fiscal year of the Corporation thereafter until conversion of
all outstanding shares of Class B Common Stock to Class A Common Stock in the
manner provided above, and after examination and audit of the books and records
and financial statements of the Corporation, the independent public accountants
then employed by the Company shall furnish letter certifying the amount of the
after tax earnings or the Cumulative Earnings of the Corporation at fiscal year
end to the Secretary of the Corporation who shall immediately mail copy of said
letter to each holder of Class B Common Stock advising such holder of the number
of shares of Class B Common Stock he is entitled to convert to Class A Common
Stock. Such holder shall have twenty (20) days from the date of mailing of such
letter within which to exercise his right to convert Class B shares to Class A
shares in the manner provided in the next succeeding paragraph.

     (i) Method of Conversion: Such right to convert shall be exercised by
surrendering for such purpose to the Corporation, at the place where the
Corporation shall maintain its principal office, certificates representing the
shares to be converted, duly endorsed in blank, and at the time of such
surrender of shares eligible for conversion (subject to the limitations
contained herein), the person exercising such right to convert shall be deemed
to be the holder of record of the shares of Class A Common Stock issuable upon
such conversion, notwithstanding that the share register of the Corporation
shall then be closed or the certificates representing such Class A Common Stock
shall not then be actually delivered to him.

     (j) Issuance of Certificates: The Corporation shall, as soon as practicable
after such surrender of certificates for conversion, issue and deliver at such
office to the person for whose account such shares of Class B Common Stock were
so surrendered, certificates for the number of shares of Class A Common Stock to
which he shall be entitled. Shares so surrendered and converted shall be
cancelled and shall not be reissued.

     (k) Reservation of Class A Common Stock: The Corporation shall at all times
reserve and keep available out of its authorized but unissued Class A Common
Stock no less than the full number of shares of Class A Common Stock issuable
upon the conversion of all of the then outstanding shares of Class B Common
Stock and shall take all such action to obtain all such permits or orders as may
be necessary to enable the Corporation lawfully to issue such shares of Class A
Common Stock upon the conversion of shares of Class B Common Stock.


                                                                               5


     (l) Conversion Adjustment: In the event that the Corporation shall be
recapitalized through a subdivision or combination of its outstanding Class A
Common shares or its outstanding Class B Common shares into a greater or smaller
number of shares, then in each such case the number of shares of Class A Common
Stock into which the shares of Class B Common Stock may be converted shall be
proportionately changed.

     FIFTH: The amount of stated capital with which the corporation will be in
business is Five Hundred Dollars ($500.00).

     SIXTH: When authorized by the affirmative vote of the Board of Directors,
without the action or approval of the shareholders of this corporation, this
corporation may purchase, or contract to purchase, at any time and from time to
time, shares of any class issued by this corporation, voting trust certificates
for shares, bonds, debentures, notes, script, warrants, obligations, evidences
of indebtedness or any other securities of this corporation, for such prices and
upon and subject to such terms and conditions as the Board of Directors may
determine, provided that no such purchase shall be made, pursuant to any such
contract or otherwise, if after such purchase the assets of this corporation
would be less than its liabilities plus stated capital or if it is insolvent as
defined in the General Corporation Law of Ohio or if there is reasonable ground
to believe that by such purchase it would be rendered insolvent.

     SEVENTH: No shareholder of this corporation shall be entitled, as such, as
a matter of right to subscribe for or purchase shares of any class now or
hereafter authorized, or to purchase or subscribe for securities convertible
into or exchangeable for shares of the corporation or to which shall be attached
or appertain any warrants or rights entitling the holder thereof to subscribe
for or purchase shares except such rights of subscription or purchase, if any,
at such price or prices and upon such terms and conditions as the Board of
Directors, in its discretion, from time to time may determine.

     EIGHTH: The Board of Directors is hereby authorized to fix and determine
and to vary the amount of working capital of the corporation, to determine to
the extent permitted by the General Corporation Law of Ohio whether any, and, if
any, what part, of its surplus, however created or arising, shall be used or
disposed of or declared in dividends or paid to shareholders.

     NINTH: Notwithstanding any provision of the General Corporation Law of
Ohio, now or hereafter in force, requiring for any purpose the vote or consent
of the holders of shares entitling them to exercise two-thirds, or any other
proportion of the voting power of the corporation or of any class or classes of
shares thereof, such action, unless otherwise expressly required by statute may
be taken by the vote of the holders of shares entitling them to exercise a
majority of the voting power of the corporation or of such class or classes.

     TENTH: Every statute of the State of Ohio hereafter enacted whereby the
rights or privileges of shareholders of a corporation organized under the
General Corporation Law of said State are increased, diminished or in any way
affected, or whereby effect is given to any action authorized, ratified or
approved by less than all the shareholders of any such corporation, shall apply
to this corporation and shall be binding upon every shareholder thereof


                                                                               6


to the same extent as if such statute had been in force at the date of the
filing of these Articles of Incorporation.

     ELEVENTH: A director of this Corporation shall not be disqualified by his
office from dealing or contracting with the corporation as a vendor, purchaser,
employee, agent or otherwise; nor shall any transaction or contract or act of
this corporation be void or voidable or in any way affected or invalidated by
reason of the fact that any director or any firm of which any director is a
member or any corporation of which any director is a shareholder or director is
in any way interested in such transaction or contract or act, provided the fact
that such director or such firm or such corporation is so interested shall be
disclosed or shall be known to the Board of Directors or such members thereof as
shall be present at any meeting of the Board of Directors at which action upon
any such contract or transaction or act shall be taken; nor shall any such
director be accountable or responsible to the corporation for or in respect of
any such transaction or contract or act of this corporation or for any gains or
profits realized by him by reason of the fact that he or any firm of which he is
a member or any corporation of which he is a shareholder or director is
interested in such transaction or contract or act; and any such director may be
counted in determining the existence of a quorum at any meeting of the Board of
Directors of the corporation which shall authorize or take action in respect to
any such contract or transaction or act, and may vote thereat to authorize,
ratify or approve any such contract or transaction or act, with like force and
effect as if he or any firm of which he is a member or any corporation of which
he is a shareholder or director were not interested in such transaction or
contract or act.

     The Board of Directors shall have the power to fix compensation of officers
or directors or both and a director may be counted in determining the existence
of a quorum at any meeting of the board of Directors which shall take such
action and may vote thereat in favor or against such action whether or not such
director may be interested in the action so taken.


                                                                               7


     IN WITNESS WHEREOF, said G. J. Mealey, President and John E. McDowell,
Assistant Secretary, of Cincinnati Electronics Corporation, acting for and on
behalf of said corporation, have hereunto subscribed their names this 13th day
of October, 1972.

                                       /s/ G.J. Mesley
                                       ----------------------------------------
                                                      President


                                       /s/ John E. McDowell
                                       -----------------------------------------
                                       Assistant Secretary



                            CERTIFICATE OF AMENDMENT

                        TO THE ARTICLES OF INCORPORATION

                                       OF

                       CINCINNATI ELECTRONICS CORPORATION

     Douglas G. Dwyre, who is President, and William J. McGurn, who is Assistant
Secretary of Cincinnati Electronics Corporation, a for profit corporation
organized and existing under the laws of Ohio, do hereby certify that pursuant
to ss.1701.54 of the Revised Code in a writing signed by all of the shareholders
who would be entitled to a notice of a meeting held for that purpose, the
following resolution was adopted:

               RESOLVED, that Articles Fourth and Fifth of the
          Articles of Incorporation of this Corporation be, and they
          hereby are, amended to read in their entirety as follows:

                                 ARTICLE FOURTH

     The authorized number of shares without par value is Two Hundred Thousand
(200,000), all of which are classified and designated as common stock. The
authorized number of shares with par value is Twenty Thousand (20,000), all of
which are classified and designated as preferred stock, each with a par value of
One Thousand ($1,000.00) Dollars.

     1. The express terms and provisions of the shares classified and designated
as common stock are as follows:

          (a) Voting Rights: The holders of shares of common stock, issued and
outstanding, except where otherwise provided by law or by these Articles of
Incorporation, shall have and possess the exclusive rights to Notice of
Shareholders' meetings and the exclusive voting rights and powers in all
matters. The holders of said shares shall be entitled to one vote per share at
all meetings of the shareholders of the Company.

          (b) Liquidation Rights: After the payment to the holders of all
preferred stock of the preferential amounts to which they shall be entitled in
the event of the dissolution or liquidation of the Company, the holders of the
shares of common stock shall be entitled to all of the residue of the assets and
shall receive payment thereof in proportion to the shares held by them
respectively.

          (c) Rights and Privileges as Shareholders: Subject to the express
terms and provisions of the shares designated as preferred stock, the holders of
the shares of common


                                                                               2


stock shall have all rights, interests, powers and privileges of shareholders of
corporations for profit as provided by law, without any restrictions,
qualifications or limitations thereof.

     2. The express terms and provisions of the shares classified and designated
as preferred stock are as follows:

          (a) Voting Rights: Except as otherwise provided by law or by these
Articles of Incorporation, the holders of the preferred shares shall have no
voting power.

          (b) Dividend Rights:

               (1) Regular Dividends: The holders of said shares shall be
entitled to and receive dividends, when and as declared by the Board of
Directors, out of funds available for the payment of dividends, at the rate of
ten percent (10%) per annum of the par value thereof and no more, payable
annually on the tenth (10th) day of September, in preference to all other
shareholders, and no dividend shall be paid on the shares of any other class
unless the current annual dividend, and all arrears of dividends, if any, on the
shares of the preferred stock shall have been paid, or provisions shall have
been made for the payment thereof; but the holders of said shares shall at no
time have any other or further dividend or similar right of participation of any
kind. The Board of Directors in its reasonable, good faith discretion may decide
not to declare or pay dividends in any year or years or may decide to declare
and pay dividends in any year or years in amounts less than the full amount
payable, as determined by the foregoing dividend rate.

               (2) Dividends Cumulative: Any dividends not declared and paid on
the preferred shares on such annual basis shall be cumulative from the date of
issuance and shall be considered accumulated dividends. No interest shall accrue
or be paid on accumulated dividends.

          (c) Liquidation Rights: In case of the dissolution or liquidation of
the Company, the holders of said shares shall be entitled to receive payment of
the par value thereof, and all accumulated and accrued dividends thereon, from
the assets remaining after paying the debts and liabilities of the Company,
before any payment shall be made to the holders of the shares of common stock
but shall not be entitled to participate any further in the distribution of the
assets of the Company.

          (d) Redemptions:

               (1) Company Redemptions: At any time after the first anniversary
of the date of their issuance and at the discretion of the Board of Directors,
the Company may redeem all or from time to time may redeem any part of the
preferred shares on any dividend date by paying in cash the par value thereof,
plus an amount in cash equal to all dividends on such preferred shares
accumulated as provided in this Article, whether earned or declared or not, up
to and including the date fixed for redemption, the aggregate of said amounts
being hereinafter sometimes referred to as the redemption price. In the event of
the redemption of a part only of the preferred shares, the shares will be
redeemed on a pro rata basis.

                                                                               3


     In the event the Corporation shall elect to redeem all or any of the
preferred shares, notice of such election shall be given by mailing the same to
every holder of record of preferred shares whose shares are to be redeemed, on a
date not less than forty-five (45) days prior to the date designated in such
notice as the date of the redemption and retirement of preferred shares, at the
address of such holder as the same shall appear on the books of the Corporation.
Such notice shall state that on the date therein specified the Corporation will
redeem and retire all the preferred shares represented by or included in the
certificates which shall be specified by number in such notice, or a specified
number of such shares, as the case may be, upon the surrender for cancellation,
duly endorsed, of the certificate or certificates representing or including the
shares to be redeemed.

     If such notice of redemption shall have been duly given, and if on the date
fixed for redemption, funds necessary for the redemption shall be available
therefor, then notwithstanding that the certificates evidencing any preferred
shares so called for redemption shall not have been surrendered, the dividends
with respect to such shares shall cease to accrue after the date fixed for
redemption and all rights with respect to such shares shall forthwith after such
date cease and determine and such shares shall be deemed to be no longer
outstanding, except that the holders thereof shall have the right to receive the
redemption price thereof without interest, upon surrender of the certificates
therefor.

               (2) Holder Redemptions: At any time after the fifth anniversary
of the date of their issuance, any holder of preferred shares may request the
Company to redeem such preferred shares by notifying the Company in writing at
least ninety (90) days prior to the end of the Company's fiscal year of the
number of preferred shares to be redeemed. On the first dividend date of the
ensuing fiscal year and upon surrender of certificates representing shares to be
redeemed, the Company shall purchase, redeem and retire the preferred stock
designated in such request. The Company shall pay cash therefor in an amount
equal to the par value plus all accumulated and accrued dividends.

               (3) Changes in Rights, Preferences and Powers: As long as any
shares of preferred stock shall be outstanding, the corporation shall not,
without first obtaining the approval by affirmative vote of the holders of at
least a majority of the total number of shares of common stock outstanding and
of the holders of at least a majority of the total number of shares of preferred
stock outstanding: (1) alter or change the rights, preferences, privileges or
restrictions granted to or imposed on the common stock or the rights,
preferences, privileges or restrictions granted to or imposed on the preferred
stock so as materially adversely to affect the common stock or the preferred
stock; or (2) alter or change the restrictions on the payment of dividends to
the holders of common stock or preferred stock; (3) sell, lease or otherwise
dispose of all or substantially all of the Company's assets; (4) dissolve,
liquidate or wind up the affairs of the Company; (5) increase the authorized
amount of preferred stock beyond 20,000 shares or authorize any stock ranking on
a priority with or senior to the preferred stock as to dividends or assets; (6)
consummate an agreement of merger or consolidation with any other corporation or
corporations.

                                  ARTICLE FIFTH


                                                                               4


     The stated capital of the Company shall be the aggregate stated capital of
all classes of outstanding shares:

     (a) The stated capital of preferred shares with par value shall be the par
value of such shares.

     (b) The stated capital of common shares without par value shall be the
aggregate amount of consideration received by the Company for the issuance of
shares without par value, plus such amounts as, from time to time, by resolution
of the Board of Directors may be transferred thereto.

     IN WITNESS WHEREOF, the above named officers, acting for and on behalf of
the Corporation, have subscribed their names this 14th of January, 1983.


                                      /s/ Douglas G. Dwyre
                                      ------------------------------------------
                                      Douglas G. Dwyre, President


                                      /s/ William J. McGurn
                                      ------------------------------------------
                                      William J. McGurn,
                                      Assistant Secretary

EX-3.104

                                                                   Exhibit 3.104

                                                          Adopted April 12, 1985
                                                            Amended May 15, 1987
                                                       Amended September 9, 1988


             CINCINNATI ELECTRONICS CORPORATION (the "Corporation")

                               CODE OF REGULATIONS

ARTICLE I. - SEAL
- -----------------

     The corporate seal of the Corporation shall be circular and bear the words
"Cincinnati Electronics Corporation."

ARTICLE II. - SHAREHOLDERS
- --------------------------

     (a) Annual Meeting. The annual meeting of the shareholders shall be held at
the principal office of the Corporation, or at such other place either within or
without the State of Ohio as may be specified in the notice required under
paragraph (c) of this Article on the last Monday of the fourth month following
the close of each fiscal year of the Corporation, at which time there shall be
elected a Board of Directors to serve for one (1) year and until their
successors are elected and qualified. Any other business may be transacted at
the annual meeting without specific notice of such business being given, except
such business as may require specific notice by law. Notwithstanding the above
provisions, the Board of Directors may accelerate or postpone the date of the
annual meeting for not more than thirty (30) days from the date fixed herein if
the Board deems such action necessary or desirable. Any business transacted or
elections held at any annual meeting which has been postponed by the Board of
Directors pursuant to the authority herein conferred shall be valid as if
transacted or held at the regularly scheduled annual meeting.

     (b) Special Meetings. Special meetings of the shareholders may be called
and held as provided by law.

     (c) Notice. Notice of each annual or special meeting of the shareholders
shall be given in writing either by the President, any Vice President, the
Secretary, or any Assistant Secretary, not less than ten (10) days before the
meeting. Any shareholder may, at any time, waive any notice required to be given
under these Regulations.

     (d) Quorum. The shareholders present in person or by proxy at any meeting
shall constitute a quorum unless a larger proportion is required to take the
action stated in the notice of the meeting, in which case, to constitute a
quorum, there shall be present in person or by proxy the holders of record of
shares entitling them to exercise the voting power required by the Articles of
Incorporation of the Corporation to take the action stated.

     (e) Order of Business. At all shareholders' meetings the order of business
shall be as follows:

             1. Ratification of minutes of previous meeting, if applicable.


                                                                               2


             2. Election of Directors.

             3. Appointment of Auditors.

             4. Other Business.

     (f) Organization. The President shall preside at all meetings of the
shareholders, but in his absence the shareholders shall elect another officer or
a shareholder to so preside. The Secretary of the Corporation shall act as
Secretary of all meetings of the shareholders, but in the absence of the
Secretary at any meeting of the shareholders, the presiding officer may appoint
any person to act as Secretary of the meeting.

ARTICLE III. - DIRECTORS
- ------------------------

     (a) The Board of Directors shall be composed of seven (7) persons who shall
be elected annually by action of the shareholders, and who shall have the
qualifications set forth in Paragraphs 1 and 4 of that certain Special Security
Agreement dated September 9, 1988 by and among CMC Holdings, Inc., Canadian
Marconi Company, Canmar Investments, Inc., The English Electric Company, Ltd.,
Cincinnati Electronics Corporation, The General Electric Company, p.l.c. and the
Department of Defense of the United States Government ("Special Security
Agreement"). Any vacancy on the Board of Directors arising by reason of
resignation, death or inability to act shall be filled promptly by the
shareholders in the manner provided in Paragraph 4 of the Special Security
Agreement and a successor Director shall have the qualifications set forth in
Paragraph 4.

     (b) Quorum. A majority of the Board of Directors provided such majority
includes at least one of the outside directors as defined in Paragraph 1 of the
Special Security Agreement shall constitute a quorum and the action of a
majority of those present at a meeting shall constitute the action of the Board
of Directors and have the same effect as though taken by all members of the
Board of Directors.

     (c) Time of Meeting; Presence Through Communications Equipment. The Board
of Directors shall meet at the principal office of the Corporation, at least
annually, as soon as possible, following the annual meeting of the shareholder,
but the Directors shall have the authority to change the time and place of their
said meeting by Resolution. Meeting of the Board of Directors, and meeting of
any Committee thereof, may be held through any communications equipment if all
persons participating can hear each other and participation in a meeting
pursuant to this subparagraph (b) shall constitute presence at such meeting.

     (d) Call and Notice. Meetings of the Board of Directors (other than the one
following the annual Shareholder Meeting) may be called at any time by the
President and shall be called by the President upon the request of two members
of the Board. The Board shall decide what notice shall be given of all other
meetings. Any meeting at which all of the directors are present shall be a valid
meeting whether notice thereof was given or not and any business may be
transacted at such a meeting.

     (e) Resolutions. The Board of Directors may adopt Resolutions for their own
government and that of the Corporation provided such Resolutions are not
inconsistent with the


                                                                               3


Articles of Incorporation of the Corporation or these Regulations. Further,
Resolutions by the Board of Directors may be adopted by action in writing signed
by all the Directors in lieu of meeting.

ARTICLE IV. - COMMITTEES
- ------------------------

     There shall be a permanent standing committee of the Board of Directors to
be known as the Defense Security Committee, and the Board of Directors shall
each year in its annual organizational meeting designate five (5) of its number
having the qualifications set forth in the Special Security Agreement to serve
on the Defense Security Committee. The duties and authority of the Defense
Security Committee shall be as stated in the Special Security Agreement.

     The Board of Directors may by resolution designate not less than three (3)
of its number to serve on any other committee or committees as the Board may
from time to time constitute. The duties and authority of any such other
committee or committees shall be as stated in the resolution constituting the
same.

ARTICLE V. - OFFICERS
- ---------------------

     (a) Number. The officers of the Corporation shall be a President, one or
more Vice President(s), a Secretary and a Treasurer. Any two or more of the
offices may be held by the same persons, but no officer shall execute,
acknowledge, or verify any instrument in more than one capacity if such
instrument is required to be executed, acknowledged or verified by two or more
officers.

     (b) Other Officers. The Board of Directors is authorized in its discretion
to establish the office of Chairman of the Board, and shall have the further
power to provide for such other officers, assistant officers and agents as it
shall deem necessary from time and may dispense with any of said offices and
agencies at any time.

     (c) Election, Term and Removal. At the first meeting of the Board of
Directors after the annual meeting of the shareholders, the Board shall select
one of its members by a majority vote to be President of the Corporation. It
shall also select all other officers of the Corporation by a majority vote but
none of such other officers shall be required to be members of the Board, except
the Chairman of the Board if that office is established. All officers of the
Corporation shall hold office for one year and until their successors are
elected and qualified.

     (d) Vacancies and Absence. If any office shall become vacant by reason of
the death, resignation, disqualification, or removal of the incumbent thereof,
or other cause, the Board of Directors may elect a successor to hold office for
the unexpired term in respect to which such vacancy occurred or was created. In
case of the absence of any officer of the Corporation or for any reason that the
Board of Directors may determine as sufficient, the said Board may delegate the
powers and duties of such officer to any other office or to any director, except
where otherwise provided by these regulations or by statute, for the time being.


                                                                               4


ARTICLE VI. - DUTIES OF OFFICERS
- --------------------------------

     (a) Chairman of the Board. The Chairman of the Board of Directors, if the
board establishes such office, shall preside at all meetings of the Board,
appoint all special or other Committees unless otherwise ordered by the Board,
confer with and advise all other officers of the Corporation, and perform such
other duties as may be delegated to him from time to time by the Board.

     (b) President. The President shall be the chief executive officer and
active head of the Corporation, and in the recesses of the Board of Directors
and the Executive Committee, shall have general control and management of all
its business and affairs. He shall make such recommendations to the Board of
Directors as he thinks proper, and he shall bring before said Board such
information as may be required touching the business and property of the
Corporation. He shall perform generally all duties incident to the office of
President, as required or authorized by law and such as are usually vested in
the President of a similar corporation.

     (c) Vice President. The Vice Presidents shall perform such duties as may be
delegated to them by the Board of Directors, or assigned to them from time to
time by the Board of Directors, or the President. The Vice President, or in the
event there shall be more than one Vice President, such Vice President as may be
designated by the Board, shall perform the duties and have the powers of the
President in case of the absence of the latter from his office, and during such
absence such Vice President shall be authorized to exercise all the functions of
the President and shall sign all papers and perform all duties as acting
President.

     (d) Secretary. The Secretary shall keep a record of all proceedings of the
Board of Directors, and of all meetings of Shareholders, and shall perform such
other duties as may be assigned to him by the Board of Directors or the
President.

     (e) Assistant Secretaries. The Assistant Secretaries shall perform such
duties as may be assigned to them by the Secretary or the Board of Directors.
The Board of Directors or the president may designate one of the Assistant
Secretaries to serve as acting Secretary during the absence or disability of the
Secretary.

     (f) Treasurer. The Treasurer shall have charge of the funds and accounts of
the Corporation. He shall keep proper books of account showing all receipts,
expenditures and disbursements of the Corporation, with vouchers in support
thereof. He shall also from time to time, as required, make reports and
statements to the Directors as to the financial condition of the Corporation,
and submit detailed statements of his receipts and disbursements; he shall
perform such other duties as shall be assigned to him from time to time by the
Board of Directors or the President.

     (g) Assistant Treasurers. The Assistant Treasurers shall perform such
duties as may be assigned to them by the Treasurer of the Board of Directors.
The Board of Directors or the President may designate one of the Assistant
Treasurers to serve as acting Treasurer during the absence or disability of the
Treasurer.


                                                                               5


     (h) Bonds of Officers. The Board of Directors shall determine which
officers, if any, of the Corporation shall give bond, and the terms and amount
thereof, the expense to be paid by the Corporation.

ARTICLE VII. - INDEMNIFICATION OF DIRECTORS AND OFFICERS
- --------------------------------------------------------

     The Corporation shall indemnify each director and each officer of the
Corporation, and each person employed by the Corporation who serves at the
written request of the President of the Corporation as a director, trustee,
officer, employee, or agent of another corporation, domestic or foreign,
non-profit or for profit, partnership, joint venture, trust or other enterprise,
to the full extent permitted by Ohio law. The term "officer" as used in this
Section shall include the Chairman of the Board and the Vice Chairman of the
Board if such offices are filled, the President, each Vice President, the
Treasurer, the Secretary and any other person who is specifically designated as
an "officer" within the operation of this Article by action of the Board of
Directors. The Corporation may indemnify assistant officers, employees and
others by action of the Board of Directors to the extent permitted by Ohio law.

ARTICLE VIII. - STOCK
- ---------------------

     (a) Certificates of Stock. Each shareholder of this Corporation whose stock
has been fully paid shall be entitled to a certificate or certificates, showing
the number of shares registered in his name on the books of the Corporation.
Each certificate shall be signed by the President or any Vice President and the
Secretary or any Assistant Secretary. A full record of each certificate, as
issued, shall be entered on the stub thereof.

     (b) Transfers of Stock. Shares shall be transferable on the books of the
Corporation by the holders thereof in person or by a duly authorized attorney
upon surrender of the certificates thereto with duly executed assignment
endorsed thereon or attached thereto. Evidence of authority to endorse any
certificate and to request its transfer shall be produced to the Corporation. In
case of transfer by executors, administrators, guardians or other legal
representatives or fiduciaries, appropriate legal evidence of their authority to
act shall be produced and may be required to be filed with the Corporation. No
transfer shall be made until the stock certificate in question and such evidence
of authority are delivered to the Corporation.

     (c) Transfer Agents and Registrars. The Board of Directors may appoint an
agent or agents to keep the records of the shares of the Corporation, or to
transfer or to register shares, or both, in Ohio or any other state and shall
define the duties and liabilities of any such agent or agents.

     (d) Lost, Destroyed or Mutilated Certificates. If any certificate of stock
in this Corporation becomes worn, defaced or mutilated, the Directors, upon
production and surrender thereof, may order the same cancelled, and may issue a
new certificate in lieu of the same. If any certificate of stock be lost or
destroyed, a new certificate may be issued upon such terms and under such
regulations as may be adopted by the Board of Directors.


                                                                               6


ARTICLE IX. - AMENDMENTS
- ------------------------

     These Regulations, or any of them, may be altered, amended, added to or
repealed as provided by law.

EX-4.1

                                                                     EXHIBIT 4.1





================================================================================





                         L-3 COMMUNICATIONS CORPORATION,
                                    As Issuer




                    5-7/8% SENIOR SUBORDINATED NOTES DUE 2015




                             ----------------------

                                    INDENTURE

                          Dated as of November 12, 2004

                             ----------------------




                             ----------------------

                              The Bank of New York,
                                   As Trustee

                             ----------------------





================================================================================











                                                  TABLE OF CONTENTS


ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................2


   SECTION 1.01       DEFINITIONS.................................................................................2

   SECTION 1.02       OTHER DEFINITIONS..........................................................................19

   SECTION 1.03       INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT..........................................19

   SECTION 1.04       RULES OF CONSTRUCTION......................................................................20


ARTICLE 2. THE NOTES ............................................................................................20


   SECTION 2.01       FORM AND DATING............................................................................20

   SECTION 2.02       EXECUTION AND AUTHENTICATION...............................................................21

   SECTION 2.03       REGISTRAR AND PAYING AGENT.................................................................22

   SECTION 2.04       PAYING AGENT TO HOLD MONEY IN TRUST........................................................22

   SECTION 2.05       HOLDER LISTS...............................................................................22

   SECTION 2.06       TRANSFER AND EXCHANGE......................................................................22

   SECTION 2.07       REPLACEMENT NOTES..........................................................................35

   SECTION 2.08       OUTSTANDING NOTES..........................................................................35

   SECTION 2.09       TREASURY NOTES.............................................................................36

   SECTION 2.10       TEMPORARY NOTES............................................................................36

   SECTION 2.11       CANCELLATION...............................................................................36

   SECTION 2.12       DEFAULTED INTEREST.........................................................................36

   SECTION 2.13       CUSIP NUMBERS..............................................................................37


ARTICLE 3. REDEMPTION AND PREPAYMENT.............................................................................37


   SECTION 3.01       NOTICES TO TRUSTEE.........................................................................37

   SECTION 3.02       SELECTION OF NOTES TO BE REDEEMED..........................................................37

   SECTION 3.03       NOTICE OF REDEMPTION.......................................................................38

   SECTION 3.04       EFFECT OF NOTICE OF REDEMPTION.............................................................38

   SECTION 3.05       DEPOSIT OF REDEMPTION PRICE................................................................39

   SECTION 3.06       NOTES REDEEMED IN PART.....................................................................39

   SECTION 3.07       OPTIONAL REDEMPTION........................................................................39

   SECTION 3.08       MANDATORY REDEMPTION.......................................................................40

   SECTION 3.09       OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS........................................40


ARTICLE 4. COVENANTS ............................................................................................42


   SECTION 4.01       PAYMENT OF NOTES...........................................................................42

   SECTION 4.02       MAINTENANCE OF OFFICE OR AGENCY............................................................42

   SECTION 4.03       REPORTS....................................................................................42

   SECTION 4.04       COMPLIANCE CERTIFICATE.....................................................................43

   SECTION 4.05       TAXES......................................................................................44

   SECTION 4.06       STAY, EXTENSION AND USURY LAWS.............................................................44

   SECTION 4.07       RESTRICTED PAYMENTS........................................................................44

   SECTION 4.08       DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES..................47

   SECTION 4.09       INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.................................48

   SECTION 4.10       ASSET SALES................................................................................50


                                       i






   SECTION 4.11       TRANSACTIONS WITH AFFILIATES...............................................................51

   SECTION 4.12       LIENS......................................................................................52

   SECTION 4.13       FUTURE SUBSIDIARY GUARANTEES...............................................................52

   SECTION 4.14       CORPORATE EXISTENCE........................................................................54

   SECTION 4.15       OFFER TO REPURCHASE UPON CHANGE OF CONTROL.................................................54

   SECTION 4.16       NO SENIOR SUBORDINATED DEBT................................................................55

   SECTION 4.17       PAYMENTS FOR CONSENT.......................................................................55

   SECTION 4.18       CHANGES IN COVENANTS WHEN NOTES RATED INVESTMENT GRADE.....................................55


ARTICLE 5. SUCCESSORS ...........................................................................................56


   SECTION 5.01       MERGER, CONSOLIDATION, OR SALE OF ASSETS...................................................56

   SECTION 5.02       SUCCESSOR CORPORATION SUBSTITUTED..........................................................57


ARTICLE 6. DEFAULTS AND REMEDIES.................................................................................57


   SECTION 6.01       EVENTS OF DEFAULT..........................................................................57

   SECTION 6.02       ACCELERATION...............................................................................59

   SECTION 6.03       OTHER REMEDIES.............................................................................60

   SECTION 6.04       WAIVER OF PAST DEFAULTS....................................................................60

   SECTION 6.05       CONTROL BY MAJORITY........................................................................60

   SECTION 6.06       LIMITATION ON SUITS........................................................................60

   SECTION 6.07       RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT..............................................61

   SECTION 6.08       COLLECTION SUIT BY TRUSTEE.................................................................61

   SECTION 6.09       TRUSTEE MAY FILE PROOFS OF CLAIM...........................................................61

   SECTION 6.10       PRIORITIES.................................................................................62

   SECTION 6.11       UNDERTAKING FOR COSTS......................................................................62


ARTICLE 7. TRUSTEE...............................................................................................63

   SECTION 7.01       DUTIES OF TRUSTEE..........................................................................63

   SECTION 7.02       RIGHTS OF TRUSTEE..........................................................................64

   SECTION 7.03       INDIVIDUAL RIGHTS OF TRUSTEE...............................................................65

   SECTION 7.04       TRUSTEE'S DISCLAIMERS......................................................................65

   SECTION 7.05       NOTICE OF DEFAULTS.........................................................................65

   SECTION 7.06       REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.................................................65

   SECTION 7.07       COMPENSATION AND INDEMNITY.................................................................66

   SECTION 7.08       REPLACEMENT OF TRUSTEE.....................................................................66

   SECTION 7.09       SUCCESSOR TRUSTEE BY MERGER, ETC...........................................................67

   SECTION 7.10       ELIGIBILITY; DISQUALIFICATION..............................................................68

   SECTION 7.11       PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY..........................................68


ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE..............................................................68


   SECTION 8.01       OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE...................................68

   SECTION 8.02       LEGAL DEFEASANCE AND DISCHARGE.............................................................68

   SECTION 8.03       COVENANT DEFEASANCE........................................................................69

   SECTION 8.04       CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.................................................69



                                       ii






   SECTION 8.05       DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER
                         MISCELLANEOUS PROVISIONS................................................................70

   SECTION 8.06       REPAYMENT TO COMPANY.......................................................................71

   SECTION 8.07       REINSTATEMENT..............................................................................71


ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER......................................................................72


   SECTION 9.01       WITHOUT CONSENT OF HOLDERS OF NOTES........................................................72

   SECTION 9.02       WITH CONSENT OF HOLDERS OF NOTES...........................................................72

   SECTION 9.03       COMPLIANCE WITH TRUST INDENTURE ACT........................................................74

   SECTION 9.04       REVOCATION AND EFFECT OF CONSENTS..........................................................74

   SECTION 9.05       NOTATION ON OR EXCHANGE OF NOTES...........................................................74

   SECTION 9.06       TRUSTEE TO SIGN AMENDMENTS, ETC............................................................74


ARTICLE 10. SUBSIDIARY GUARANTEES................................................................................75


   SECTION 10.01      AGREEMENT TO GUARANTEE.....................................................................75

   SECTION 10.02      EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES............................................75

   SECTION 10.03      GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS..........................................77

   SECTION 10.04      RELEASES...................................................................................77

   SECTION 10.05      NO RECOURSE AGAINST OTHERS.................................................................78

   SECTION 10.06      SUBORDINATION OF SUBSIDIARY GUARANTEES.....................................................78


ARTICLE 11. SUBORDINATION........................................................................................79


   SECTION 11.01      AGREEMENT TO SUBORDINATE...................................................................79

   SECTION 11.02      LIQUIDATION; DISSOLUTION; BANKRUPTCY.......................................................79

   SECTION 11.03      DEFAULT ON DESIGNATED SENIOR DEBT..........................................................79

   SECTION 11.04      ACCELERATION OF SECURITIES.................................................................80

   SECTION 11.05      WHEN DISTRIBUTION MUST BE PAID OVER........................................................81

   SECTION 11.06      NOTICE BY COMPANY..........................................................................81

   SECTION 11.07      SUBROGATION................................................................................81

   SECTION 11.08      RELATIVE RIGHTS............................................................................81

   SECTION 11.09      SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY...............................................82

   SECTION 11.10      DISTRIBUTION OR NOTICE TO REPRESENTATIVE...................................................82

   SECTION 11.11      RIGHTS OF TRUSTEE AND PAYING AGENT.........................................................82

   SECTION 11.12      AUTHORIZATION TO EFFECT SUBORDINATION......................................................82

   SECTION 11.13      AMENDMENTS.................................................................................83


ARTICLE 12. MISCELLANEOUS........................................................................................83


   SECTION 12.01      TRUST INDENTURE ACT CONTROLS...............................................................83

   SECTION 12.02      NOTICES....................................................................................83

   SECTION 12.03      COMMUNICATIONS BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.............................84

   SECTION 12.04      CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.........................................84

   SECTION 12.05      STATEMENTS REQUIRED IN CERTIFICATE OR OPINION..............................................84

   SECTION 12.06      RULE BY TRUSTEE AND AGENTS.................................................................85


                                      iii






   SECTION 12.07      NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS...................85

   SECTION 12.08      GOVERNING LAW..............................................................................85

   SECTION 12.09      NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS..............................................85

   SECTION 12.10      SUCCESSORS.................................................................................85

   SECTION 12.11      SEVERABILITY...............................................................................86

   SECTION 12.12      COUNTERPART ORIGINALS......................................................................86

   SECTION 12.13      TABLE OF CONTENTS, HEADINGS, ETC...........................................................86




                                    EXHIBITS
                                    --------
EXHIBIT A                          FORM OF NOTE


EXHIBIT B                          FORM OF CERTIFICATE OF TRANSFER


EXHIBIT C                          FORM OF CERTIFICATE OF EXCHANGE


EXHIBIT D                          FORM OF CERTIFICATE FROM ACQUIRING
                                   INSTITUTIONAL ACCREDITED INVESTORS


EXHIBIT E                          FORM OF SUPPLEMENTAL INDENTURE


EXHIBIT F                          FORM OF NOTATION ON SENIOR SUBORDINATED NOTE
                                   RELATING TO SUBSIDIARY GUARANTEE











                                       iv






                             Cross-Reference Table*





Trust Indenture Act Section                                                               Indenture Section

310   (a)(1)..................................................................                  7.10
      (a)(2)..................................................................                  7.10
      (a)(3)..................................................................                  N.A.
      (a)(4)..................................................................                  N.A.
      (a)(5)..................................................................                  7.10
      (b).....................................................................                  7.10
      (c).....................................................................                  N.A.
311   (a).....................................................................                  7.11
      (b).....................................................................                  7.11
      (c).....................................................................                  N.A.
312   (a).....................................................................                  2.05
      (b).....................................................................                  12.03
      (c).....................................................................                  12.03
313   (a).....................................................................                  7.06
      (b)(1)..................................................................                  11.03
      (b)(2)..................................................................                  7.07
      (c).....................................................................               7.06;12.02
      (d).....................................................................                  7.06
314   (a).....................................................................               4.03;12.02
      (b).....................................................................                  11.02
      (c)(1)..................................................................                  12.04
      (c)(2)..................................................................                  12.04
      (c)(3)..................................................................                  N.A.
      (d).....................................................................           11.03, 11.04, 11.05
      (e).....................................................................                  12.05
      (f).....................................................................                  N.A.
315   (a).....................................................................                  7.01
      (b).....................................................................               7.05, 12.02
      (c).....................................................................                  7.01
      (d).....................................................................                  7.01
      (e).....................................................................                  6.11
316   (a)(last sentence)......................................................                  2.09
      (a)(1)(A)...............................................................                  6.05
      (a)(1)(B)...............................................................                  6.04
      (a)(2)..................................................................                  N.A.
      (b).....................................................................                  6.07
      (c).....................................................................                  2.12
317   (a)(1)..................................................................                  6.08
      (a)(2)..................................................................                  6.09
      (b).....................................................................                  2.04
318   (a).....................................................................                  12.01
      (b).....................................................................                  N.A.
      (c).....................................................................                  12.01



N.A. means not applicable.







- ---------------------
    * This Cross-Reference Table is not part of the Indenture.


                                       v




         This INDENTURE, dated as of November 12, 2004, among L-3 Communications
Corporation, a Delaware corporation, (the "Company"), Apcom, Inc., a Maryland
corporation, Broadcast Sports Inc., a Delaware corporation, D.P. Associates
Inc., a Virginia corporation, Electrodynamics, Inc., an Arizona corporation,
Henschel Inc., a Delaware corporation, Hygienetics Environmental Services, Inc.,
a Delaware corporation, Interstate Electronics Corporation, a California
corporation, KDI Precision Products, Inc., a Delaware corporation. L-3
Communications Aeromet, Inc., an Oregon corporation, L-3 Communications Vertex
Aerospace LLC, a Delaware limited liability company, L-3 Communications AIS GP
Corporation, a Delaware corporation, L-3 Communications Avionics Systems, Inc.,
a Delaware corporation, L-3 Communications Avisys Corporation, a Texas
corporation, L-3 Communications CSI, Inc., a California corporation, L-3
Communications Aydin Corporation, a Delaware corporation, L-3 Communications
ESSCO, Inc., a Delaware corporation, L-3 Communications Flight International
Aviation LLC, a Delaware limited liability company, L-3 Communications Flight
Capital LLC, a Delaware limited liability company, L-3 Communications Government
Services, Inc., a Virginia corporation, L-3 Communications ILEX Systems, Inc., a
Delaware corporation, L-3 Communications Integrated Systems L.P., a Delaware
limited partnership, L-3 Communications Investments Inc., a Delaware
corporation, L-3 Communications Klein Associates, Inc., a Delaware corporation,
L-3 Communications MAS (US) Corporation, a Delaware corporation. L-3
Communications Security and Detection Systems, Inc., a Delaware corporation, L-3
Communications Storm Control Systems, Inc., a California corporation, L-3
Communications Vector International Aviation LLC, a Delaware limited liability
company, L-3 Communications Westwood Corporation, a Nevada corporation, MCTI
Acquisition Corporation, a Maryland corporation, Microdyne Communications
Technologies Incorporated, a Maryland corporation, Microdyne Corporation, a
Maryland corporation, Microdyne Outsourcing Incorporated, a Maryland
corporation, MPRI, Inc., a Delaware corporation, Pac Ord Inc., a Delaware
corporation, Power Paragon, Inc., a Delaware corporation, Ship Analytics, Inc.,
a Connecticut corporation, Ship Analytics International, Inc., a Delaware
corporation, Ship Analytics USA Inc., a Connecticut corporation, SPD Electrical
Systems, Inc., a Delaware corporation, SPD Switchgear Inc., a Delaware
corporation, SYColeman Corporation, a Florida corporation, Troll Technology
Corporation, a California corporation, Wescam Air Ops Inc., a Delaware
corporation, Wescam Air Ops LLC, a Delaware limited liability company, Wescam
Holdings (US) Inc., a Delaware corporation, Wescam Incorporated, a Florida
corporation, Wescam LLC, a Delaware limited liability company, Wescam Sonoma
Inc., a California corporation and Wolf Coach, Inc., a Massachusetts corporation
(collectively, the "Guarantors"), and The Bank of New York, as trustee (the
"Trustee").

         The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 5-7/8% Senior
Subordinated Notes due 2015 (the "Series A Notes") and the 5-7/8% Senior
Subordinated Notes due 2015 (the "Exchange Notes" and, together with the Series
A Notes, the "Notes"):






                                   ARTICLE 1.
                          DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

Section 1.01      Definitions.

                  "144A Global Note" means the global note in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with and registered in the name of the Depositary or its nominee
that will be issued in a denomination equal to the outstanding principal amount
of the Notes sold in reliance on Rule 144A.

                  "2002 Indenture" means the indenture, dated as of June 28,
2002, among The Bank of New York, as trustee, the Company and the guarantors
party thereto, with respect to the 2002 Notes.

                  "2002 Notes" means the $750,000,000 in aggregate principal
amount of the Company's 7-5/8% Senior Subordinated Notes due 2012, issued
pursuant to the 2002 Indenture on June 28, 2002.

                  "Acquired Debt" means, with respect to any specified Person,
(i) Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person, and (ii) Indebtedness secured by
a Lien encumbering any asset acquired by such specified Person.

                  "Additional Interest" means all additional interest then owing
pursuant to Section 5 of the Registration Rights Agreement.

                  "Additional Notes" means any Notes (other than the Initial
Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09
hereof.

                  "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the voting securities of a
Person shall be deemed to be control.

                  "Agent" means any Registrar, Paying Agent or co-registrar.

                  "Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.




                                       2



                  "Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
sale and leaseback) other than sales of inventory in the ordinary course of
business (provided that the sale, lease, conveyance or other disposition of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole shall be governed by the covenant contained in
Section 4.15 and/or the covenant contained in Section 5.01 and not by the
covenant contained in Section 4.10), and (ii) the issue or sale by the Company
or any of its Subsidiaries of Equity Interests of any of the Company's
Restricted Subsidiaries, in the case of either clause (i) or (ii), whether in a
single transaction or a series of related transactions (A) that have a fair
market value in excess of $5.0 million or (B) for net proceeds in excess of $5.0
million. Notwithstanding the foregoing: (i) a transfer of assets by the Company
to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to
another Restricted Subsidiary, (ii) an issuance of Equity Interests by a
Restricted Subsidiary to the Company or to another Restricted Subsidiary, (iii)
a Restricted Payment that is permitted by the covenant contained in Section 4.07
and (iv) a disposition of Cash Equivalents in the ordinary course of business
shall not be deemed to be an Asset Sale.

                  "Attributable Debt" in respect of a sale and leaseback
transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in such transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended).

                  "Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.

                  "Board of Directors" means the Board of Directors of the
Company, or any authorized committee of the Board of Directors.

                  "Broker-Dealer" has the meaning set forth in the Registration
Rights Agreement.

                  "Business Day" means any day other than a Legal Holiday.

                  "Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at such time be required to be capitalized on a balance
sheet in accordance with GAAP.

                  "Capital Stock" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.

                  "Cash Equivalents" means (i) United States dollars, (ii)
securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof having maturities of
not more than one year from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of six months or less from



                                       3




the date of acquisition, bankers' acceptances with maturities not exceeding six
months and overnight bank deposits, in each case with any domestic financial
institution to the Senior Credit Facilities or with any domestic commercial bank
having capital and surplus in excess of $500.0 million and a Thompson Bank Watch
Rating of "B" or better, (iv) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clauses (ii)
and (iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above, (v) commercial paper having the
highest rating obtainable from Moody's or S&P and in each case maturing within
six months after the date of acquisition, (vi) investment funds investing 95% of
their assets in securities of the types described in clauses (i)-(v) above, and
(vii) readily marketable direct obligations issued by any State of the United
States of America or any political subdivision thereof having maturities of not
more than one year from the date of acquisition and having one of the two
highest rating categories obtainable from either Moody's or S&P.

                  "Change of Control" means the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole to any "person" (as such term is used
in Section 13(d)(3) of the Exchange Act) other than the Principals or their
Related Parties (as defined below), (ii) the adoption of a plan relating to the
liquidation or dissolution of the Company, (iii) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as defined above), other than the
Principals and their Related Parties, becomes the "beneficial owner" (as such
term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly
or indirectly, of more than 50% of the Voting Stock of the Company (measured by
voting power rather than number of shares) or (iv) the first day on which a
majority of the members of the Board of Directors of the Company are not
Continuing Directors.

                  "Clearstream" means Clearstream Banking, societe anonyme
(formerly Cedelbank).

                  "Consolidated Cash Flow" means, with respect to any Person for
any period, the Consolidated Net Income of such Person for such period plus (i)
an amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale (to the extent such losses were deducted in
computing such Consolidated Net Income), plus (ii) provision for taxes based on
income or profits of such Person and its Restricted Subsidiaries for such
period, to the extent that such provision for taxes was included in computing
such Consolidated Net Income, plus (iii) consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
and whether or not capitalized (including, without limitation, original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income, plus (iv) depreciation, amortization
(including amortization of goodwill, debt issuance costs and other intangibles
but excluding amortization of other prepaid cash expenses that were paid in a
prior period) and other non-cash




                                       4




expenses (excluding any such non-cash expense to the extent that it represents
an accrual of or reserve for cash expenses in any future period or amortization
of a prepaid cash expense that was paid in a prior period) of such Person and
its Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income, minus (v) non-cash items (excluding any
items that were accrued in the ordinary course of business) increasing such
Consolidated Net Income for such period, in each case, on a consolidated basis
and determined in accordance with GAAP.

                  "Consolidated Net Income" means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that (i) the Net Income of any Person that is not
a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof, (ii) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar distributions
by that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded, (iv) the cumulative effect of a change in accounting principles
shall be excluded, (v) the Net Income of any Unrestricted Subsidiary shall be
excluded, whether or not distributed to the Company or one of its Restricted
Subsidiaries, and (vi) the Net Income of any Restricted Subsidiary shall be
calculated after deducting preferred stock dividends payable by such Restricted
Subsidiary to Persons other than the Company and its other Restricted
Subsidiaries.

                  "Consolidated Tangible Assets" means, with respect to the
Company, the total consolidated assets of the Company and its Restricted
Subsidiaries, less the total intangible assets of the Company and its Restricted
Subsidiaries, as shown on the most recent internal consolidated balance sheet of
the Company and such Restricted Subsidiaries calculated on a consolidated basis
in accordance with GAAP.

                  "Continuing Directors" means, as of any date of determination,
any member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.

                  "Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 12.02 hereof or such other address
as to which the Trustee may give notice to the Company.

                  "Credit Facilities" means, with respect to the Company, one or
more debt facilities (including, without limitation, the Senior Credit
Facilities) or commercial paper facilities with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to


                                       5




special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time
(and whether or not with the original lender or lenders and whether provided
under the original Credit Facilities or other credit agreement, indenture or
otherwise).

                  "December 1998 Indenture" means the indenture, dated as of
December 11, 1998, among The Bank of New York, as trustee, the Company and the
guarantors party thereto, with respect to the December 1998 Notes.

                  "December 1998 Notes" means the $200,000,000 in aggregate
principal amount of the Company's 8% Senior Subordinated Notes due 2008, issued
pursuant to the December 1998 Indenture on December 11, 1998.

                  "December 2003 Indenture" means the indenture, dated as of
December 22, 2003, among The Bank of New York, as trustee, the Company and the
guarantors party thereto, with respect to the December 2003 Notes.

                  "December 2003 Notes" means the $400,000,000 in aggregate
principal amount of the Company's 6-1/8% Senior Subordinated Notes due 2014,
issued pursuant to the December 2003 Indenture on December 22, 2003.

                  "Default" means any event that is, or with the passage of time
or the giving of notice or both would be, an Event of Default. "Definitive Note"
means a certificated Note registered in the name of the Holder thereof and
issued in accordance with Article 2 hereof, substantially in the form of Exhibit
A hereto, except that such Note shall not bear the Global Note Legend and shall
not have the "Schedule of Exchanges of Interests in the Global Note" attached
thereto.

                  "Depositary" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depositary with respect to the Notes, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.

                  "Designated Senior Debt" means (i) any Indebtedness
outstanding under the Senior Credit Facilities and (ii) any other Senior Debt
permitted under the Indenture the principal amount of which is $25.0 million or
more and that has been designated by the Company as "Designated Senior Debt".

                  "Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the Holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature; provided, however, that any Capital Stock that
would constitute Disqualified Stock solely because the holders thereof have the
right to require the Company to repurchase




                                       6




such Capital Stock upon the occurrence of a Change of Control or an Asset Sale
shall not constitute Disqualified Stock if the terms of such Capital Stock
provide that the Company may not repurchase or redeem any such Capital Stock
pursuant to such provisions unless such repurchase or redemption complies with
Section 4.07 hereof; and provided further, that if such Capital Stock is issued
to any plan for the benefit of employees of the Company or its Subsidiaries or
by any such plan to such employees, such Capital Stock shall not constitute
Disqualified Stock solely because it may be required to be repurchased by the
Company in order to satisfy applicable statutory or regulatory obligations.

                  "Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).

                  "Equity Offering" means any public or private sale of equity
securities (excluding Disqualified Stock) of the Company or Holdings, other than
any private sales to an Affiliate of the Company or Holdings.

                  "Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

                  "Exchange Notes" means the Notes issued in the Exchange Offer
pursuant to Section 2.06(f).

                  "Exchange Offer" has the meaning set forth in the Registration
Rights Agreement.

                  "Exchange Offer Registration Statement" has the meaning set
forth in the Registration Rights Agreement.

                  "Existing Indebtedness" means any Indebtedness of the Company
and its Restricted Subsidiaries (other than Indebtedness under the Senior Credit
Facilities and the Notes) in existence on the date of the Indenture, until such
amounts are repaid.

                  "Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) the consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid or
accrued (including, without limitation, original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations, but excluding amortization of debt issuance costs) and (ii) the
consolidated interest of such Person and its Restricted Subsidiaries that was
capitalized during such period, and (iii) any interest expense on Indebtedness
of another Person that is guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of its
Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon)
and (iv) the product of (A) all dividend payments, whether or not in cash, on
any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividend




                                       7




payments on Equity Interests payable solely in Equity Interests of the Company,
times (B) a fraction, the numerator of which is one and the denominator of which
is one minus the then current combined federal, state and local statutory tax
rate of such Person, expressed as a decimal, in each case, on a consolidated
basis and in accordance with GAAP.

                  "Fixed Charge Coverage Ratio" means with respect to any Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person and its Restricted Subsidiaries for
such period. In the event that the Company or any of its Restricted Subsidiaries
incurs, assumes, Guarantees or redeems any Indebtedness (other than revolving
credit borrowings) or issues preferred stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated but on
or prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, Guarantee or redemption of Indebtedness, or such issuance or
redemption of preferred stock, as if the same had occurred at the beginning of
the applicable four-quarter reference period. In addition, for purposes of
making the computation referred to above, (i) acquisitions that have been made
by the Company or any of its Restricted Subsidiaries, including through mergers
or consolidations and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date shall be deemed to have occurred on the first day
of the four-quarter reference period and Consolidated Cash Flow for such
reference period shall be calculated without giving effect to clause (iii) of
the proviso set forth in the definition of Consolidated Net Income, (ii) the
Consolidated Cash Flow attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, and (iii) the Fixed Charges attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Fixed Charges will
not be obligations of the referent Person or any of its Restricted Subsidiaries
following the Calculation Date.

                  "Foreign Subsidiary" means a Restricted Subsidiary of the
Company that was not organized or existing under the laws of the United States,
any state thereof, the District of Columbia or any territory thereof or that has
not guaranteed or otherwise provided direct credit support for any Indebtedness
of the Company.

                  "GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which were in effect on April 30, 1997.

                  "Global Notes" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes, substantially in
the form of Exhibit A hereto issued in accordance with Article 2 hereof.

                  "Global Note Legend" means the legend set forth in Section
2.06(g)(ii) to be placed on all Global Notes issued under this Indenture.



                                       8



                  "Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States is
pledged.

                  "Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.

                  "Guarantors" means each Person listed in the preamble to the
Indenture and each Subsidiary of the Company that executes a Subsidiary
Guarantee in accordance with the provisions of the Indenture, and their
respective successors and assigns.

                  "Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) currency exchange or interest rate swap
agreements, interest rate cap agreements and currency exchange or interest rate
collar agreements and (ii) other agreements or arrangements designed to protect
such Person against fluctuations in currency exchange rates or interest rates.

                  "Holder" means a Person in whose name a Note is registered.

                  "Holdings" means L-3 Communications Holdings, Inc., a Delaware
corporation.

                  "IAI Global Note" means the global Note in the form of Exhibit
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with and registered in the name of the Depositary or its nominee that
will be issued in a denomination equal to the outstanding principal amount of
the Notes sold to Institutional Accredited Investors.

                  "Indebtedness" means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property or representing any Hedging
Obligations, except any such balance that constitutes an accrued expense or
trade payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and Hedging Obligations) would appear as a liability upon
a balance sheet of such Person prepared in accordance with GAAP, as well as all
indebtedness of others secured by a Lien on any asset of such Person (whether or
not such indebtedness is assumed by such Person) and, to the extent not
otherwise included, the Guarantee by such Person of any indebtedness of any
other Person. The amount of any Indebtedness outstanding as of any date shall be
(i) the accreted value thereof, in the case of any Indebtedness that does not
require current payments of interest, and (ii) the principal amount thereof,
together with any interest thereon that is more than 30 days past due, in the
case of any other Indebtedness.

                  "Indenture" means this Indenture, as amended or supplemented
from time to time.

                  "Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.



                                       9




                  "Initial Notes" means $650.0 million in aggregate principal
amount of Notes issued under this Indenture on the date hereof.

                  "Institutional Accredited Investor" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act.

                  "Investments" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the forms
of direct or indirect loans (including guarantees of Indebtedness or other
obligations), advances or capital contributions (excluding commission, travel,
moving and similar loans or advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP. If the Company or any Restricted Subsidiary of the Company
sells or otherwise disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary of the Company such that, after giving effect to any such
sale or disposition, such Person is no longer a Subsidiary of the Company, the
Company shall be deemed to have made an Investment on the date of any such sale
or disposition equal to the fair market value of the Equity Interests of such
Subsidiary not sold or disposed of in an amount determined as provided in the
last paragraph of the covenant contained in Section 4.07.

                  "Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in The City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.

                  "Lehman Investor" means Lehman Brothers Holdings Inc. and any
of its Affiliates.

                  "Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Series A Notes for use by
such Holders in connection with the Exchange Offer.

                  "Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).

                  "Marketable Securities" means, with respect to any Asset Sale,
any readily marketable equity securities that are (i) traded on The New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market; and
(ii) issued by a corporation having a total equity market capitalization of not
less than $250.0 million; provided that the excess of (A) the aggregate amount
of securities of any one such corporation held by the Company and any Restricted
Subsidiary over (B) ten times the average daily trading volume of such
securities



                                       10




during the 20 immediately preceding trading days shall be deemed not to be
Marketable Securities; as determined on the date of the contract relating to
such Asset Sale.

                  "May 2003 Indenture" means the indenture, dated as of May 21,
2003, among The Bank of New York, as trustee, the Company and the guarantors
party thereto, with respect to the May 2003 Notes.

                  "May 2003 Notes" means the $400,000,000 in aggregate principal
amount of the Company's 6-1/8% Senior Subordinated Notes due 2013, issued
pursuant to the May 2003 Indenture.

                  "Moody's" means Moody's Investors Services, Inc.

                  "Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i) any
gain or loss, together with any related provision for taxes thereon, realized in
connection with (A) any Asset Sale (including, without limitation, dispositions
pursuant to sale and leaseback transactions) or (B) the disposition of any
securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries and (ii) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss and (iii) the cumulative
effect of a change in accounting principles.

                  "Net Proceeds" means the aggregate cash proceeds received by
the Company or any of its Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that were the subject of such Asset
Sale and any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP.

                  "Non-Recourse Debt" means Indebtedness (i) as to which neither
the Company nor any of its Restricted Subsidiaries (A) provides credit support
of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (B) is directly or indirectly liable (as a guarantor
or otherwise), or (C) constitutes the lender; and (ii) no default with respect
to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
Indebtedness incurred under Credit Facilities) of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its stated maturity;
and (iii) as to which the lenders have been notified in writing that they will
not have any recourse to the stock or assets of the Company or any of its
Restricted Subsidiaries.

                  "Non-U.S. Person" means a person who is not a U.S. Person.



                                       11



                  "Note Custodian" means the Trustee, as custodian with respect
to the Notes in global form, or any successor entity thereto.

                  "Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes shall be treated as a
single class for all purposes under this Indenture, and unless the context
otherwise requires, all references to the Notes shall include the Initial Notes
and any Additional Notes.

                  "Obligations" means any principal, premium and Additional
Interest (if any), interest (including interest accruing on or after the filing
of any petition in bankruptcy or for reorganization, whether or not a claim for
post-filing interest is allowed in such proceeding), penalties, fees, charges,
expenses, indemnifications, reimbursement obligations, damages, guarantees and
other liabilities or amounts payable under the documentation governing any
Indebtedness or in respect thereto.

                  "Offering" means the offering of the Notes by the Company.

                  "Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary, any Assistant Secretary or any Vice-President of
such Person.

                  "Officers' Certificate" means a certificate signed on behalf
of the Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.

                  "Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.

                  "Participant" means, with respect to DTC, Euroclear or
Clearstream, a Person who has an account with DTC, Euroclear or Clearstream,
respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).

                  "Permitted Investment" means (i) any Investment in the Company
or in a Restricted Subsidiary of the Company that is a Guarantor; (ii) any
Investment in cash or Cash Equivalents; (iii) any Investment by the Company or
any Restricted Subsidiary of the Company in a Person, if as a result of such
Investment (A) such Person becomes a Restricted Subsidiary of the Company and a
Guarantor or (B) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary of the Company that is a
Guarantor; (iv) any Restricted Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 or any disposition of assets not constituting an
Asset sale; (v) any acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the Company; (vi) advances
to employees not to exceed $2.5 million at any one time outstanding; (vii) any
Investment acquired in connection with or as a result of a workout or bankruptcy
of a customer or supplier; (viii) Hedging Obligations permitted



                                       12




to be incurred under Section 4.09; (ix) any Investment in a Similar Business
that is not a Restricted Subsidiary; provided that the aggregate fair market
value of all Investments outstanding pursuant to this clause (ix) (valued on the
date each such Investment was made and without giving effect to subsequent
changes in value) may not at any one time exceed 10% of the Consolidated
Tangible Assets of the Company; and (x) other Investments in any Person having
an aggregate fair market value (measured on the date each such Investment was
made and without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (x) that are at
the time outstanding, not to exceed $30.0 million.

                  "Permitted Joint Venture" means any joint venture, partnership
or other Person designated by the Board of Directors (until designation by the
Board of Directors to the contrary); provided that (i) at least 25% of the
Capital Stock thereof with voting power under ordinary circumstances to elect
directors (or Persons having similar or corresponding powers and
responsibilities) is at the time owned (beneficially or directly) by the Company
and/or by one or more Restricted Subsidiaries of the Company and (ii) such joint
venture, partnership or other Person is engaged in a Similar Business. Any such
designation or designation to the contrary shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.

                  "Permitted Junior Securities" means Equity Interests in the
Company or debt securities that are subordinated to all Senior Debt (and any
debt securities issued in exchange for Senior Debt) to substantially the same
extent as, or to a greater extent than, the Notes and the Subsidiary Guarantees
are subordinated to Senior Debt pursuant to Article 11 of this Indenture.

                  "Permitted Liens" means (i) Liens securing Senior Debt of the
Company or any Guarantor that was permitted by the terms of this Indenture to be
incurred; (ii) Liens in favor of the Company or any Guarantor; (iii) Liens on
property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Restricted Subsidiary of the Company;
provided that such Liens were in existence prior to the contemplation of such
merger or consolidation and do not extend to any assets other than those of the
Person merged into or consolidated with the Company; (iv) Liens on property
existing at the time of acquisition thereof by the Company or any Subsidiary of
the Company, provided that such Liens were in existence prior to the
contemplation of such acquisition and do not extend to any other assets of the
Company or any of its Restricted Subsidiaries; (v) Liens to secure the
performance of statutory obligations, surety or appeal bonds, performance bonds
or other obligations of a like nature incurred in the ordinary course of
business; (vi) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (iv) of the second paragraph of Section 4.09
covering only the assets acquired with such Indebtedness; (vii) Liens existing
on the date of this Indenture; (viii) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly instituted and
diligently concluded, provided that any reserve or other appropriate provision
as shall be required in conformity with GAAP shall have been made therefor; (ix)
Liens incurred in the ordinary course of business of the Company or any
Restricted Subsidiary of the Company with respect to obligations that do not
exceed $50.0 million at any one time outstanding; (x) Liens on assets of
Guarantors to secure Senior Debt of such Guarantors that was permitted by



                                       13




this Indenture to be incurred; (xi) Liens securing Permitted Refinancing
Indebtedness, provided that any such Lien does not extend to or cover any
property, shares or debt other than the property, shares or debt securing the
Indebtedness so refunded, refinanced or extended; (xii) Liens incurred or
deposits made to secure the performance of tenders, bids, leases, statutory
obligations, surety and appeal bonds, government contracts, performance and
return of money bonds and other obligations of a like nature, in each case
incurred in the ordinary course of business (exclusive of obligations for the
payment of borrowed money); (xiii) Liens upon specific items of inventory or
other goods and proceeds of any Person securing such Person's obligations in
respect of bankers' acceptances issued or created for the account of such Person
to facilitate the purchase, shipment or storage of such inventory or other goods
in the ordinary course of business; (xiv) Liens encumbering customary initial
deposits and margin deposits, and other Liens incurred in the ordinary course of
business that are within the general parameters customary in the industry, in
each case securing Indebtedness under Hedging Obligations; and (xv) Liens
encumbering deposits made in the ordinary course of business to secure
nondelinquent obligations arising from statutory or regulatory, contractual or
warranty requirements of the Company or its Subsidiaries for which a reserve or
other appropriate provision, if any, as shall be required by GAAP shall have
been made.

                  "Permitted Refinancing Indebtedness" means any Indebtedness of
the Company or any of its Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount of
(or accreted value, if applicable), plus accrued interest on, the Indebtedness
so extended, refinanced, renewed, replaced, defeased or refunded (plus the
amount of reasonable expenses and prepayment premiums incurred in connection
therewith); (ii) such Permitted Refinancing Indebtedness has a final maturity
date no earlier than the final maturity date of, and has a Weighted Average Life
to Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the Notes,
such Permitted Refinancing Indebtedness is subordinated in right of payment to
the Notes on terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness
is incurred either by the Company or by the Restricted Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.

                  "Permitted Securities" means, with respect to any Asset Sale,
Voting Stock of a Person primarily engaged in one or more Similar Businesses;
provided that after giving effect to the Asset Sale such Person shall become a
Restricted Subsidiary and, unless the Asset Sale relates to a Foreign
Subsidiary, a Guarantor (to the extent required by the terms of this Indenture).

                  "Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).



                                       14



                  "Principals" means any Lehman Investor, Frank C. Lanza and
Robert V. LaPenta.

                  "Private Placement Legend" means the legend set forth in
Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except
as otherwise permitted by the provisions of this Indenture.

                  "Purchase Agreement" means the Purchase Agreement, dated as of
November 1, 2004, among the Company, the Guarantors, Lehman Brothers Inc., Banc
of America Securities LLC, Morgan Stanley & Co. Incorporated, SG Americas
Securities, LLC and Wachovia Capital Markets, LLC, as representatives of the
several initial purchasers named therein.

                  "QIB" means a "qualified institutional buyer" as defined in
Rule 144A.

                  "Registration Rights Agreement" means the A/B Exchange
Registration Rights Agreement, dated as of the date hereof, by and among the
Company and the other parties named on the signature pages thereof, as such
agreement may be amended, modified or supplemented from time to time and, with
respect to any Additional Notes, one or more registration rights agreements
between the Company and the other parties thereto, as such agreement(s) may be
amended, modified or supplemented from time to time, relating to rights given by
the Company to the purchasers of Additional Notes to register such Additional
Notes under the Securities Act.

                  "Regulation S" means Regulation S promulgated under the
Securities Act.

                  "Regulation S Global Note" means a global Note bearing the
Private Placement Legend and deposited with and registered in the name of the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Regulation S.

                  "Related Party" with respect to any Principal means (i) any
controlling stockholder, 50% (or more) owned Subsidiary, or spouse or immediate
family member (in the case of an individual) of such Principal or (ii) any
trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding a more than 50%
controlling interest of which consist of such Principal and/or such other
Persons referred to in the immediately preceding clause (i).

                  "Representative" means the indenture trustee or other trustee,
agent or representative for any Senior Debt.

                  "Responsible Officer" when used with respect to the Trustee,
means any officer within the Corporate Trust Administration of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.

                  "Restricted Definitive Note" means a Definitive Note bearing
the Private Placement Legend.



                                       15



                  "Restricted Global Notes" means the 144A Global Note, the IAI
Global Note and the Regulation S Global Note, each of which shall bear the
Private Placement Legend.

                  "Restricted Investment" means an Investment other than a
Permitted Investment.

                  "Restricted Period" means the 40-day restricted period as
defined in Regulation S.

                  "Restricted Subsidiary" means, with respect to any Person,
each Subsidiary of such Person that is not an Unrestricted Subsidiary.

                  "Rule 144" means Rule 144 under the Securities Act.

                  "Rule 144A" means Rule 144A under the Securities Act.

                  "Rule 903" means Rule 903 under the Securities Act.

                  "Rule 904" means Rule 904 under the Securities Act.

                  "SEC" means the Securities and Exchange Commission.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Senior Credit Facilities" means the Second Amended and
Restated 364 Day Credit Agreement, dated as of May 16, 2001, as in effect on the
date of this Indenture, among the Company, the lenders party thereto, Bank of
America, N.A., as administrative agent, and Lehman Commercial Paper Inc., as
syndication agent and documentation agent, and the Third Amended and Restated
Credit Agreement, dated as of May 16, 2001, as in effect on the date of this
Indenture among the Company, the lenders party thereto, Bank of America, N.A.,
as administrative agent, and Lehman Commercial Paper Inc., as syndication agent
and documentation agent, and any related notes, collateral documents, letters of
credit and guarantees, including any appendices, exhibits or schedules to any of
the foregoing (as the same may be in effect from time to time), in each case, as
such agreements may be amended, modified, supplemented or restated from time to
time, or refunded, refinanced, restructured, replaced, renewed, repaid or
extended from time to time (whether with the original agents and lenders or
other agents and lenders or otherwise, and whether provided under the original
credit agreement or other credit agreements, indentures or otherwise).

                  "Senior Debt" means (i) all Indebtedness of the Company or any
of its Restricted Subsidiaries outstanding under Credit Facilities and all
Hedging Obligations with respect thereto, (ii) any other Indebtedness permitted
to be incurred by the Company or any of its Restricted Subsidiaries under the
terms of the Indenture, unless the instrument under which such Indebtedness is
incurred expressly provides that it is on a parity with or subordinated in right
of payment to the Notes and (iii) all Obligations with respect to the foregoing.
Notwithstanding anything to the contrary in the foregoing, Senior Debt will not
include (i) any liability for federal, state, local or other taxes owed or owing
by the Company, (ii) any Indebtedness of the Company to any of its Subsidiaries
or other Affiliates, (iii) any trade payables or (iv) any Indebtedness that is
incurred in violation of the Indenture. The December 1998 Notes, 2002 Notes, the
May 2003



                                       16




Notes and the December 2003 Notes shall be deemed to rank pari passu with the
Notes and shall not constitute Senior Debt.

                  "Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.

                  "Significant Subsidiary" means any Subsidiary which is a
"significant subsidiary" within the meaning of Rule 405 under the Securities
Act.
                  "Similar Business" means a business, a majority of whose
revenues in the most recently ended calendar year were derived from (i) the sale
of defense products, electronics, communications systems, aerospace products,
avionics products and/or communications products, (ii) any services related
thereto, (iii) any business or activity that is reasonably similar thereto or a
reasonable extension, development or expansion thereof or ancillary thereto, and
(iv) any combination of any of the foregoing.

                  "Stated Maturity" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.

                  "Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (A) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (B) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof).

                  "S&P" means Standard and Poor's Corporation.

                  "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under TIA.

                  "Transaction Documents" means the Indenture, the Notes, the
Purchase Agreement and the Registration Rights Agreement.

                  "Transfer Restricted Securities" means securities that bear or
are required to bear the Private Placement Legend set forth in Section
2.06(g)(i) hereof.

                  "Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.




                                       17



                  "Unrestricted Global Note" means one or more Global Notes, in
the form of Exhibit A attached hereto, that do not and are not required to bear
the Private Placement Legend and are deposited with and registered in the name
of the Depositary or its nominee.

                  "Unrestricted Definitive Note" means one or more Definitive
Notes that do not and are not required to bear the Private Placement Legend.

                  "Unrestricted Subsidiary" means any Subsidiary that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
resolution of the Board of Directors, but only to the extent that such
Subsidiary: (i) has no Indebtedness other than Non-Recourse Debt; (ii) is not
party to any agreement, contract, arrangement or understanding with the Company
or any Restricted Subsidiary of the Company unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to the
Company or such Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Company; (iii) is a Person with
respect to which neither the Company nor any of its Restricted Subsidiaries has
any direct or indirect obligation (A) to subscribe for additional Equity
Interests or (B) to maintain or preserve such Person's financial condition or to
cause such Person to achieve any specified levels of operating results; (iv) has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries; and (v)
has at least one director on its board of directors that is not a director or
executive officer of the Company or any of its Restricted Subsidiaries. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
filing with the Trustee a certified copy of a resolution of the Board of
Directors giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions and was
permitted by Section 4.07. If, at any time, any Unrestricted Subsidiary would
fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture
and any Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary of the Company as of such date (and, if such Indebtedness
is not permitted to be incurred as of such date under Section 4.09, the Company
shall be in default of such covenant). The Board of Directors of the Company may
at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted under Section 4.09, calculated
on a pro forma basis as if such designation had occurred at the beginning of the
four-quarter reference period, and (ii) no Default or Event of Default would be
in existence following such designation.

                  "U.S. Person" means a U.S. person as defined in Rule 902(k)
under the Securities Act.

                  "Voting Stock" of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.

                  "Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (A) the amount of each then remaining
installment, sinking fund, serial maturity or



                                       18




other required payments of principal, including payment at final maturity, in
respect thereof, by (B) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment,
by (ii) the then outstanding principal amount of such Indebtedness.

                  "Wholly Owned" means, when used with respect to any Subsidiary
or Restricted Subsidiary of a Person, a Subsidiary (or Restricted Subsidiary, as
appropriate) of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Subsidiaries (or
Wholly Owned Restricted Subsidiaries, as appropriate) of such Person and one or
more Wholly Owned Subsidiaries (or Wholly Owned Restricted Subsidiaries, as
appropriate) of such Person.

Section 1.02      Other Definitions.

                                                                 Defined in
                   Term                                            Section

        "Affiliate Transaction".....................................4.11
        "Asset Sale Offer"..........................................3.09
        "Change of Control Offer"...................................4.15
        "Change of Control Payment".................................4.15
        "Change of Control Payment Date"............................4.15
        "Covenant Defeasance".......................................8.03
        "DTC".......................................................2.03
        "Event of Default"..........................................6.01
        "Excess Proceeds"...........................................4.10
        "Global Note Legend"........................................2.06
        "incur".....................................................4.09
        "Legal Defeasance"..........................................8.02
        "Offer Amount"..............................................3.09
        "Offer Period"..............................................3.09
        "Paying Agent"..............................................2.03
        "Payment Blockage Notice" .................................11.03
        "Permitted Debt" ...........................................4.09
        "Purchase Date".............................................3.09
        "Registrar".................................................2.03
        "Restricted Payments".......................................4.07
        "Series A Notes"........................................preamble


Section 1.03      Incorporation by Reference of Trust Indenture Act.

                  Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.

                  The following TIA terms used in this Indenture have the
following meanings:





                                       19



                  "indenture securities" means the Notes;

                  "indenture security Holder" means a Holder of a Note;

                  "indenture to be qualified" means this Indenture;

                  "indenture trustee" or "institutional trustee" means the
Trustee;

                  "obligor" on the Notes means the Company and any successor
obligor upon the Notes.

                  All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.

Section 1.04      Rules of Construction.

                  Unless the context otherwise requires:

                  (1)  a term has the meaning assigned to it;

                  (2) an accounting term not otherwise defined has the meaning
             assigned to it in accordance with GAAP;

                  (3)  "or" is not exclusive;

                  (4) words in the singular include the plural, and in the
             plural include the singular;

                  (5) provisions apply to successive events and transactions;
             and

                  (6) references to sections of or rules under the Securities
             Act shall be deemed to include substitute, replacement of successor
             sections or rules adopted by the SEC from time to time.


                                    ARTICLE 2
                                    THE NOTES


Section 2.01      Form and Dating.

                  The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may be issued
in the form of Definitive Notes or Global Notes, as specified by the Company.
The Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its authentication.
The Notes shall be in denominations of $1,000 and integral multiples thereof.

                  The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.




                                       20




However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.

                  Notes issued in global form shall be substantially in the form
of Exhibit A attached hereto (including the Global Note Legend and the "Schedule
of Exchanges in the Global Note" attached thereto). Notes issued in definitive
form shall be substantially in the form of Exhibit A attached hereto (but
without the Global Note Legend and without the "Schedule of Exchanges of
Interests in the Global Note" attached thereto). Each Global Note shall
represent such of the outstanding Notes as shall be specified therein and each
shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee or the Note Custodian, at the direction of
the Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.

                  The provisions of the "Operating Procedures of the Euroclear
System" and "Terms and Conditions Governing Use of Euroclear" and the "General
Terms and Conditions of Clearstream Banking" and "Customer Handbook" of
Clearstream shall be applicable to interests in the Regulation S Global Notes
that are held by the Agent Members through Euroclear or Clearstream.

Section 2.02      Execution and Authentication.

                  Two Officers shall sign the Notes for the Company by manual or
facsimile signature.

                  If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.

                  A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.

                  The Trustee shall, upon a written order of the Company signed
by two Officers, authenticate the Initial Notes for original issue up to $650.0
million in aggregate principal amount and, upon receipt of an authentication
order in accordance with this Section 2.02, at any time and from time to time
thereafter, the Trustee shall authenticate Additional Notes and Exchange Notes
for original issue in an aggregate principal amount specified in such
authentication order.

                  The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.




                                       21



Section 2.03      Registrar and Paying Agent.

                  The Company shall maintain an office or agency where Notes may
be presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.

                  The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.

                  The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Note Custodian with respect to the
Global Notes.

Section 2.04      Paying Agent To Hold Money In Trust.

                  The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium or Additional Interest, if any, or interest on the
Notes, and will notify the Trustee of any default by the Company in making any
such payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.

Section 2.05      Holder Lists.

                  The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA ss. 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
five Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA ss. 312(a).

Section 2.06      Transfer and Exchange.

                  (a)   Transfer and Exchange of Global Notes. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of


                                       22



the Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
will be exchanged by the Company for Definitive Notes if (i) the Company
delivers to the Trustee notice from the Depositary that it is unwilling or
unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 120 days after the date of
such notice from the Depositary or (ii) the Company in its sole discretion
determines that the Global Notes (in whole but not in part) should be exchanged
for Definitive Notes and delivers a written notice to such effect to the
Trustee. Upon the occurrence of either of the preceding events in (i) or (ii)
above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole
or in part, as provided in Sections 2.07 and 2.11 hereof. Every Note
authenticated and made available for delivery in exchange for, or in lieu of, a
Global Note or any portion thereof, pursuant to Section 2.07 or 2.11 hereof,
shall be authenticated and made available for delivery in the form of, and shall
be, a Global Note. A Global Note may not be exchanged for another Note other
than as provided in this Section 2.06(a), however beneficial interests in a
Global Note may be transferred and exchanged as provided in Section 2.06(b), (c)
or (f) hereof.

                  (b)    Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the procedures of the Depositary therefor.
Beneficial interests in the Restricted Global Notes shall be subject to
restrictions on transfer comparable to those set forth herein to the extent
required by the Securities Act. The Trustee shall have no obligation to
ascertain the Depositary's compliance with any such restrictions on transfer.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs as applicable:

                  (i)    Transfer of Beneficial Interests in the Same Global
             Note. Beneficial interests in any Restricted Global Note may be
             transferred to Persons who take delivery thereof in the form of a
             beneficial interest in the same Restricted Global Note in
             accordance with the transfer restrictions set forth in the
             Private Placement Legend; provided, however, that prior to the
             expiration of the Restricted Period transfers of beneficial
             interests in the Regulation S Global Note may not be made to a
             U.S. Person or for the account or benefit of a U.S. Person (other
             than an Initial Purchaser). Beneficial interests in any
             Unrestricted Global Note may be transferred only to Persons who
             take delivery thereof in the form of a beneficial interest in an
             Unrestricted Global Note. No written orders or instructions shall
             be required to be delivered to the Registrar to effect the
             transfers described in this Section 2.06(b)(i).

                  (ii)   All Other Transfers and Exchanges of Beneficial
             Interests in Global Notes. In connection with all transfers and
             exchanges of beneficial interests (other than transfers of
             beneficial interests in a Global Note to Persons who take
             delivery thereof in the form of a beneficial interest in the same
             Global Note), the transferor of such beneficial interest must
             deliver to the Registrar either (A)(1) a written order from a
             Participant or an Indirect Participant given to the Depositary in
             accordance with the Applicable Procedures directing the
             Depositary to credit or cause to be credited a



                                       23




             beneficial interest in the specified Global Note in an amount
             equal to the beneficial interest to be transferred or exchanged
             and (2) instructions given in accordance with the Applicable
             Procedures containing information regarding the Participant
             account to be credited with such increase or (B)(1) a written
             order from a Participant or an Indirect Participant given to the
             Depositary in accordance with the Applicable Procedures directing
             the Depositary to cause to be issued a Definitive Note in an
             amount equal to the beneficial interest to be transferred or
             exchanged and (2) instructions given by the Depositary to the
             Registrar containing information regarding the Person in whose
             name such Definitive Note shall be registered to effect the
             transfer or exchange referred to in (1) above. Upon an Exchange
             Offer by the Company in accordance with Section 2.06(f) hereof,
             the requirements of this Section 2.06(b)(ii) shall be deemed to
             have been satisfied upon receipt by the Registrar of the
             instructions contained in the Letter of Transmittal delivered by
             the Holder of such beneficial interests in the Restricted Global
             Notes. Upon satisfaction of all of the requirements for transfer
             or exchange of beneficial interests in Global Notes contained in
             this Indenture, the Notes and otherwise applicable under the
             Securities Act, the Trustee shall adjust the principal amount of
             the relevant Global Note(s) pursuant to Section 2.06(h) hereof.

                  (iii)  Transfer of Beneficial Interests to Another Restricted
             Global Note. Beneficial interests in any Restricted Global Note may
             be transferred to Persons who take delivery thereof in the form of
             a beneficial interest in another Restricted Global Note if the
             Registrar receives the following:

                         (A)   if the transferee will take delivery in the form
                  of a beneficial interest in the 144A Global Note, then the
                  transferor must deliver a certificate in the form of Exhibit
                  B hereto, including the certifications in item (1) thereof;

                         (B)   if the transferee will take delivery in the form
                  of a beneficial interest in the Regulation S Global Note,
                  then the transferor must deliver a certificate in the form
                  of Exhibit B hereto, including the certifications in item
                  (2) thereof; and

                         (C)   if the transferee will take delivery in the form
                  of a beneficial interest in the IAI Global Note, then the
                  transferor must deliver (x) a certificate in the form of
                  Exhibit B hereto, including the certifications in item (3)
                  thereof, (y) to the extent required by item 3(d) of Exhibit
                  B hereto, an Opinion of Counsel in form reasonably
                  acceptable to the Company to the effect that such transfer
                  is in compliance with the Securities Act and such beneficial
                  interest is being transferred in compliance with any
                  applicable blue sky securities laws of any State of the
                  United States and (z) if the transfer is being made to an
                  Institutional Accredited Investor and effected pursuant to
                  an exemption from the registration requirements of the
                  Securities Act other than Rule 144A under the Securities
                  Act, Rule 144 under the Securities Act or Rule 904 under the
                  Securities Act, a certificate from the transferee in the
                  form of Exhibit D hereto.

                  (iv)   Transfer and Exchange of Beneficial Interests in a
             Restricted Global Note for Beneficial Interests in the
             Unrestricted Global Note. Beneficial interests in any


                                       24



             Restricted Global Note may be exchanged by any holder thereof for
             a beneficial interest in the Unrestricted Global Note or
             transferred to Persons who take delivery thereof in the form of a
             beneficial interest in the Unrestricted Global Note if:

                         (A)   such exchange or transfer is effected pursuant to
                  the Exchange Offer in accordance with the Registration Rights
                  Agreement and the holder, in the case of an exchange, or the
                  transferee, in the case of a transfer, is not (1) a
                  broker-dealer, (2) a Person participating in the distribution
                  of the Exchange Notes or (3) a Person who is an affiliate (as
                  defined in Rule 144) of the Company;

                         (B)   any such transfer is effected pursuant to the
                  Shelf Registration Statement in accordance with the
                  Registration Rights Agreement;

                         (C)   any such transfer is effected by a Broker-Dealer
                  pursuant to the Exchange Offer Registration Statement in
                  accordance with the Registration Rights Agreement; or

                         (D  ) the Registrar receives the following:

                               (1)   if the holder of such beneficial interest
                         in a Restricted Global Note proposes to exchange such
                         beneficial interest for a beneficial interest in the
                         Unrestricted Global Note, a certificate from such
                         holder in the form of Exhibit C hereto, including the
                         certifications in item (1)(a) thereof;

                               (2)   if the holder of such beneficial interest
                         in a Restricted Global Note proposes to transfer such
                         beneficial interest to a Person who shall take delivery
                         thereof in the form of a beneficial interest in the
                         Unrestricted Global Note, a certificate from such
                         holder in the form of Exhibit B hereto, including the
                         certifications in item (4) thereof;

                               (3)   in each such case set forth in this
                         subparagraph (D), an Opinion of Counsel in form
                         reasonably acceptable to the Registrar to the effect
                         that such exchange or transfer is in compliance with
                         the Securities Act, that the restrictions on transfer
                         contained herein and in the Private Placement Legend
                         are not required in order to maintain compliance with
                         the Securities Act, and such beneficial interest is
                         being exchanged or transferred in compliance with any
                         applicable blue sky securities laws of any State of the
                         United States.

                  If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an authentication order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraph
(B) or (D) above.



                                       25



                  Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in any Restricted Global Note.

                  (c)    Transfer or Exchange of Beneficial Interests for
Definitive Notes.

                  (i)    If any holder of a beneficial interest in a Restricted
             Global Note proposes to exchange such beneficial interest for a
             Definitive Note or to transfer such beneficial interest to a
             Person who takes delivery thereof in the form of a Definitive
             Note, then, upon receipt by the Registrar of the following
             documentation (all of which may be submitted by facsimile):

                         (A)   if the holder of such beneficial interest in a
                  Restricted Global Note proposes to exchange such beneficial
                  interest for a Definitive Note, a certificate from such
                  holder in the form of Exhibit C hereto, including the
                  certifications in item (2)(a) thereof;

                         (B)   if such beneficial interest is being transferred
                  to a QIB in accordance with Rule 144A under the Securities
                  Act, a certificate to the effect set forth in Exhibit B
                  hereto, including the certifications in item (1) thereof;

                         (C)   if such beneficial interest is being transferred
                  to a Non-U.S. Person in an offshore transaction in
                  accordance with Rule 904 under the Securities Act, a
                  certificate to the effect set forth in Exhibit B hereto,
                  including the certifications in item (2) thereof;

                         (D)   if such beneficial interest is being transferred
                  pursuant to an exemption from the registration requirements
                  of the Securities Act in accordance with Rule 144 under the
                  Securities Act, a certificate to the effect set forth in
                  Exhibit B hereto, including the certifications in item
                  (3)(a) thereof;

                         (E)   if such beneficial interest is being transferred
                  to an Institutional Accredited Investor in reliance on an
                  exemption from the registration requirements of the
                  Securities Act other than those listed in subparagraphs (B)
                  through (D) above, a certificate to the effect set forth in
                  Exhibit B hereto, including the certifications in item
                  (3)(d) thereof, a certificate from the transferee to the
                  effect set forth in Exhibit D hereof and, to the extent
                  required by item 3(d) of Exhibit B, an Opinion of Counsel
                  from the transferee or the transferor reasonably acceptable
                  to the Company to the effect that such transfer is in
                  compliance with the Securities Act and such beneficial
                  interest is being transferred in compliance with any
                  applicable blue sky securities laws of any State of the
                  United States;

                         (F)   if such beneficial interest is being transferred
                  to the Company or any of its Subsidiaries, a certificate to
                  the effect set forth in Exhibit B hereto, including the
                  certifications in item (3)(b) thereof; or



                                       26



                         (G)   if such beneficial interest is being transferred
                  pursuant to an effective registration statement under the
                  Securities Act, a certificate to the effect set forth in
                  Exhibit B hereto, including the certifications in item
                  (3)(c) thereof, the Trustee shall cause the aggregate
                  principal amount of the applicable Global Note to be reduced
                  accordingly pursuant to Section 2.06(h) hereof, and the
                  Company shall execute and the Trustee shall authenticate and
                  deliver to the Person designated in the instructions a
                  Definitive Note in the appropriate principal amount.
                  Definitive Notes issued in exchange for beneficial interests
                  in a Restricted Global Note pursuant to this Section 2.06(c)
                  shall be registered in such names and in such authorized
                  denominations as the holder shall instruct the Registrar
                  through instructions from the Depositary and the Participant
                  or Indirect Participant. The Trustee shall deliver such
                  Definitive Notes to the Persons in whose names such Notes
                  are so registered. Definitive Notes issued in exchange for a
                  beneficial interest in a Restricted Global Note pursuant to
                  this Section 2.06(c)(i) shall bear the Private Placement
                  Legend and shall be subject to all restrictions on transfer
                  contained therein.

                  (ii)   Notwithstanding 2.06(c)(i), a holder of a beneficial
             interest in a Restricted Global Note may exchange such beneficial
             interest for an Unrestricted Definitive Note or may transfer such
             beneficial interest to a Person who takes delivery thereof in the
             form of an Unrestricted Definitive Note only if:

                         (A)   such exchange or transfer is effected pursuant to
                  the Exchange Offer in accordance with the Registration
                  Rights Agreement and the holder, in the case of an exchange,
                  or the transferee, in the case of a transfer, is not (1) a
                  broker-dealer, (2) a Person participating in the
                  distribution of the Exchange Notes or (3) a Person who is an
                  affiliate (as defined in Rule 144) of the Company;

                         (B)   any such transfer is effected pursuant to the
                  Shelf Registration Statement in accordance with the
                  Registration Rights Agreement;

                         (C)   any such transfer is effected by a Broker-Dealer
                  pursuant to the Exchange Offer Registration Statement in
                  accordance with the Registration Rights Agreement; or

                         (D)   the Registrar receives the following:

                               (1)   if the holder of such beneficial interest
                         in a Restricted Global Note proposes to exchange such
                         beneficial interest for a Definitive Note that does not
                         bear the Private Placement Legend, a certificate from
                         such holder in the form of Exhibit C hereto, including
                         the certifications in item (1)(b) thereof;

                               (2)   if the holder of such beneficial interest
                         in a Restricted Global Note proposes to transfer such
                         beneficial interest to a Person who shall take delivery
                         thereof in the form of a Definitive Note that does not
                         bear the Private Placement Legend, a certificate from
                         such holder in the


                                       27




                         form of Exhibit B hereto, including the certifications
                         in item (4) thereof; and

                               (3)   in each such case set forth in this
                         subparagraph (D), an Opinion of Counsel in form
                         reasonably acceptable to the Company, to the effect
                         that such exchange or transfer is in compliance with
                         the Securities Act, that the restrictions on transfer
                         contained herein and in the Private Placement Legend
                         are not required in order to maintain compliance with
                         the Securities Act, and such beneficial interest in a
                         Restricted Global Note is being exchanged or
                         transferred in compliance with any applicable blue sky
                         securities laws of any State of the United States.

                  (iii)  If any holder of a beneficial interest in an
             Unrestricted Global Note proposes to exchange such beneficial
             interest for a Definitive Note or to transfer such beneficial
             interest to a Person who takes delivery thereof in the form of a
             Definitive Note, then, upon satisfaction of the conditions set
             forth in Section 2.06(b)(ii), the Trustee shall cause the
             aggregate principal amount of the applicable Global Note to be
             reduced accordingly pursuant to Section 2.06(h) hereof, and the
             Company shall execute and the Trustee shall authenticate and
             deliver to the Person designated in the instructions a Definitive
             Note in the appropriate principal amount. Definitive Notes issued
             in exchange for a beneficial interest pursuant to this Section
             2.06(c)(iii) shall be registered in such names and in such
             authorized denominations as the holder shall instruct the
             Registrar through instructions from the Depositary and the
             Participant or Indirect Participant. The Trustee shall deliver
             such Definitive Notes to the Persons in whose names such Notes
             are so registered. Definitive Notes issued in exchange for a
             beneficial interest pursuant to this section 2.06(c)(iii) shall
             not bear the Private Placement Legend. Beneficial interests in an
             Unrestricted Global Note cannot be exchanged for a Definitive
             Note bearing the Private Placement Legend or transferred to a
             Person who takes delivery thereof in the form of a Definitive
             Note bearing the Private Placement Legend.

                  (d)    Transfer or Exchange of Definitive Notes for
Beneficial Interests.

                  (i)    If any Holder of Restricted Definitive Notes
             proposes to exchange such Notes for a beneficial interest in a
             Restricted Global Note or to transfer such Definitive Notes to a
             Person who takes delivery thereof in the form of a beneficial
             interest in a Restricted Global Note, then, upon receipt by the
             Registrar of the following documentation (all of which may be
             submitted by facsimile):

                         (A)   if the Holder of such Restricted Definitive Notes
                  proposes to exchange such Notes for a beneficial interest in
                  a Restricted Global Note, a certificate from such Holder in
                  the form of Exhibit C hereto, including the certifications
                  in item (2)(b) thereof;

                         (B)   if such Definitive Notes are being transferred to
                  a QIB in accordance with Rule 144A under the Securities Act,
                  a certificate to the effect set forth in Exhibit B hereto,
                  including the certifications in item (1) thereof;



                                       28



                         (C)   if such Definitive Notes are being transferred to
                  a Non-U.S. Person in an offshore transaction in accordance
                  with Rule 904 under the Securities Act, a certificate to the
                  effect set forth in Exhibit B hereto, including the
                  certifications in item (2) thereof;

                         (D)   if such Definitive Notes are being transferred
                  pursuant to an exemption from the registration requirements
                  of the Securities Act in accordance with Rule 144 under the
                  Securities Act, a certificate to the effect set forth in
                  Exhibit B hereto, including the certifications in item
                  (3)(a) thereof;

                         (E)   if such Definitive Notes are being transferred to
                  an Institutional Accredited Investor in reliance on an
                  exemption from the registration requirements of the
                  Securities Act other than those listed in subparagraphs (B)
                  through (D) above, a certificate to the effect set forth in
                  Exhibit B hereto, including the certifications in item
                  (3)(d) thereof, a certificate from the transferee to the
                  effect set forth in Exhibit D hereof and, to the extent
                  required by item 3(d) of Exhibit B, an Opinion of Counsel
                  from the transferee or the transferor reasonably acceptable
                  to the Company to the effect that such transfer is in
                  compliance with the Securities Act and such Definitive Notes
                  are being transferred in compliance with any applicable blue
                  sky securities laws of any State of the United States;

                         (F)   if such Definitive Notes are being transferred to
                  the Company or any of its Subsidiaries, a certificate to the
                  effect set forth in Exhibit B hereto, including the
                  certifications in item (3)(b) thereof; or

                         (G)   if such Definitive Notes are being transferred
                  pursuant to an effective registration statement under the
                  Securities Act, a certificate to the effect set forth in
                  Exhibit B hereto, including the certifications in item
                  (3)(c) thereof,

             the Trustee shall cancel the Definitive Notes, increase or cause
             to be increased the aggregate principal amount of, in the case of
             clause (A) above, the appropriate Restricted Global Note, in the
             case of clause (B) above, the 144A Global Note, in the case of
             clause (C) above, the Regulation S Global Note, and in all other
             cases, the IAI Global Note.

                  (ii)   A Holder of Restricted Definitive Notes may exchange
             such Notes for a beneficial interest in the Unrestricted Global
             Note or transfer such Restricted Definitive Notes to a Person who
             takes delivery thereof in the form of a beneficial interest in
             the Unrestricted Global Note only if:

                         (A)   such exchange or transfer is effected pursuant to
                  the Exchange Offer in accordance with the Registration
                  Rights Agreement and the Holder, in the case of an exchange,
                  or the transferee, in the case of a transfer, is not (1) a
                  broker-dealer, (2) a Person participating in the
                  distribution of the Exchange Notes or (3) a Person who is an
                  affiliate (as defined in Rule 144) of the Company;

                         (B)   any such transfer is effected pursuant to the
                  Shelf Registration Statement in accordance with the
                  Registration Rights Agreement;




                                       29



                         (C)   any such transfer is effected by a Broker-Dealer
                  pursuant to the Exchange Offer Registration Statement in
                  accordance with the Registration Rights Agreement; or

                         (D)   the Registrar receives the following:

                               (1)   if the Holder of such Definitive Notes
                         proposes to exchange such Notes for a beneficial
                         interest in the Unrestricted Global Note, a certificate
                         from such Holder in the form of Exhibit C hereto,
                         including the certifications in item (1)(c) thereof;

                         (2)   if the Holder of such Definitive Notes proposes
                         to transfer such Notes to a Person who shall take
                         delivery thereof in the form of a beneficial interest
                         in the Unrestricted Global Note, a certificate from
                         such Holder in the form of Exhibit B hereto, including
                         the certifications in item (4) thereof; and

                         (3)   in each such case set forth in this subparagraph
                         (D), an Opinion of Counsel in form reasonably
                         acceptable to the Company to the effect that such
                         exchange or transfer is in compliance with the
                         Securities Act, that the restrictions on transfer
                         contained herein and in the Private Placement Legend
                         are not required in order to maintain compliance with
                         the Securities Act, and such Definitive Notes are being
                         exchanged or transferred in compliance with any
                         applicable blue sky securities laws of any State of the
                         United States.

             Upon satisfaction of the conditions of any of the subparagraphs
             in this Section 2.06(d)(ii), the Trustee shall cancel the
             Definitive Notes and increase or cause to be increased the
             aggregate principal amount of the Unrestricted Global Note.

                  (iii)  A Holder of Unrestricted Definitive Notes may
             exchange such Notes for a beneficial interest in the Unrestricted
             Global Note or transfer such Definitive Notes to a Person who
             takes delivery thereof in the form of a beneficial interest in
             the Unrestricted Global Note. Upon receipt of a request for such
             an exchange or transfer, the Trustee shall cancel the
             Unrestricted Definitive Notes and increase or cause to be
             increased the aggregate principal amount of the Unrestricted
             Global Note.

                  If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an authentication order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraphs
(ii)(B), (ii)(D) or (iii) above.

                  (e)    Transfer and Exchange of Definitive Notes. Upon request
by a Holder of Definitive Notes and such Holder's compliance with the provisions
of this Section 2.06(e), the Registrar shall register the transfer or exchange
of Definitive Notes. Prior to such registration of transfer or exchange, the
requesting Holder shall present or surrender to the Registrar the



                                       30




Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, pursuant to the provisions of this Section 2.06(e).

                  (i)    Restricted Definitive Notes may be transferred to and
             registered in the name of Persons who take delivery thereof if the
             Registrar receives the following:

                         (A)   if the transfer will be made pursuant to Rule
                  144A under the Securities Act, then the transferor must
                  deliver a certificate in the form of Exhibit B hereto,
                  including the certifications in item (1) thereof;

                         (B)   if the transfer will be made pursuant to
                  Rule 904, then the transferor must deliver a certificate in
                  the form of Exhibit B hereto, including the certifications
                  in item (2) thereof; and

                         (C)   if the transfer will be made pursuant to any
                  other exemption from the registration requirements of the
                  Securities Act, then the transferor must deliver (x) a
                  certificate in the form of Exhibit B hereto, including the
                  certifications in item (3) thereof, (y) to the extent
                  required by item 3(d) of Exhibit B hereto, an Opinion of
                  Counsel in form reasonably acceptable to the Company to the
                  effect that such transfer is in compliance with the
                  Securities Act and such beneficial interest is being
                  transferred in compliance with any applicable blue sky
                  securities laws of any State of the United States and (z) if
                  the transfer is being made to an Institutional Accredited
                  Investor and effected pursuant to an exemption from the
                  registration requirements of the Securities Act other than
                  Rule 144A under the Securities Act, Rule 144 under the
                  Securities Act or Rule 904 under the Securities Act, a
                  certificate from the transferee in the form of Exhibit D
                  hereto.

                  (ii)   Restricted Definitive Notes may be exchanged by any
             Holder thereof for an Unrestricted Definitive Note or transferred
             to Persons who take delivery thereof in the form of an Unrestricted
             Definitive Note if:

                         (A)   such exchange or transfer is effected pursuant to
                  the Exchange Offer in accordance with the Registration
                  Rights Agreement and the holder, in the case of an exchange,
                  or the transferee, in the case of a transfer, is not (1) a
                  broker-dealer, (2) a Person participating in the
                  distribution of the Exchange Notes or (3) a Person who is an
                  affiliate (as defined in Rule 144) of the Company;

                         (B)   any such transfer is effected pursuant to the
                  Shelf Registration Statement in accordance with the
                  Registration Rights Agreement;

                         (C)   any such transfer is effected by a Broker-Dealer
                  pursuant to the Exchange Offer Registration Statement in
                  accordance with the Registration Rights Agreement; or

                         (D)   the Registrar receives the following:



                                       31



                               (1)   if the Holder of such Restricted Definitive
                         Notes proposes to exchange such Notes for an
                         Unrestricted Definitive Note, a certificate from such
                         Holder in the form of Exhibit C hereto, including the
                         certifications in item (1)(a) thereof;

                               (2)   if the Holder of such Restricted Definitive
                         Notes proposes to transfer such Notes to a Person who
                         shall take delivery thereof in the form of an
                         Unrestricted Definitive Note, a certificate from such
                         Holder in the form of Exhibit B hereto, including the
                         certifications in item (4) thereof; and

                               (3)   in each such case set forth in this
                         subparagraph (D), an Opinion of Counsel in form
                         reasonably acceptable to the Company to the effect that
                         such exchange or transfer is in compliance with the
                         Securities Act, that the restrictions on transfer
                         contained herein and in the Private Placement Legend
                         are not required in order to maintain compliance with
                         the Securities Act, and such Restricted Definitive Note
                         is being exchanged or transferred in compliance with
                         any applicable blue sky securities laws of any State of
                         the United States.

                  (iii)  A Holder of Unrestricted Definitive Notes may
             transfer such Notes to a Person who takes delivery thereof in the
             form of an Unrestricted Definitive Note. Upon receipt of a
             request for such a transfer, the Registrar shall register the
             Unrestricted Definitive Notes pursuant to the instructions from
             the Holder thereof. Unrestricted Definitive Notes cannot be
             exchanged for or transferred to Persons who take delivery thereof
             in the form of a Restricted Definitive Note.

                  (f)    Exchange Offer. Upon the occurrence of the Exchange
Offer in accordance with the Registration Rights Agreement, the Company shall
issue and, upon receipt of an authentication order in accordance with Section
2.02, the Trustee shall authenticate (i) one or more Unrestricted Global Notes
in an aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by persons that
are not (x) broker-dealers, (y) Persons participating in the distribution of the
Exchange Notes or (z) Persons who are affiliates (as defined in Rule 144) of the
Company and accepted for exchange in the exchange Offer and (ii) Definitive
Notes in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Notes accepted for exchange in the Exchange Offer.
Concurrent with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and make available for delivery to the Persons designated by the
Holders of Definitive Notes so accepted Definitive Notes in the appropriate
principal amount.

                  (g)    Legends. The following legends shall appear on the face
of all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.

                  (i)          Private Placement Legend.



                                       32



                         (A)   Except as permitted by subparagraph (B) below,
                  each Global Note and each Definitive Note (and all Notes
                  issued in exchange therefor or substitution thereof) shall
                  bear the legend in substantially the following form:

             "THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
             ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
             SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
             (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT
             BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
             REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER
             OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
             SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
             SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
             THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
             BENEFIT OF L-3 COMMUNICATIONS CORPORATION THAT (A) SUCH SECURITY
             MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A
             PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
             INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
             ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b)
             IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
             SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
             IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
             SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
             THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
             UPON AN OPINION OF COUNSEL IF L-3 COMMUNICATIONS CORPORATION SO
             REQUESTS), (2) TO L-3 COMMUNICATIONS CORPORATION OR (3) PURSUANT
             TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
             ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
             THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
             THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
             NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
             THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."

                         (B)   Notwithstanding the foregoing, any Global Note or
                  Definitive Note issued pursuant to subparagraphs (b)(iv),
                  (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or
                  (f) to this Section 2.06 (and all Notes issued in exchange
                  therefor or substitution thereof) shall not bear the Private
                  Placement Legend.

                  (ii)   Global Note Legend. Each Global Note shall bear a
             legend in substantially the following form:

             "THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
             INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
             BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE
             TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT



                                       33



             THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
             REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS
             GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO
             SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE
             DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
             2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
             TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
             CONSENT OF THE COMPANY."

                  (h)    Cancellation and/or Adjustment of Global Notes. At such
time as all beneficial interests in a particular Global Note have been exchanged
for Definitive Notes or a particular Global Note has been redeemed, repurchased
or canceled in whole and not in part, each such Global Note shall be returned to
or retained and canceled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note, by the
Trustee or by the Depositary at the direction of the Trustee, to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note, by the Trustee or by the
Depositary at the direction of the Trustee, to reflect such increase.

                  (i)    General Provisions Relating to Transfers and Exchanges.

                  (i)    To permit registrations of transfers and exchanges, the
             Company shall execute and the Trustee shall authenticate Global
             Notes and Definitive Notes upon the Company's order or at the
             Registrar's request.

                  (ii)   No service charge shall be made to a holder of a
             beneficial interest in a Global Note or to a Holder of a Definitive
             Note for any registration of transfer or exchange, but the Company
             may require payment of a sum sufficient to cover any transfer tax
             or similar governmental charge payable in connection therewith
             (other than any such transfer taxes or similar governmental charge
             payable upon exchange or transfer pursuant to Sections 2.10, 3.06,
             4.10, 4.15 and 9.05 hereof).

                  (iii)  The Registrar shall not be required to register the
             transfer of or exchange any Note selected for redemption in whole
             or in part, except the unredeemed portion of any Note being
             redeemed in part.

                  (iv)   All Global Notes and Definitive Notes issued upon any
             registration of transfer or exchange of Global Notes or Definitive
             Notes shall be the valid obligations of the Company, evidencing the
             same debt, and entitled to the same benefits under this Indenture,
             as the Global Notes or Definitive Notes surrendered upon such
             registration of transfer or exchange.



                                       34



                  (v)    The Company shall not be required (A) to issue, to
             register the transfer of or to exchange Notes during a period
             beginning at the opening of business 15 days before the day of any
             selection of Notes for redemption under Section 3.02 hereof and
             ending at the close of business on the day of selection, (B) to
             register the transfer of or to exchange any Note so selected for
             redemption in whole or in part, except the unredeemed portion of
             any Note being redeemed in part or (C) to register the transfer of
             or to exchange a Note between a record date and the next succeeding
             interest payment date.

                  (vi)   Prior to due presentment for the registration of a
             transfer of any Note, the Trustee, any Agent and the Company may
             deem and treat the Person in whose name any Note is registered as
             the absolute owner of such Note for the purpose of receiving
             payment of principal of and interest on such Notes and for all
             other purposes, and none of the Trustee, any Agent or the Company
             shall be affected by notice to the contrary.

                  (vii)  The Trustee shall authenticate Global Notes and
             Definitive Notes in accordance with the provisions of Section 2.02
             hereof.

Section 2.07      Replacement Notes.

                  If any mutilated Note is surrendered to the Trustee, or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon the written order of the Company signed by two Officers of the Company,
shall authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge for its expenses in replacing a Note.

                  Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.

Section 2.08      Outstanding Notes.

                  The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Note effected
by the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 2.09 hereof, a
Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.

                  If a Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.

                  If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.



                                       35



                  If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.

Section 2.09      Treasury Notes.

                  In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that a Trustee knows are so owned shall
be so disregarded.

Section 2.10      Temporary Notes.

                  Until Definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon a written order
of the Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate Definitive Notes in exchange for temporary
Notes.

                  Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.

Section 2.11      Cancellation.

                  The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.

Section 2.12      Defaulted Interest.

                  If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in



                                       36




the name and at the expense of the Company) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.

Section 2.13      CUSIP Numbers.

                  The Company in issuing the Notes may use CUSIP numbers (if
then generally in use), and, if so, the Trustee shall use CUSIP numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the CUSIP numbers.


                                   ARTICLE 3.
                            REDEMPTION AND PREPAYMENT

Section 3.01      Notices to Trustee.

                  If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.

Section 3.02      Selection of Notes to Be Redeemed.

                  If less than all of the Notes are to be redeemed at any time,
selection of Notes for redemption shall be made by the Trustee in compliance
with the requirements of the principal national securities exchange, if any, on
which the Notes are listed, or, if the Notes are not so listed, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate;
provided that no Notes of $1,000 or less shall be redeemed in part. Notices of
redemption shall be mailed by first class mail at least 30 but not more than 60
days before the redemption date to each Holder of Notes to be redeemed at its
registered address. Notices of redemption may not be conditional. If any Note is
to be redeemed in part only, the notice of redemption that relates to such Note
shall state the portion of the principal amount thereof to be redeemed. A new
Note in principal amount equal to the unredeemed portion thereof shall be issued
in the name of the Holder thereof upon cancellation of the original Note. Notes
called for redemption become due on the date fixed for redemption. On and after
the redemption date, interest ceases to accrue on Notes or portions of them
called for redemption.

                  The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.



                                       37



Section 3.03      Notice Of Redemption.

                  Subject to the provisions of Section 3.09 hereof, at least 30
days but not more than 60 days before a redemption date, the Company shall mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.

                  The notice shall identify the Notes to be redeemed (including
CUSIP Numbers, if any) and shall state:

                  (a)    the redemption date;

                  (b)    the redemption price;

                  (c)    if any Note is being redeemed in part, the portion of
             the principal amount of such Note to be redeemed and that, after
             the redemption date upon surrender of such Note, a new Note or
             Notes in principal amount equal to the unredeemed portion shall
             be issued upon cancellation of the original Note;

                  (d)    the name and address of the Paying Agent;

                  (e)    that Notes called for redemption must be surrendered to
             the Paying Agent to collect the redemption price;

                  (f)    that, unless the Company defaults in making such
             redemption payment, interest on Notes called for redemption ceases
             to accrue on and after the redemption date;

                  (g)    the paragraph of the Notes and/or Section of this
             Indenture pursuant to which the Notes called for redemption are
             being redeemed; and

                  (h)    that no representation is made as to the correctness or
             accuracy of the CUSIP number, if any, listed in such notice or
             printed on the Notes.

                  At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.

Section 3.04      Effect Of Notice Of Redemption.

                  Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.




                                       38



Section 3.05      Deposit Of Redemption Price.

                  Prior to 11:00 a.m. on the Business Day prior to the
redemption date, the Company shall deposit with the Trustee or with the Paying
Agent money sufficient to pay the redemption price of and accrued interest on
all Notes to be redeemed on that date. The Trustee or the Paying Agent shall
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Notes to be redeemed.

                  If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.

Section 3.06      Notes Redeemed In Part.

                  Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.

Section 3.07      Optional Redemption.

(a) Except as set forth in clause (b) of this Section 3.7, the Notes shall not
be redeemable at the Company's option prior to January 15, 2010. Thereafter, the
Notes shall be subject to redemption at any time at the option of the Company,
in whole or in part, upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Additional Interest thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on January 15 of the years indicated below:

                  Year                                      Percentage

                  2010...............................          102.938%
                  2011...............................          101.958%
                  2012...............................          100.979%
                  2013 and thereafter................          100.000%

                  (b)    Notwithstanding the foregoing clause (a), before
January 15, 2008, the Company may on any one or more occasions redeem up to an
aggregate of 35% of the Notes originally issued at a redemption price of
105.875% of the principal amount thereof, plus accrued and unpaid interest and
Additional Interest thereon, if any, to the redemption date, with the net



                                       39




cash proceeds of one or more Equity Offerings by the Company or the net cash
proceeds of one or more Equity Offerings by Holdings that are contributed to the
Company as common equity capital; provided that at least 65% of the Notes
originally issued remain outstanding immediately after the occurrence of each
such redemption; and provided, further, that any such redemption must occur
within 120 days of the date of the closing of such Equity Offering.

Section 3.08      Mandatory Redemption.

                  Except as set forth under Sections 4.10 and 4.15, the Company
is not required to make mandatory redemption or sinking fund payments with
respect to the Notes.

Section 3.09      Offer To Purchase By Application Of Excess Proceeds.

                  In the event that, pursuant to Section 4.10 hereof, the
Company shall be required to commence an offer to all Holders to purchase Notes
(an "Asset Sale Offer"), it shall follow the procedures specified below.

                  The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 hereof (the "Offer Amount")
or, if less than the Offer Amount has been tendered, all Notes tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.

                  If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and unpaid
interest shall be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.

                  Upon the commencement of an Asset Sale Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of the
Holders, with a copy to the Trustee. The notice shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice,
which shall govern the terms of the Asset Sale Offer, shall state:

                  (a)    that the Asset Sale Offer is being made pursuant to
             this Section 3.09 and Section 4.10 hereof and the length of time
             the Asset Sale Offer shall remain open;

                  (b)    the Offer Amount, the purchase price and the Purchase
             Date;

                  (c)    that any Note not tendered or accepted for payment
             shall continue to accrete or accrue interest;

                  (d)    that, unless the Company defaults in making such
             payment, any Note accepted for payment pursuant to the Asset Sale
             Offer shall cease to accrete or accrue interest after the
             Purchase Date;



                                       40



                  (e)    that Holders electing to have a Note purchased pursuant
             to an Asset Sale Offer may only elect to have all of such Note
             purchased and may not elect to have only a portion of such Note
             purchased;

                  (f)    that Holders electing to have a Note purchased pursuant
             to any Asset Sale Offer shall be required to surrender the Note,
             with the form entitled "Option of Holder to Elect Purchase" on
             the reverse of the Note completed, or transfer by book-entry
             transfer, to the Company, a depositary, if appointed by the
             Company, or a Paying Agent at the address specified in the notice
             at least three days before the Purchase Date;

                  (g)    that Holders shall be entitled to withdraw their
             election if the Company, the Depositary or the Paying Agent, as
             the case may be, receives, not later than the expiration of the
             Offer Period, a facsimile transmission or letter setting forth
             the name of the Holder, the principal amount of the Note the
             Holder delivered for purchase and a statement that such Holder is
             withdrawing his election to have such Note purchased;

                  (h)    that, if the aggregate principal amount of Notes
             surrendered by Holders exceeds the Offer Amount, the Company shall
             select the Notes to be purchased on a pro rata basis (with such
             adjustments as may be deemed appropriate by the Company so that
             only Notes in denominations of $1,000, or integral multiples
             thereof, shall be purchased); and

                  (i)    that Holders whose Notes were purchased only in part
             shall be issued new Notes equal in principal amount to the
             unpurchased portion of the Notes surrendered (or transferred by
             book-entry transfer).

                  On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes or portions thereof tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers' Certificate stating that
such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09. The Company, the Depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a new
Note, and the Trustee, upon written request from the Company shall authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce the results of the Asset Sale Offer on the
Purchase Date.

                  Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.




                                       41




                                   ARTICLE 4.
                                   COVENANTS

Section 4.01      Payment Of Notes.

                  The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then due. The
Company shall pay all Additional Interest, if any, in the same manner on the
dates and in the amounts set forth in the Registration Rights Agreement.

                  The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to 1.0% per annum in excess of the then applicable interest rate on
the Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Additional Interest (without regard to any applicable grace period)
at the same rate to the extent lawful.

Section 4.02      Maintenance Of Office Or Agency.

                  The Company shall maintain in the Borough of Manhattan, The
City of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.

                  The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.

                  The Company hereby designates the Corporate Trust Office of
the Trustee as one such office or agency of the Company in accordance with
Section 2.03.

Section 4.03      Reports.

                  Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise
report on an annual and



                                       42



quarterly basis on forms provided for such annual and quarterly reporting
pursuant to rules and regulations promulgated by the SEC, the Company shall file
with the SEC (and provide the Trustee and Holders with copies thereof), without
cost to each Holder, within 15 days after it files them with the SEC:

                  (a)    within 90 days after the end of each fiscal year,
             annual reports on Form 10-K (or any successor or comparable form)
             containing the information required to be contained therein (or
             required in such successor or comparable form);

                  (b)    within 45 days after the end of each of the first three
             fiscal quarters of each fiscal year, reports on Form 10-Q (or any
             successor or comparable form);

                  (c)    promptly from time to time after the occurrence of an
             event required to be therein reported, such other reports on Form
             8-K (or any successor or comparable form); and

                  (d)    any other information, documents and other reports
             which the Company would be required to file with the SEC if it
             were subject to Section 13 or 15(d) of the Exchange Act;
             provided, however, the Company shall not be so obligated to file
             such reports with the SEC if the SEC does not permit such filing,
             in which event the Company will make available such information
             to prospective purchasers of Notes, in addition to providing such
             information to the Trustee and the Holders, in each case within
             15 days after the time the Company would be required to file such
             information with the SEC, if it were subject to Sections 13 or
             15(d) of the Exchange Act.

                  Subject to the provisions of Article 7, delivery of such
reports, information and documents to the Trustee is for informational purposes
only and the Trustee's receipt of such shall not constitute constructive notice
of any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).

Section 4.04      Compliance Certificate.

                  (a)    The Company shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or



                                       43




interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.

                  (b)    So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.03(a) above shall
be accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Article 4 or Article 5 hereof or, if any
such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.

                  (c)    The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, as soon as possible and in any event within
five Business Days after any Officer becoming aware of any Default or Event of
Default, an Officers' Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.

Section 4.05      Taxes.

                  The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.

Section 4.06       Stay, Extension and Usury Laws

                  The Company and each of the Guarantors covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time hereafter
in force, that may affect the covenants or the performance of this Indenture;
and, to the extent that it may lawfully do so, the Company and each of the
Guarantors hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law has been enacted.

Section 4.07      Restricted Payments.

                  The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any other payment or distribution on account of the Company's
or any of its Restricted Subsidiaries' Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation involving
the Company) or to the direct or indirect holders of the Company's or any of its
Restricted Subsidiaries' Equity Interests in their capacity as such (other than
(A) dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company or (B) dividends or



                                       44




distributions by a Restricted Subsidiary so long as, in the case of any dividend
or distribution payable on or in respect of any class or series of securities
issued by a Restricted Subsidiary other than a Wholly Owned Restricted
Subsidiary, the Company or a Restricted Subsidiary receives at least its pro
rata share of such dividend or distribution in accordance with its Equity
Interests in such class or series of securities); (ii) purchase, redeem or
otherwise acquire or retire for value (including without limitation, in
connection with any merger or consolidation involving the Company) any Equity
Interests of the Company or any direct or indirect parent of the Company; (iii)
make any payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is subordinated to
the Notes except a payment of interest or principal at Stated Maturity; or (iv)
make any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:

                  (a)    no Default or Event of Default shall have occurred and
             be continuing or would occur as a consequence thereof; and

                  (b)    the Company would, at the time of such Restricted
             Payment and after giving pro forma effect thereto as if such
             Restricted Payment had been made at the beginning of the
             applicable four-quarter period, have been permitted to incur at
             least $1.00 of additional Indebtedness pursuant to the Fixed
             Charge Coverage Ratio test set forth in the first paragraph of
             Section 4.09; and

                  (c)    such Restricted Payment, together with the aggregate
             amount of all other Restricted Payments made by the Company and its
             Restricted Subsidiaries since April 30, 1997 (excluding Restricted
             Payments permitted by clauses (ii) through (viii) of the next
             succeeding paragraph or of the kind contemplated by such clauses
             that were made prior to the date of this Indenture), is less than
             the sum of (i) 50% of the Consolidated Net Income of the Company
             for the period (taken as one accounting period) from July 1, 1997
             to the end of the Company's most recently ended fiscal quarter for
             which internal financial statements are available at the time of
             such Restricted Payment (or, if such Consolidated Net Income for
             such period is a deficit, less 100% of such deficit), plus (ii)
             100% of the aggregate net cash proceeds received by the Company
             since April 30, 1997 as a contribution to its common equity capital
             or from the issue or sale of Equity Interests of the Company (other
             than Disqualified Stock) or from the issue or sale of Disqualified
             Stock or debt securities of the Company that have been converted
             into such Equity Interests (other than Equity Interests (or
             Disqualified Stock or convertible debt securities) sold to a
             Subsidiary of the Company and other than Disqualified Stock or
             convertible debt securities that have been converted into
             Disqualified Stock), plus (iii) to the extent that any Restricted
             Investment that was made after April 30, 1997 is sold for cash or
             otherwise liquidated or repaid for cash, the amount of cash
             received in connection therewith (or from the sale of Marketable
             Securities received in connection therewith), plus (iv) to the
             extent not already included in such Consolidated Net Income of the
             Company for such period and without duplication, (A) 100% of the
             aggregate amount of cash received as a dividend from an
             Unrestricted Subsidiary, (B) 100% of the cash received upon the
             sale of Marketable Securities received as a dividend from an



                                       45




             Unrestricted Subsidiary, and (C) 100% of the net assets of any
             Unrestricted Subsidiary on the date that it becomes a Restricted
             Subsidiary.

                  The foregoing provisions shall not prohibit: (i) the payment
of any dividend within 60 days after the date of declaration thereof, if at said
date of declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the Company
in exchange for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Subsidiary of the Company) of, other Equity Interests of
the Company (other than any Disqualified Stock); provided that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause
(c)(ii) of the preceding paragraph; (iii) the defeasance, redemption, repurchase
or other acquisition of subordinated Indebtedness (other than intercompany
Indebtedness) in exchange for, or with the net cash proceeds from an incurrence
of, Permitted Refinancing Indebtedness; (iv) the repurchase, retirement or other
acquisition or retirement for value of common Equity Interests of the Company or
Holdings held by any future, present or former employee, director or consultant
of the Company or any Subsidiary or Holdings issued pursuant to any management
equity plan or stock option plan or any other management or employee benefit
plan or agreement; provided, however, that the aggregate amount of Restricted
Payments made under this clause (iv) does not exceed $1.5 million in any
calendar year and provided further that cancellation of Indebtedness owing to
the Company from members of management of the Company or any of its Restricted
Subsidiaries in connection with a repurchase of Equity Interests of the Company
shall not be deemed to constitute a Restricted Payment for purposes of this
covenant or any other provision of this Indenture; (v) repurchases of Equity
Interests deemed to occur upon exercise of stock options upon surrender of
Equity Interests to pay the exercise price of such options; (vi) payments to
Holdings (A) in amounts equal to the amounts required for Holdings to pay
franchise taxes and other fees required to maintain its legal existence and
provide for other operating costs of up to $500,000 per fiscal year and (B) in
amounts equal to amounts required for Holdings to pay federal, state and local
income taxes to the extent such income taxes are actually due and owing;
provided that the aggregate amount paid under this clause (B) does not exceed
the amount that the Company would be required to pay in respect of the income of
the Company and its Subsidiaries if the Company were a stand alone entity that
was not owned by Holdings; (vii) dividends paid to Holdings in amounts equal to
amounts required for Holdings to pay interest and/or principal on Indebtedness
that has been guaranteed by, or is otherwise considered Indebtedness of, the
Company; and (viii) other Restricted Payments in an aggregate amount since May
22, 1998 not to exceed $20.0 million.

                  The Board of Directors of the Company may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would
not cause a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated shall be deemed to be Restricted
Payments at the time of such designation and shall reduce the amount available
for Restricted Payments under the first paragraph of this covenant. All such
outstanding Investments shall be deemed to constitute Investments in an amount
equal to the fair market value of such Investments at the time of such
designation. Such designation shall only be permitted if such Restricted Payment
would be



                                       46




permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.

                  The amount of all Restricted Payments (other than cash) shall
be the fair market value on the date of the Restricted Payment of the asset(s)
or securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined by
the Board of Directors whose resolution with respect thereto shall be delivered
to the Trustee. Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by Section 4.07 were computed.

Section 4.08      Dividend And Other Payment Restrictions Affecting Restricted
                  Subsidiaries.

                  The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (i)(A) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or
measured by, its profits, or (B) pay any indebtedness owed to the Company or any
of its Restricted Subsidiaries, (ii) make loans or advances to the Company or
any of its Restricted Subsidiaries, or (iii) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries. However, the
preceding restrictions will not apply to encumbrances or restrictions existing
under or by reason of (A) the provisions of security agreements that restrict
the transfer of assets that are subject to a Lien created by such security
agreements, (B) the provisions of agreements governing Indebtedness incurred
pursuant to clause (v) of the second paragraph of Section 4.09, (C) the Senior
Credit Facilities, this Indenture, the Notes, the Exchange Notes, the December
1998 Indenture, the December 1998 Notes, the 2002 Notes, the 2002 Indenture, the
May 2003 Notes, the May 2003 Indenture, the December 2003 Notes and the December
2003 Indenture, (D) applicable law, (E) any instrument governing Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to the extent
such Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Indenture to
be incurred, (F) by reason of customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices, (G) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in this
clause (iii) of the preceding paragraph, (H) Permitted Refinancing Indebtedness,
provided that the restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are not materially more restrictive, taken as
a whole, than those contained in the agreements governing the Indebtedness being
refinanced, (I) contracts for the sale of assets, including, without limitation,
customary restrictions with respect to a Subsidiary pursuant to an agreement
that has been entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary, (J) agreements relating
to secured Indebtedness otherwise permitted to be incurred pursuant to 4.09 and
4.12 that limit the right of the debtor to dispose of the assets securing such



                                       47




Indebtedness, (K) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business, or
(L) customary provisions in joint venture agreements and other similar
agreements entered into in the ordinary course of business.

Section 4.09      Incurrence of Indebtedness and Issuance Of Preferred Stock.

                  The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt) and that the Company shall not issue any
Disqualified Stock and shall not permit any of its Restricted Subsidiaries to
issue any shares of preferred stock; provided, however, that the Company and any
Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue
shares of preferred stock if the Fixed Charge Coverage Ratio for the Company's
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such additional
Indebtedness is incurred or such preferred stock is issued would have been at
least 2.0 to 1.0, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred, or the preferred stock had been issued, as the case may be,
at the beginning of such four-quarter period.

                  The provisions of the first paragraph of this Section 4.09
shall not apply to the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):

                  (i)    the incurrence by the Company of additional
             Indebtedness under Credit Facilities (and the guarantee thereof
             by the Guarantors) in an aggregate principal amount outstanding
             pursuant to this clause (i) at any one time (with letters of
             credit being deemed to have a principal amount equal to the
             maximum potential liability of the Company and its Restricted
             Subsidiaries thereunder), including all Permitted Refinancing
             Indebtedness then outstanding incurred to refund, refinance or
             replace any other Indebtedness incurred pursuant to this clause
             (i), not to exceed $750.0 million less the aggregate amount of
             all Net Proceeds of Asset Sales applied to repay any such
             Indebtedness pursuant to Section 4.10;

                (ii)   the incurrence by the Company and its Restricted
             Subsidiaries of the Existing Indebtedness;

                  (iii)  the incurrence by the Company and the Guarantors of
             $650.0 million in aggregate principal amount of each of the Notes
             and the Exchange Notes and the Subsidiary Guarantees thereof;

                  (iv)   the incurrence by the Company or any of its Restricted
             Subsidiaries of Indebtedness represented by Capital Lease
             Obligations, mortgage financings or purchase money obligations, in
             each case incurred for the purpose of financing all or any part of
             the purchase price or cost of construction or improvement of
             property, plant or equipment used in the business of the Company or
             such Restricted Subsidiary, in an aggregate principal amount,
             including all Permitted Refinancing Indebtedness then outstanding




                                       48



             incurred to refund, refinance or replace any other Indebtedness
             incurred pursuant to this clause (iv), not to exceed $100.0 million
             at any time outstanding;

                  (v)    the incurrence by the Company or any of its Restricted
             Subsidiaries of Indebtedness in connection with the acquisition of
             assets or a new Restricted Subsidiary; provided that such
             Indebtedness was incurred by the prior owner of such assets or such
             Restricted Subsidiary prior to such acquisition by the Company or
             one of its Restricted Subsidiaries and was not incurred in
             connection with, or in contemplation of, such acquisition by the
             Company or one of its Restricted Subsidiaries; and provided further
             that the principal amount (or accreted value, as applicable) of
             such Indebtedness, together with any other outstanding Indebtedness
             incurred pursuant to this clause (v), does not exceed $50.0
             million;

                  (vi)   the incurrence by the Company or any of its Restricted
             Subsidiaries of Permitted Refinancing Indebtedness in exchange for,
             or the net proceeds of which are used to refund, refinance or
             replace, Indebtedness that was permitted by this Indenture to be
             incurred (other than intercompany Indebtedness or Indebtedness
             incurred pursuant to clause (i) above);

                  (vii)  Indebtedness incurred by the Company or any of its
             Restricted Subsidiaries constituting reimbursement obligations with
             respect to letters of credit issued in the ordinary course of
             business in respect of workers' compensation claims or
             self-insurance, or other Indebtedness with respect to reimbursement
             type obligations regarding workers' compensation claims; provided,
             however, that upon the drawing of such letters of credit or the
             incurrence of such Indebtedness, such obligations are reimbursed
             within 30 days following such drawing or incurrence;

                  (viii) Indebtedness arising from agreements of the Company or
             a Restricted Subsidiary providing for indemnification, adjustment
             of purchase price or similar obligations, in each case, incurred or
             assumed in connection with the disposition of any business, assets
             or a Subsidiary, other than guarantees of Indebtedness incurred by
             any Person acquiring all or any portion of such business, assets or
             a Subsidiary for the purpose of financing such acquisition;
             provided, however, that (A) such Indebtedness is not reflected on
             the balance sheet of the Company or any Restricted Subsidiary
             (contingent obligations referred to in a footnote to financial
             statements and not otherwise reflected on the balance sheet shall
             not be deemed to be reflected on such balance sheet for purposes of
             this clause (A)) and (B) the maximum assumable liability in respect
             of all such Indebtedness shall at no time exceed the gross proceeds
             including noncash proceeds (the fair market value of such noncash
             proceeds being measured at the time received and without giving
             effect to any subsequent changes in value) actually received by the
             Company and its Restricted Subsidiaries in connection with such
             disposition;

                  (ix)   the incurrence by the Company or any of its Restricted
             Subsidiaries of intercompany Indebtedness between or among the
             Company and any of its Restricted Subsidiaries; provided, however,
             that (A) if the Company is the obligor on such Indebtedness, such
             Indebtedness is expressly subordinated to the prior payment in full
             in cash of all Obligations with respect to the Notes and (B)(1) any
             subsequent issuance or



                                       49



             transfer of Equity Interests that results in any such
             Indebtedness being held by a Person other than the Company or one
             of its Restricted Subsidiaries and (2) any sale or other transfer
             of any such Indebtedness to a Person that is not either the
             Company or one of its Restricted Subsidiaries shall be deemed, in
             each case, to constitute an incurrence of such Indebtedness by
             the Company or such Restricted Subsidiary, as the case may be;

                  (x)    the incurrence by the Company or any of the Guarantors
             of Hedging Obligations that are incurred for the purpose of (A)
             fixing, hedging or capping interest rate risk with respect to any
             floating rate Indebtedness that is permitted by the terms of this
             Indenture to be outstanding or (B) protecting the Company and its
             Restricted Subsidiaries against changes in currency exchange
             rates;

                  (xi)   the guarantee by the Company or any of the Guarantors
             of Indebtedness of the Company or a Restricted Subsidiary of the
             Company that was permitted to be incurred by another provision of
             this Section 4.09;

                  (xii)  the incurrence by the Company's Unrestricted
             Subsidiaries of Non-Recourse Debt, provided, however, that if any
             such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted
             Subsidiary, such event shall be deemed to constitute an incurrence
             of Indebtedness by a Restricted Subsidiary of the Company that was
             not permitted by this clause (xii), and the issuance of preferred
             stock by Unrestricted Subsidiaries;

                  (xiii) obligations in respect of performance and surety bonds
             and completion guarantees provided by the Company or any Restricted
             Subsidiaries in the ordinary course of business; and

                  (xiv)  the incurrence by the Company or any of its Restricted
             Subsidiaries of additional Indebtedness in an aggregate principal
             amount (or accreted value, as applicable) at any time outstanding,
             including all Permitted Refinancing Indebtedness then outstanding
             incurred to refund, refinance or replace any other Indebtedness
             incurred pursuant to this clause (xiv), not to exceed $100.0
             million.

                  For purposes of determining compliance with this Section 4.09,
in the event that an item of Indebtedness meets the criteria of more than one of
the categories of Permitted Debt described in clauses (i) through (xiv) above or
is entitled to be incurred pursuant to the first paragraph of this Section 4.09,
the Company shall, in its sole discretion, classify, or later reclassify, such
item of Indebtedness in any manner that complies with this covenant. Accrual of
interest, the accretion of accreted value and the payment of interest in the
form of additional Indebtedness shall not be deemed to be an incurrence of
Indebtedness for purposes of this Section 4.09.

Section 4.10      Asset Sales.

                  The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company or
the Restricted Subsidiary, as the case may be, receives consideration at the
time of such Asset Sale at least equal to the fair market value (evidenced by an
Officers' Certificate delivered to the Trustee which will include a resolution
of



                                       50




the Board of Directors with respect to such fair market value in the event such
Asset Sale involves aggregate consideration in excess of $10.0 million) of the
assets or Equity Interests issued or sold or otherwise disposed of and (ii) at
least 80% of the consideration therefor received by the Company or such
Restricted Subsidiary, as the case may be, consists of cash, Cash Equivalents
and/or Marketable Securities; provided, however, that (A) the amount of any
Senior Debt of the Company or such Restricted Subsidiary that is assumed by the
transferee in any such transaction and (B) any consideration received by the
Company or such Restricted Subsidiary, as the case may be, that consists of (1)
all or substantially all of the assets of one or more Similar Businesses, (2)
other long-term assets that are used or useful in one or more Similar Businesses
and (3) Permitted Securities shall be deemed to be cash for purposes of this
provision.

                  Within 365 days after the receipt of any Net Proceeds from an
Asset Sale, the Company may apply such Net Proceeds, at its option, (i) to repay
Indebtedness under a Credit Facility, (ii) to the acquisition of Permitted
Securities, (iii) to the acquisition of all or substantially all of the assets
of one or more Similar Businesses, (iv) to the making of a capital expenditure
or (v) to the acquisition of other long-term assets in a Similar Business.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce Indebtedness under a Credit Facility or otherwise invest such
Net Proceeds in any manner that is not prohibited by this Indenture. Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the
first sentence of this paragraph shall be deemed to constitute "Excess
Proceeds". When the aggregate amount of Excess Proceeds exceeds $10.0 million,
the Company will be required to make an offer to all Holders of the Notes (an
"Asset Sale Offer") and any other Indebtedness that ranks pari passu with the
Notes (including, without limitation, the December 1998 Notes, the 2002 Notes,
the May 2003 Notes and the December 2003 Notes) that, by its terms, requires the
Company to offer to repurchase such Indebtedness with such Excess Proceeds to
purchase the maximum principal amount of Notes and pari passu Indebtedness that
may be purchased out of such Excess Proceeds at an offer price in cash in an
amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest thereon, if any, to the date of purchase, in accordance with the
procedures set forth in this Indenture. To the extent that the aggregate amount
of Notes or pari passu Indebtedness tendered pursuant to an Asset Sale Offer is
less than the Excess Proceeds, the Company may use any Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Notes or pari
passu Indebtedness surrendered by Holders thereof exceeds the amount of Excess
Proceeds in an Asset Sale Offer, the Company shall repurchase such Indebtedness
on a pro rata basis and the Trustee shall select the Notes to be purchased on a
pro rata basis. Upon completion of such offer to purchase, the amount of Excess
Proceeds shall be reset at zero.

Section 4.11      Transactions With Affiliates.

                  The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by



                                       51




the Company or such Restricted Subsidiary with an unrelated Person and (ii) the
Company delivers to the Trustee (A) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (i) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors and (B) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $15.0 million, an opinion as to
the fairness to the Holders of such Affiliate Transaction from a financial point
of view issued by an accounting, appraisal or investment banking firm of
national standing.

                  The foregoing provisions shall not prohibit: (i) any
employment agreement entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business; (ii) any transaction with a
Lehman Investor; (iii) any transaction between or among the Company and/or its
Restricted Subsidiaries; (iv) transactions between the Company or any of its
Restricted Subsidiaries, on the one hand, and a Permitted Joint Venture, on the
other hand, on terms that are not materially less favorable to the Company or
the applicable Restricted Subsidiary of the Company than those that could have
been obtained from an unaffiliated third party; provided that (A) in the case of
any such transaction or series of related transactions pursuant to this clause
(iv) involving aggregate consideration in excess of $5.0 million but less than
$25.0 million, such transaction or series of transactions (or the agreement
pursuant to which the transactions were executed) was approved by the Company's
Chief Executive Officer or Chief Financial Officer and (B) in the case of any
such transaction or series of related transactions pursuant to this clause (iv)
involving aggregate consideration equal to or in excess of $25.0 million, such
transaction or series of related transactions (or the agreement pursuant to
which the transactions were executed) was approved by a majority of the
disinterested members of the Board of Directors; (v) any transaction pursuant to
and in accordance with the provisions of the Transaction Documents as the same
are in effect on the date of this Indenture; and (vi) any Restricted Payment
that is permitted by the provisions of Section 4.07.

Section 4.12      Liens.

                  The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien (other than Permitted Liens) securing Indebtedness on
any asset now owned or hereafter acquired, or any income or profits therefrom or
assign or convey any right to receive income therefrom, unless all payments due
under this Indenture and the Notes are secured on an equal and ratable basis
with the Obligations so secured until such time as such Obligations are no
longer secured by a Lien.

Section 4.13      Future Subsidiary Guarantees.

                  If the Company or any of its Subsidiaries shall acquire or
create a Subsidiary (other than a Foreign Subsidiary or an Unrestricted
Subsidiary) after the date of this Indenture, then such Subsidiary shall execute
a Subsidiary Guarantee, in the form of the Supplemental Indenture attached
hereto as Exhibit E, and the Form of Notation on Senior Subordinated Note,
attached hereto as Exhibit F, and deliver an opinion of counsel as to the
validity of such Subsidiary Guarantee, in accordance with the terms of this
Indenture. The Subsidiary Guarantee



                                       52




of each Guarantor will be subordinated to the prior payment in full of all
Senior Debt of such Guarantor, which would include the guarantees of amounts
borrowed under the Senior Credit Facilities. The obligations of each Guarantor
under its Subsidiary Guarantee will be limited so as not to constitute a
fraudulent conveyance under applicable law.

                  Notwithstanding the foregoing paragraph, for so long as
certain covenants are suspended pursuant to Section 4.18 hereof, no newly
acquired or created Subsidiary will be required to execute a Subsidiary
Guarantee or the related Notation on Senior Subordinated Note unless such
Subsidiary Guarantees Indebtedness of the Company under a Credit Facility.
However, any Subsidiary (other than a Foreign Subsidiary or an Unrestricted
Subsidiary) that Guarantees any Indebtedness of the Company under a Credit
Facility will become a Subsidiary Guarantor and, if at any time certain
covenants are reinstituted pursuant to Section 4.18 hereof, any newly acquired
or created Subsidiary (other than a Foreign Subsidiary or an Unrestricted
Subsidiary) will Guarantee the Notes on the terms and conditions set forth in
this Indenture.

                  No Guarantor may consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person) another Person (except
the Company or another Guarantor) unless (i) subject to the provisions of the
following paragraph, the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made assumes
all the obligations of such Guarantor pursuant to a supplemental indenture in
form and substance reasonably satisfactory to the Trustee, under the Notes and
this Indenture; (ii) immediately after giving effect to such transaction, no
Default or Event of Default exists; and (iii) the Company (A) would be permitted
by virtue of the Company's pro forma Fixed Charge Coverage Ratio, immediately
after giving effect to such transaction, to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.09 or (B) would have a pro forma Fixed Charge Coverage Ratio that is
greater than the actual Fixed Charge Coverage Ratio for the same four-quarter
period without giving pro forma effect to such transaction.

                  Notwithstanding the foregoing clause (iii), (i) any Guarantor
may consolidate with, merge into or transfer all or part of its properties and
assets to the Company or to another Guarantor and (ii) any Guarantor may merge
with an Affiliate that has no significant assets or liabilities and was
incorporated solely for the purpose of reincorporating such Guarantor in another
State of the United States so long as the amount of Indebtedness of the Company
and its Restricted Subsidiaries is not increased thereby.

                  In the event of a sale or other disposition of all of the
assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale
or other disposition of all of the capital stock of any Guarantor, then such
Guarantor (in the event of a sale or other disposition, by way of such a merger,
consolidation or otherwise, of all of the capital stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all of the assets of such Guarantor) will be released and
relieved of any obligations under its Subsidiary Guarantee; provided that the
Net Proceeds of such sale or other disposition are applied in accordance with
the applicable provisions of Section 4.10.



                                       53



Section 4.14      Corporate Existence.

                  Subject to Article 5 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i)
its corporate existence, and the corporate, partnership or other existence of
each of its Restricted Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Restricted Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Restricted
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Restricted Subsidiaries, if the Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Restricted Subsidiaries, taken as
a whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.

Section 4.15      Offer To Repurchase Upon Change Of Control.

(a) Upon the occurrence of a Change of Control, each Holder of Notes shall have
the right to require the Company to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of such Holder's Notes pursuant to the offer
described below (the "Change of Control Offer") at an offer price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Additional Interest thereon, if any, to the date of purchase (the
"Change of Control Payment"). Within ten days following any Change of Control,
the Company shall mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Notes on the date specified in such notice, which date shall be no earlier than
30 days and no later than 60 days from the date such notice is mailed (the
"Change of Control Payment Date"). Such notice, which shall govern the terms of
the Change of Control offer, shall state: (i) that the Change of Control Offer
is being made pursuant to this Section 4.15 and that all Notes tendered will be
accepted for payment; (ii) the purchase price and the purchase date; (iii) that
any Note not tendered will continue to accrue interest; (iv) that, unless the
Company defaults in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date; (v) that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer will
be required to surrender the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (vi) that Holders
will be entitled to withdraw their election if the Paying Agent receives, not
later than the close of business on the second Business Day preceding the Change
of Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing his election to
have the Notes purchased; and (vii) that Holders whose Notes are being purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple thereof. The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes in
connection with a Change of Control.



                                       54



                  (b)    On the Change of Control Payment Date, the Company
shall, to the extent lawful, (i) accept for payment all Notes or portions
thereof properly tendered pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions thereof so tendered and (iii) deliver or cause
to be delivered to the Trustee the Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Notes or portions thereof
being purchased by the Company. The Paying Agent shall promptly mail to each
Holder of Notes so tendered the Change of Control Payment for such Notes, and
the Trustee shall promptly authenticate and mail (or cause to be transferred by
book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that each such
new Note shall be in a principal amount of $1,000 or an integral multiple
thereof. Prior to mailing a Change of Control Offer, but in any event within 90
days following a Change of Control, the Company shall either repay all
outstanding Senior Debt or offer to repay all Senior Debt and terminate all
commitments thereunder of each lender who has accepted such offer or obtain the
requisite consents, if any, under all agreements governing outstanding Senior
Debt to permit the repurchase of Notes required by this Section 4.15. The
Company shall publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Payment Date.

Section 4.16      No Senior Subordinated Debt.

                  The Company shall not incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt and senior in any respect in right of
payment to the Notes. No Guarantor shall incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt of a Guarantor and senior in any respect in
right of payment to any of the Subsidiary Guarantees.

Section 4.17      Payments For Consent.

                  Neither the Company nor any of its Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
or is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.

Section 4.18      Changes in Covenants when Notes Rated Investment Grade.

                  If on any date following the date of this Indenture: (i) the
Notes are rated Baa3 or better by Moody's and BBB- or better by S&P (or, if
either such entity ceases to rate the Notes for reasons outside of the control
of the Company, the equivalent investment grade credit rating from any other
"nationally recognized statistical rating organization" within the meaning of
Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by Company as a
replacement agency) and (ii) no Default or Event of Default shall have occurred
and be continuing, then, beginning on that day and subject to the provisions of
the following paragraph, the provisions and covenants contained in Sections
4.07, 4.08, 4.09, 4.10, 4.11 and 4.17 hereof, clauses (iii)(A) and (B) of the


                                       55




third paragraph of Section 4.13 hereof and clauses (iv)(A) and (B) of the first
paragraph of Section 5.01 hereof will be suspended.

                  In addition, following the achievement of such investment
grade ratings, (i) the Subsidiary Guarantees of the Company's Restricted
Subsidiaries will be released at the time of the release of Guarantees under all
outstanding Credit Facilities; provided that in the event that any such
Restricted Subsidiary thereafter Guarantees any Indebtedness of the Company
under any Credit Facility (or if any released Guarantee under any Credit
Facility is reinstated or renewed), or if at any time certain covenants are
reinstituted as provided in the following paragraph, then such Restricted
Subsidiary will Guarantee the Notes on the terms and conditions set forth in
this Indenture and (ii) as described in Section 4.13 hereof, no Restricted
Subsidiary thereafter acquired or created will be required to execute a
Subsidiary Guarantee unless such Subsidiary Guarantees Indebtedness of the
Company under a Credit Facility.

                  Notwithstanding the foregoing, if the rating assigned to the
Notes by any such rating agency should subsequently decline to below Baa3 or
BBB-, respectively, the foregoing covenants shall be reinstituted as of and from
the date of such rating decline. For purposes of determining whether a
Restricted Payment exceeds the allowable amount under the calculation described
in subparagraphs (i) through (iv) of Section 4.07(c) hereof, the covenant
contained in Section 4.07 hereof will be interpreted as if it had been in effect
since the date of this Indenture. However, no default will be deemed to have
occurred as a result of the provisions and covenants contained in Sections 4.07,
4.08, 4.09, 4.10, 4.11 and 4.17 hereof, clauses (iii)(A) and (B) of the third
paragraph of Section 4.13 hereof and clauses (iv)(A) and (B) of the first
paragraph of Section 5.01 hereof while those provisions and covenants were
suspended.

                                   ARTICLE 5.
                                   SUCCESSORS

Section 5.01      Merger, Consolidation, Or Sale Of Assets.

                  The Company may not consolidate or merge with or into (whether
or not the Company is the surviving corporation), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets in one or more related transactions, to another Person unless (i) the
Company is the surviving corporation or the Person formed by or surviving any
such consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia; (ii) the Person formed by or
surviving any such consolidation or merger (if other than the Company) or the
Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the obligations of the Company
under the Registration Rights Agreement, the Notes and this Indenture pursuant
to a supplemental indenture in a form reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of Default exists;
and (iv) except in the case of a merger of the Company with or into a Wholly
Owned Restricted Subsidiary of the Company, the Company or the Person formed by
or surviving any such consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made, after giving pro forma effect to such transaction as if
such transaction had



                                       56




occurred at the beginning of the most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding such
transaction either: (A) would be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.09 or (B) would have a pro forma Fixed Charge
Coverage Ratio that is greater than the actual Fixed Charge Coverage Ratio for
the same four-quarter period without giving pro forma effect to such
transaction.

                  Notwithstanding clause (iv) in the immediately foregoing
paragraph, (i) any Restricted Subsidiary may consolidate with, merge into or
transfer all or part of its properties and assets to the Company; and (ii) the
Company may merge with an Affiliate that has no significant assets or
liabilities and was incorporated solely for the purpose of reincorporating the
Company in another State of the United States so long as the amount of
Indebtedness of the Company and its Restricted Subsidiaries is not increased
thereby.

Section 5.02      Successor Corporation Substituted.

                  Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, be substituted for (so that from and after
the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale of all of the Company's assets that meets the requirements of Section
5.01 hereof.

                                   ARTICLE 6.
                              DEFAULTS AND REMEDIES

Section 6.01      Events of Default.

                  An "Event of Default" occurs if:

                  (a)    the Company defaults in the payment when due of
             interest on, or Additional Interest, if any, with respect to, the
             Notes and such default continues for a period of 30 days (whether
             or not prohibited by the subordination provisions of this
             Indenture);

                  (b)    the Company defaults in the payment when due of the
             principal of or premium, if any, on the Notes (whether or not
             prohibited by the subordination provisions of this Indenture);

                  (c)    the Company fails to comply with any of the provisions
             of Section 4.10, 4.15, or 5.01 hereof;



                                       57



                  (d)    the Company fails to observe or perform any other
             covenant or other agreement in this Indenture or the Notes for 60
             days after notice to the Company by the Trustee or the Holders of
             at least 25% in aggregate principal amount of the Notes then
             outstanding;

                  (e)    a default occurs under any mortgage, indenture or
             instrument under which there may be issued or by which there may be
             secured or evidenced any Indebtedness for money borrowed by the
             Company or any of its Restricted Subsidiaries (or the payment of
             which is guaranteed by the Company or any of its Restricted
             Subsidiaries), whether such Indebtedness or guarantee now exists,
             or is created after the date of this Indenture, which default
             results in the acceleration of such Indebtedness prior to its
             express maturity and, in each case, the principal amount of such
             Indebtedness, together with the principal amount of any other such
             Indebtedness, the maturity of which has been so accelerated,
             aggregates $25.0 million or more;

                  (f)    the Company or any of its Restricted Subsidiaries is
             subject to a final judgments aggregating in excess of $25.0
             million, which judgments are not paid, discharged or stayed for a
             period of 60 days;

                  (g)    the Company or any of its Significant Subsidiaries or
             any group of Subsidiaries that, taken as a whole, would
             constitute a Significant Subsidiary pursuant to or within the
             meaning of Bankruptcy Law:

                         (i)   commences a voluntary case,

                         (ii)  consents to the entry of an order for relief
                  against it in an involuntary case,

                         (iii) consents to the appointment of a custodian of
                  it or for all or substantially all of its property,

                         (iv)  makes a general assignment for the benefit of
                  its creditors, or

                         (v)   generally is not paying its debts as they become
                  due;

                  (h)    a court of competent jurisdiction enters an order or
             decree under any Bankruptcy Law that:

                         (i)   is for relief against the Company or any of its
                  Significant Subsidiaries or any group of Subsidiaries that,
                  taken as a whole, would constitute a Significant Subsidiary in
                  an involuntary case;

                         (ii)  appoints a custodian of the Company or any of
                  its Significant Subsidiaries or any group of Subsidiaries
                  that, taken as a whole, would constitute a Significant
                  Subsidiary or for all or substantially all of the property of
                  the Company or any of its Significant Subsidiaries or any
                  group of Subsidiaries that, taken as a whole, would constitute
                  a Significant Subsidiary; or



                                       58



                         (iii) orders the liquidation of the Company or any of
                  its Significant Subsidiaries or any group of Subsidiaries
                  that, taken as a whole, would constitute a Significant
                  Subsidiary;

                  and the order or decree remains unstayed and in effect for 60
                  consecutive days; or

                         (i)   except as permitted herein, any Subsidiary
                  Guarantee shall be held in any judicial proceeding to be
                  unenforceable or invalid.

                  The Holders of a majority in aggregate principal amount of the
Notes then outstanding by notice to the Trustee may on behalf of the Holders of
all of the Notes waive any existing Default or Event of Default and its
consequences under this Indenture except a continuing Default or Event of
Default in the payment of interest on, or the principal of, the Notes.

Section 6.02      Acceleration.

                  If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable immediately; provided, however,
that so long as any Designated Senior Debt is outstanding, such declaration
shall not become effective until the earlier of (i) the day which is five
Business Days after receipt by the Representatives of Designated Senior Debt of
such notice of acceleration or (ii) the date of acceleration of any Designated
Senior Debt. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, with respect to the
Company or any Significant Subsidiary or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary, all outstanding Notes
will become due and payable without further action or notice. Holders of the
Notes may not enforce this Indenture or the Notes except as provided in this
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.

                  In the case of any Event of Default occurring by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Notes pursuant to
the optional redemption provisions of this Indenture, an equivalent premium
shall also become and be immediately due and payable to the extent permitted by
law upon the acceleration of the Notes. If an Event of Default occurs prior to
January 15, 2010 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Notes prior to January 15, 2010 then the
premium specified below (expressed as a percentage of the principal amount of
the Notes on the date of payment that would otherwise be due but for the
provisions of this sentence) shall also become immediately due and payable to
the extent permitted by law upon the acceleration of the Notes during the
twelve-month period ending on January 15 of the years indicated below:



                                       59



            YEAR                                         PERCENTAGE
            ----                                         ----------
            2005............................................5.875%
            2006............................................5.2875%
            2007............................................4.700%
            2008............................................4.1125%
            2009............................................3.525%
            2010............................................2.9375%


Section 6.03      Other Remedies.

                  If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.

                  The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.

Section 6.04      Waiver of Past Defaults.

                  Holders of not less than a majority in aggregate principal
amount of the then outstanding Notes by notice to the Trustee may on behalf of
the Holders of all of the Notes waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of the principal of, premium or Additional Interest, if any, or
interest on, the Notes including in connection with an offer to purchase;
provided, however, that the Holders of a majority in aggregate principal amount
at maturity of the then outstanding Notes may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.

Section 6.05      Control By Majority.

                  Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or that the Trustee
determines may be unduly prejudicial to the rights of other Holders of Notes or
that may involve the Trustee in personal liability.

Section 6.06      Limitation On Suits.

                  A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:



                                       60



                  (a)    the Holder of a Note gives to the Trustee written
             notice of a continuing Event of Default;

                  (b)    the Holders of at least 25% in principal amount of the
             then outstanding Notes make a written request to the Trustee to
             pursue the remedy;

                  (c)    such Holder of a Note or Holders of Notes offer and, if
             requested, provide to the Trustee indemnity satisfactory to the
             Trustee against any loss, liability or expense;

                  (d)    the Trustee does not comply with the request within 60
             days after receipt of the request and the offer and, if requested,
             the provision of indemnity; and

                  (e)    during such 60-day period the Holders of a majority in
             principal amount of the then outstanding Notes do not give the
             Trustee a direction inconsistent with the request.

A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.

Section 6.07      Rights of Holders of Notes to Receive Payment.

                  Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal, premium and
Additional Interest, if any, and interest on the Note, on or after the
respective due dates expressed in the Note (including in connection with an
offer to purchase), or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.

Section 6.08      Collection Suit by Trustee.

                  If an Event of Default specified in Section 6.01(a) or (b)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium and Additional Interest, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.09      Trustee May File Proofs Of Claim.

                  The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders of the Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Notes), its creditors or its property and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the



                                       61




Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.

Section 6.10      Priorities.

                  If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:

                  First: to the Trustee, its agents and attorneys for amounts
             due under Section 7.07 hereof, including payment of all
             compensation, expense and liabilities incurred, and all advances
             made, by the Trustee and the costs and expenses of collection;

                  Second: to Holders of Notes for amounts due and unpaid on the
             Notes for principal, premium and Additional Interest, if any, and
             interest, ratably, without preference or priority of any kind,
             according to the amounts due and payable on the Notes for
             principal, premium and Additional Interest, if any, and interest,
             respectively; and

                  Third: to the Company or to such party as a court of competent
             jurisdiction shall direct.

                  The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.

Section 6.11      Undertaking for Costs.

                  In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Notes.






                                       62



                                   ARTICLE 7.
                                    TRUSTEE

Section 7.01      Duties Of Trustee.

                  (a)    If an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's affairs.

                  (b)    Except during the continuance of an Event of Default:

                  (i)    the duties of the Trustee shall be determined solely by
             the express provisions of this Indenture and the Trustee need
             perform only those duties that are specifically set forth in this
             Indenture and no others, and no implied covenants or obligations
             shall be read into this Indenture against the Trustee; and

                  (ii)   in the absence of bad faith or negligence on its part,
             the Trustee may conclusively rely, as to the truth of the
             statements and the correctness of the opinions expressed therein,
             upon certificates or opinions furnished to the Trustee and
             conforming to the requirements of this Indenture. However, the
             Trustee shall examine the certificates and opinions to determine
             whether or not they conform to the requirements of this Indenture
             (but need not confirm or investigate the accuracy of mathematical
             calculations or other facts stated therein).

                  (c)    The Trustee may not be relieved from liabilities for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

                  (i)    this paragraph does not limit the effect of paragraph
             (b) of this Section;

                  (ii)   the Trustee shall not be liable for any error of
             judgment made in good faith by a Responsible Officer, unless it
             is proved that the Trustee was negligent in ascertaining the
             pertinent facts; and

                  (iii)  the Trustee shall not be liable with respect to any
             action it takes or omits to take in good faith in accordance with a
             direction received by it pursuant to Section 6.05 hereof.

                  (d)    Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.

                  (e)    No provision of this Indenture shall require the
Trustee to expend or risk its own funds or incur any liability. The Trustee
shall be under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.




                                       63



                  (f)    The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.

Section 7.02      Rights Of Trustee.

                  (a)    The Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in such
document.

                  (b)    Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.

                  (c)    The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.

                  (d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.

                  (e)    Unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.

                  (f)    The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.

                  (g)    The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder.

                  (h)    The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Notes and this Indenture.

                  (i)    Money held by the Trustee in trust hereunder need not
be segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.



                                       64



                  (j)    The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.

                  (k)    The Trustee may request that the Company deliver an
Officers' Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Indenture, which Officers' Certificate may be signed by any person authorized to
sign an Officers' Certificate, including any person specified as so authorized
in any such certificate previously delivered send not superseded.

Section 7.03      Individual Rights of Trustee.

                  The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

Section 7.04      Trustee's Disclaimers.

                  The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.

Section 7.05      Notice of Defaults.

                  If a Default or Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 90 days after it occurs. Except
in the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest on any Note, the Trustee may withhold the notice if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the Notes.

Section 7.06      Reports by Trustee to Holders of the Notes.

                  Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA ss. 313(a) (but if no
event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b)(2). The Trustee shall also transmit by mail all
reports as required by TIA ss. 313(c).




                                       65



                  A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Notes are listed in accordance with TIA ss. 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.

Section 7.07      Compensation and Indemnity.

                  The Company shall pay to the Trustee from time to time such
compensation as the Company and the Trustee shall from time to time agree in
writing for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.

                  The Company shall indemnify the Trustee or any predecessor
Trustee against any and all losses, liabilities or expenses, including taxes
(except for taxes based upon the income of the Trustee), incurred by it arising
out of or in connection with the acceptance or administration of its duties
under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this Section 7.07) and defending itself
against any claim (whether asserted by the Company or any Holder or any other
person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence or bad faith. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.

                  The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture and the resignation or
removal of the Trustee.

                  When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.

                  The Trustee shall comply with the provisions of TIA ss.
313(b)(2) to the extent applicable.

Section 7.08      Replacement of Trustee.

                  A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.




                                       66



                  The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of Notes of a majority in principal amount of the then outstanding Notes
may remove the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:

                  (a)    the Trustee fails to comply with Section 7.10 hereof;

                  (b)    the Trustee is adjudged a bankrupt or an insolvent or
             an order for relief is entered with respect to the Trustee under
             any Bankruptcy Law;

                  (c)    a custodian or public officer takes charge of the
             Trustee or its property; or

                  (d)    the Trustee becomes incapable of acting.

                  If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.

                  If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee (at the
Company's expense), the Company, or the Holders of Notes of at least 10% in
principal amount of the then outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

                  If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.

                  A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.

Section 7.09      Successor Trustee by Merger, Etc.

                  If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.







                                       67




Section 7.10      Eligibility; Disqualification.

                  There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $50 million as set forth in its most recent published annual report of
condition.

                  This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).

Section 7.11      Preferential Collection of Claims Against Company.

                  The Trustee is subject to TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated therein.

                                   ARTICLE 8.
                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01      Option to Effect Legal Defeasance or Covenant Defeasance.

                  The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article 8.

Section 8.02      Legal Defeasance and Discharge.

                  Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding Notes
on the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium and Additional Interest, if any, and interest on such
Notes when such payments are due, (b) the Company's obligations with respect to
such Notes under Sections 2.06, 2.07, 2.10 and 4.02 hereof, (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (d) this Article 8. Subject to
compliance with this Article 8, the Company may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under Section 8.03
hereof.




                                       68



Section 8.03      Covenant Defeasance.

                  Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from its obligations under Sections 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
4.13, 4.15 and 4.16 and Article 5 hereof with respect to the outstanding Notes
on and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(d) through 6.01(f) hereof shall not
constitute Events of Default.

Section 8.04      Conditions to Legal or Covenant Defeasance.

                  The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes:

                  In order to exercise either Legal Defeasance or Covenant
Defeasance:

                  (a)    the Company must irrevocably deposit with the Trustee,
             in trust, for the benefit of the Holders, cash in United States
             dollars, non-callable Government Securities, or a combination
             thereof, in such amounts as will be sufficient, in the opinion of
             a nationally recognized firm of independent public accountants,
             to pay the principal of, premium and Additional Interest, if any,
             and interest on the outstanding Notes on the stated date for
             payment thereof or on the applicable redemption date, as the case
             may be, and the Company must specify whether the Notes are being
             defeased to maturity or to a particular redemption date;

                  (b)    in the case of an election under Section 8.02 hereof,
             the Company shall have delivered to the Trustee an Opinion of
             Counsel in the United States reasonably acceptable to the Trustee
             confirming that (A) the Company has received from, or there has
             been published by, the Internal Revenue Service a ruling or (B)
             since the date of this Indenture, there has been a change in the
             applicable federal income tax law, in either case to the effect
             that, and based thereon such Opinion of Counsel shall confirm
             that, the Holders of the outstanding Notes will not recognize
             income, gain or loss for federal income tax purposes as a result
             of such Legal Defeasance and will be subject to federal



                                       69



             income tax on the same amounts, in the same manner and at the
             same times as would have been the case if such Legal Defeasance
             had not occurred;

                  (c)    in the case of an election under Section 8.03 hereof,
             the Company shall have delivered to the Trustee an Opinion of
             Counsel in the United States reasonably acceptable to the Trustee
             confirming that the Holders of the outstanding Notes will not
             recognize income, gain or loss for federal income tax purposes as
             a result of such Covenant Defeasance and will be subject to
             federal income tax on the same amounts, in the same manner and at
             the same times as would have been the case if such Covenant
             Defeasance had not occurred;

                  (d)    no Default or Event of Default shall have occurred and
             be continuing on the date of such deposit (other than a Default
             or Event of Default resulting from the incurrence of Indebtedness
             all or a portion of the proceeds of which will be used to defease
             the Notes pursuant to this Article 8 concurrently with such
             incurrence) or insofar as Sections 6.01(g) or 6.01(h) hereof is
             concerned, at any time in the period ending on the 91st day after
             the date of deposit;

                  (e)    such Legal Defeasance or Covenant Defeasance shall not
             result in a breach or violation of, or constitute a default under,
             any material agreement or instrument (other than this Indenture) to
             which the Company or any of its Restricted Subsidiaries is a party
             or by which the Company or any of its Restricted Subsidiaries is
             bound; (f) the Company shall have delivered to the Trustee an
             opinion of counsel to the effect that on the 91st day following the
             deposit, the trust funds will not be subject to the effect of any
             applicable bankruptcy, insolvency, reorganization or similar laws
             affecting creditors' rights generally;

                  (g)    the Company shall have delivered to the Trustee an
             Officers' Certificate stating that the deposit was not made by the
             Company with the intent of preferring the Holders over any other
             creditors of the Company or with the intent of defeating,
             hindering, delaying or defrauding any other creditors of the
             Company; and

                  (h)    the Company shall have delivered to the Trustee an
             Officers' Certificate and an Opinion of Counsel, each stating that
             all conditions precedent provided for or relating to the Legal
             Defeasance or the Covenant Defeasance have been complied with.

Section 8.05      Deposited Money and Government Securities to be held in Trust;
                  Other Miscellaneous Provisions.

                  Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of



                                       70



principal, premium and Additional Interest, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.

                  The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.

                  Anything in this Article 8 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or non-callable Government Securities held by
it as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.

Section 8.06      Repayment to Company.

                  Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium
and Additional Interest, if any, or interest on any Note and remaining unclaimed
for two years after such principal, premium and Additional Interest, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Note shall thereafter, as a secured creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in The New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.

Section 8.07      Reinstatement.

                  If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company
makes any payment of principal of, premium, if any, or interest on any Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.




                                       71



                                   ARTICLE 9.
                        AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01      Without Consent of Holders of Notes.

                  Notwithstanding Section 9.02 of this Indenture, the Company
and the Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder of a Note:

                  (a)    to cure any ambiguity, defect or inconsistency;

                  (b)    to provide for uncertificated Notes in addition to or
             in place of certificated Notes;

                  (c)    to provide for the assumption of the Company's
             obligations to the Holders of the Notes in the case of a merger
             or consolidation pursuant to Article 5 hereof;

                  (d)    to make any change that would provide any additional
             rights or benefits to the Holders of the Notes or that does not
             adversely affect the legal rights hereunder of any Holder of the
             Note;

                  (e)    to comply with requirements of the SEC in order to
             effect or maintain the qualification of this Indenture under the
             TIA; or

                  (f)    to conform the text of this Indenture or the Notes to
             any provision of the "Description of the Notes" section of the
             Company's Offering Memorandum, dated November 1, 2004, related to
             the initial offering of the Notes, to the extent that such
             provision in that "Description of the Notes" section was intended
             to be a verbatim recitation of a provision of this Indenture, the
             Subsidiary Guarantees or the Notes.

                Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Company in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.

Section 9.02      With Consent of Holders of Notes.

                  Except as provided below in this Section 9.02, the Company and
the Trustee may amend or supplement this Indenture (including Section 3.09, 4.10
and 4.15 hereof) and the Notes may be amended or supplemented with the consent
of the Holders of at least a majority in principal amount of the Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for the Notes), and, subject to Sections 6.04 and 6.07 hereof,
any existing Default or Event of Default (other than a Default or Event of
Default in the payment of the principal of, premium, if any, or interest on the
Notes, except a payment default resulting



                                       72




from an acceleration that has been rescinded) or compliance with any provision
of this Indenture or the Notes may be waived with the consent of the Holders of
a majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for the Notes).

                  Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company in the execution of such amended
or supplemental Indenture unless such amended or supplemental Indenture affects
the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.

                  The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Persons entitled to consent to any
indenture supplemental hereto. If a record date is fixed, the Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to consent to such supplemental indenture, whether or not such Holders
remain Holders after such record date; provided, that unless such consent shall
have become effective by virtue of the requisite percentage having been obtained
prior to the date which is 180 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
canceled and of no further effect.

                  It shall not be necessary for the consent of the Holders of
Notes under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.

                  After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment or waiver may not (with respect to any Notes
held by a non-consenting Holder):

                  (a)    reduce the principal amount of Notes whose Holders must
             consent to an amendment, supplement or waiver;

                  (b)    reduce the principal of or change the fixed maturity of
             any Note or alter or waive any of the provisions with respect to
             the redemption of the Notes except as provided above with respect
             to Sections 4.10 and 4.15 hereof;

                  (c)    reduce the rate of or change the time for payment of
             interest, including default interest, on any Note;



                                       73



                  (d)   waive a Default or Event of Default in the payment of
             principal of, or premium and Additional Interest, if any, or
             interest on the Notes (except a rescission of acceleration of the
             Notes by the Holders of at least a majority in aggregate principal
             amount of the then outstanding Notes and a waiver of the payment
             default that resulted from such acceleration);

                  (e)   make any Note payable in money other than that stated
             in the Notes;

                  (f)   make any change in the provisions of this Indenture
             relating to waivers of past Defaults or the rights of Holders of
             Notes to receive payments of principal of or premium and Additional
             Interest, if any, or interest on the Notes;

                  (g)   waive a redemption payment with respect to any Note

             (other than a payment required by Sections 3.09, 4.10 and 4.15
             hereof); or

                  (h)   make any change in Section 6.04 or 6.07 hereof or in the
             foregoing amendment and waiver provisions.

Section 9.03      Compliance with Trust Indenture Act.

                  Every amendment or supplement to this Indenture or the Notes
shall be set forth in a amended or supplemental Indenture that complies with the
TIA as then in effect.

Section 9.04      Revocation and Effect of Consents.

                  Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.

Section 9.05      Notation on or Exchange of Notes.

                  The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall authenticate
new Notes that reflect the amendment, supplement or waiver.

                  Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.

Section 9.06      Trustee to Sign Amendments, Etc.

                  The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights,



                                       74




duties, liabilities or immunities of the Trustee. The Company may not sign an
amendment or supplemental indenture until the Board of Directors approves it. In
executing any amended or supplemental indenture, the Trustee shall be entitled
to receive and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that the
execution of such amended or supplemental indenture is authorized or permitted
by this Indenture.

                                  ARTICLE 10.
                              SUBSIDIARY GUARANTEES

Section 10.01     Agreement to Guarantee.

                  Each of the Guarantors hereby agrees as follows:

                  (a)    Such Guarantor, jointly and severally with all other
             Guarantors, unconditionally guarantees to each Holder of a Note
             authenticated and delivered by the Trustee and to the Trustee its
             successors and assigns, regardless of the validity and
             enforceability of this Indenture, the Notes or the Obligations of
             the Company under this Indenture or the Notes, that:

                  (i)    the principal of, premium, interest and Additional
             Interest, if any, on the Notes will be promptly paid in full when
             due, whether at maturity, by acceleration, redemption or otherwise,
             and interest on the overdue principal of, premium, interest and
             Additional Interest, if any, on the Notes, to the extent lawful,
             and all other Obligations of the Company to the Holders or the
             Trustee thereunder or under this Indenture will be promptly paid in
             full, all in accordance with the terms thereof; and

                  (ii)   in case of any extension of time for payment or renewal
             of any Notes or any of such other Obligations, that the same will
             be promptly paid in full when due in accordance with the terms of
             the extension or renewal, whether at stated maturity, by
             acceleration or otherwise.

                  (b)    Notwithstanding the foregoing, in the event that this
Guarantee would constitute or result in a violation of any applicable fraudulent
conveyance or similar law of any relevant jurisdiction, the liability of the
Guarantors under this Indenture shall be reduced to the maximum amount
permissible under such fraudulent conveyance or similar law. Section 10.02
Execution and Delivery of Subsidiary Guarantees.

                  (a)    To evidence its Subsidiary Guarantees set forth in this
Indenture, each Guarantor hereby agrees that a notation of such Guarantee
substantially in the form attached as Exhibit F to this Indenture shall be
endorsed by an Officer of such Guarantor on each Note authenticated and
delivered by the Trustee on or after the date hereof.

                  (b)    Notwithstanding the foregoing, each Guarantor hereby
agrees that its Guarantee set forth herein shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Guarantee.



                                       75



                  (c)    If an Officer whose signature is on this Indenture no
longer holds that office at the time the Trustee authenticates the Note on which
a Guarantee is endorsed, the Guarantee shall be valid nevertheless.

                  (d)    The delivery of any Note by the Trustee, after the
authentication thereof under this Indenture, shall constitute due delivery of
the Guarantee set forth in this Indenture on behalf of each Guarantor.

                  (e)    Each Guarantor hereby agrees that its obligations
hereunder shall be unconditional, regardless of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.

                  (f)    Each Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that its
Guarantee made pursuant to this Indenture will not be discharged except by
complete performance of the obligations contained in the Notes and this
Indenture.

                  (g)    If any Holder or the Trustee is required by any court
or otherwise to return to the Company or any Guarantor, or any custodian,
Trustee, liquidator or other similar official acting in relation to either the
Company or such Guarantor, any amount paid by either to the Trustee or such
Holder, the Guarantee made pursuant to this Indenture, to the extent theretofore
discharged, shall be reinstated in full force and effect.

                  (h)    Each Guarantor agrees that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Guarantor further agrees that, as between such
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand:

                  (i)    the maturity of the Obligations guaranteed hereby may
             be accelerated as provided in Article 6 of this Indenture for the
             purposes of the Guarantee made pursuant to this Indenture,
             notwithstanding any stay, injunction or other prohibition
             preventing such acceleration in respect of the obligations
             guaranteed hereby; and

                  (ii)   in the event of any declaration of acceleration of such
             Obligations as provided in Article 6 of this Indenture, such
             Obligations (whether or not due and payable) shall forthwith become
             due and payable by such Guarantor for the purpose of the Guarantee
             made pursuant to this Indenture.

                  (i)    Each Guarantor shall have the right to seek
contribution from any other non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders or the Trustee under the
Guarantee made pursuant to this Indenture.



                                       76



Section 10.03     Guarantors May Consolidate, Etc. on Certain Terms.

                  (a)    Except as set forth in Articles 4 and 5 of this
Indenture, nothing contained in this Indenture or in the Notes shall prevent any
consolidation or merger of any Guarantor with or into the Company or any other
Guarantor or shall prevent any transfer, sale or conveyance of the property of
any Guarantor as an entirety or substantially as an entirety, to the Company or
any other Guarantor.

                  (b)    Except as set forth in Articles 4 and 5 of this
Indenture, nothing contained in this Indenture or in the Notes shall prevent any
consolidation or merger of any Guarantor with or into a corporation or
corporations other than the Company or any other Guarantor (in each case,
whether or not affiliated with the Guarantor), or successive consolidations or
mergers in which a Guarantor or its successor or successors shall be a party or
parties, or shall prevent any sale or conveyance of the property of any
Guarantor as an entirety or substantially as an entirety, to a corporation other
than the Company or any other Guarantor (in each case, whether or not affiliated
with the Guarantor) authorized to acquire and operate the same; provided,
however, that each Guarantor hereby covenants and agrees that (i) subject to
this Indenture, upon any such consolidation, merger, sale or conveyance, the due
and punctual performance and observance of all of the covenants and conditions
of this Indenture to be performed by such Guarantor, shall be expressly assumed
(in the event that such Guarantor is not the surviving corporation in the
merger), by supplemental indenture satisfactory in form to the Trustee, executed
and delivered to the Trustee, by the corporation formed by such consolidation,
or into which such Guarantor shall have been merged, or by the corporation which
shall have acquired such property and (ii) immediately after giving effect to
such consolidation, merger, sale or conveyance no Default or Event of Default
exists.

                  (c)    In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the Guarantee made pursuant to this Indenture and the due and
punctual performance of all of the covenants and conditions of this Indenture to
be performed by such Guarantor, such successor corporation shall succeed to and
be substituted for such Guarantor with the same effect as if it had been named
herein as one of the Guarantors. Such successor corporation thereupon may cause
to be signed any or all of the Guarantees to be endorsed upon the Notes issuable
under this Indenture which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Guarantees so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Guarantees
theretofore and thereafter issued in accordance with the terms of this Indenture
as though all of such Guarantees had been issued at the date of the execution
hereof.

Section 10.04     Releases.

                  (a)    Concurrently with any sale of assets (including, if
applicable, all of the Capital Stock of a Guarantor), all Liens, if any, in
favor of the Trustee in the assets sold thereby shall be released; provided that
in the event of an Asset Sale, the Net Proceeds from such sale or other
disposition are treated in accordance with the provisions of Section 4.10 of
this Indenture. If the assets sold in such sale or other disposition include all
or substantially all of the assets of a Guarantor or all of the Capital Stock of
a Guarantor, then the Guarantor (in the event of a sale or




                                       77




other disposition of all of the Capital Stock of such Guarantor) or the Person
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) shall be released from and
relieved of its obligations under this Indenture and its Guarantee made pursuant
hereto; provided that in the event of an Asset Sale, the Net Proceeds from such
sale or other disposition are treated in accordance with the provisions of
Section 4.10 of this Indenture. Upon delivery by the Company to the Trustee of
an Officers' Certificate to the effect that such sale or other disposition was
made by the Company or the Guarantor, as the case may be, in accordance with the
provisions of this Indenture, including, without limitation, Section 4.10 of
this Indenture, the Trustee shall execute any documents reasonably required in
order to evidence the release of the Guarantor from its obligations under this
Indenture and its Guarantee made pursuant hereto. If the Guarantor is not
released from its obligations under its Guarantee, it shall remain liable for
the full amount of principal of and interest and Additional Interest, if any, on
the Notes and for the other obligations of such Guarantor under this Indenture.

                  (b)    Upon the designation of a Guarantors as an Unrestricted
Subsidiary in accordance with the terms of this Indenture, such Guarantor shall
be released and relieved of its obligations under this Indenture. Upon delivery
by the Company to the Trustee of an Officers' Certificate and an Opinion of
Counsel to the effect that such designation of such Guarantor as an Unrestricted
Subsidiary was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.07 hereof, the Trustee shall
execute any documents reasonably required in order to evidence the release of
such Guarantor from its obligations under its Guarantee. Any Guarantor not
released from its obligations under its Guarantee shall remain liable for the
full amount of principal of and interest on the Notes and for the other
obligations of any Guarantor under this Indenture as provided in this Article
10.

                  (c)    Each Guarantor shall be released and relieved of its
obligations under this Indenture in accordance with, and subject to, Section
4.18 hereof.

Section 10.05     No Recourse Against Others.

                  No past, present or future director, officer, employee,
incorporator, stockholder or agent of any Subsidiary of the Company, as such,
shall have any liability for any obligations of the Company or any Subsidiary of
the Company under the Notes, any Guarantees, this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of the Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the Securities and Exchange
Commission that such a waiver is against public policy.

Section 10.06     Subordination of Subsidiary Guarantees

                  The Guarantee of each Guarantor shall be subordinated to the
prior payment in full of all Senior Debt of that Guarantor (in the same manner
and to the same extent that the Notes are subordinated to Senior Debt), which
shall include all guarantees of Senior Debt.



                                       78



                                  ARTICLE 11.
                                  SUBORDINATION

Section 11.01     Agreement to Subordinate.

                  The Company agrees, and each Holder by accepting a Note
agrees, that the Indebtedness evidenced by the Notes is subordinated in right of
payment, to the extent and in the manner provided in this Article 11, to the
prior payment in full in cash of all Senior Debt (whether outstanding on the
date hereof or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Debt.

Section 11.02     Liquidation; Dissolution; Bankruptcy.

                  Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company, in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property, in an assignment for the benefit of creditors or in any marshalling of
the Company's assets and liabilities, the holders of Senior Debt shall be
entitled to receive payment in full in cash of all Obligations due in respect of
such Senior Debt (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior Debt, whether or not
an allowable claim in any such proceeding) before the Holders of Notes will be
entitled to receive any payment with respect to the Notes, and until all
Obligations with respect to Senior Debt are paid in full in cash, any
distribution to which the Holders of Notes would be entitled shall be made to
the holders of Senior Debt (except, in each case, that Holders of Notes may
receive Permitted Junior Securities and payments made from the trust described
under Article 8).

Section 11.03     Default on Designated Senior Debt.

                  The Company may not make any payment or distribution to the
Trustee or any Holder in respect of Obligations with respect to the Notes and
may not acquire from the Trustee or any Holder any Notes for cash or property
(other than (i) securities that are subordinated to at least the same extent as
the Notes to (a) Senior Debt and (b) any securities issued in exchange for
Senior Debt and (ii) payments and other distributions made from any defeasance
trust created pursuant to Section 8.01 hereof) until all principal and other
Obligations with respect to the Senior Debt have been paid in full if:

                  (i)    a default in the payment of any principal or other
             Obligations with respect to Designated Senior Debt occurs and is
             continuing; or

                  (ii)   a default, other than a payment default, on Designated
             Senior Debt occurs and is continuing that then permits holders of
             the Designated Senior Debt as to which such default relates to
             accelerate its maturity (or that would permit such holders to
             accelerate with the giving of notice or the passage of time or
             both) and the Trustee receives a notice of the default (a
             "Payment Blockage Notice") from the Company or a Representative
             with respect to such Designated Senior Debt. If the Trustee
             receives any such Payment Blockage Notice, no subsequent Payment
             Blockage Notice shall be effective for purposes of this Section
             unless and until (i) at least 360 days shall have elapsed since
             the effectiveness of the immediately prior Payment Blockage
             Notice and



                                       79



             (ii) all scheduled payments of principal, premium and Additional
             Interest, if any, and interest on the Notes that have come due
             have been paid in full in cash. No nonpayment default that
             existed or was continuing on the date of delivery of any Payment
             Blockage Notice to the Trustee shall be, or be made, the basis
             for a subsequent Payment Blockage Notice unless such default
             shall have been waived or cured for a period of not less than 90
             days.

                  The Company may and shall resume payments on and distributions
in respect of the Notes and may acquire them upon the earlier of:

                  (i)    the date upon which the default is cured or waived, or

                  (ii)   in the case of a default referred to in
             Section 11.03(ii) hereof, 179 days pass after the date on which
             the applicable Payment Blockage Notice is received if the
             maturity of such Designated Senior Debt has not been accelerated,

if this Article otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.

Section 11.04     Acceleration of Securities.

                  If payment of the Securities is accelerated because of an
Event of Default, the Company shall promptly notify holders of Senior Debt of
the acceleration.

Section 11.05     When Distribution Must Be Paid Over.

                  In the event that the Trustee or any Holder receives any
payment of any Obligations with respect to the Notes at a time when the Trustee
or such Holder, as applicable, has actual knowledge that such payment is
prohibited by Article 11 hereof, such payment shall be held by the Trustee or
such Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered, upon written request, to, the holders of Senior Debt as their
interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.

                  With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Company or any other Person money or assets to which any holders
of Senior Debt shall be entitled by virtue of this Article 11, except if such
payment is made as a result of the willful misconduct or negligence of the
Trustee.




                                       80



Section 11.06     Notice by Company.

                  The Company shall promptly notify the Trustee and the Paying
Agent of any facts known to the Company that would cause a payment of any
Obligations with respect to the Notes to violate this Article 11, but failure to
give such notice shall not affect the subordination of the Notes to the Senior
Debt as provided in this Article 11.

                  The Trustee shall be entitled to rely on the delivery to it of
a written notice by a person representing himself to be a holder of Senior Debt
(or a trustee or agent on behalf of such holder) to establish that such notice
has been given by a holder of Senior Debt (or a trustee or agent on behalf of
any such holder). In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any person as holder
of Senior Debt to participate in any payment or distribution pursuant to this
Article 11, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such person, the extent to which such person is entitled to participate in such
evidence is not furnish, the Trustee may defer any payment which it may be
required to make for the benefit of such person pursuant to the terms of this
Indenture pending judicial determination as to the rights of such person to
receive such payment.

Section 11.07     Subrogation.

                  After all Senior Debt is paid in full in cash and until the
Notes are paid in full, Holders of Notes shall be subrogated (equally and
ratably with all other Indebtedness pari passu with the Notes) to the rights of
holders of Senior Debt to receive distributions applicable to Senior Debt to the
extent that distributions otherwise payable to the Holders of Notes have been
applied to the payment of Senior Debt. A distribution made under this Article 11
to holders of Senior Debt that otherwise would have been made to Holders of
Notes is not, as between the Company and Holders, a payment by the Company on
the Notes.

Section 11.08     Relative Rights.

                  This Article 11 defines the relative rights of Holders of
Notes and holders of Senior Debt. Nothing in this Indenture shall:

                  (i)    impair, as between the Company and Holders of Notes,
             the obligation of the Company, which is absolute and
             unconditional, to pay principal of and interest on the Notes in
             accordance with their terms;

                  (ii)   affect the relative rights of Holders of Notes and
             creditors of the Company other than their rights in relation to
             holders of Senior Debt; or

                  (iii)  prevent the Trustee or any Holder of Notes from
             exercising its available remedies upon a Default or Event of
             Default, subject to the rights of holders and owners of Senior
             Debt to receive distributions and payments otherwise payable to
             Holders of Notes.

                  If the Company fails because of this Article 11 to pay
principal of or interest on a Note on the due date, the failure is still a
Default or Event of Default.



                                       81



Section 11.09     Subordination May Not Be Impaired by Company.

                  No right of any holder of Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.

Section 11.10     Distribution or Notice to Representative.

                  Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the notice given to
their Representative.

                  Upon any payment or distribution of assets of the Company
referred to in this Article 11, the Trustee and the Holders of Notes shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 11.

Section 11.11     Rights of Trustee and Paying Agent.

                  Notwithstanding the provisions of this Article 11 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least three Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 11. Only the Company or a
Representative may give the notice. Nothing in this Article 11 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.

                  The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.

Section 11.12     Authorization to Effect Subordination.

                  Each Holder of Notes, by the Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article 11, and appoints the Trustee to act as such Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 hereof at least 30 days before the expiration of the
time to file such claim, the credit agents are hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Notes.



                                       82



Section 11.13     Amendments.

                  The provisions of this Article 11 shall not be amended or
modified without the written consent of the holders of at least 75% in aggregate
principal amount of the Notes then outstanding if such amendment would adversely
affect the rights of Holders of Notes.

                                   ARTICLE 12.
                                  MISCELLANEOUS

Section 12.01     Trust Indenture Act Controls.

                  If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA ss. 318(c), the imposed duties shall
control.

Section 12.02     Notices.

                  Any notice or communication by the Company or the Trustee to
the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), telecopier
or overnight air courier guaranteeing next day delivery, to the others' address:

                  If to the Company or any Guarantor:

                  L-3 Communications Corporation
                  600 Third Avenue, 34th Floor,
                  New York, New York  10016
                  Attention:  Senior Vice President-Finance (Fax: 212-805-5440)

                  With a copy to:

                  Simpson Thacher & Bartlett LLP
                  425 Lexington Avenue
                  New York, New York  10017
                  Attention:  Vincent Pagano, Jr. (Fax: 212-455-2502)

                  If to the Trustee:

                  The Bank of New York
                  101 Barclay Street
                  New York, New York  10286
                  Attention:  Corporate Trust Administration (Fax: 212-815-5704)

                  The Company or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.

                  All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given, at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt



                                       83




acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.

                 Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA ss. 313(c), to the extent required by the
TIA. Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders.

                 If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.

                 If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.

Section 12.03    Communications By Holders of Notes with Other Holders of Notes.

                 Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA ss. 312(c).

Section 12.04    Certificate and Opinion as to Conditions Precedent.

                 Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:

                 (a)    an Officers' Certificate in form and substance
             reasonably satisfactory to the Trustee (which shall include the
             statements set forth in Section 12.05 hereof) stating that, in
             the opinion of the signers, all conditions precedent and
             covenants, if any, provided for in this Indenture relating to the
             proposed action have been satisfied; and

                 (b)    an Opinion of Counsel in form and substance reasonably
             satisfactory to the Trustee (which shall include the statements
             set forth in Section 12.05 hereof) stating that, in the opinion
             of such counsel, all such conditions precedent and covenants have
             been satisfied.

Section 12.05    Statements required in Certificate or Opinion.

                 Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and shall include:

                 (a)    a statement that the Person making such certificate or
             opinion has read such covenant or condition;



                                       84




                  (b)    a brief statement as to the nature and scope of the
             examination or investigation upon which the statements or
             opinions contained in such certificate or opinion are based;

                  (c)    a statement that, in the opinion of such Person, he or
             she has made such examination or investigation as is necessary to
             enable him to express an informed opinion as to whether or not
             such covenant or condition has been satisfied; and

                  (d)    a statement as to whether or not, in the opinion of
             such Person, such condition or covenant has been satisfied.

Section 12.06     Rule by Trustee and Agents.

                  The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.

Section 12.07     No Personal Liability of Directors, Officers, Employees and
                  Stockholders.

                  No director, officer, employee, incorporator or stockholder of
the Company or any Subsidiary of the Company, as such, shall have any liability
for any obligations of the Company or any Subsidiary of the Company under the
Notes or the Subsidiary Guarantees and this Indenture or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each Holder
of Notes by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes. Such waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the SEC that such a waiver is against public policy.

Section 12.08     Governing Law.

                  THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

Section 12.09     No Adverse Interpretation of other Agreements.

                  This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.

Section 12.10     Successors.

                  All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.








                                       85




Section 12.11     Severability.

                  In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.

Section 12.12     Counterpart Originals.

                  The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.

Section 12.13     Table of Contents, Headings, Etc.

                  The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.


                         [Signatures on following pages]

























                                       86




                                   SIGNATURES

Dated as of November 12, 2004


                         L-3 COMMUNICATIONS CORPORATION


                         By:
                             ------------------------------------------------
                             Name:
                             Title:


GUARANTORS:

APCOM, INC.
BROADCAST SPORTS INC.
D.P. ASSOCIATES INC.
ELECTRODYNAMICS, INC.
HENSCHEL INC.
HYGIENETICS ENVIRONMENTAL SERVICES, INC.
INTERSTATE ELECTRONICS CORPORATION
KDI PRECISION PRODUCTS, INC.
L-3 COMMUNICATIONS AEROMET, INC.
L-3 COMMUNICATIONS VERTEX AEROSPACE LLC
L-3 COMMUNICATIONS AIS GP CORPORATION
L-3 COMMUNICATIONS AVIONICS SYSTEMS, INC.
L-3 COMMUNICATIONS AVISYS CORPORATION
L-3 COMMUNICATIONS CSI, INC.
L-3 COMMUNICATIONS AYDIN CORPORATION
L-3 COMMUNICATIONS ESSCO, INC.
L-3 COMMUNICATIONS FLIGHT INTERNATIONAL AVIATION LLC
L-3 COMMUNICATIONS FLIGHT CAPITAL LLC
L-3 COMMUNICATIONS GOVERNMENT SERVICES, INC.
L-3 COMMUNICATIONS ILEX SYSTEMS, INC.
L-3 COMMUNICATIONS INVESTMENTS INC.
L-3 COMMUNICATIONS KLEIN ASSOCIATES, INC.
L-3 COMMUNICATIONS MAS (US) CORPORATION
L-3 COMMUNICATIONS SECURITY AND DETECTION SYSTEMS, INC.
L-3 COMMUNICATIONS STORM CONTROL SYSTEMS, INC.
L-3 COMMUNICATIONS VECTOR INTERNATIONAL AVIATION LLC
L-3 COMMUNICATIONS WESTWOOD CORPORATION
MCTI ACQUISITION CORPORATION
MICRODYNE COMMUNICATIONS TECHNOLOGIES INCORPORATED
MICRODYNE CORPORATION
MICRODYNE OUTSOURCING INCORPORATED
MPRI, INC.
PAC ORD INC.
POWER PARAGON, INC.
SHIP ANALYTICS, INC.
SHIP ANALYTICS INTERNATIONAL, INC.



                                      S-1








SHIP ANALYTICS USA, INC.
SPD ELECTRICAL SYSTEMS, INC.
SPD SWITCHGEAR INC.
SYCOLEMAN CORPORATION
TROLL TECHNOLOGY CORPORATION
WESCAM AIR OPS INC.
WESCAM AIR OPS LLC
WESCAM HOLDINGS (US) INC.
WESCAM INCORPORATED
WESCAM LLC
WESCAM SONOMA INC.
WOLF COACH, INC.,
         as Guarantors


By:
    ------------------------------------------------
    Name:  Christopher C. Cambria
    Title: Vice President and Secretary



L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P.
         as Guarantor
By: L-3 COMMUNICATIONS AIS GP CORPORATION,
         as General Partner

    By:
        --------------------------------------------
        Name:
        Title: Authorized Person


THE BANK OF NEW YORK,
    as Trustee


By:
    ------------------------------------------------
    Name:
    Title:












                                      S-2







                                                                                                          EXHIBIT A

                                 (Face of Note)
- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

                                                                                                        CUSIP _____

                    5-7/8% Senior Subordinated Notes due 2015

         No. ___                                                                                         $_________

                    L-3 COMMUNICATIONS CORPORATION

         promises to pay to
                            ---------------------------------------------------------------------
         or registered assigns,
         the principal sum of
                              -------------------------------------------------------------------
         Dollars on January 15, 2015.

         Interest Payment Dates: January 15 and July 15.

         Record Dates:  January 1 and July 1.

                                               Dated: November 12, 2004

                                               L-3 COMMUNICATIONS CORPORATION


                                                By:
                                                     ----------------------------------------------
                                                     Name:
                                                     Title:


                                                By:
                                                     ----------------------------------------------
                                                     Name:
                                                     Title:

This is one of the [Global]
Notes referred to in the
within-mentioned Indenture:

Dated:  November 12, 2004

THE BANK OF NEW YORK,
    as Trustee

By:
    ------------------------------------------------
    Name:
    Title:


- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------




                                      A-1







                                 (Back of Note)

                    5-7/8% Senior Subordinated Notes due 2015

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF L-3 COMMUNICATIONS
CORPORATION.(1)

THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISION OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF L-3 COMMUNICATIONS CORPORATION THAT
(A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a)
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES
TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER
THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.


- ------------------------
    (1)  This paragraph should be included only if the Note is issued in global
         form.


                                      A-2




                  Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.

         1.       INTEREST. L-3 Communications Corporation, a Delaware
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at 5-7/8% per annum from November 12, 2004 until maturity and shall
pay the Additional Interest payable pursuant to Section 5 of the Registration
Rights Agreement referred to below. The Company will pay interest and Additional
Interest, if any, semi-annually on January 15 and July 15 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"), with the same force and effect as if made on the date
for such payment. Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from 1:00 p.m.
November 12, 2004; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be January 15, 2005. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Additional Interest
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.

         2.       METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Additional Interest, if any, to the Persons who
are registered Holders of Notes at the close of business on the January 1 and
July 1 next (whether or not a Business Day) preceding the Interest Payment Date,
even if such Notes are canceled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.12 of the Indenture with
respect to defaulted interest. The Notes will be payable as to principal,
premium and Additional Interest, if any, and interest at the office or agency of
the Company maintained for such purpose within The City and State of New York,
or, at the option of the Company, payment of interest and Additional Interest
may be made by check mailed to the Holders at their addresses set forth in the
register of Holders; provided that payment by wire transfer of immediately
available funds will be required with respect to principal of and interest,
premium and Additional Interest on, all Global Notes and all other Notes the
Holders of which shall have provided wire transfer instructions to the Company
or the Paying Agent if such Holders shall be registered Holders of at least
$250,000 in principal amount of the Notes. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.

         3.       PAYING AGENT AND REGISTRAR. Initially, The Bank of New York,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.

         4.       INDENTURE. The Company issued the Notes under an Indenture
dated as of November 12, 2004 ("Indenture") among the Company, the Guarantors
named therein and the


                                      A-3





Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling.

         5.       OPTIONAL REDEMPTION.

                  (a) Except as set forth in clause (b) of this paragraph 5, the
Notes shall not be redeemable at the Company's option prior to January 15, 2010.
Thereafter, the Notes shall be subject to redemption at any time at the option
of the Company, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest and Additional Interest
thereon, if any, to the applicable redemption date, if redeemed during the
twelve-month period beginning on January 15 of the years indicated below:


                  YEAR                                      PERCENTAGE

                  2010................................          102.938%
                  2011................................          101.958%
                  2012................................          100.979%
                  2013 and thereafter.................          100.000%


                  (b) Notwithstanding the foregoing, before January 15, 2008,
the Company may on any one or more occasions redeem up to an aggregate of 35% of
the Notes originally issued at a redemption price of 105.875% of the principal
amount thereof, plus accrued and unpaid interest and Additional Interest
thereon, if any, to the redemption date, with the net cash proceeds of one or
more Equity Offerings by the Company or the net cash proceeds of one or more
Equity Offerings by Holdings that are contributed to the Company as common
equity capital; provided that at least 65% of the Notes originally issued remain
outstanding immediately after the occurrence of each such redemption; and
provided, further, that any such redemption must occur within 120 days of the
date of the closing of such Equity Offering.










                                      A-4





         6.       MANDATORY REDEMPTION.

                  Except as set forth in paragraph 7 below, the Company shall
not be required to make mandatory redemption payments with respect to the Notes.

         7.       REPURCHASE AT OPTION OF HOLDER.

                  (a) If there is a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
a purchase price equal to 101% of aggregate principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase (the "Change of
Control Payment"). Within 10 days following any Change of Control, the Company
shall mail a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.

                  (b) If the Company or a Subsidiary consummates any Asset
Sales, within five Business Days of each date on which the aggregate amount of
Excess Proceeds exceeds $10.0 million, the Company will be required to make an
offer to all Holders of the Notes (an "Asset Sale Offer") and any other
Indebtedness that ranks pari passu with the Notes (including the December 1998
Notes, the 2002 Notes, the May 2003 Notes and the December 2003 Notes) that, by
its terms, requires the Company to offer to repurchase such Indebtedness with
such Excess Proceeds to purchase the maximum principal amount of Notes and pari
passu Indebtedness that may be purchased out of such Excess Proceeds at an offer
price in cash in an amount equal to 100% of the principal amount thereof plus
accrued and unpaid interest thereon, if any, to the date of purchase, in
accordance with the procedures set forth in the Indenture. To the extent that
the aggregate amount of Notes or pari passu Indebtedness tendered pursuant to an
Asset Sale Offer is less than the Excess Proceeds, the Company may use any
Excess Proceeds for general corporate purposes. If the aggregate principal
amount of Notes or pari passu Indebtedness surrendered by Holders thereof
exceeds the amount of Excess Proceeds in an Asset Sale Offer, the Company shall
repurchase such Indebtedness on a pro rata basis and the Trustee shall select
the Notes to be purchased on a pro rata basis. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.

         8.       NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.

         9.       DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by


                                      A-5




law or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.

         10.      PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.

         11.      AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the then
outstanding Notes, and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.

         12.      DEFAULTS AND REMEDIES. An "Event of Default" occurs if: (i)
default for 30 days in the payment when due of interest on, or Additional
Interest with respect to, the Notes (whether or not prohibited by the
subordination provisions of the Indenture); (ii) default in payment when due of
the principal of or premium, if any, on the Notes (whether or not prohibited by
the subordination provisions of the Indenture); (iii) failure by the Company to
comply with the covenants contained in sections 4.10, 4.15 or 5.01 of the
Indenture; (iv) failure by the Company for 60 days after notice to comply with
any of its other agreements in the Indenture or the Notes; (v) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of the
Indenture, which default results in the acceleration of such Indebtedness prior
to its express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
the maturity of which has been so accelerated, aggregates $25.0 million or more;
(vi) failure by the Company or any of its Restricted Subsidiaries to pay final
judgments aggregating in excess of $25.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days; (vii) certain events of bankruptcy
or insolvency with respect to the Company or any of its Significant Subsidiaries
or any group of Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary; and (viii) except as permitted by the Indenture, any
Subsidiary Guarantee shall be held in any judicial proceeding to be
unenforceable or invalid.

         If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and


                                      A-6






payable immediately; provided, however, that so long as any Designated Senior
Debt is outstanding, such declaration shall not become effective until the
earlier of (i) the day which is five Business Days after receipt by the
Representatives of Designated Senior Debt of such notice of acceleration or (ii)
the date of acceleration of any Designated Senior Debt. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company or any Significant
Subsidiary or any group of Subsidiaries that, taken as a whole, would constitute
a Significant Subsidiary, all outstanding Notes will become due and payable
without further action or notice. Holders of the Notes may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest.

         In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of the Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes. If an Event of Default occurs prior to
January 15, 2010 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Notes prior to January 15, 2010 then the
premium specified in the Indenture shall also become immediately due and payable
to the extent permitted by law upon the acceleration of the Notes.

         The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes.

         13.      SUBORDINATION. Payment of the principal of, premium and
Additional Interest, if any, or interest on the Notes is subordinated to the
prior payment of Senior Debt on the terms provided in the Indenture.















                                      A-7





         14.      TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.

         15.      NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or any Subsidiary of the Company, as
such, shall not have any liability for any obligations of the Company or any
Subsidiary of the Company under the Notes, the Indenture or the Subsidiary
Guarantees or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.

         16.      AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.

         17.      ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

         18.      ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED
SECURITIES. In addition to the rights provided to Holders of Notes under the
Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement dated as of November 12,
2004, between the Company and the parties named on the signature pages thereof,
or, with respect to any Additional Notes, Holders of Transfer Restricted
Securities shall have all the rights set forth in one or more registration
rights agreements between the Company and the other parties thereto, relating to
rights given by the Company to the purchasers of Additional Notes (collectively,
the "Registration Rights Agreement").

         19.      CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.












                                      A-8






         20.      GOVERNING LAW. This Note shall be governed by, and construed
in accordance with, the laws of the State of New York.

         The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

                    L-3 Communications Corporation
                    600 Third Avenue, 34th Floor,
                    New York, New York  10016
                    Attention: Senior Vice President-Finance (Fax: 212-805-5440)










                                      A-9





                                 ASSIGNMENT FORM


         To assign this Note, fill in the form below:  (I) or (we) assign and
transfer this Note to


- --------------------------------------------------------------------------------
                  (Insert assignee's soc. sec. or tax I.D. no.)

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
              (Print or type assignee's name, address and zip code)

and irrevocably appoint
                        --------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

- --------------------------------------------------------------------------------

Date:
      -------------------------------------


                                 Your Signature:
                                                  ------------------------------
                                 (Sign exactly as your name appears on the face
                                                  of this Note)

Signature Guarantee.









                                      A-10





                       Option of Holder to Elect Purchase

         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:

         [ ]  Section 4.10                [ ]  Section 4.15

If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:

$______________


Date:                                     Your Signature:
       -------------------------                           ---------------------
                                          (Sign exactly as your name appears on
                                                          the Note)


                                          Tax Identification No.:
                                                                   -------------


Signature Guarantee.







                                      A-11






              Schedule of Exchanges of Interests in the Global Note

         The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:




                                                                          Principal Amount of
                                                                            this Global Note         Signature of
                           Amount of decrease    Amount of increase in      following such       authorized officer
                           in Principal Amount    Principal Amount of          decrease          of Trustee or Note
    Date of Exchange       of this Global Note      this Global Note         (or increase)            Custodian
- ----------------------   ----------------------- ----------------------  ---------------------  ---------------------












                                      A-12







                                                                       EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER


L-3 Communications Corporation
600 Third Avenue, 34th Floor,
New York, New York  10016

[Registrar address block]

         Re:  5-7/8% Senior Subordinated Notes due 2015.
              ------------------------------------------

         Reference is hereby made to the Indenture, dated as of November 12,
2004 (the "Indenture"), among L-3 Communications Corporation, as issuer (the
"Company"), the Guarantors party thereto and The Bank of New York, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.

         ________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:

                             [CHECK ALL THAT APPLY]

1.  [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF BOOK-ENTRY INTERESTS IN THE
144A GLOBAL NOTE OR DEFINITIVE NOTES PURSUANT TO RULE 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the Book-Entry
Interests or Definitive Notes are being transferred to a Person that the
Transferor reasonably believes is purchasing the Book-Entry Interests or
Definitive Notes for its own account, or for one or more accounts with respect
to which such Person exercises sole investment discretion, and such Person and
each such account is a "qualified institutional buyer" within the meaning of
Rule 144A in a transaction meeting the requirements of Rule 144A and such
Transfer is in compliance with any applicable blue sky securities laws of any
state of the United States. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred Book-Entry Interest
or Definitive Note will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the 144A Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.

2.  [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF BOOK-ENTRY INTERESTS IN THE
TEMPORARY REGULATION S GLOBAL NOTE, THE REGULATION S GLOBAL NOTE OR DEFINITIVE
NOTES PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and
in accordance with Rule 903 or Rule 904 under the Securities Act and,
accordingly, the Transferor hereby further certifies that (i) the Transfer is
not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the


                                      B-1






transaction was prearranged with a buyer in the United States, (ii) no directed
selling efforts have been made in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities Act and (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred Book-Entry Interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.

3.  [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF BOOK-ENTRY
INTERESTS IN THE IAI GLOBAL NOTE OR DEFINITIVE NOTES PURSUANT TO ANY PROVISION
OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is
being effected in compliance with the transfer restrictions applicable to
Book-Entry Interests in Restricted Global Notes and Definitive Notes bearing the
Private Placement Legend and pursuant to and in accordance with the Securities
Act and any applicable blue sky securities laws of any State of the United
States, and accordingly the Transferor hereby further certifies that (check
one):

         (a) [ ] such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;

                                       OR

         (b) [ ] such Transfer is being effected to the Company or a subsidiary
thereof,

                                       OR

         (c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act;

                                       OR

         (d) [ ] such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that the Transfer complies with the transfer
restrictions applicable to Book-Entry Interests in a Restricted Global Note or
Definitive Notes bearing the Private Placement Legend and the requirements of
the exemption claimed, which certification is supported by (x) if such Transfer
is in respect of a principal amount of Notes at the time of Transfer of $250,000
or more, a certificate executed by the Transferee in the form of Exhibit D to
the Indenture, or (y) if such Transfer is in respect of a principal amount of
Notes at the time of transfer of less than $250,000, (1) a certificate executed
by the Transferee in the form of Exhibit D to the Indenture and (2) an Opinion
of Counsel provided by the Transferor or the Transferee (a copy of which the
Transferor has attached to this certification), to the effect that (1) such
Transfer is in compliance with the Securities Act and (2) such Transfer complies
with any applicable blue sky securities laws of any state of the United States.
Upon consummation of the proposed transfer in accordance with the terms of the
Indenture, the transferred Book-Entry Interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the IAI Global Note and/or the Definitive Notes and in the
Indenture and the Securities Act.



                                      B-2





4.       [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF BOOK-ENTRY INTERESTS IN
THE UNRESTRICTED GLOBAL NOTE OR IN DEFINITIVE NOTES THAT DO NOT BEAR THE PRIVATE
PLACEMENT LEGEND.

         (a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred Book-Entry Interests or Definitive
Notes will no longer be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Global Notes, on
Definitive Notes bearing the Private Placement Legend and in the Indenture.

         (b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred Book-Entry
Interests or Definitive Notes will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Definitive Notes bearing the Private Placement Legend and in
the Indenture.

         (c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred Book-Entry
Interests or Definitive Notes will not be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes or Definitive Notes bearing the Private Placement Legend and in the
Indenture.

         This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.


                                        -------------------------------
                                        [Insert Name of Transferor]


                                        By:
                                            ----------------------------
                                            Name:
                                            Title:


Dated:
      ----------------, -----


                                      B-3






                       ANNEX A TO CERTIFICATE OF TRANSFER

1.       The Transferor owns and proposes to transfer the following:

                            [CHECK ONE OF (A) OR (B)]

         (a) [ ] Book-Entry Interests in the:

             (i)   [ ] 144A Global Note (CUSIP _______), or

             (ii)  [ ] Regulation S Global Note (CUSIP ______), or

             (iii) [ ] IAI Global Note (CUSIP ________); or

         (b) [ ] Restricted Definitive Notes.

2.       After the Transfer the Transferee will hold:

                                   [CHECK ONE]

         (a) Book-Entry Interests in the:

              (i)  [ ] 144A Global Note (CUSIP _____), or

              (ii) [ ] Regulation S Global Note (CUSIP _____), or

              (iii)[ ] IAI Global Note (CUSIP ______); or

              (iv) [ ] Unrestricted Global Note (CUSIP ______); or

         (b)  [ ] Restricted Definitive Notes; or

         (c)  [ ] Definitive Notes that do not bear the Private Placement

                  Legend, in accordance with the terms of the Indenture.











                                      B-4








                                                                       EXHIBIT C

                         FORM OF CERTIFICATE OF EXCHANGE

L-3 Communications Corporation
600 Third Avenue, 34th Floor,
New York, New York 10016
Attention:  Senior Vice President-Finance (Fax: 212-805-5440)

         Re:  5-7/8% Senior Subordinated Notes due 2015
              -----------------------------------------

                             (CUSIP [____________])

                  Reference is hereby made to the Indenture, dated as of
November 12, 2004 (the "Indenture"), among L-3 Communications Corporation, as
issuer (the "Company"), the Guarantors party thereto and The Bank of New York,
as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.

                  ______________, (the "Holder") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $______________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Holder hereby certifies that:

1.   EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR RESTRICTED BOOK-ENTRY INTERESTS
FOR DEFINITIVE NOTES THAT DO NOT BEAR THE PRIVATE PLACEMENT LEGEND OR
UNRESTRICTED BOOK-ENTRY INTERESTS

                  (a)   [ ] CHECK IF EXCHANGE IS FROM RESTRICTED BOOK-ENTRY
INTEREST TO UNRESTRICTED BOOK-ENTRY INTEREST. In connection with the Exchange of
the Holder's Restricted Book-Entry Interest for Unrestricted Book-Entry
Interests in an equal principal amount, the Holder hereby certifies (i) the
Unrestricted Book-Entry Interests are being acquired for the Holder's own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Global Notes and pursuant to
and in accordance with the United States Securities Act of 1933, as amended (the
"Securities Act"), (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Book-Entry
Interests are being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.

                  (b)   [ ] CHECK IF EXCHANGE IS FROM RESTRICTED BOOK-ENTRY
INTEREST TO DEFINITIVE NOTES THAT DO NOT BEAR THE PRIVATE PLACEMENT LEGEND. In
connection with the Exchange of the Holder's Restricted Book-Entry Interests for
Definitive Notes that do not bear the Private Placement Legend, the Holder
hereby certifies (i) the Definitive Notes are being acquired for the Holder's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Restricted Global Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the


                                      C-1






Securities Act and (iv) the Definitive Notes are being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.

                  (c)   [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTES TO UNRESTRICTED BOOK-ENTRY INTERESTS. In connection with the Holder's
Exchange of Restricted Definitive Notes for Unrestricted Book-Entry Interests,
(i) the Unrestricted Book-Entry Interests are being acquired for the Holder's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Book-Entry Interests are being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.

                  (d)   [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTES TO DEFINITIVE NOTES THAT DO NOT BEAR THE PRIVATE PLACEMENT LEGEND. In
connection with the Holder's Exchange of a Restricted Definitive Note for
Definitive Notes that do not bear the Private Placement Legend, the Holder
hereby certifies (i) the Definitive Notes that do not bear the Private Placement
Legend are being acquired for the Holder's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act , (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Notes are being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.

2.   EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR RESTRICTED BOOK-ENTRY INTERESTS
FOR RESTRICTED DEFINITIVE NOTES OR RESTRICTED BOOK-ENTRY INTERESTS

                  (a)   [ ] CHECK IF EXCHANGE IS FROM RESTRICTED BOOK-ENTRY
INTERESTS TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the
Holder's Restricted Book-Entry Interest for Restricted Definitive Notes with an
equal principal amount, (i) the Restricted Definitive Notes are being acquired
for the Holder's own account without transfer and (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, and in compliance with any applicable blue sky securities laws of any state
of the United States. Upon consummation of the proposed Exchange in accordance
with the terms of the Indenture, the Restricted Definitive Notes issued will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Definitive Notes and in the Indenture and the
Securities Act.

                  (b)   [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTES TO RESTRICTED BOOK-ENTRY INTERESTS. In connection with the Exchange of the
Holder's Restricted Definitive Note for Restricted Book-Entry Interests in the
[CHECK ONE] 144A Global Note, Regulation S Global Note, IAI Global Note with an
equal principal amount, (i) the Definitive Notes are being acquired for the
Holder's own account without transfer and (ii) such Exchange has been effected
in compliance with the transfer restrictions applicable to the Restricted
Definitive Note and pursuant to and in accordance with the Securities Act, and
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon

                                      C-2






consummation of the proposed Exchange in accordance with the terms of the
Indenture, the Book-Entry Interests issued will be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the relevant
Restricted Global Note and in the Indenture and the Securities Act.

         This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.


                           ----------------------------------------------
                           [Insert Name of Transferor]



                           By:
                                ------------------------------------------
                                Name:
                                Title:



Dated:  ____________, ____












                                      C-3






                                                                       EXHIBIT D

                            FORM OF CERTIFICATE FROM
                   ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

L-3 Communications Corporation
600 Third Avenue, 34th Floor,
New York, New York  10016
Attention:  Senior Vice President-Finance (Fax: 212-805-5440)

         Re:  5-7/8% Senior Subordinated Notes due 2015
              -----------------------------------------

                  Reference is hereby made to the Indenture, dated as of
November 12, 2004 (the "Indenture"), among L-3 Communications Corporation, as
issuer (the "Company"), the Guarantors party thereto and The Bank of New York,
as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.

                  In connection with our proposed purchase of $____________
aggregate principal amount at maturity of:

         (a)      [ ]   Book-Entry Interests, or

         (b)      [ ]   Definitive Notes,

         we confirm that:

                  1.    We understand that any subsequent transfer of the Notes
or any interest therein is subject to certain restrictions and conditions set
forth in the Indenture and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").

                  2.    We understand that the offer and sale of the Notes have
not been registered under the Securities Act, and that the Notes and any
interest therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and, if such
transfer is in respect of a principal amount of Notes, at the time of transfer
of less than $250,000, an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144 under the Securities Act or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing the Definitive Notes or Book-Entry


                                      D-1





Interests from us in a transaction meeting the requirements of clauses (A)
through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.

                  3.    We understand that, on any proposed resale of the Notes
or Book-Entry Interests, we will be required to furnish to you and the Company
such certifications, legal opinions and other information as you and the Company
may reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Notes or Book-Entry Interests therein acquired
by us must be effected through one of the Placement Agents.

                  4.    We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of our investment in the Notes,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.

                  5.    We are acquiring the Notes or Book-Entry Interests
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.

                  You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.


                                    --------------------------------------------
                                    [Insert Name of Accredited Investor]



                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:

Dated:  ____________, ____


                                      D-2





                                                                       EXHIBIT E

                 FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED
                           BY GUARANTEEING SUBSIDIARY

                  SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated
as of _________________, among ____________________ (the "Guaranteeing
Subsidiaries"), each a direct or indirect subsidiary of L-3 Communications
Corporation (or its permitted successor), a Delaware corporation (the
"Company"), the Company and The Bank of New York, as trustee under the indenture
referred to below (the "Trustee").

                                   WITNESSETH

                  WHEREAS, the Company has heretofore executed and delivered to
the Trustee an indenture (the "Indenture"), dated as of November 12, 2004
providing for the issuance of an unlimited amount of 5-7/8% Senior Subordinated
Notes due 2015 (the "Notes");

                  WHEREAS, the Indenture provides that under certain
circumstances the Guaranteeing Subsidiaries shall execute and deliver to the
Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiaries
shall unconditionally guarantee all of the Company's Obligations (as defined in
the Indenture) under the Notes and the Indenture on the terms and conditions set
forth herein (the "Subsidiary Guarantee"); and

                  WHEREAS, pursuant to Section 9.01 of the Indenture, the
Trustee is authorized to execute and deliver this Supplemental Indenture.

                  NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties mutually covenant and agree for the equal and ratable benefit of the
Holders of the Notes as follows:

         1.       CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

         2.       AGREEMENT TO GUARANTEE. Each Guaranteeing Subsidiary hereby
agrees as follows:

         (a)      Such Guaranteeing Subsidiary, jointly and severally with all
                  other current and future guarantors of the Notes
                  (collectively, the "Guarantors" and each, a "Guarantor"),
                  unconditionally guarantees to each Holder of a Note
                  authenticated and delivered by the Trustee and to the Trustee
                  and its successors and assigns, regardless of the validity and
                  enforceability of the Indenture, the Notes or the Obligations
                  of the Company under the Indenture or the Notes, that:

                  (i)      the principal of, premium, interest and Additional
                           Interest, if any, on the Notes will be promptly paid
                           in full when due, whether at maturity, by
                           acceleration, redemption or otherwise, and interest
                           on the overdue principal of, premium, interest and
                           Additional Interest, if any, on the Notes, to the
                           extent lawful, and all other Obligations of the
                           Company to


                                      E-1






                           the Holders or the Trustee thereunder or under the
                           Indenture will be promptly paid in full, all in
                           accordance with the terms thereof; and

                  (ii)     in case of any extension of time for payment or
                           renewal of any Notes or any of such other
                           Obligations, that the same will be promptly paid in
                           full when due in accordance with the terms of the
                           extension or renewal, whether at stated maturity, by
                           acceleration or otherwise.

         (b)      Notwithstanding the foregoing, in the event that this
                  Subsidiary Guarantee would constitute or result in a violation
                  of any applicable fraudulent conveyance or similar law of any
                  relevant jurisdiction, the liability of such Guaranteeing
                  Subsidiary under this Supplemental Indenture and its
                  Subsidiary Guarantee shall be reduced to the maximum amount
                  permissible under such fraudulent conveyance or similar law.

         3.       EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.

         (a)      To evidence its Subsidiary Guarantee set forth in this
                  Supplemental Indenture, such Guaranteeing Subsidiary hereby
                  agrees that a notation of such Subsidiary Guarantee
                  substantially in the form of Exhibit F to the Indenture shall
                  be endorsed by an officer of such Guaranteeing Subsidiary on
                  each Note authenticated and delivered by the Trustee after the
                  date hereof.

         (b)      Notwithstanding the foregoing, such Guaranteeing Subsidiary
                  hereby agrees that its Subsidiary Guarantee set forth herein
                  shall remain in full force and effect notwithstanding any
                  failure to endorse on each Note a notation of such Subsidiary
                  Guarantee.

         (c)      If an Officer whose signature is on this Supplemental
                  Indenture or on the Subsidiary Guarantee no longer holds that
                  office at the time the Trustee authenticates the Note on which
                  a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee
                  shall be valid nevertheless.

         (d)      The delivery of any Note by the Trustee, after the
                  authentication thereof under the Indenture, shall constitute
                  due delivery of the Subsidiary Guarantee set forth in this
                  Supplemental Indenture on behalf of each Guaranteeing
                  Subsidiary.

         (e)      Each Guaranteeing Subsidiary hereby agrees that its
                  Obligations hereunder shall be unconditional, regardless of
                  the validity, regularity or enforceability of the Notes or the
                  Indenture, the absence of any action to enforce the same, any
                  waiver or consent by any Holder of the Notes with respect to
                  any provisions hereof or thereof, the recovery of any judgment
                  against the Company, any action to enforce the same or any
                  other circumstance which might otherwise constitute a legal or
                  equitable discharge or defense of a guarantor.

         (f)      Each Guaranteeing Subsidiary hereby waives diligence,
                  presentment, demand of payment, filing of claims with a court
                  in the event of insolvency or bankruptcy of the Company, any
                  right to require a proceeding first against the Company,
                  protest,


                                      E-2





                  notice and all demands whatsoever and covenants that its
                  Subsidiary Guarantee made pursuant to this Supplemental
                  Indenture will not be discharged except by complete
                  performance of the Obligations contained in the Notes and
                  the Indenture.

         (g)      If any Holder or the Trustee is required by any court or
                  otherwise to return to the Company or any Guaranteeing
                  Subsidiary, or any custodian, Trustee, liquidator or other
                  similar official acting in relation to either the Company or
                  such Guaranteeing Subsidiary, any amount paid by either to the
                  Trustee or such Holder, the Subsidiary Guarantee made pursuant
                  to this Supplemental Indenture, to the extent theretofore
                  discharged, shall be reinstated in full force and effect.

         (h)      Each Guaranteeing Subsidiary agrees that it shall not be
                  entitled to any right of subrogation in relation to the
                  Holders in respect of any Obligations guaranteed hereby until
                  payment in full of all Obligations guaranteed hereby. Each
                  Guaranteeing Subsidiary further agrees that, as between such
                  Guaranteeing Subsidiary, on the one hand, and the Holders and
                  the Trustee, on the other hand:

                  (i)      the maturity of the Obligations guaranteed hereby may
                           be accelerated as provided in Article 6 of the
                           Indenture for the purposes of the Subsidiary
                           Guarantee made pursuant to this Supplemental
                           Indenture, notwithstanding any stay, injunction or
                           other prohibition preventing such acceleration in
                           respect of the Obligations guaranteed hereby; and

                  (ii)     in the event of any declaration of acceleration of
                           such Obligations as provided in Article 6 of the
                           Indenture, such Obligations (whether or not due and
                           payable) shall forthwith become due and payable by
                           such Guaranteeing Subsidiary for the purpose of the
                           Subsidiary Guarantee made pursuant to this
                           Supplemental Indenture.

         (i)      Each Guaranteeing Subsidiary shall have the right to seek
                  contribution from any other non-paying Guaranteeing Subsidiary
                  so long as the exercise of such right does not impair the
                  rights of the Holders or the Trustee under the Subsidiary
                  Guarantee made pursuant to this Supplemental Indenture.

         4.       GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN
                  TERMS.

         (a)      Except as set forth in Articles 4 and 5 of the Indenture,
                  nothing contained in the Indenture, this Supplemental
                  Indenture or in the Notes shall prevent any consolidation or
                  merger of any Guaranteeing Subsidiary with or into the Company
                  or any other Guarantor or shall prevent any transfer, sale or
                  conveyance of the property of any Guaranteeing Subsidiary as
                  an entirety or substantially as an entirety, to the Company or
                  any other Guarantor.

         (b)      Except as set forth in Articles 4 and 5 of the  Indenture,
                  nothing contained in the Indenture, this Supplemental
                  Indenture or in the Notes shall prevent any consolidation or
                  merger of any Guaranteeing Subsidiary with or into a
                  corporation or corporations other than the Company or any
                  other Guarantor (in each case,


                                      E-3




                  whether or not affiliated with the Guaranteeing Subsidiary),
                  or successive consolidations or mergers in which a
                  Guaranteeing Subsidiary or its successor or successors shall
                  be a party or parties, or shall prevent any sale or
                  conveyance of the property of any Guaranteeing Subsidiary as
                  an entirety or substantially as an entirety, to a
                  corporation other than the Company or any other Guarantor
                  (in each case, whether or not affiliated with the
                  Guaranteeing Subsidiary) authorized to acquire and operate
                  the same; provided, however, that each Guaranteeing
                  Subsidiary hereby covenants and agrees that (i) subject to
                  the Indenture, upon any such consolidation, merger, sale or
                  conveyance, the due and punctual performance and observance
                  of all of the covenants and conditions of the Indenture and
                  this Supplemental Indenture to be performed by such
                  Guaranteeing Subsidiaries, shall be expressly assumed (in
                  the event that such Guaranteeing Subsidiary is not the
                  surviving corporation in the merger), by supplemental
                  indenture satisfactory in form to the Trustee, executed and
                  delivered to the Trustee, by the corporation formed by such
                  consolidation, or into which such Guaranteeing Subsidiary
                  shall have been merged, or by the corporation which shall
                  have acquired such property and (ii) immediately after
                  giving effect to such consolidation, merger, sale or
                  conveyance no Default or Event of Default exists.

         (c)      In case of any such consolidation,  merger, sale or conveyance
                  and upon the assumption by the successor corporation, by
                  supplemental indenture, executed and delivered to the
                  Trustee and satisfactory in form to the Trustee, of the
                  Subsidiary Guarantee made pursuant to this Supplemental
                  Indenture and the due and punctual performance of all of the
                  covenants and conditions of the Indenture and this
                  Supplemental Indenture to be performed by such Guaranteeing
                  Subsidiary, such successor corporation shall succeed to and
                  be substituted for such Guaranteeing Subsidiary with the
                  same effect as if it had been named herein as the
                  Guaranteeing Subsidiary. Such successor corporation
                  thereupon may cause to be signed any or all of the
                  Subsidiary Guarantees to be endorsed upon the Notes issuable
                  under the Indenture which theretofore shall not have been
                  signed by the Company and delivered to the Trustee. All the
                  Subsidiary Guarantees so issued shall in all respects have
                  the same legal rank and benefit under the Indenture and this
                  Supplemental Indenture as the Subsidiary Guarantees
                  theretofore and thereafter issued in accordance with the
                  terms of the Indenture and this Supplemental Indenture as
                  though all of such Subsidiary Guarantees had been issued at
                  the date of the execution hereof.

         5.       RELEASES.

         (a)      Concurrently with any sale of assets (including, if
                  applicable, all of the Capital Stock of a Guaranteeing
                  Subsidiary), all Liens, if any, in favor of the Trustee in
                  the assets sold thereby shall be released; provided that in
                  the event of an Asset Sale, the Net Proceeds from such sale
                  or other disposition are treated in accordance with the
                  provisions of Section 4.10 of the Indenture. If the assets
                  sold in such sale or other disposition include all or
                  substantially all of the assets of a Guaranteeing Subsidiary
                  or all of the Capital Stock of a Guaranteeing Subsidiary,
                  then the Guaranteeing Subsidiary (in the event of a sale or
                  other disposition of all


                                      E-4





                  of the Capital Stock of such Guaranteeing Subsidiary) or the
                  Person acquiring the property (in the event of a sale or
                  other disposition of all or substantially all of the assets
                  of such Guaranteeing Subsidiary) shall be released from and
                  relieved of its Obligations under this Supplemental
                  Indenture and its Subsidiary Guarantee made pursuant hereto;
                  provided that in the event of an Asset Sale, the Net
                  Proceeds from such sale or other disposition are treated in
                  accordance with the provisions of Section 4.10 of the
                  Indenture. Upon delivery by the Company to the Trustee of an
                  Officers' Certificate to the effect that such sale or other
                  disposition was made by the Company or the Guaranteeing
                  Subsidiary, as the case may be, in accordance with the
                  provisions of the Indenture and this Supplemental Indenture,
                  including without limitation, Section 4.10 of the Indenture,
                  the Trustee shall execute any documents reasonably required
                  in order to evidence the release of the Guaranteeing
                  Subsidiary from its Obligations under this Supplemental
                  Indenture and its Subsidiary Guarantee made pursuant hereto.
                  If the Guaranteeing Subsidiary is not released from its
                  Obligations under its Subsidiary Guarantee, it shall remain
                  liable for the full amount of principal of and interest on
                  the Notes and for the other Obligations of such Guaranteeing
                  Subsidiary under the Indenture as provided in this
                  Supplemental Indenture.

         (b)      Upon the designation of a Guaranteeing Subsidiary as an
                  Unrestricted Subsidiary in accordance with the terms of the
                  Indenture, such Guaranteeing Subsidiary shall be released
                  and relieved of its Obligations under its Subsidiary
                  Guarantee and this Supplemental Indenture. Upon delivery by
                  the Company to the Trustee of an Officers' Certificate and
                  an Opinion of Counsel to the effect that such designation of
                  such Guaranteeing Subsidiary as an Unrestricted Subsidiary
                  was made by the Company in accordance with the provisions of
                  the Indenture, including without limitation Section 4.07 of
                  the Indenture, the Trustee shall execute any documents
                  reasonably required in order to evidence the release of such
                  Guaranteeing Subsidiary from its Obligations under its
                  Subsidiary Guarantee. Any Guaranteeing Subsidiary not
                  released from its Obligations under its Subsidiary Guarantee
                  shall remain liable for the full amount of principal of and
                  interest on the Notes and for the other Obligations of any
                  Guaranteeing Subsidiary under the Indenture as provided
                  herein.

         (c)      Each Guaranteeing Subsidiary shall be released and relieved of
                  its obligations under this Supplemental Indenture in
                  accordance with, and subject to, Section 4.18 of the
                  Indenture.

         6.       NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, stockholder or agent of any
Subsidiary of the Company, as such, shall have any liability for any Obligations
of the Company or any Subsidiary of the Company under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such Obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the SEC that such a waiver is against
public policy.






                                      E-5




         7.       ANTI-LAYERING; SUBORDINATION OF SUBSIDIARY GUARANTEES. No
Guaranteeing Subsidiary shall incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt of a Guaranteeing Subsidiary and senior in
any respect in right of payment to any of the Subsidiary Guarantees.
Notwithstanding the foregoing sentence, the Subsidiary Guarantee of each
Guaranteeing Subsidiary shall be subordinated to the prior payment in full of
all Senior Debt of that Guaranteeing Subsidiary (in the same manner and to the
same extent that the Notes are subordinated to Senior Debt), which shall include
all guarantees of Senior Debt. 8. New York Law To Govern. This Supplemental
Indenture shall be governed by, and construed in accordance with, the laws Of
The State Of New York.

         9.       COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.

         10.      EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.

         11.      THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiaries and the
Company.










                                      E-6






                  IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, all as of the date first above
written.


Dated:  ______________, ______





                         L-3 COMMUNICATIONS CORPORATION



                         By:
                             --------------------------------------------------
                             Name:
                             Title:


GUARANTEEING SUBSIDIARIES:

[EXISTING GUARANTORS]
[ADDITIONAL GUARANTORS]




Dated:  ______________, ______




THE BANK OF NEW YORK,
         as Trustee



By:
    ------------------------------------------------
    Name:
    Title:















                                      E-7









                                                                       EXHIBIT F


            FORM OF NOTATION ON SENIOR SUBORDINATED NOTE RELATING TO
                              SUBSIDIARY GUARANTEE

                  Pursuant to the Indenture (the "Indenture"), dated as of
November 12, 2004, among L-3 Communications Corporation, the Guarantors party
thereto (each a "Guarantor" and collectively the "Guarantors") and The Bank of
New York, as trustee (the "Trustee"), each Guarantor (i) has jointly and
severally unconditionally guaranteed (a) the due and punctual payment of the
principal of, and premium, interest and Additional Interest on the Notes,
whether at maturity or an interest payment date, by acceleration, call for
redemption or otherwise, (b) the due and punctual payment of interest on the
overdue principal and premium of, and interest and Additional Interest on the
Notes, and (c) in case of any extension of time of payment or renewal of any
Notes or any of such other Obligations, the same will be promptly paid in full
when due in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise and (ii) has agreed to pay any and
all costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or any Holder in enforcing any rights under the Subsidiary Guarantee (as
defined in the Supplemental Indenture). Notwithstanding the foregoing, the
Subsidiary Guarantee of each Guarantor shall be subordinated to the prior
payment in full of all Senior Debt (as defined in the Indenture) of that
Guarantor (in the same manner and to the same extent that the Notes are
subordinated to Senior Debt), which shall include all guarantees of Senior Debt.

                  Notwithstanding the foregoing, in the event that the
Subsidiary Guarantee of any Guarantor would constitute or result in a violation
of any applicable fraudulent conveyance or similar law of any relevant
jurisdiction, the liability of such Guarantor under its Subsidiary Guarantee
shall be reduced to the maximum amount permissible under such fraudulent
conveyance or similar law.

                  No past, present or future director, officer, employee, agent,
incorporator, stockholder or agent of any Subsidiary of the Company, as such,
shall have any liability for any Obligations of the Company or any Subsidiary of
the Company under the Notes, any Subsidiary Guarantee, the Indenture, any
supplemental indenture delivered pursuant to the Indenture by such Guarantor, or
for any claim based on, in respect of or by reason of such Obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability.

                  The Subsidiary Guarantee shall be binding upon each Guarantor
and its successors and assigns and shall inure to the benefit of the successors
and assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
herein conferred upon that party shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.

                  The Subsidiary Guarantee shall not be valid or obligatory for
any purpose until the certificate of authentication on the Note upon which the
Subsidiary Guarantee is noted has been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers. Capitalized
terms used herein have the meaning assigned to them in the Indenture.



                                      F-1





                  IN WITNESS WHEREOF, the Guarantors hereto have caused this
Notation on the 5-7/8% Senior Subordinated Note due 2015 to be duly executed,
all as of the date first above written.

Dated:  ______________, ______






GUARANTEEING SUBSIDIARIES:

[EXISTING GUARANTORS]
[ADDITIONAL GUARANTORS]


































                                      F-2

EX-4.4

                                                                     EXHIBIT 4.4

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------








                                  A/B EXCHANGE
                          REGISTRATION RIGHTS AGREEMENT


                          Dated as of November 12, 2004

                                  by and among


                         L-3 COMMUNICATIONS CORPORATION

               THE GUARANTORS LISTED ON THE SIGNATURE PAGES HERETO

                                       AND

                              LEHMAN BROTHERS INC.
                         CREDIT SUISSE FIRST BOSTON LLC
                         BANC OF AMERICA SECURITIES LLC
                        MORGAN STANLEY & CO. INCORPORATED
                           SG AMERICAS SECURITIES, LLC
                                       AND
                          WACHOVIA CAPITAL MARKETS, LLC











- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------





                   A/B EXCHANGE REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this "Agreement") is made and entered
into as of November 12, 2004 by and among L-3 Communications Corporation, a
Delaware corporation (the "Company") the guarantors listed on the signature
pages hereto (collectively, the "Existing Guarantors"), and Lehman Brothers
Inc., Credit Suisse First Boston LLC, Banc of America Securities LLC, Morgan
Stanley & Co. Incorporated, SG Americas Securities, LLC and Wachovia Capital
Markets, LLC, as representatives of the several initial purchasers (the "Initial
Purchasers") named in Schedule 1 to the Purchase Agreement (as defined below),
each of whom has agreed to purchase the Company's 5 7/8% Senior Subordinated
Notes due 2015 (the "Series A Notes") pursuant to the Purchase Agreement (as
defined below).

     This Agreement is made pursuant to the Purchase Agreement, dated as of
November 1, 2004 (the "Purchase Agreement"), by and among the Company, the
Existing Guarantors and the Initial Purchasers. In order to induce the Initial
Purchasers to purchase the Series A Notes, the Company and the Existing
Guarantors have agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchasers set forth in Section 3 of the Purchase
Agreement.

     The parties hereby agree as follows:

SECTION 1 DEFINITIONS

     As used in this Agreement, the following capitalized terms shall have the
following meanings:

     Act: The Securities Act of 1933, as amended.

     Additional Guarantor: Any subsidiary of the Company that executes a
Subsidiary Guarantee under the Indenture after the date of this Agreement.

     Broker-Dealer: Any broker or dealer registered under the Exchange Act.

     Closing Date: The date of this Agreement.

     Commission: The Securities and Exchange Commission.

     Consummate: A Registered Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (ii) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof and (iii) the delivery by the Company
to the Registrar under the Indenture of Series B Notes in the same aggregate
principal amount as the aggregate principal amount of Series A Notes that were
tendered by Holders thereof pursuant to the Exchange Offer.

     Damages Payment Date: With respect to the Series A Notes, each Interest
Payment Date.

     Effectiveness Target Date: As defined in Section 5.

     Exchange Act: The Securities Exchange Act of 1934, as amended.




     Exchange Offer: The registration by the Company under the Act of the Series
B Notes (including the Subsidiary Guarantees) pursuant to a Registration
Statement pursuant to which the Company offers the Holders of all outstanding
Transfer Restricted Securities the opportunity to exchange all such outstanding
Transfer Restricted Securities held by such Holders for Series B Notes and
registered Subsidiary Guarantees in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities tendered in
such exchange offer by such Holders.

     Exchange Offer Registration Statement: The Registration Statement relating
to the Exchange Offer, including the related Prospectus.

     Exempt Resales: The transactions in which the Initial Purchasers propose to
sell the Series A Notes to (i) certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Act, (ii) to certain institutional
"accredited investors," as such term is defined in Rule 501(a)(1), (2), (3) and
(7) under the Act ("Accredited Institutions") and (iii) outside the United
States to Persons other than U.S. Persons in offshore transactions meeting the
requirements of rule 904 of Regulation S under the Act.

     Guarantors: The Additional Guarantors and the Existing Guarantors.

     Holders: As defined in Section 2 hereof.

     Indenture: The Indenture, dated as of the date hereof, among the Company,
the Existing Guarantors and The Bank of New York, as trustee (the "Trustee"),
pursuant to which the Notes are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.

     Initial Purchasers: As defined in the preamble hereto.

     Interest Payment Date: As defined in the Notes.

     NASD: National Association of Securities Dealers, Inc.

     Notes: The Series A Notes and the Series B Notes.

     Offering Memorandum: As defined in the Purchase Agreement.

     Person: An individual, partnership, corporation, trust, limited liability
company or unincorporated organization, or a government or agency or political
subdivision thereof.

     Prospectus: The prospectus included in a Registration Statement, as amended
or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.

     Record Holder: With respect to any Damages Payment Date relating to Notes,
each Person who is a Holder of Notes on the record date with respect to the
Interest Payment Date on which such Damages Payment Date shall occur.

     Registration Default: As defined in Section 5 hereof.

     Registrar: As defined in the Indenture.

     Registration Statement: Any registration statement of the Company relating
to (a) an offering of Series B Notes pursuant to an Exchange Offer or (b) the
registration for resale of Transfer Restricted


                                       2


Securities pursuant to the Shelf Registration Statement, which is filed pursuant
to the provisions of this Agreement, in each case including the Prospectus
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.

     Series B Notes: The Company's 5 7/8% Senior Subordinated Notes due 2015 to
be issued pursuant to the Indenture in the Exchange Offer.

     Shelf Filing Deadline: As defined in Section 4 hereof.

     Shelf Registration Statement: As defined in Section 4 hereof.

     Subsidiary Guarantee: The Guarantee by a Guarantor of the Company's
obligations under the Notes and Indenture.

     TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in
effect on the date of the Indenture.

     Transfer Restricted Securities: Each Note (including the Subsidiary
Guarantees), until the earliest to occur of (a) the date on which such Note is
exchanged by a person other than a Broker-Dealer for a Series B Note in the
Exchange Offer, (b) following the exchange by a Broker-Dealer in the Exchange
Offer of a Note for a Series B Note, the date on which such Series B Note is
sold to a purchaser who receives from such Broker-Dealer on or prior to the date
of such sale a copy of the Prospectus contained in the Exchange Offer
Registration Statement, (c) the date on which such Note (including the
Subsidiary Guarantees) is effectively registered under the Act and disposed of
in accordance with the Shelf Registration Statement or (d) the date on which
such Note (including the Subsidiary Guarantees) is distributed to the public
pursuant to Rule 144 under the Act.

     Underwritten Registration or Underwritten Offering: A registration in which
securities of the Company are sold to an underwriter for reoffering to the
public.

SECTION 2 SECURITIES SUBJECT TO THIS AGREEMENT

     (a) Transfer Restricted Securities. The securities entitled to the benefits
of this Agreement are the Transfer Restricted Securities.

     (b) Holders of Transfer Restricted Securities. A Person is deemed to be a
holder of Transfer Restricted Securities (each, a "Holder") whenever such Person
owns Transfer Restricted Securities.

SECTION 3 REGISTERED EXCHANGE OFFER

     (a) Unless the Exchange Offer shall not be permissible under applicable law
or Commission policy (after the procedures set forth in Section 6(a) below have
been complied with), the Company and the Guarantors shall (i) cause to be filed
with the Commission as promptly as practicable after the Closing Date, but in no
event later than 90 days after the Closing Date, a Registration Statement under
the Act relating to the Series B Notes (including the Subsidiary Guarantees) and
the Exchange Offer, (ii) use all commercially reasonable efforts to cause such
Registration Statement to be declared effective by the Commission as promptly as
practicable, but in no event later than 180 days after the Closing Date (which
180-day period shall be extended for a number of days equal to the number of
business days, if any, the Commission is officially closed during such period),
(iii) in connection with the foregoing, file (A) all pre-effective amendments to
such


                                       3


Registration Statement as may be necessary in order to cause such Registration
Statement to become effective, (B) if applicable, a post-effective amendment to
such Registration Statement pursuant to Rule 430A under the Act and (C) cause
all necessary filings in connection with the registration and qualification of
the Series B Notes (including the Subsidiary Guarantees) to be made under the
Blue Sky laws of such jurisdictions as are necessary to permit Consummation of
the Exchange Offer and (iv) upon the effectiveness of such Registration
Statement, commence the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting registration of the Series B Notes (including the
Subsidiary Guarantees) to be offered in exchange for the Transfer Restricted
Securities and to permit resales of Notes held by Broker-Dealers as contemplated
by Section 3(c) below.

     (b) The Company and the Guarantors shall cause the Exchange Offer
Registration Statement to be effective continuously and shall keep the Exchange
Offer open for a period of not less than the minimum period required under
applicable federal and state securities laws to Consummate the Exchange Offer;
provided, however, that in no event shall such period be less than 20 business
days. The Company and the Guarantors shall cause the Exchange Offer to comply
with all applicable federal and state securities laws. No securities other than
the Notes (including the Subsidiary Guarantees) shall be included in the
Exchange Offer Registration Statement. The Company and the Guarantors shall use
all commercially reasonable efforts to cause the Exchange Offer to be
Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
business days thereafter.

     (c) The Company and the Guarantors shall indicate in a "Plan of
Distribution" section contained in the Prospectus contained in the Exchange
Offer Registration Statement that any Broker-Dealer who owns Series A Notes that
are Transfer Restricted Securities and that were acquired for its own account as
a result of market-making activities or other trading activities (other than
Transfer Restricted Securities acquired directly from the Company), may exchange
such Series A Notes pursuant to the Exchange Offer; however, such Broker-Dealer
may be deemed to be an "underwriter" within the meaning of the Act and must,
therefore, deliver a Prospectus meeting the requirements of the Act in
connection with any resales of the Series B Notes received by such Broker-Dealer
in the Exchange Offer, which Prospectus delivery requirement may be satisfied by
the delivery by such Broker-Dealer of the Prospectus contained in the Exchange
Offer Registration Statement. Such "Plan of Distribution" section shall also
contain all other information with respect to such resales by Broker-Dealers
that the Commission may require in order to permit such resales pursuant
thereto, but such "Plan of Distribution" shall not name any such Broker-Dealer
or disclose the amount of Notes held by any such Broker-Dealer except to the
extent required by the Commission.

     The Company and the Guarantors shall use all commercially reasonable
efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
6(c) below to the extent necessary to ensure that it is available for resales of
Notes acquired by Broker-Dealers for their own accounts as a result of
market-making activities or other trading activities, and to ensure that it
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of 180 days from the date on which the Exchange Offer Registration
Statement is declared effective or such shorter period that will terminate when
all Notes covered by the Exchange Offer Registration Statement have been
exchanged in the Exchange Offer.

     The Company and the Guarantors shall provide sufficient copies of the
latest version of such Prospectus to Broker-Dealers promptly upon request at any
time during such 180 day period in order to facilitate such resales.

SECTION 4 SHELF REGISTRATION


                                       4


     (a) Shelf Registration. If (i) the Company and the Guarantors are not
required to file the Exchange Offer Registration Statement or permitted to
Consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with) or (ii) any Holder of Transfer Restricted
Securities that is a "qualified institutional buyer," as such term is defined in
Rule 144A under the Act or an institutional "accredited investor," as such term
is defined in Rule 501(a)(1), (2), (3) and (7) under the Act shall notify the
Company prior to the 20th day following the Consummation of the Exchange Offer
that such Holder alone or together with holders who hold in the aggregate at
least $1.0 million in principal amount of Series A Notes (A) is prohibited by
applicable law or Commission policy from participating in the Exchange Offer, or
(B) may not resell the Series B Notes acquired by it in the Exchange Offer to
the public without delivering a prospectus and that the Prospectus contained in
the Exchange Offer Registration Statement is not appropriate or available for
such resales by such Holder, or (C) is a Broker-Dealer and holds Series A Notes
acquired directly from the Company or an affiliate of the Company, the Company
and the Guarantors shall:

          (i) cause to be filed with the Commission a shelf Registration
     Statement pursuant to Rule 415 under the Act, which may be an amendment to
     the Exchange Offer Registration Statement (in either event, the "Shelf
     Registration Statement") on or prior to the earliest to occur of (A) the
     30th day after the date on which the Company determines that it is not
     required to file the Exchange Offer Registration Statement, or permitted to
     Consummate the Exchange Offer and (B) the 30th day after the date on which
     the Company receives notice from a Holder of Transfer Restricted Securities
     as contemplated by clause (ii) of paragraph (a) above (such earliest date
     being the "Shelf Filing Deadline"), which Shelf Registration Statement
     shall provide for resales of all Transfer Restricted Securities the Holders
     of which shall have provided the information required pursuant to Section
     4(b) hereof; and

          (ii) use all commercially reasonable efforts to cause such Shelf
     Registration Statement to be declared effective by the Commission on or
     before the 90th day after the Shelf Filing Deadline.

The Company and the Guarantors shall use all commercially reasonable efforts to
keep such Shelf Registration Statement continuously effective, supplemented and
amended as required by the provisions of Sections 6(b) and (c) hereof to the
extent necessary to ensure that it is available for resales of Notes by the
Holders of Transfer Restricted Securities entitled to the benefit of this
Section 4(a), and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least two years following the
Closing Date or such shorter period that will terminate when all Notes covered
by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or become eligible for resale pursuant to Rule 144
without volume or other restrictions.

     (b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 10 business days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to additional interest pursuant to Section 5 hereof unless and until
such Holder shall have used its best efforts to provide all such reasonably
requested information. Each Holder as to which any Shelf Registration Statement
is being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.



                                       5


SECTION 5 ADDITIONAL INTEREST

     If (i) any of the Registration Statements required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
sections 3(a) and 4(a), as applicable, (ii) any of such required Registration
Statements has not been declared effective by the Commission on or prior to the
date specified for such effectiveness in sections 3(a) and 4(a), as applicable,
(the "Effectiveness Target Date"), (iii) the Exchange Offer has not been
Consummated within 30 business days after the Effectiveness Target Date with
respect to the Exchange Offer Registration Statement, or (iv) any Registration
Statement required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
without being succeeded within five business days by a post-effective amendment
to such Registration Statement that cures such failure and that is itself
immediately declared effective (each such event referred to in clauses (i)
through (iv), a "Registration Default"), the Company and the Guarantors jointly
and severally agree to pay additional interest to each Holder of Transfer
Restricted Securities with respect to the first 90-day period immediately
following the occurrence of such Registration Default, in an amount equal to
$.05 per week per $1,000 principal amount of Transfer Restricted Securities held
by such Holder for each week or portion thereof that the Registration Default
continues. The amount of the additional interest shall increase by an additional
$.05 per week per $1,000 in principal amount of Transfer Restricted Securities
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of additional interest of $.50 per week
per $1,000 principal amount of Transfer Restricted Securities. The Company shall
in no event be required to pay additional interest for more than one
Registration Default at any given time. All accrued additional interest shall be
paid to Record Holders by the Company and the Guarantors by wire transfer of
immediately available funds or by federal funds check on each Damages Payment
Date, as provided in the Indenture. Following the cure of all Registration
Defaults relating to any particular Transfer Restricted Securities, the accrual
of additional interest with respect to such Transfer Restricted Securities will
cease.

     All payment obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such payment obligations with respect to
such Security shall have been satisfied in full provided, however, that the
additional interest shall cease to accrue on the day immediately prior to the
date such Transfer Restricted Securities cease to be Transfer Restricted
Securities.

SECTION 6 REGISTRATION PROCEDURES

     (a) Exchange Offer Registration Statement. In connection with the Exchange
Offer, the Company and the Guarantors shall comply with all of the provisions of
Section 6(c) below, shall use all commercially reasonable efforts to effect such
exchange to permit the sale of Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:

          (i) If in the reasonable opinion of counsel to the Company and the
     Guarantors there is a question as to whether the Exchange Offer is
     permitted by applicable law, the Company and the Guarantors hereby agree to
     seek a no-action letter or other favorable decision from the Commission
     allowing the Company and the Guarantors to Consummate an Exchange Offer for
     such Series A Notes. The Company and the Guarantors hereby agree to pursue
     the issuance of such a decision to the Commission staff level but shall not
     be required to take commercially unreasonable action to effect a change of
     Commission policy. The Company and the Guarantors hereby agree however, to
     (A) participate in telephonic conferences with the Commission, (B) deliver
     to the Commission staff an analysis prepared by counsel to the Company and
     the


                                       6


     Guarantors setting forth the legal bases, if any, upon which such counsel
     has concluded that such an Exchange Offer should be permitted and (C)
     diligently pursue a resolution (which need not be favorable) by the
     Commission staff of such submission.

          (ii) As a condition to its participation in the Exchange Offer
     pursuant to the terms of this Agreement, each Holder of Transfer Restricted
     Securities shall furnish, upon the request of the Company, prior to the
     Consummation thereof, a written representation to the Company and the
     Guarantors (which may be contained in the letter of transmittal
     contemplated by the Exchange Offer Registration Statement) to the effect
     that (A) it is not an affiliate of the Company, (B) it is not engaged in,
     and does not intend to engage in, and has no arrangement or understanding
     with any person to participate in, a distribution of the Series B Notes to
     be issued in the Exchange Offer and (C) it is acquiring the Series B Notes
     in its ordinary course of business. In addition, all such Holders of
     Transfer Restricted Securities shall otherwise cooperate in the Company's
     and the Guarantors' preparations for the Exchange Offer. Each Holder hereby
     acknowledges and agrees that any Broker-Dealer and any such Holder using
     the Exchange Offer to participate in a distribution of the securities to be
     acquired in the Exchange Offer (A) could not under Commission policy as in
     effect on the date of this Agreement rely on the position of the Commission
     enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and
     Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted
     in the Commission's letter to Shearman & Sterling dated July 2, 1993, and
     similar no-action letters (including any no-action letter obtained pursuant
     to clause (i) above), and (B) must comply with the registration and
     prospectus delivery requirements of the Act in connection with a secondary
     resale transaction and that such a secondary resale transaction should be
     covered by an effective Registration Statement containing the selling
     security holder information required by Item 507 or 508, as applicable, of
     Regulation S-K if the resales are of Series B Notes obtained by such Holder
     in exchange for Series A Notes acquired by such Holder directly from the
     Company.

          (iii) Prior to effectiveness of the Exchange Offer Registration
     Statement, the Company and the Guarantors shall provide a supplemental
     letter to the Commission (A) stating that the Company and the Guarantors
     are registering the Exchange Offer in reliance on the position of the
     Commission enunciated in Exxon Capital Holdings Corporation (available May
     13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) and, if
     applicable, any no-action letter obtained pursuant to clause (i) above and
     (B) including a representation that neither the Company nor any Guarantor
     has entered into any arrangement or understanding with any Person to
     distribute the Series B Notes to be received in the Exchange Offer and
     that, to the best of the Company's and each Guarantor's information and
     belief, each Holder participating in the Exchange Offer is acquiring the
     Series B Notes in its ordinary course of business and has no arrangement or
     understanding with any Person to participate in the distribution of the
     Series B Notes received in the Exchange Offer.

     (b) Shelf Registration Statement. In connection with the Shelf Registration
Statement, the Company and the Guarantors shall comply with all the provisions
of Section 6(c) below and shall use all commercially reasonable efforts to
effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and pursuant thereto the Company and the Guarantors will
as expeditiously as possible prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the Act,
which form shall be available for the sale of the Transfer Restricted Securities
in accordance with the intended method or methods of distribution thereof.

     (c) General Provisions. In connection with any Registration Statement and
any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Securities (including,


                                       7


without limitation, any Registration Statement and the related Prospectus
required to permit resales of Notes by Broker-Dealers), the Company and the
Guarantors shall:

          (i) use all commercially reasonable efforts to keep such Registration
     Statement continuously effective and provide all requisite financial
     statements (including, if required by the Act or any regulation thereunder,
     financial statements of any Guarantors) for the period specified in Section
     3 or 4 of this Agreement, as applicable; upon the occurrence of any event
     that would cause any such Registration Statement or the Prospectus
     contained therein (A) to contain a material misstatement or omission or (B)
     not to be effective and usable for resale of Transfer Restricted Securities
     during the period required by this Agreement, the Company and the
     Guarantors shall file promptly an appropriate amendment to such
     Registration Statement, in the case of clause (A), correcting any such
     misstatement or omission, and, in the case of either clause (A) or (B), use
     all commercially reasonable efforts to cause such amendment to be declared
     effective and such Registration Statement and the related Prospectus to
     become usable for their intended purpose(s) as soon as practicable
     thereafter. Notwithstanding the foregoing, at any time after Consummation
     of the Exchange Offer, the Company and the Guarantors may allow the Shelf
     Registration Statement to cease to become effective and usable if (A) the
     board of directors of the Company determines in good faith that it is in
     the best interests of the Company not to disclose the existence of or facts
     surrounding any proposed or pending material corporate transaction
     involving the Company and the Guarantors, and the Company notifies the
     Holders within two business days after the Board of Directors makes such
     determination, or (B) the Prospectus contained in the Shelf Registration
     Statement contains an untrue statement of the material fact or omits 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;
     provided that the two-year period referred to in Section 4(a) hereof during
     which the Shelf Registration Statement is required to be effective and
     usable shall be extended by the number of days during which such
     Registration Statement was not effective or usable pursuant to the
     foregoing provisions;

          (ii) subject to Section 6(c)(i), prepare and file with the Commission
     such amendments and post-effective amendments to the Registration Statement
     as may be necessary to keep the Registration Statement effective for the
     applicable period set forth in Section 3 or 4 hereof, as applicable, or
     such shorter period as will terminate when all Transfer Restricted
     Securities covered by such Registration Statement have been sold; cause the
     Prospectus to be supplemented by any required Prospectus supplement, and as
     so supplemented to be filed pursuant to Rule 424 under the Act, and to
     comply fully with the applicable provisions of Rules 424 and 430A under the
     Act in a timely manner; and comply with the provisions of the Act with
     respect to the disposition of all securities covered by such Registration
     Statement during the applicable period in accordance with the intended
     method or methods of distribution by the sellers thereof set forth in such
     Registration Statement or supplement to the Prospectus;

          (iii) advise the underwriter(s), if any, and selling Holders of
     Transfer Restricted Securities and, if requested by such Persons, to
     confirm such advice in writing, (A) when the Prospectus or any Prospectus
     supplement or post-effective amendment has been filed, and, with respect to
     any Registration Statement or any post-effective amendment thereto, when
     the same has become effective, (B) of any request by the Commission for
     amendments to the Registration Statement or amendments or supplements to
     the Prospectus or for additional information relating thereto, (C) of the
     issuance by the Commission of any stop order suspending the effectiveness
     of the Registration Statement under the Act or of the suspension by any
     state securities commission of the qualification of the Transfer Restricted
     Securities for offering or sale in any jurisdiction, or the initiation of
     any proceeding for any of the preceding purposes and (D) of the existence
     of any fact or the happening of any event that makes any statement of a
     material fact made in the


                                       8


     Registration Statement, the Prospectus, any amendment or supplement
     thereto, or any document incorporated by reference therein untrue, or that
     requires the making of any additions to or changes in the Registration
     Statement or the Prospectus in order to make the statements therein not
     misleading. If at any time the Commission shall issue any stop order
     suspending the effectiveness of the Registration Statement, or any state
     securities commission or other regulatory authority shall issue an order
     suspending the qualification or exemption from qualification of the
     Transfer Restricted Securities under state securities or Blue Sky laws, the
     Company and the Guarantors shall use all commercially reasonable efforts to
     obtain the withdrawal or lifting of such order at the earliest possible
     time;

          (iv) upon written request, furnish to each of the selling Holders of
     Transfer Restricted Securities and each of the underwriter(s), if any,
     before filing with the Commission, copies of any Registration Statement or
     any Prospectus included therein or any amendments or supplements to any
     such Registration Statement or Prospectus (including all documents
     incorporated by reference after the initial filing of such Registration
     Statement), which documents will be subject to the review of such Holders
     and underwriter(s), if any, for a period of at least five business days,
     and the Company and the Guarantors will not file any such Registration
     Statement or Prospectus or any amendment or supplement to any such
     Registration Statement or Prospectus (including all such documents
     incorporated by reference) if a selling Holder of Transfer Restricted
     Securities covered by such Registration Statement or the underwriter(s), if
     any, shall reasonably object within 5 business days after receipt thereof;

          (v) upon written request, promptly prior to the filing of any document
     that is to be incorporated by reference into a Registration Statement or
     Prospectus, provide copies of such document to the selling Holders and to
     the underwriter(s), if any, make the Company's and the Guarantors'
     representatives available for discussion of such document and other
     customary due diligence matters, and include such information in such
     document prior to the filing thereof as such selling Holders or
     underwriter(s), if any, reasonably may request;

          (vi) in the case of a Shelf Registration Statement, make available at
     reasonable times at the Company's principal place of business for
     inspection by the selling Holders of Transfer Restricted Securities, any
     underwriter participating in any disposition pursuant to such Registration
     Statement, and any attorney or accountant retained by such selling Holders
     or any of the underwriter(s) who shall certify to the Company and the
     Guarantors that they have a current intention to sell Transfer Restricted
     Securities pursuant to a Shelf Registration Statement, such financial and
     other information of the Company and the Guarantors as reasonably requested
     and cause the Company's and the Guarantors' officers, directors and
     employees to respond to such inquiries as shall be reasonably necessary, in
     the reasonable judgment of counsel to such Holders, to conduct a reasonable
     investigation; provided, however, that each such party shall be required to
     maintain in confidence and not to disclose to any other person any
     information or records reasonably designated by the Company in writing as
     being confidential, until such time as (A) such information becomes a
     matter of public record (whether by virtue of its inclusion in such
     Registration Statement or otherwise), or (B) such person shall be required
     so to disclose such information pursuant to the subpoena or order of any
     court or other governmental agency or body having jurisdiction over the
     matter (subject to the requirements of such order, and only after such
     person shall have given the Company prompt prior written notice of such
     requirement), or (C) such information is required to be set forth in such
     Registration Statement or the Prospectus included therein or in an
     amendment to such Registration Statement or an amendment or supplement to
     such Prospectus in order that such Registration Statement, Prospectus,
     amendment or supplement, as the case may be, does not contain an untrue
     statement of a material fact or omit


                                       9


     to state therein a material fact required to be stated therein or necessary
     to make the statements therein not misleading;

          (vii) if requested by any selling Holders of Transfer Restricted
     Securities or the underwriter(s), if any, promptly incorporate in any
     Registration Statement or Prospectus, pursuant to a supplement or
     post-effective amendment if necessary, such information as such selling
     Holders and underwriter(s), if any, may reasonably request to have included
     therein, including, without limitation, information relating to the "Plan
     of Distribution" of the Transfer Restricted Securities information with
     respect to the principal amount of Transfer Restricted Securities being
     sold to such underwriter(s), the purchase price being paid therefor and any
     other terms of the offering of the Transfer Restricted Securities to be
     sold in such offering; and make all required filings of such Prospectus
     supplement or post-effective amendment as soon as practicable after the
     Company is notified of the matters to be incorporated in such Prospectus
     supplement or post-effective amendment;

          (viii) upon request, furnish to each selling Holder of Transfer
     Restricted Securities and each of the underwriter(s), if any, without
     charge, at least one copy of the Registration Statement, as first filed
     with the Commission, and of each amendment thereto, including all documents
     incorporated by reference therein and all exhibits (including exhibits
     incorporated therein by reference);

          (ix) deliver to each selling Holder of Transfer Restricted Securities
     and each of the underwriter(s), if any, without charge, as many copies of
     the Prospectus (including each preliminary prospectus) and any amendment or
     supplement thereto as such Persons reasonably may request; the Company and
     the Guarantors hereby consent to the use of the Prospectus and any
     amendment or supplement thereto by each of the selling Holders and each of
     the underwriter(s), if any, in connection with the offering and the sale of
     the Transfer Restricted Securities covered by the Prospectus or any
     amendment or supplement thereto;

          (x) enter into such agreements (including an underwriting agreement),
     and make such representations and warranties, and take all such other
     actions in connection therewith in order to expedite or facilitate the
     disposition of the Transfer Restricted Securities pursuant to any
     Registration Statement contemplated by this Agreement, all to such extent
     as may be requested by the Initial Purchaser or, in the case of
     registration for resale of Transfer Restricted Securities pursuant to the
     Shelf Registration Statement, by any Holder or Holders of Transfer
     Restricted Securities who hold at least 25% in aggregate principal amount
     of such class of Transfer Restricted Securities; provided, that, the
     Company and the Guarantors shall not be required to enter into any such
     agreement more than once with respect to all of the Transfer Restricted
     Securities and, in the case of a Shelf Registration Statement, may delay
     entering into such agreement if the Board of Directors of the Company
     determines in good faith that it is in the best interests of the Company
     and the Guarantors not to disclose the existence of or facts surrounding
     any proposed or pending material corporate transaction involving the
     Company and the Guarantors; and whether or not an underwriting agreement is
     entered into and whether or not the registration is an Underwritten
     Registration, the Company and the Guarantors shall:

               (A) furnish to the Initial Purchasers, the Holders of Transfer
          Restricted Securities who hold at least 25% in aggregate principal
          amount of such class of Transfer Restricted Securities (in the case of
          a Shelf Registration Statement) and each underwriter, if any, in such
          substance and scope as they may request and as are customarily made in
          connection with an offering of debt securities pursuant to a
          Registration Statement (i) upon the effective date of any Registration
          Statement (and if such Registration Statement contemplates an
          Underwritten


                                       10


          Offering of Transfer Restricted Securities upon the date of the
          closing under the underwriting agreement related thereto) and (ii)
          upon the filing of any amendment or supplement to any Registration
          Statement or any other document that is incorporated in any
          Registration Statement by reference and includes financial data with
          respect to a fiscal quarter or year:

                    (1) a certificate, dated the date of effectiveness of the
               Shelf Registration Statement signed by (y) the respective
               Chairman of the Board, the respective President or any Vice
               President and (z) the respective Chief Financial Officer of the
               Company and each of the Guarantors confirming, as of the date
               thereof, the matters set forth in paragraph (h) of Section 7 of
               the Purchase Agreement and such other matters as such parties may
               reasonably request;

                    (2) an opinion, dated the date of effectiveness of the Shelf
               Registration Statement, as the case may be, of counsel for the
               Company covering the matters set forth in paragraphs (c) and (d)
               of Section 7 of the Purchase Agreement and such other matter as
               such parties may reasonably request, and in any event including a
               statement to the effect that such counsel has participated in
               conferences with officers and other representatives of the
               Company, representatives of the independent public accountants
               for the Company, the Initial Purchasers' representatives and the
               Initial Purchasers' counsel in connection with the preparation of
               such Registration Statement and the related Prospectus and have
               considered the matters required to be stated therein and the
               statements contained therein, although such counsel has not
               independently verified the accuracy, completeness or fairness of
               such statements; and that such counsel advises that, on the basis
               of the foregoing (relying as to materiality to a large extent
               upon facts provided to such counsel by officers and other
               representatives of the Company and without independent check or
               verification), no facts came to such counsel's attention that
               caused such counsel to believe that the applicable Registration
               Statement, at the time such Registration Statement or any
               post-effective amendment thereto became effective, and, in the
               case of the Exchange Offer Registration Statement, as of the date
               of Consummation, contained an untrue statement of a material fact
               or omitted to state a material fact required to be stated therein
               or necessary to make the statements therein not misleading, or
               that the Prospectus contained in such Registration Statement as
               of its date and, in the case of the opinion dated the date of
               Consummation of the Exchange Offer, as of the date of
               Consummation, contained an untrue statement of a material fact or
               omitted 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. Such counsel may state further
               that such counsel assumes no responsibility for, and has not
               independently verified, the accuracy, completeness or fairness of
               the financial statements, notes and schedules and other financial
               data included in any Registration Statement contemplated by this
               Agreement or the related Prospectus; and

                    (3) a customary comfort letter, dated as of the date of
               Consummation of the Exchange Offer or the date of effectiveness
               of the Shelf Registration Statement, as the case may be, from the
               Company's independent accountants, in the customary form and
               covering matters of the type customarily covered in comfort
               letters by underwriters in connection with primary underwritten
               offerings, and affirming the matters set forth in the comfort
               letters delivered pursuant to Section 7 of the Purchase
               Agreement, without exception;


                                       11


               (B) set forth in full or incorporated by reference in the
          underwriting agreement, if any, the indemnification provisions and
          procedures of Section 8 hereof with respect to all parties to be
          indemnified pursuant to said Section; and

               (C) deliver such other documents and certificates as may be
          reasonably requested by such parties to evidence compliance with
          clause (A) above and with any customary conditions contained in the
          underwriting agreement or other agreement entered into by the Company
          and the Guarantors pursuant to this clause (x), if any.

          (xi) prior to any public offering of Transfer Restricted Securities,
     cooperate with the selling Holders of Transfer Restricted Securities, the
     underwriter(s), if any, and their respective counsel in connection with the
     registration and qualification of the Transfer Restricted Securities under
     the securities or Blue Sky laws of such jurisdictions as the selling
     Holders of Transfer Restricted Securities or underwriter(s) may reasonably
     request and do any and all other acts or things necessary or advisable to
     enable the disposition in such jurisdictions of the Transfer Restricted
     Securities covered by the Shelf Registration Statement filed pursuant to
     Section 4 hereof; provided, however, that the Company and the Guarantors
     shall not be required to register or qualify as a foreign corporation where
     it is not now so qualified or to take any action that would subject it to
     the service of process in suits or to taxation, other than as to matters
     and transactions relating to the Registration Statement, in any
     jurisdiction where it is not now so subject;

          (xii) shall issue, upon the request of any Holder of Series A Notes
     covered by the Shelf Registration Statement, Series B Notes, having an
     aggregate principal amount equal to the aggregate principal amount of
     Series A Notes surrendered to the Company by such Holder in exchange
     therefor or being sold by such Holder; such Series B Notes to be registered
     in the name of such Holder or in the name of the purchaser(s) of such
     Notes, as the case may be; in return, the Series A Notes held by such
     Holder shall be surrendered to the Company for cancellation;

          (xiii) cooperate with the selling Holders of Transfer Restricted
     Securities and the underwriter(s), if any, to facilitate the timely
     preparation and delivery of certificates representing Transfer Restricted
     Securities to be sold and not bearing any restrictive legends; and enable
     such Transfer Restricted Securities to be in such denominations and
     registered in such names as the Holders or the underwriter(s), if any, may
     request at least two business days prior to any sale of Transfer Restricted
     Securities made by such underwriter(s);

          (xiv) use all commercially reasonable efforts to cause the Transfer
     Restricted Securities covered by the Registration Statement to be
     registered with or approved by such other governmental agencies or
     authorities as may be necessary to enable the seller or sellers thereof or
     the underwriter(s), if any, to consummate the disposition of such Transfer
     Restricted Securities, subject to the proviso contained in clause (xi)
     above;

          (xv) subject to clause (d)(i) above, if any fact or event contemplated
     by clause (d)(iii)(D) above shall exist or have occurred, prepare a
     supplement or post-effective amendment to the Registration Statement or
     related Prospectus or any document incorporated therein by reference or
     file any other required document so that, as thereafter delivered to the
     purchasers of Transfer Restricted Securities, the Prospectus will not
     contain an untrue statement of a material fact or omit to state any
     material fact required to be stated therein or necessary to make the
     statements therein not misleading;



                                       12


          (xvi) provide a CUSIP number for all Transfer Restricted Securities
     not later than the effective date of the Registration Statement and provide
     the Trustee under the Indenture with printed certificates for the Transfer
     Restricted Securities which are in a form eligible for deposit with The
     Depository Trust Company;

          (xvii) cooperate and assist in any filings required to be made with
     the NASD and in the performance of any due diligence investigation by any
     underwriter (including any "qualified independent underwriter") that is
     required to be retained in accordance with the rules and regulations of the
     NASD;

          (xviii) otherwise use all commercially reasonable efforts to comply
     with all applicable rules and regulations of the Commission, and make
     generally available to its security holders, as soon as practicable, a
     consolidated earnings statement meeting the requirements of Rule 158 (which
     need not be audited) for the twelve-month period (A) commencing at the end
     of any fiscal quarter in which Transfer Restricted Securities are sold to
     underwriters in a firm or best efforts Underwritten Offering or (B) if not
     sold to underwriters in such an offering, beginning with the first month of
     the Company's first fiscal quarter commencing after the effective date of
     the Registration Statement;

          (xix) cause the Indenture to be qualified under the TIA not later than
     the effective date of the first Registration Statement required by this
     Agreement, and, in connection therewith, cooperate with the Trustee and the
     Holders of Notes to effect such changes to the Indenture as may be required
     for such Indenture to be so qualified in accordance with the terms of the
     TIA; and execute, and use all commercially reasonable efforts to cause the
     Trustee to execute, all documents that may be required to effect such
     changes and all other forms and documents required to be filed with the
     Commission to enable such Indenture to be so qualified in a timely manner;

          (xx) provide promptly to each Holder upon request each document filed
     with the Commission pursuant to the requirements of Section 13 and Section
     15 of the Exchange Act; and

          (xxi) so long as any Transfer Restricted Securities remain
     outstanding, cause each Additional Guarantor upon the creation or
     acquisition by the Company of such Additional Guarantor, to execute a
     counterpart to this Agreement in the form attached hereto as Annex A and to
     deliver such counterpart, together with an opinion of counsel as to the
     enforceability thereof against such entity, to the Initial Purchasers no
     later than five business days following the execution thereof.

     Each Holder agrees by acquisition of a Transfer Restricted Security that,
upon receipt of any notice from the Company of the existence of any fact of the
kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith
discontinue disposition and will use its reasonable best efforts to cause any
underwriter to forthwith discontinue disposition of Transfer Restricted
Securities pursuant to the applicable Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 6(c)(xv) hereof, or until it is advised in writing (the "Advice") by the
Company that the use of the Prospectus may be resumed, and has received copies
of any additional or supplemental filings that are incorporated by reference in
the Prospectus. If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of such notice. In
the event the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from


                                       13


and including the date of the giving of such notice pursuant to Section
6(c)(iii)(D) hereof to and including the date when each selling Holder covered
by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(d)(xv) hereof or
shall have received the Advice.

     The Company and the Guarantors may require each Holder of Transfer
Restricted Securities as to which any registration is being effected to furnish
to the Company such information regarding such Holder and such Holder's intended
method of distribution of the applicable Transfer Restricted Securities as the
Company may from time to time reasonably request in writing, but only to the
extent that such information is required in order to comply with the Act. Each
such Holder agrees to notify the Company as promptly as practicable of (i) any
inaccuracy or change in information previously furnished by such Holder to the
Company or (ii) the occurrence of any event, in either case, as a result of
which any Prospectus relating to such registration contains or would contain an
untrue statement of a material fact regarding such Holder or such Holder's
intended method of distribution of the applicable Transfer Restricted Securities
or omits to state any material fact regarding such Holder or such Holder's
intended method of distribution of the applicable Transfer Restricted Securities
required to be stated therein or necessary to make the statements therein not
misleading and promptly to furnish to the Company any additional information
required to correct and update any previously furnish to the Company any
additional information required to correct and update any previously furnished
information or required so that such Prospectus shall not contain, with respect
to such Holder or the distribution of the applicable Transfer Restricted
Securities an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.

     Notwithstanding anything herein to the contrary, any party to this
Agreement (and any employee, representative, or other agent of any party to this
Agreement) may disclose to any and all persons, without limitation of any kind,
the U.S. federal income tax treatment and tax structure of the transactions
contemplated by this Agreement (the "Transactions") and all materials of any
kind (including opinions or other tax analyses) that are provided to it relating
to such tax treatment and tax structure; provided, however, that neither party
(nor any employee, representative or other agent thereof) shall disclose any
information (a) that is not relevant to an understanding of the U.S. federal
income tax treatment or tax structure of the Transactions or (b) to the extent
such disclosure could result in a violation of any federal or state securities
laws.

SECTION 7 REGISTRATION EXPENSES

     All expenses incident to the Company's and the Guarantors' performance of
or compliance with this Agreement will be borne by the Company regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses (including filings
made by any Initial Purchaser or Holder with the NASD (and, if applicable, the
fees and expenses of any "qualified independent underwriter" and its counsel
that may be required by the rules and regulations of the NASD)); (ii) all fees
and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the Series B Notes to be issued in the Exchange Offer and printing of
Prospectuses), messenger and delivery services; (iv) all fees and disbursements
of counsel for the Company and the Guarantors and the Holders of Transfer
Restricted Securities; and (v) all fees and disbursements of independent
certified public accountants of the Company (including the expenses of any
special audit and comfort letters required by or incident to such performance).

     The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting


                                       14


duties), the expenses of any annual audit and the fees and expenses of any
Person, including special experts, retained by the Company or the Guarantors.

SECTION 8 INDEMNIFICATION

     (a) The Company and the Guarantors shall, jointly and severally, indemnify
and hold harmless each Holder of Transfer Restricted Securities, its officers
and employees and each person, if any, who controls any such Holders, within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases, sales and registration of Notes), to which that Holder, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Registration Statement or Prospectus or in
any amendment or supplement thereto or (B) in any blue sky application or other
document prepared or executed by the Company or any Guarantor (or based upon any
written information furnished by the Company or any Guarantor) specifically for
the purpose of qualifying any or all of the Notes under the securities laws of
any state or other jurisdiction (any such application, document or information
being hereinafter called a "Blue Sky Application"), (ii) the omission or alleged
omission to state in any Registration Statement or Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (iii) any act or failure to act or any alleged act or failure
to act by any Holder in connection with, or relating in any manner to, the Notes
or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above (provided that the
Company and the Guarantors shall not be liable under this clause (iii) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such Holder through its gross negligence or willful misconduct), and shall
reimburse each Holder and each such officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably incurred by that
Holder, officer, employee or controlling person in connection with investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company and the Guarantors shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Registration Statement or Prospectus, or in any
such amendment or supplement, or in any Blue Sky Application, in reliance upon
and in conformity with written information concerning such Holder furnished to
the Company by or on behalf of any Holder specifically for inclusion therein.
The foregoing indemnity agreement is in addition to any liability which the
Company and the Guarantors may otherwise have to any Holder or to any officer,
employee or controlling person of that Holder.

     (b) Each Holder, severally and not jointly, shall indemnify and hold
harmless the Company and the Guarantors, their respective officers and
employees, each of their respective directors, and each person, if any, who
controls the Company or the Guarantors within the meaning of the Securities Act,
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company, the Guarantors or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Registration Statement or
Prospectus, or in any amendment or supplement thereto, or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in any
Registration Statement or Prospectus, or in any amendment or supplement thereto,
or in any Blue Sky Application any material fact required to be stated therein
or necessary to make the statements therein not misleading, but


                                       15


in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Holders furnished to the
Company by or on behalf of that Holder specifically for inclusion therein, and
shall reimburse the Company, the Guarantors and any such director, officer or
controlling person for any legal or other expenses reasonably incurred by the
Company, the Guarantors or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability which any Holder
may otherwise have to the Company, the Guarantors or any such director, officer,
employee or controlling person. The Company and the Guarantors shall be entitled
to receive indemnities from underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the distribution of
such Registrable Securities to the same extent as provided above with respect to
information or affidavit furnished in writing by such Persons as provided
specifically for in any Prospectus or Registration Statement.

     (c) Promptly after receipt by an indemnified party under this Section 8 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 8. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel it is advisable for such indemnified party
to employ separate counsel or (iii) the indemnifying party has failed to assume
the defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to one local counsel) at
any time for all such indemnified parties, which firm shall be designated in
writing by Lehman Brothers Inc., if the indemnified parties under this Section 8
consist of any Initial Purchaser or any of their respective officers, employees
or controlling persons, or by the Company, if the indemnified parties under this
Section consist of the Company, the Guarantors or any of their respective
directors, officers, employees or controlling persons. No indemnifying party
shall (i) without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld), settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties


                                       16


are actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding,
or (ii) be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with the consent of the indemnifying party or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.

     (d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
and the Guarantors, on the one hand, and the Holders on the other, from the
offering of the Notes or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and the Guarantors, on the one hand and the
Holders on the other with respect to the statements or omissions which resulted
in such loss, claim, damage or liability, or action in respect thereof, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Guarantors, on the one hand and the Holders on the other
with respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Series A Notes purchased under
the Purchase Agreement (before deducting expenses) received by the Company and
the Guarantors, on the one hand, and the total discounts and commissions
received by the Holders with respect to the Series A Notes purchased under this
Agreement, on the other hand, bear to the total gross proceeds from the offering
of the Series A Notes under the Purchase Agreement. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, the Guarantors or the Holders, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Guarantors and the Holders agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no Holder
shall be required to contribute any amount in excess of the amount by which the
net proceeds received by it in connection with its sale of Notes exceeds the
amount of any damages which such Holder has otherwise paid or become liable to
pay by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute as provided in this Section 8(d) are several and not
joint.

SECTION 9 RULE 144A

     The Company and each Guarantor hereby agrees with each Holder of Transfer
Restricted Securities, during any period in which the Company or such Guarantor
is not subject to Section 13 or 15(d) of the Exchange Act within the two-year
period following the Closing Date, to make available to any Holder or beneficial
owner of Transfer Restricted Securities, in connection with any sale thereof and


                                       17


any prospective purchaser of such Transfer Restricted Securities from such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A.

SECTION 10 PARTICIPATION IN UNDERWRITTEN REGISTRATIONS

     No Holder may participate in any Underwritten Registration hereunder unless
such Holder (a) agrees to sell such Holder's Transfer Restricted Securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of such
underwriting arrangements.

SECTION 11 SELECTION OF UNDERWRITERS

     The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering at such Holders' expense. In any such
Underwritten Offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders of
a majority in aggregate principal amount of the Transfer Restricted Securities
included in such offering; provided, that such investment bankers and managers
must be reasonably satisfactory to the Company.

SECTION 12 MISCELLANEOUS

     (a) Remedies. The Company and the Guarantors agree that monetary damages
(including the additional interest contemplated hereby) would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.

     (b) No Inconsistent Agreements. Neither the Company nor any Guarantor will,
on or after the date of this Agreement, enter into any agreement with respect to
its securities that is inconsistent with the rights granted to the Holders in
this Agreement or otherwise conflicts with the provisions hereof. Except as
disclosed in the Offering Memorandum or in the documents incorporated therein by
reference, neither the Company nor any Guarantor has previously entered into any
agreement granting any registration rights with respect to its securities to any
Person that is inconsistent with the terms of this Agreement. The rights granted
to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's or any
Guarantor's securities under any agreement in effect on the date hereof.

     (c) Adjustments Affecting the Notes. The Company and the Guarantors will
not take any action, or permit any change to occur, with respect to the Notes
that would materially and adversely affect the ability of the Holders to
Consummate any Exchange Offer.

     (d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by


                                       18


the Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities being tendered or registered.

     (e) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:

          (i) if to a Holder, at the address set forth on the records of the
     Registrar under the Indenture, with a copy to the Registrar under the
     Indenture; and

          (ii) if to the Company or the Guarantors:

               L-3 Communications Corporation
               600 Third Avenue, 34th Floor,
               New York, New York 10016,
               Attention: Christopher C. Cambria (Fax: 212-805-5494),

               With a copy to:

               Simpson Thacher & Bartlett LLP
               425 Lexington Avenue
               New York, NY, 10017
               Attention: Vincent Pagano Jr. (Fax: 212-455-2502)

     All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.

     Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

     (f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders; provided, however, that this Agreement shall not inure to the benefit
of or be binding upon a successor or assign of a Holder unless and to the extent
such successor or assign acquired Transfer Restricted Securities from such
Holder.

     (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

     (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     (j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.



                                       19


     (k) Entire Agreement. This Agreement together with the other Operative
Documents (as defined in the Purchase Agreement) is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company and the
Guarantors with respect to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

                            [Signature pages follow]




                                       20



     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

L-3 COMMUNICATIONS CORPORATION


By:
    ------------------------------------------
Name:  Christopher C. Cambria
Title: Senior Vice President, Secretary and General Counsel


APCOM, INC.
BROADCAST SPORTS INC.
D.P. ASSOCIATES INC.
ELECTRODYNAMICS, INC.
HENSCHEL INC.
HYGIENETICS ENVIRONMENTAL SERVICES, INC.
INTERSTATE ELECTRONICS CORPORATION
KDI PRECISION PRODUCTS, INC.
L-3 COMMUNICATIONS AEROMET, INC.
L-3 COMMUNICATIONS VERTEX AEROSPACE LLC
L-3 COMMUNICATIONS AIS GP CORPORATION
L-3 COMMUNICATIONS AVIONICS SYSTEMS, INC.
L-3 COMMUNICATIONS AVISYS CORPORATION
L-3 COMMUNICATIONS CSI, INC.
L-3 COMMUNICATIONS AYDIN CORPORATION
L-3 COMMUNICATIONS ESSCO, INC.
L-3 COMMUNICATIONS FLIGHT INTERNATIONAL AVIATION LLC
L-3 COMMUNICATIONS FLIGHT CAPITAL LLC
L-3 COMMUNICATIONS GOVERNMENT SERVICES, INC.
L-3 COMMUNICATIONS ILEX SYSTEMS, INC.
L-3 COMMUNICATIONS INVESTMENTS INC.
L-3 COMMUNICATIONS KLEIN ASSOCIATES, INC.
L-3 COMMUNICATIONS MAS (US) CORPORATION
L-3 COMMUNICATIONS SECURITY AND DETECTION SYSTEMS, INC.
L-3 COMMUNICATIONS STORM CONTROL SYSTEMS, INC.
L-3 COMMUNICATIONS VECTOR INTERNATIONAL AVIATION LLC
L-3 COMMUNICATIONS WESTWOOD CORPORATION
MCTI ACQUISITION CORPORATION
MICRODYNE COMMUNICATIONS TECHNOLOGIES INCORPORATED
MICRODYNE CORPORATION
MICRODYNE OUTSOURCING INCORPORATED
MPRI, INC.
PAC ORD INC.
POWER PARAGON, INC.
SHIP ANALYTICS, INC.
SHIP ANALYTICS INTERNATIONAL, INC.
SHIP ANALYTICS USA, INC.
SPD ELECTRICAL SYSTEMS, INC.
SPD SWITCHGEAR INC.
SYCOLEMAN CORPORATION



TROLL TECHNOLOGY CORPORATION
WESCAM AIR OPS INC.
WESCAM AIR OPS LLC
WESCAM HOLDINGS (US) INC.
WESCAM INCORPORATED
WESCAM LLC
WESCAM SONOMA INC.
WOLF COACH, INC.,
     as Guarantors


By:
    --------------------------------------
Name:  Christopher C. Cambria
Title: Vice President and Secretary


L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P.
  as Guarantor

BY: L-3 COMMUNICATIONS AIS GP CORPORATION,
    as general partner


By:
    --------------------------------------
Name:
Title: Authorized Person


LEHMAN BROTHERS INC.
CREDIT SUISSE FIRST BOSTON LLC
BANC OF AMERICA SECURITIES LLC
MORGAN STANLEY & CO. INCORPORATED
SG AMERICAS SECURITIES, LLC
WACHOVIA CAPITAL MARKETS, LLC

BY: LEHMAN BROTHERS INC.


By:
    --------------------------------------
Name:
Title:





                          Registration Rights Agreement


                                                                         ANNEX A
                                                                         -------



                  COUNTERPART TO REGISTRATION RIGHTS AGREEMENT
                  --------------------------------------------

     The undersigned hereby absolutely, unconditionally and irrevocably agrees
(as a "Guarantor") to use all commercially reasonable efforts to include its
Subsidiary Guarantee in any Registration Statement required to be filed by the
Company and the Guarantors pursuant to the Registration Rights Agreement, dated
as of November 12, 2004, (the "Registration Rights Agreement") by and among L-3
Communications Corporation, a Delaware corporation, the guarantors party
thereto, Lehman Brothers Inc., Credit Suisse First Boston LLC, Banc of America
Securities LLC, Morgan Stanley & Co. Incorporated, SG Americas Securities, LLC
and Wachovia Capital Markets, LLC; to use all commercially reasonable efforts to
cause such Registration Statement to become effective as specified in the
Registration Rights Agreement; and to otherwise be bound by the terms and
provisions of the Registration Rights Agreement.

     IN WITNESS WHEREOF, the undersigned has executed this Counterpart as of
_____________.


                                     [NAME]



                                                  By:
                                                      --------------------------
                                                      Name:
                                                      Title:

EX-5

                                                                      EXHIBIT 5

                   [SIMPSON THACHER & BARTLETT LLP LETTERHEAD]







                                                               February 2, 2005


L-3 Communications Corporation
600 Third Avenue, 34th Floor
New York, NY 10016

Ladies and Gentlemen:

         We have acted as counsel to L-3 Communications Corporation, a Delaware
corporation (the "Company"), and to the Delaware subsidiaries of the Company
named on Schedule I attached hereto (each, a "Delaware Guarantor" and
collectively, the "Delaware Guarantors") and to the non-Delaware subsidiaries of
the Company named on Schedule II attached hereto (each, a "Non-Delaware
Guarantor," collectively, the "Non-Delaware Guarantors," and taken together with
the Delaware Guarantors, the "Guarantors") in connection with the Registration
Statement on Form S-4 (the "Registration Statement") filed by the Company and
the Guarantors with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, relating to the issuance by the
Company of $650,000,000 aggregate principal amount of 5 7/8% Series B Senior
Subordinated Notes due 2015 (the "Exchange Notes") and the issuance by the
Guarantors of guarantees (the "Guarantees") with respect to the Exchange Notes.
The Exchange Notes and the Guarantees will be issued under an indenture dated as
of November 12, 2004 (the "Indenture") among the Company, the Guarantors and The
Bank of New York, as trustee (the "Trustee"). The Exchange Notes will be offered
by the Company in exchange for $650,000,000 aggregate principal amount of its
outstanding 5 7/8% Senior Subordinated Notes due 2015.

         We have examined the Registration Statement and the Indenture, which
has been filed with the Commission as an exhibit to the Registration Statement.
We also have examined the





                                  -2-


originals, or duplicates or certified or conformed copies, of such corporate
records, agreements, documents and other instruments and have made such other
investigations as we have deemed relevant and necessary in connection with the
opinions hereinafter set forth. As to questions of fact material to this
opinion, we have relied upon certificates or comparable documents of public
officials and of officers and representatives of the Company and the Guarantors.

         In rendering the opinions set forth below, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as duplicates or certified
or conformed copies and the authenticity of the originals of such latter
documents. We also have assumed that the Indenture is the valid and legally
binding obligation of the Trustee. We have assumed further that (1) the
Non-Delaware Guarantors have duly authorized, executed and delivered the
Indenture and the Guarantees, (2) the execution, delivery and performance by the
Non-Delaware Guarantors of the Indenture and the Guarantees do not and will not
violate the laws of the Non-Delaware Guarantors' respective states of
incorporation or any other applicable laws (excepting the laws of the State of
New York and the federal laws of the United States) and (3) each of the
Non-Delaware Guarantors is duly incorporated and validly existing under the laws
of its respective jurisdiction of organization.

         Based upon the foregoing, and subject to the qualifications,
assumptions and limitations stated herein, we are of the opinion that:

                1.       When the Exchange Notes have been duly executed,
         authenticated, issued and delivered in accordance with the provisions
         of the Indenture upon the exchange, the Exchange Notes will constitute
         valid and legally binding obligations of the Company enforceable
         against the Company in accordance with their terms.

                2.       When (a) the Exchange Notes have been duly executed,
         authenticated, issued and delivered in accordance with the provisions
         of the Indenture upon the exchange and (b) the Guarantees have been
         duly endorsed as a notation on the Exchange Notes, the Guarantees will
         constitute valid and legally binding obligations of the Guarantors
         enforceable against the Guarantors in accordance with their terms.




                                  -3-

         Our opinions set forth above are subject to (i) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, (ii)
general equitable principles (whether considered in a proceeding in equity or at
law) and (iii) an implied covenant of good faith and fair dealing.

         We do not express any opinion herein concerning any law other than the
law of the State of New York, the federal law of the United States, the Delaware
General Corporation Law (including the statutory provisions, all applicable
provisions of the Delaware Constitution and reported judicial decisions
interpreting the foregoing), the Delaware Limited Liability Company Act and the
Delaware Revised Uniform Limited Partnership Act.

         We hereby consent to the filing of this opinion letter as Exhibit 5 to
the Registration Statement and to the use of our name under the caption "Legal
Matters" in the Prospectus included in the Registration Statement.

                                            Very truly yours,

                                            /s/ Simpson Thacher & Bartlett LLP

                                            SIMPSON THACHER & BARTLETT LLP










                                   SCHEDULE I

DELAWARE GUARANTORS
- -------------------

BROADCAST SPORTS INC., a Delaware corporation
HENSCHEL INC., a Delaware corporation
HYGIENETICS ENVIRONMENTAL SERVICES, INC., a Delaware corporation
KDI PRECISION PRODUCTS, INC., a Delaware corporation
L-3 COMMUNICATIONS AIS GP CORPORATION, a Delaware corporation
L-3 COMMUNICATIONS AVIONICS SYSTEMS, INC., a Delaware corporation
L-3 COMMUNICATIONS AYDIN CORPORATION, a Delaware corporation
L-3 COMMUNICATIONS CE HOLDINGS, INC., a Delaware corporation
L-3 COMMUNICATIONS ESSCO, INC., a Delaware corporation
L-3 COMMUNICATIONS FLIGHT INTERNATIONAL AVIATION LLC, a Delaware limited
    liability company
L-3 COMMUNICATIONS FLIGHT CAPITAL LLC, a Delaware limited liability company
L-3 COMMUNICATIONS ILEX SYSTEMS, INC., a Delaware corporation
L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P., a Delaware limited partnership
L-3 COMMUNICATIONS INVESTMENTS INC., a Delaware corporation
L-3 COMMUNICATIONS KLEIN ASSOCIATES, INC., a Delaware corporation
L-3 COMMUNICATIONS MAS (US) CORPORATION, a Delaware corporation
L-3 COMMUNICATIONS SECURITY AND DETECTION SYSTEMS, INC., a Delaware corporation
L-3 COMMUNICATIONS VECTOR INTERNATIONAL AVIATION LLC, a Delaware limited
    liability company
L-3 COMMUNICATIONS VERTEX AEROSPACE LLC, a Delaware limited liability company
MPRI, INC., a Delaware corporation
PAC ORD INC., a Delaware corporation
POWER PARAGON, INC., a Delaware corporation
SHIP ANALYTICS INTERNATIONAL, INC., a Delaware corporation
SPD ELECTRICAL SYSTEMS, INC., a Delaware corporation
SPD SWITCHGEAR INC., a Delaware corporation
WESCAM AIR OPS INC., a Delaware corporation
WESCAM AIR OPS LLC, a Delaware limited liability company
WESCAM HOLDINGS (US) INC., a Delaware corporation
WESCAM LLC, a Delaware limited liability company






                                   SCHEDULE II

NON-DELAWARE GUARANTORS
- -----------------------

APCOM, INC., a Maryland corporation
D.P. ASSOCIATES INC., a Virginia corporation
ELECTRODYNAMICS, INC., an Arizona corporation
INTERSTATE ELECTRONICS CORPORATION, a California corporation
L-3 COMMUNICATIONS AEROMET, INC., an Oregon corporation
L-3 COMMUNICATIONS CINCINNATI ELECTRONICS CORPORATION, an Ohio corporation
L-3 COMMUNICATIONS CSI, INC., a California corporation
L-3 COMMUNICATIONS AVYSIS CORPORATION, a Texas corporation
L-3 COMMUNICATIONS GOVERNMENT SERVICES, INC., a Virginia corporation
L-3 COMMUNICATIONS STORM CONTROL SYSTEMS, INC., a California corporation
L-3 COMMUNICATIONS WESTWOOD CORPORATION, a Nevada corporation
MCTI ACQUISITION CORPORATION, a Maryland corporation
MICRODYNE COMMUNICATIONS TECHNOLOGIES INCORPORATED, a Maryland corporation
MICRODYNE CORPORATION, a Maryland corporation
MICRODYNE OUTSOURCING INCORPORATED, a Maryland corporation
SHIP ANALYTICS, INC., a Connecticut corporation
SHIP ANALYTICS USA, INC., a Connecticut corporation
SYCOLEMAN CORPORATION, a Florida corporation
TROLL TECHNOLOGY CORPORATION, a California corporation
WESCAM INCORPORATED, a Florida corporation
WESCAM SONOMA INC., a California corporation
WOLF COACH, INC., a Massachusetts corporation

EX-10.55

                                                                   Exhibit 10.55

                     SUPPLEMENTAL INDENTURE TO BE DELIVERED
                          BY GUARANTEEING SUBSIDIARIES

     Supplemental Indenture (this "Supplemental Indenture"), dated as of January
14, 2005, among L-3 Communications Corporation (or its permitted successor), a
Delaware corporation (the "Company"), each a direct or indirect subsidiary of
the Company signatory hereto (each, a "Guaranteeing Subsidiary", and
collectively, the "Guaranteeing Subsidiaries"), and The Bank of New York, as
trustee under the indenture referred to below (the "Trustee").

                               W I T N E S S E T H

         WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of May 21, 2003 providing for
the issuance of an unlimited amount of 6 1/8% Senior Subordinated Notes due 2013
(the "Notes");

         WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiaries shall execute and deliver to the Trustee a
supplemental indenture pursuant to which the Guaranteeing Subsidiaries shall
unconditionally guarantee all of the Company's Obligations (as defined in the
Indenture) under the Notes and the Indenture on the terms and conditions set
forth herein (the "Subsidiary Guarantee"); and

         WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

         NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiaries and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

         1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.

         2. AGREEMENT TO GUARANTEE. Each Guaranteeing Subsidiary hereby agrees
as follows:

            (a) Such Guaranteeing Subsidiary, jointly and severally with all
                other current and future guarantors of the Notes (collectively,
                the "Guarantors" and each, a "Guarantor"), unconditionally
                guarantees to each Holder of a Note authenticated and delivered
                by the Trustee and to the Trustee and its successors and
                assigns, regardless of the validity and enforceability of the
                Indenture, the Notes or the Obligations of the Company under the
                Indenture or the Notes, that:

               (i)  the principal of, premium, interest and Additional Amounts,
                    if any, on the Notes will be promptly paid in full when due,
                    whether at maturity, by acceleration, redemption or
                    otherwise, and interest on the overdue principal of,


                                       1


                    premium, interest and Additional Amounts, if any, on the
                    Notes, to the extent lawful, and all other Obligations of
                    the Company to the Holders or the Trustee thereunder or
                    under the Indenture will be promptly paid in full, all in
                    accordance with the terms thereof; and

               (ii) in case of any extension of time for payment or renewal of
                    any Notes or any of such other Obligations, that the same
                    will be promptly paid in full when due in accordance with
                    the terms of the extension or renewal, whether at stated
                    maturity, by acceleration or otherwise.

            (b) Notwithstanding the foregoing, in the event that this Subsidiary
                Guarantee would constitute or result in a violation of any
                applicable fraudulent conveyance or similar law of any relevant
                jurisdiction, the liability of such Guaranteeing Subsidiary
                under this Supplemental Indenture and its Subsidiary Guarantee
                shall be reduced to the maximum amount permissible under such
                fraudulent conveyance or similar law.

       3.   EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.

            (a) To evidence its Subsidiary Guarantee set forth in this
                Supplemental Indenture, such Guaranteeing Subsidiary hereby
                agrees that a notation of such Subsidiary Guarantee
                substantially in the form of Exhibit F to the Indenture shall be
                endorsed by an officer of such Guaranteeing Subsidiary on each
                Note authenticated and delivered by the Trustee after the date
                hereof.

            (b) Notwithstanding the foregoing, such Guaranteeing Subsidiary
                hereby agrees that its Subsidiary Guarantee set forth herein
                shall remain in full force and effect notwithstanding any
                failure to endorse on each Note a notation of such Subsidiary
                Guarantee.

            (c) If an Officer whose signature is on this Supplemental Indenture
                or on the Subsidiary Guarantee no longer holds that office at
                the time the Trustee authenticates the Note on which a
                Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall
                be valid nevertheless.

            (d) The delivery of any Note by the Trustee, after the
                authentication thereof under the Indenture, shall constitute due
                delivery of the Subsidiary Guarantee set forth in this
                Supplemental Indenture on behalf of each Guaranteeing
                Subsidiary.

            (e) Each Guaranteeing Subsidiary hereby agrees that its Obligations
                hereunder shall be unconditional, regardless of the validity,
                regularity or enforceability of the Notes or the Indenture, the
                absence of any action to enforce the same, any waiver or consent


                                       2


                by any Holder of the Notes with respect to any provisions hereof
                or thereof, the recovery of any judgment against the Company,
                any action to enforce the same or any other circumstance which
                might otherwise constitute a legal or equitable discharge or
                defense of a guarantor.

            (f) Each Guaranteeing Subsidiary hereby waives diligence,
                presentment, demand of payment, filing of claims with a court in
                the event of insolvency or bankruptcy of the Company, any right
                to require a proceeding first against the Company, protest,
                notice and all demands whatsoever and covenants that its
                Subsidiary Guarantee made pursuant to this Supplemental
                Indenture will not be discharged except by complete performance
                of the Obligations contained in the Notes and the Indenture.

            (g) If any Holder or the Trustee is required by any court or
                otherwise to return to the Company or any Guaranteeing
                Subsidiary, or any custodian, Trustee, liquidator or other
                similar official acting in relation to either the Company or
                such Guaranteeing Subsidiary, any amount paid by either to the
                Trustee or such Holder, the Subsidiary Guarantee made pursuant
                to this Supplemental Indenture, to the extent theretofore
                discharged, shall be reinstated in full force and effect.

            (h) Each Guaranteeing Subsidiary agrees that it shall not be
                entitled to any right of subrogation in relation to the Holders
                in respect of any Obligations guaranteed hereby until payment in
                full of all Obligations guaranteed hereby. Each Guaranteeing
                Subsidiary further agrees that, as between such Guaranteeing
                Subsidiary, on the one hand, and the Holders and the Trustee, on
                the other hand:

               (i)  the maturity of the Obligations guaranteed hereby may be
                    accelerated as provided in Article 6 of the Indenture for
                    the purposes of the Subsidiary Guarantee made pursuant to
                    this Supplemental Indenture, notwithstanding any stay,
                    injunction or other prohibition preventing such acceleration
                    in respect of the Obligations guaranteed hereby; and

               (ii) in the event of any declaration of acceleration of such
                    Obligations as provided in Article 6 of the Indenture, such
                    Obligations (whether or not due and payable) shall forthwith
                    become due and payable by such Guaranteeing Subsidiary for
                    the purpose of the Subsidiary Guarantee made pursuant to
                    this Supplemental Indenture.

            (i) Each Guaranteeing Subsidiary shall have the right to seek
                contribution from any other non-paying Guaranteeing Subsidiary
                so long as the exercise of such right does not impair the rights
                of



                                       3


               the Holders or the Trustee under the Subsidiary Guarantee made
               pursuant to this Supplemental Indenture.

          4.   GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.

            (a) Except as set forth in Articles 4 and 5 of the Indenture,
                nothing contained in the Indenture, this Supplemental Indenture
                or in the Notes shall prevent any consolidation or merger of any
                Guaranteeing Subsidiary with or into the Company or any other
                Guarantor or shall prevent any transfer, sale or conveyance of
                the property of any Guaranteeing Subsidiary as an entirety or
                substantially as an entirety, to the Company or any other
                Guarantor.

            (b) Except as set forth in Article 4 and 5 of the Indenture, nothing
                contained in the Indenture, this Supplemental Indenture or in
                the Notes shall prevent any consolidation or merger of any
                Guaranteeing Subsidiary with or into a corporation or
                corporations other than the Company or any other Guarantor (in
                each case, whether or not affiliated with the Guaranteeing
                Subsidiary), or successive consolidations or mergers in which a
                Guaranteeing Subsidiary or its successor or successors shall be
                a party or parties, or shall prevent any sale or conveyance of
                the property of any Guaranteeing Subsidiary as an entirety or
                substantially as an entirety, to a corporation other than the
                Company or any other Guarantor (in each case, whether or not
                affiliated with the Guaranteeing Subsidiary) authorized to
                acquire and operate the same; provided, however, that each
                Guaranteeing Subsidiary hereby covenants and agrees that (i)
                subject to the Indenture, upon any such consolidation, merger,
                sale or conveyance, the due and punctual performance and
                observance of all of the covenants and conditions of the
                Indenture and this Supplemental Indenture to be performed by
                such Guaranteeing Subsidiaries, shall be expressly assumed (in
                the event that such Guaranteeing Subsidiary is not the surviving
                corporation in the merger), by supplemental indenture
                satisfactory in form to the Trustee, executed and delivered to
                the Trustee, by the corporation formed by such consolidation, or
                into which such Guaranteeing Subsidiary shall have been merged,
                or by the corporation which shall have acquired such property
                and (ii) immediately after giving effect to such consolidation,
                merger, sale or conveyance no Default or Event of Default
                exists.

            (c) In case of any such consolidation, merger, sale or conveyance
                and upon the assumption by the successor corporation, by
                supplemental indenture, executed and delivered to the Trustee
                and satisfactory in form to the Trustee, of the Subsidiary
                Guarantee made pursuant to this Supplemental Indenture and the
                due and



                                       4


                punctual performance of all of the covenants and conditions
                of the Indenture and this Supplemental Indenture to be
                performed by such Guaranteeing Subsidiary, such successor
                corporation shall succeed to and be substituted for such
                Guaranteeing Subsidiary with the same effect as if it had
                been named herein as the Guaranteeing Subsidiary. Such
                successor corporation thereupon may cause to be signed any
                or all of the Subsidiary Guarantees to be endorsed upon the
                Notes issuable under the Indenture which theretofore shall
                not have been signed by the Company and delivered to the
                Trustee. All the Subsidiary Guarantees so issued shall in
                all respects have the same legal rank and benefit under the
                Indenture and this Supplemental Indenture as the Subsidiary
                Guarantees theretofore and thereafter issued in accordance
                with the terms of the Indenture and this Supplemental
                Indenture as though all of such Subsidiary Guarantees had
                been issued at the date of the execution hereof.

        5.  RELEASES.

            (a) Concurrently with any sale of assets (including, if applicable,
                all of the Capital Stock of a Guaranteeing Subsidiary), all
                Liens, if any, in favor of the Trustee in the assets sold
                thereby shall be released; provided that in the event of an
                Asset Sale, the Net Proceeds from such sale or other disposition
                are treated in accordance with the provisions of Section 4.10 of
                the Indenture. If the assets sold in such sale or other
                disposition include all or substantially all of the assets of a
                Guaranteeing Subsidiary or all of the Capital Stock of a
                Guaranteeing Subsidiary, then the Guaranteeing Subsidiary (in
                the event of a sale or other disposition of all of the Capital
                Stock of such Guaranteeing Subsidiary) or the Person acquiring
                the property (in the event of a sale or other disposition of all
                or substantially all of the assets of such Guaranteeing
                Subsidiary) shall be released from and relieved of its
                Obligations under this Supplemental Indenture and its Subsidiary
                Guarantee made pursuant hereto; provided that in the event of an
                Asset Sale, the Net Proceeds from such sale or other disposition
                are treated in accordance with the provisions of Section 4.10 of
                the Indenture. Upon delivery by the Company to the Trustee of an
                Officers' Certificate to the effect that such sale or other
                disposition was made by the Company or the Guaranteeing
                Subsidiary, as the case may be, in accordance with the
                provisions of the Indenture and this Supplemental Indenture,
                including without limitation, Section 4.10 of the Indenture, the
                Trustee shall execute any documents reasonably required in order
                to evidence the release of the Guaranteeing Subsidiary from its
                Obligations under this Supplemental Indenture and its Subsidiary
                Guarantee made pursuant hereto. If the Guaranteeing Subsidiary
                is not released from its obligations under its Subsidiary
                Guarantee, it shall remain liable for the full amount



                                       5


                of principal of and interest on the Notes and for the other
                obligations of such Guaranteeing Subsidiary under the Indenture
                as provided in this Supplemental Indenture.

            (b) Upon the designation of a Guaranteeing Subsidiary as an
                Unrestricted Subsidiary in accordance with the terms of the
                Indenture, such Guaranteeing Subsidiary shall be released and
                relieved of its Obligations under its Subsidiary Guarantee and
                this Supplemental Indenture. Upon delivery by the Company to the
                Trustee of an Officers' Certificate and an Opinion of Counsel to
                the effect that such designation of such Guaranteeing Subsidiary
                as an Unrestricted Subsidiary was made by the Company in
                accordance with the provisions of the Indenture, including
                without limitation Section 4.07 of the Indenture, the Trustee
                shall execute any documents reasonably required in order to
                evidence the release of such Guaranteeing Subsidiary from its
                Obligations under its Subsidiary Guarantee. Any Guaranteeing
                Subsidiary not released from its Obligations under its
                Subsidiary Guarantee shall remain liable for the full amount of
                principal of and interest on the Notes and for the other
                Obligations of any Guaranteeing Subsidiary under the Indenture
                as provided herein.

            (c) Each Guaranteeing Subsidiary shall be released and relieved of
                its obligations under this Supplemental Indenture in accordance
                with, and subject to, Section 4.18 of the Indenture.

         6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of any Guaranteeing
Subsidiary, as such, shall have any liability for any Obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such Obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.

         7. SUBORDINATION OF SUBSIDIARY GUARANTEES; ANTI-LAYERING. No
Guaranteeing Subsidiary shall incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt of a Guaranteeing Subsidiary and senior in
any respect in right of payment to any of the Subsidiary Guarantees.
Notwithstanding the foregoing sentence, the Subsidiary Guarantee of each
Guaranteeing Subsidiary shall be subordinated to the prior payment in full of
all Senior Debt of that Guaranteeing Subsidiary (in the same manner and to the
same extent that the Notes are subordinated to Senior Debt), which shall include
all guarantees of Senior Debt.

         8. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.



                                       6


         9. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

         10. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.

         11. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiaries and the Company.





                                       7


                                                                   Exhibit 10.55

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first above written.


Dated: January 14, 2005             L-3 COMMUNICATIONS CORPORATION


                                    By: ______________________________________
                                        Name:
                                        Title:






                                                                   Exhibit 10.55


Dated: January 14, 2005         APCOM, INC., a Maryland corporation
                                BROADCAST SPORTS INC., a Delaware corporation
                                D.P. ASSOCIATES INC., a Virginia corporation
                                ELECTRODYNAMICS, INC., an Arizona corporation
                                HENSCHEL INC., a Delaware corporation
                                HYGIENETICS ENVIRONMENTAL SERVICES, INC., a
                                   Delaware corporation
                                INTERSTATE ELECTRONICS CORPORATION, a California
                                   corporation
                                KDI PRECISION PRODUCTS, INC., a Delaware
                                   corporation
                                L-3 COMMUNICATIONS AEROMET, INC., an Oregon
                                   corporation
                                L-3 COMMUNICATIONS VERTEX AEROSPACE LLC, a
                                   Delaware limited liability company
                                L-3 COMMUNICATIONS AIS GP CORPORATION, a
                                   Delaware corporation
                                L-3 COMMUNICATIONS AVIONICS SYSTEMS, INC., a
                                   Delaware corporation
                                L-3 COMMUNICATIONS AVYSIS CORPORATION, a Texas
                                   corporation
                                L-3 COMMUNICATIONS AYDIN CORPORATION, a Delaware
                                   corporation
                                L-3 COMMUNICATIONS CE HOLDINGS, INC., a Delaware
                                   corporation
                                L-3 COMMUNICATIONS CINCINNATI ELECTRONICS
                                   CORPORATION, an Ohio corporation
                                L-3 COMMUNICATIONS CSI, INC., a California
                                   corporation
                                L-3 COMMUNICATIONS ESSCO, INC., a Delaware
                                   corporation
                                L-3 COMMUNICATIONS FLIGHT INTERNATIONAL AVIATION
                                   LLC, a Delaware limited liability company
                                L-3 COMMUNICATIONS FLIGHT CAPITAL LLC, a
                                   Delaware limited liability company
                                L-3 COMMUNICATIONS GOVERNMENT SERVICES, INC., a
                                   Virginia corporation
                                L-3 COMMUNICATIONS ILEX SYSTEMS, INC., a
                                   Delaware corporation
                                L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P., a
                                   Delaware limited partnership
                                L-3 COMMUNICATIONS INVESTMENTS INC., a Delaware
                                   corporation
                                L-3 COMMUNICATIONS KLEIN ASSOCIATES, INC., a
                                   Delaware corporation
                                L-3 COMMUNICATIONS MAS (US) CORPORATION, a
                                   Delaware corporation
                                L-3 COMMUNICATIONS SECURITY AND DETECTION
                                   SYSTEMS, INC., a Delaware corporation



                                L-3 COMMUNICATIONS STORM CONTROL SYSTEMS, INC.,
                                   a California corporation
                                L-3 COMMUNICATIONS VECTOR INTERNATIONAL AVIATION
                                   LLC, a Delaware limited liability company
                                L-3 COMMUNICATIONS WESTWOOD CORPORATION, a
                                   Nevada corporation
                                MCTI ACQUISITION CORPORATION, a Maryland
                                   corporation
                                MICRODYNE COMMUNICATIONS TECHNOLOGIES
                                   INCORPORATED, a Maryland corporation
                                MICRODYNE CORPORATION, a Maryland corporation
                                MICRODYNE OUTSOURCING INCORPORATED, a Maryland
                                   corporation
                                MPRI, INC., a Delaware corporation
                                PAC ORD INC., a Delaware corporation
                                POWER PARAGON, INC., a Delaware corporation
                                SHIP ANALYTICS, INC., a Connecticut corporation
                                SHIP ANALYTICS INTERNATIONAL, INC., a Delaware
                                   corporation
                                SHIP ANALYTICS USA, INC., a Connecticut
                                   corporation
                                SPD ELECTRICAL SYSTEMS, INC., a Delaware
                                   corporation
                                SPD SWITCHGEAR INC., a Delaware corporation
                                SYCOLEMAN CORPORATION, a Florida corporation
                                TROLL TECHNOLOGY CORPORATION, a California
                                   corporation
                                WESCAM AIR OPS INC., a Delaware corporation
                                WESCAM AIR OPS LLC, a Delaware limited liability
                                   company
                                WESCAM HOLDINGS (US) INC., a Delaware
                                   corporation
                                WESCAM INCORPORATED, a Florida corporation
                                WESCAM LLC, a Delaware limited liability company
                                WESCAM SONOMA INC., a California corporation
                                WOLF COACH, INC., a Massachusetts corporation
                                   As Guaranteeing Subsidiaries

                                By: ______________________________________
                                    Name:
                                    Title:




                                                                   Exhibit 10.55

Dated:  January 14, 2005                    THE BANK OF NEW YORK,
                                            as Trustee


                                            By: _______________________________
                                                Name:
                                                Title:

EX-10.63

                                                                   Exhibit 10.63


                     SUPPLEMENTAL INDENTURE TO BE DELIVERED
                          BY GUARANTEEING SUBSIDIARIES

     Supplemental Indenture (this "Supplemental Indenture"), dated as of January
14, 2005, among L-3 Communications Corporation (or its permitted successor), a
Delaware corporation (the "Company"), each subsidiary of the Company signatory
hereto (each, a "Guaranteeing Subsidiary", and collectively, the "Guaranteeing
Subsidiaries"), and The Bank of New York, as trustee under the indenture
referred to below (the "Trustee").

                               W I T N E S S E T H

         WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of June 28, 2002 providing for
the issuance of an aggregate principal amount of up to $750,000,000 of 7 5/8%
Senior Subordinated Notes due 2012 (the "Notes");

         WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiaries shall execute and deliver to the Trustee a
supplemental indenture pursuant to which the Guaranteeing Subsidiaries shall
unconditionally guarantee all of the Company's obligations under the Notes and
the Indenture on the terms and conditions set forth herein (the "Subsidiary
Guarantee"); and

         WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

         NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiaries and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

         1. Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.

         2. Agreement to Guarantee. Each Guaranteeing Subsidiary hereby agrees
as follows:

            (a) Such Guaranteeing Subsidiary, jointly and severally with all
                other current and future guarantors of the Notes (collectively,
                the "Guarantors" and each, a "Guarantor"), unconditionally
                guarantees to each Holder of a Note authenticated and delivered
                by the Trustee and to the Trustee and its successors and
                assigns, regardless of the validity and enforceability of the
                Indenture, the Notes or the Obligations of the Company under the
                Indenture or the Notes, that:


                                       1


                                                                   Exhibit 10.63

                    (i)  the principal of, premium, interest and Additional
                         Amounts, if any, on the Notes will be promptly paid in
                         full when due, whether at maturity, by acceleration,
                         redemption or otherwise, and interest on the overdue
                         principal of, premium, interest and Additional Amounts,
                         if any, on the Notes, to the extent lawful, and all
                         other Obligations of the Company to the Holders or the
                         Trustee thereunder or under the Indenture will be
                         promptly paid in full, all in accordance with the terms
                         thereof; and

                    (ii) in case of any extension of time for payment or renewal
                         of any Notes or any of such other Obligations, that the
                         same will be promptly paid in full when due in
                         accordance with the terms of the extension or renewal,
                         whether at stated maturity, by acceleration or
                         otherwise.

               (b) Notwithstanding the foregoing, in the event that this
                   Subsidiary Guarantee would constitute or result in a
                   violation of any applicable fraudulent conveyance or similar
                   law of any relevant jurisdiction, the liability of such
                   Guaranteeing Subsidiary under this Supplemental Indenture and
                   its Subsidiary Guarantee shall be reduced to the maximum
                   amount permissible under such fraudulent conveyance or
                   similar law.

            3. Execution and Delivery of Subsidiary Guarantees.

               (a) To evidence its Subsidiary Guarantee set forth in this
                   Supplemental Indenture, such Guaranteeing Subsidiary hereby
                   agrees that a notation of such Subsidiary Guarantee
                   substantially in the form of Exhibit F to the Indenture shall
                   be endorsed by an officer of such Guaranteeing Subsidiary on
                   each Note authenticated and delivered by the Trustee after
                   the date hereof.

               (b) Notwithstanding the foregoing, such Guaranteeing Subsidiary
                   hereby agrees that its Subsidiary Guarantee set forth herein
                   shall remain in full force and effect notwithstanding any
                   failure to endorse on each Note a notation of such Subsidiary
                   Guarantee.

               (c) If an Officer whose signature is on this Supplemental
                   Indenture or on the Subsidiary Guarantee no longer holds that
                   office at the time the Trustee authenticates the Note on
                   which a Subsidiary Guarantee is endorsed, the Subsidiary
                   Guarantee shall be valid nevertheless.

               (d) The delivery of any Note by the Trustee, after the
                   authentication thereof under the Indenture, shall constitute
                   due delivery of the



                                       2


                                                                   Exhibit 10.63

                   Subsidiary Guarantee set forth in this Supplemental
                   Indenture on behalf of each Guaranteeing Subsidiary.

               (e) Each Guaranteeing Subsidiary hereby agrees that its
                   obligations hereunder shall be unconditional, regardless of
                   the validity, regularity or enforceability of the Notes or
                   the Indenture, the absence of any action to enforce the same,
                   any waiver or consent by any Holder of the Notes with respect
                   to any provisions hereof or thereof, the recovery of any
                   judgment against the Company, any action to enforce the same
                   or any other circumstance which might otherwise constitute a
                   legal or equitable discharge or defense of a guarantor.

               (f) Each Guaranteeing Subsidiary hereby waives diligence,
                   presentment, demand of payment, filing of claims with a court
                   in the event of insolvency or bankruptcy of the Company, any
                   right to require a proceeding first against the Company,
                   protest, notice and all demands whatsoever and covenants that
                   its Subsidiary Guarantee made pursuant to this Supplemental
                   Indenture will not be discharged except by complete
                   performance of the Obligations contained in the Notes and the
                   Indenture.

               (g) If any Holder or the Trustee is required by any court or
                   otherwise to return to the Company or any Guaranteeing
                   Subsidiary, or any custodian, Trustee, liquidator or other
                   similar official acting in relation to either the Company or
                   such Guaranteeing Subsidiary, any amount paid by either to
                   the Trustee or such Holder, the Subsidiary Guarantee made
                   pursuant to this Supplemental Indenture, to the extent
                   theretofore discharged, shall be reinstated in full force and
                   effect.

               (h) Each Guaranteeing Subsidiary agrees that it shall not be
                   entitled to any right of subrogation in relation to the
                   Holders in respect of any Obligations guaranteed hereby until
                   payment in full of all Obligations guaranteed hereby. Each
                   Guaranteeing Subsidiary further agrees that, as between such
                   Guaranteeing Subsidiary, on the one hand, and the Holders and
                   the Trustee, on the other hand:

                   (i)  the maturity of the Obligations guaranteed hereby may
                        be accelerated as provided in Article 6 of the
                        Indenture for the purposes of the Subsidiary Guarantee
                        made pursuant to this Supplemental Indenture,
                        notwithstanding any stay, injunction or other
                        prohibition preventing such acceleration in respect of
                        the obligations guaranteed hereby; and

                   (ii) in the event of any declaration of acceleration of such
                        obligations as provided in Article 6 of the Indenture,
                        such



                                       3


                                                                   Exhibit 10.63

                         obligations (whether or not due and payable) shall
                         forthwith become due and payable by such Guaranteeing
                         Subsidiary for the purpose of the Subsidiary Guarantee
                         made pursuant to this Supplemental Indenture.

                   (i)   Each Guaranteeing Subsidiary shall have the right to
                         seek contribution from any other non-paying
                         Guaranteeing Subsidiary so long as the exercise of such
                         right does not impair the rights of the Holders or the
                         Trustee under the Subsidiary Guarantee made pursuant to
                         this Supplemental Indenture.

                4.  Guaranteeing Subsidiary May Consolidate, Etc. on Certain
                    Terms.

                    (a)  Except as set forth in Articles 4 and 5 of the
                         Indenture, nothing contained in the Indenture, this
                         Supplemental Indenture or in the Notes shall prevent
                         any consolidation or merger of any Guaranteeing
                         Subsidiary with or into the Company or any other
                         Guarantor or shall prevent any transfer, sale or
                         conveyance of the property of any Guaranteeing
                         Subsidiary as an entirety or substantially as an
                         entirety, to the Company or any other Guarantor.

                    (b)  Except as set forth in Article 4 of the Indenture,
                         nothing contained in the Indenture, this Supplemental
                         Indenture or in the Notes shall prevent any
                         consolidation or merger of any Guaranteeing Subsidiary
                         with or into a corporation or corporations other than
                         the Company or any other Guarantor (in each case,
                         whether or not affiliated with the Guaranteeing
                         Subsidiary), or successive consolidations or mergers in
                         which a Guaranteeing Subsidiary or its successor or
                         successors shall be a party or parties, or shall
                         prevent any sale or conveyance of the property of any
                         Guaranteeing Subsidiary as an entirety or substantially
                         as an entirety, to a corporation other than the Company
                         or any other Guarantor (in each case, whether or not
                         affiliated with the Guaranteeing Subsidiary) authorized
                         to acquire and operate the same; provided, however,
                         that each Guaranteeing Subsidiary hereby covenants and
                         agrees that (i) subject to the Indenture, upon any such
                         consolidation, merger, sale or conveyance, the due and
                         punctual performance and observance of all of the
                         covenants and conditions of the Indenture and this
                         Supplemental Indenture to be performed by such
                         Guaranteeing Subsidiaries, shall be expressly assumed
                         (in the event that such Guaranteeing Subsidiary is not
                         the surviving corporation in the merger), by
                         supplemental indenture satisfactory in form to the
                         Trustee, executed and delivered to the Trustee, by the
                         corporation formed by such consolidation, or into



                                       4

                                                                   Exhibit 10.63

                         which such Guaranteeing Subsidiary shall have been
                         merged, or by the corporation which shall have acquired
                         such property and (ii) immediately after giving effect
                         to such consolidation, merger, sale or conveyance no
                         Default or Event of Default exists.

                    (c)  In case of any such consolidation, merger, sale or
                         conveyance and upon the assumption by the successor
                         corporation, by supplemental indenture, executed and
                         delivered to the Trustee and satisfactory in form to
                         the Trustee, of the Subsidiary Guarantee made pursuant
                         to this Supplemental Indenture and the due and punctual
                         performance of all of the covenants and conditions of
                         the Indenture and this Supplemental Indenture to be
                         performed by such Guaranteeing Subsidiary, such
                         successor corporation shall succeed to and be
                         substituted for such Guaranteeing Subsidiary with the
                         same effect as if it had been named herein as the
                         Guaranteeing Subsidiary. Such successor corporation
                         thereupon may cause to be signed any or all of the
                         Subsidiary Guarantees to be endorsed upon the Notes
                         issuable under the Indenture which theretofore shall
                         not have been signed by the Company and delivered to
                         the Trustee. All the Subsidiary Guarantees so issued
                         shall in all respects have the same legal rank and
                         benefit under the Indenture and this Supplemental
                         Indenture as the Subsidiary Guarantees theretofore and
                         thereafter issued in accordance with the terms of the
                         Indenture and this Supplemental Indenture as though all
                         of such Subsidiary Guarantees had been issued at the
                         date of the execution hereof.

                5.  Releases.

                    (a)  Concurrently with any sale of assets (including, if
                         applicable, all of the Capital Stock of a Guaranteeing
                         Subsidiary), all Liens, if any, in favor of the Trustee
                         in the assets sold thereby shall be released; provided
                         that in the event of an Asset Sale, the Net Proceeds
                         from such sale or other disposition are treated in
                         accordance with the provisions of Section 4.10 of the
                         Indenture. If the assets sold in such sale or other
                         disposition include all or substantially all of the
                         assets of a Guaranteeing Subsidiary or all of the
                         Capital Stock of a Guaranteeing Subsidiary, then the
                         Guaranteeing Subsidiary (in the event of a sale or
                         other disposition of all of the Capital Stock of such
                         Guaranteeing Subsidiary) or the Person acquiring the
                         property (in the event of a sale or other disposition
                         of all or substantially all of the assets of such
                         Guaranteeing Subsidiary) shall be released from and
                         relieved of its Obligations under this Supplemental
                         Indenture and its Subsidiary Guarantee made pursuant
                         hereto; provided that in the event of an Asset Sale,
                         the Net Proceeds from such sale or other disposition
                         are treated in accordance with the



                                       5

                                                                   Exhibit 10.63

                          provisions of Section 4.10 of the Indenture. Upon
                          delivery by the Company to the Trustee of an Officers'
                          Certificate to the effect that such sale or other
                          disposition was made by the Company or the
                          Guaranteeing Subsidiary, as the case may be, in
                          accordance with the provisions of the Indenture and
                          this Supplemental Indenture, including without
                          limitation, Section 4.10 of the Indenture, the Trustee
                          shall execute any documents reasonably required in
                          order to evidence the release of the Guaranteeing
                          Subsidiary from its Obligations under this
                          Supplemental Indenture and its Subsidiary Guarantee
                          made pursuant hereto. If the Guaranteeing Subsidiary
                          is not released from its obligations under its
                          Subsidiary Guarantee, it shall remain liable for the
                          full amount of principal of and interest on the Notes
                          and for the other obligations of such Guaranteeing
                          Subsidiary under the Indenture as provided in this
                          Supplemental Indenture.

                    (b)  Upon the designation of a Guaranteeing Subsidiary as an
                         Unrestricted Subsidiary in accordance with the terms of
                         the Indenture, such Guaranteeing Subsidiary shall be
                         released and relieved of its obligations under its
                         Subsidiary Guarantee and this Supplemental Indenture.
                         Upon delivery by the Company to the Trustee of an
                         Officers' Certificate and an Opinion of Counsel to the
                         effect that such designation of such Guaranteeing
                         Subsidiary as an Unrestricted Subsidiary was made by
                         the Company in accordance with the provisions of the
                         Indenture, including without limitation Section 4.07 of
                         the Indenture, the Trustee shall execute any documents
                         reasonably required in order to evidence the release of
                         such Guaranteeing Subsidiary from its obligations under
                         its Subsidiary Guarantee. Any Guaranteeing Subsidiary
                         not released from its Obligations under its Subsidiary
                         Guarantee shall remain liable for the full amount of
                         principal of and interest on the Notes and for the
                         other Obligations of any Guaranteeing Subsidiary under
                         the Indenture as provided herein.

                    (c)  Each Guaranteeing Subsidiary shall be released and
                         relieved of its obligations under this Supplemental
                         Indenture in accordance with, and subject to, Section
                         4.18 of the Indenture.

                 6. No Recourse Against Others. No past, present or future
director, officer, employee, incorporator, stockholder or agent of any
Guaranteeing Subsidiary, as such, shall have any liability for any obligations
of the Company or any Guaranteeing Subsidiary under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
Such waiver may not



                                       6

                                                                   Exhibit 10.63

be effective to waive liabilities under the federal securities laws and it is
the view of the SEC that such a waiver is against public policy.

             7. SUBORDINATION OF SUBSIDIARY GUARANTEES; ANTI-LAYERING. No
Guaranteeing Subsidiary shall incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt of a Guaranteeing Subsidiary and senior in
any respect in right of payment to any of the Subsidiary Guarantees.
Notwithstanding the foregoing sentence, the Subsidiary Guarantee of each
Guaranteeing Subsidiary shall be subordinated to the prior payment in full of
all Senior Debt of that Guaranteeing Subsidiary (in the same manner and to the
same extent that the Notes are subordinated to Senior Debt), which shall include
all guarantees of Senior Debt.

             8. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

             9. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

             10. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.

             11. The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiaries and the Company.





                                       7


                                                                   Exhibit 10.63

             IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, all as of the date first above
written.


Dated: January 14, 2005             L-3 COMMUNICATIONS CORPORATION


                                    By: ______________________________________
                                        Name:
                                        Title:









Dated: January 14, 2005               APCOM, INC., a Maryland corporation
                                      BROADCAST SPORTS INC., a Delaware corporation
                                      D.P. ASSOCIATES INC., a Virginia corporation
                                      ELECTRODYNAMICS, INC., an Arizona corporation
                                      HENSCHEL INC., a Delaware corporation
                                      HYGIENETICS ENVIRONMENTAL SERVICES, INC., a Delaware corporation
                                      INTERSTATE ELECTRONICS CORPORATION, a California corporation
                                      KDI PRECISION PRODUCTS, INC., a Delaware corporation
                                      L-3 COMMUNICATIONS AEROMET, INC., an Oregon corporation
                                      L-3 COMMUNICATIONS VERTEX AEROSPACE LLC, a Delaware limited liability
                                          company
                                      L-3 COMMUNICATIONS AIS GP CORPORATION, a Delaware corporation
                                      L-3 COMMUNICATIONS AVIONICS SYSTEMS, INC., a Delaware corporation
                                      L-3 COMMUNICATIONS AVISYS CORPORATION, a
                                          Texas corporation
                                      L-3 COMMUNICATIONS CSI, INC., a California corporation
                                      L-3 COMMUNICATIONS AYDIN CORPORATION, a Delaware corporation
                                      L-3 COMMUNICATIONS CE HOLDINGS, INC., a Delaware corporation
                                      L-3 COMMUNICATIONS CINCINNATI ELECTRONICS CORPORATION, an Ohio corporation
                                      L-3 COMMUNICATIONS ESSCO, INC., a Delaware corporation
                                      L-3 COMMUNICATIONS FLIGHT INTERNATIONAL AVIATION LLC, a Delaware limited
                                          liability company
                                      L-3 COMMUNICATIONS FLIGHT CAPITAL LLC, a Delaware limited liability company
                                      L-3 COMMUNICATIONS GOVERNMENT SERVICES, INC., a Virginia corporation
                                      L-3 COMMUNICATIONS ILEX SYSTEMS, INC., a Delaware corporation
                                      L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P., a Delaware limited partnership
                                      L-3 COMMUNICATIONS INVESTMENTS INC., a Delaware corporation
                                      L-3 COMMUNICATIONS KLEIN ASSOCIATES, INC., a Delaware corporation
                                      L-3 COMMUNICATIONS MAS (US) CORPORATION, a Delaware corporation
                                      L-3 COMMUNICATIONS SECURITY AND DETECTION SYSTEMS, INC., a Delaware
                                          corporation






                                                                   Exhibit 10.63




                                      L-3 COMMUNICATIONS STORM CONTROL SYSTEMS, INC., a California corporation
                                      L-3 COMMUNICATIONS VECTOR INTERNATIONAL AVIATION LLC, a Delaware limited
                                          liability company
                                      L-3 COMMUNICATIONS WESTWOOD CORPORATION, a Nevada corporation
                                      MCTI ACQUISITION CORPORATION, a Maryland corporation
                                      MICRODYNE COMMUNICATIONS TECHNOLOGIES INCORPORATED, a Maryland corporation
                                      MICRODYNE CORPORATION, a Maryland corporation
                                      MICRODYNE OUTSOURCING INCORPORATED, a Maryland corporation
                                      MPRI, INC., a Delaware corporation
                                      PAC ORD INC., a Delaware corporation
                                      POWER PARAGON, INC., a Delaware corporation
                                      SHIP ANALYTICS, INC., a Connecticut corporation
                                      SHIP ANALYTICS INTERNATIONAL, INC., a Delaware corporation
                                      SHIP ANALYTICS USA, INC., a Connecticut corporation
                                      SPD ELECTRICAL SYSTEMS, INC., a Delaware corporation
                                      SPD SWITCHGEAR INC., a Delaware corporation
                                      SYCOLEMAN CORPORATION, a Florida corporation
                                      TROLL TECHNOLOGY CORPORATION, a California corporation
                                      WESCAM AIR OPS INC., a Delaware corporation
                                      WESCAM AIR OPS LLC, a Delaware limited liability company
                                      WESCAM HOLDINGS (US) INC., a Delaware corporation
                                      WESCAM INCORPORATED, a Florida corporation
                                      WESCAM LLC, a Delaware limited liability company
                                      WESCAM SONOMA INC., a California corporation
                                      WOLF COACH, INC., a Massachusetts corporation
                                            As Guaranteeing Subsidiaries

                                        By: ______________________________________
                                            Name:
                                            Title:








Dated: January 14, 2005        THE BANK OF NEW YORK,
                               as Trustee


                               By: ______________________________________
                                   Name:
                                   Title:

EX-10.65

                                                                   Exhibit 10.65

                     SUPPLEMENTAL INDENTURE TO BE DELIVERED
                          BY GUARANTEEING SUBSIDIARIES

     Supplemental Indenture (this "Supplemental Indenture"), dated as of January
14, 2005, among L-3 Communications Corporation (or its permitted successor), a
Delaware corporation (the "Company"), each a direct or indirect subsidiary of
the Company signatory hereto (each, a "Guaranteeing Subsidiary", and
collectively, the "Guaranteeing Subsidiaries"), and The Bank of New York, as
trustee under the indenture referred to below (the "Trustee").

                               W I T N E S S E T H

             WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of December 22, 2003 providing
for the issuance of an unlimited amount of 6 1/8% Senior Subordinated Notes due
2014 (the "Notes");

             WHEREAS, the Indenture provides that under certain circumstances
the Guaranteeing Subsidiaries shall execute and deliver to the Trustee a
supplemental indenture pursuant to which the Guaranteeing Subsidiaries shall
unconditionally guarantee all of the Company's Obligations (as defined in the
Indenture) under the Notes and the Indenture on the terms and conditions set
forth herein (the "Subsidiary Guarantee"); and

             WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

             NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiaries and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

             1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

             2. AGREEMENT TO GUARANTEE. Each Guaranteeing Subsidiary hereby
agrees as follows:

               (a)  Such Guaranteeing Subsidiary, jointly and severally with all
                    other current and future guarantors of the Notes
                    (collectively, the "Guarantors" and each, a "Guarantor"),
                    unconditionally guarantees to each Holder of a Note
                    authenticated and delivered by the Trustee and to the
                    Trustee and its successors and assigns, regardless of the
                    validity and enforceability of the Indenture, the Notes or
                    the Obligations of the Company under the Indenture or the
                    Notes, that:

                    (i)  the principal of, premium, interest and Additional
                         Interest, if any, on the Notes will be promptly paid in
                         full when due, whether at maturity, by acceleration,
                         redemption or otherwise, and interest on the overdue
                         principal of,



                                       1


                         premium, interest and Additional Amounts, if any, on
                         the Notes, to the extent lawful, and all other
                         Obligations of the Company to the Holders or the
                         Trustee thereunder or under the Indenture will be
                         promptly paid in full, all in accordance with the terms
                         thereof; and

                    (ii) in case of any extension of time for payment or renewal
                         of any Notes or any of such other Obligations, that the
                         same will be promptly paid in full when due in
                         accordance with the terms of the extension or renewal,
                         whether at stated maturity, by acceleration or
                         otherwise.

               (b)  Notwithstanding the foregoing, in the event that this
                    Subsidiary Guarantee would constitute or result in a
                    violation of any applicable fraudulent conveyance or similar
                    law of any relevant jurisdiction, the liability of such
                    Guaranteeing Subsidiary under this Supplemental Indenture
                    and its Subsidiary Guarantee shall be reduced to the maximum
                    amount permissible under such fraudulent conveyance or
                    similar law.

          3.   EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.

               (a)  To evidence its Subsidiary Guarantee set forth in this
                    Supplemental Indenture, such Guaranteeing Subsidiary hereby
                    agrees that a notation of such Subsidiary Guarantee
                    substantially in the form of Exhibit F to the Indenture
                    shall be endorsed by an officer of such Guaranteeing
                    Subsidiary on each Note authenticated and delivered by the
                    Trustee after the date hereof.

               (b)  Notwithstanding the foregoing, such Guaranteeing Subsidiary
                    hereby agrees that its Subsidiary Guarantee set forth herein
                    shall remain in full force and effect notwithstanding any
                    failure to endorse on each Note a notation of such
                    Subsidiary Guarantee.

               (c)  If an Officer whose signature is on this Supplemental
                    Indenture or on the Subsidiary Guarantee no longer holds
                    that office at the time the Trustee authenticates the Note
                    on which a Subsidiary Guarantee is endorsed, the Subsidiary
                    Guarantee shall be valid nevertheless.

               (d)  The delivery of any Note by the Trustee, after the
                    authentication thereof under the Indenture, shall constitute
                    due delivery of the Subsidiary Guarantee set forth in this
                    Supplemental Indenture on behalf of each Guaranteeing
                    Subsidiary.

               (e)  Each Guaranteeing Subsidiary hereby agrees that its
                    Obligations hereunder shall be unconditional, regardless of
                    the validity, regularity or enforceability of the Notes or
                    the Indenture, the absence of any action to enforce the
                    same, any waiver or consent



                                       2


                    by any Holder of the Notes with respect to any provisions
                    hereof or thereof, the recovery of any judgment against the
                    Company, any action to enforce the same or any other
                    circumstance which might otherwise constitute a legal or
                    equitable discharge or defense of a guarantor.

               (f)  Each Guaranteeing Subsidiary hereby waives diligence,
                    presentment, demand of payment, filing of claims with a
                    court in the event of insolvency or bankruptcy of the
                    Company, any right to require a proceeding first against the
                    Company, protest, notice and all demands whatsoever and
                    covenants that its Subsidiary Guarantee made pursuant to
                    this Supplemental Indenture will not be discharged except by
                    complete performance of the Obligations contained in the
                    Notes and the Indenture.

               (g)  If any Holder or the Trustee is required by any court or
                    otherwise to return to the Company or any Guaranteeing
                    Subsidiary, or any custodian, Trustee, liquidator or other
                    similar official acting in relation to either the Company or
                    such Guaranteeing Subsidiary, any amount paid by either to
                    the Trustee or such Holder, the Subsidiary Guarantee made
                    pursuant to this Supplemental Indenture, to the extent
                    theretofore discharged, shall be reinstated in full force
                    and effect.

               (h)  Each Guaranteeing Subsidiary agrees that it shall not be
                    entitled to any right of subrogation in relation to the
                    Holders in respect of any Obligations guaranteed hereby
                    until payment in full of all Obligations guaranteed hereby.
                    Each Guaranteeing Subsidiary further agrees that, as between
                    such Guaranteeing Subsidiary, on the one hand, and the
                    Holders and the Trustee, on the other hand:

                    (i)  the maturity of the Obligations guaranteed hereby may
                         be accelerated as provided in Article 6 of the
                         Indenture for the purposes of the Subsidiary Guarantee
                         made pursuant to this Supplemental Indenture,
                         notwithstanding any stay, injunction or other
                         prohibition preventing such acceleration in respect of
                         the Obligations guaranteed hereby; and

                    (ii) in the event of any declaration of acceleration of such
                         Obligations as provided in Article 6 of the Indenture,
                         such Obligations (whether or not due and payable) shall
                         forthwith become due and payable by such Guaranteeing
                         Subsidiary for the purpose of the Subsidiary Guarantee
                         made pursuant to this Supplemental Indenture.

               (i)  Each Guaranteeing Subsidiary shall have the right to seek
                    contribution from any other non-paying Guaranteeing
                    Subsidiary so long as the exercise of such right does not
                    impair the rights of



                                       3


                    the Holders or the Trustee under the Subsidiary Guarantee
                    made pursuant to this Supplemental Indenture.

          4.   GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.

               (a)  Except as set forth in Articles 4 and 5 of the Indenture,
                    nothing contained in the Indenture, this Supplemental
                    Indenture or in the Notes shall prevent any consolidation or
                    merger of any Guaranteeing Subsidiary with or into the
                    Company or any other Guarantor or shall prevent any
                    transfer, sale or conveyance of the property of any
                    Guaranteeing Subsidiary as an entirety or substantially as
                    an entirety, to the Company or any other Guarantor.

               (b)  Except as set forth in Article 4 and 5 of the Indenture,
                    nothing contained in the Indenture, this Supplemental
                    Indenture or in the Notes shall prevent any consolidation or
                    merger of any Guaranteeing Subsidiary with or into a
                    corporation or corporations other than the Company or any
                    other Guarantor (in each case, whether or not affiliated
                    with the Guaranteeing Subsidiary), or successive
                    consolidations or mergers in which a Guaranteeing Subsidiary
                    or its successor or successors shall be a party or parties,
                    or shall prevent any sale or conveyance of the property of
                    any Guaranteeing Subsidiary as an entirety or substantially
                    as an entirety, to a corporation other than the Company or
                    any other Guarantor (in each case, whether or not affiliated
                    with the Guaranteeing Subsidiary) authorized to acquire and
                    operate the same; provided, however, that each Guaranteeing
                    Subsidiary hereby covenants and agrees that (i) subject to
                    the Indenture, upon any such consolidation, merger, sale or
                    conveyance, the due and punctual performance and observance
                    of all of the covenants and conditions of the Indenture and
                    this Supplemental Indenture to be performed by such
                    Guaranteeing Subsidiaries, shall be expressly assumed (in
                    the event that such Guaranteeing Subsidiary is not the
                    surviving corporation in the merger), by supplemental
                    indenture satisfactory in form to the Trustee, executed and
                    delivered to the Trustee, by the corporation formed by such
                    consolidation, or into which such Guaranteeing Subsidiary
                    shall have been merged, or by the corporation which shall
                    have acquired such property and (ii) immediately after
                    giving effect to such consolidation, merger, sale or
                    conveyance no Default or Event of Default exists.

               (c)  In case of any such consolidation, merger, sale or
                    conveyance and upon the assumption by the successor
                    corporation, by supplemental indenture, executed and
                    delivered to the Trustee and satisfactory in form to the
                    Trustee, of the Subsidiary Guarantee made pursuant to this
                    Supplemental Indenture and the due and



                                       4


                    punctual performance of all of the covenants and conditions
                    of the Indenture and this Supplemental Indenture to be
                    performed by such Guaranteeing Subsidiary, such successor
                    corporation shall succeed to and be substituted for such
                    Guaranteeing Subsidiary with the same effect as if it had
                    been named herein as the Guaranteeing Subsidiary. Such
                    successor corporation thereupon may cause to be signed any
                    or all of the Subsidiary Guarantees to be endorsed upon the
                    Notes issuable under the Indenture which theretofore shall
                    not have been signed by the Company and delivered to the
                    Trustee. All the Subsidiary Guarantees so issued shall in
                    all respects have the same legal rank and benefit under the
                    Indenture and this Supplemental Indenture as the Subsidiary
                    Guarantees theretofore and thereafter issued in accordance
                    with the terms of the Indenture and this Supplemental
                    Indenture as though all of such Subsidiary Guarantees had
                    been issued at the date of the execution hereof.

            5. RELEASES.

               (a)  Concurrently with any sale of assets (including, if
                    applicable, all of the Capital Stock of a Guaranteeing
                    Subsidiary), all Liens, if any, in favor of the Trustee in
                    the assets sold thereby shall be released; provided that in
                    the event of an Asset Sale, the Net Proceeds from such sale
                    or other disposition are treated in accordance with the
                    provisions of Section 4.10 of the Indenture. If the assets
                    sold in such sale or other disposition include all or
                    substantially all of the assets of a Guaranteeing Subsidiary
                    or all of the Capital Stock of a Guaranteeing Subsidiary,
                    then the Guaranteeing Subsidiary (in the event of a sale or
                    other disposition of all of the Capital Stock of such
                    Guaranteeing Subsidiary) or the Person acquiring the
                    property (in the event of a sale or other disposition of all
                    or substantially all of the assets of such Guaranteeing
                    Subsidiary) shall be released from and relieved of its
                    Obligations under this Supplemental Indenture and its
                    Subsidiary Guarantee made pursuant hereto; provided that in
                    the event of an Asset Sale, the Net Proceeds from such sale
                    or other disposition are treated in accordance with the
                    provisions of Section 4.10 of the Indenture. Upon delivery
                    by the Company to the Trustee of an Officers' Certificate to
                    the effect that such sale or other disposition was made by
                    the Company or the Guaranteeing Subsidiary, as the case may
                    be, in accordance with the provisions of the Indenture and
                    this Supplemental Indenture, including without limitation,
                    Section 4.10 of the Indenture, the Trustee shall execute any
                    documents reasonably required in order to evidence the
                    release of the Guaranteeing Subsidiary from its Obligations
                    under this Supplemental Indenture and its Subsidiary
                    Guarantee made pursuant hereto. If the Guaranteeing
                    Subsidiary is not released from its obligations under its
                    Subsidiary Guarantee, it shall remain liable for the full
                    amount



                                       5


                    of principal of and interest on the Notes and for the other
                    obligations of such Guaranteeing Subsidiary under the
                    Indenture as provided in this Supplemental Indenture.

               (b)  Upon the designation of a Guaranteeing Subsidiary as an
                    Unrestricted Subsidiary in accordance with the terms of the
                    Indenture, such Guaranteeing Subsidiary shall be released
                    and relieved of its Obligations under its Subsidiary
                    Guarantee and this Supplemental Indenture. Upon delivery by
                    the Company to the Trustee of an Officers' Certificate and
                    an Opinion of Counsel to the effect that such designation of
                    such Guaranteeing Subsidiary as an Unrestricted Subsidiary
                    was made by the Company in accordance with the provisions of
                    the Indenture, including without limitation Section 4.07 of
                    the Indenture, the Trustee shall execute any documents
                    reasonably required in order to evidence the release of such
                    Guaranteeing Subsidiary from its Obligations under its
                    Subsidiary Guarantee. Any Guaranteeing Subsidiary not
                    released from its Obligations under its Subsidiary Guarantee
                    shall remain liable for the full amount of principal of and
                    interest on the Notes and for the other Obligations of any
                    Guaranteeing Subsidiary under the Indenture as provided
                    herein.

               (c)  Each Guaranteeing Subsidiary shall be released and relieved
                    of its obligations under this Supplemental Indenture in
                    accordance with, and subject to, Section 4.18 of the
                    Indenture.

             6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of any Guaranteeing
Subsidiary, as such, shall have any liability for any Obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such Obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.

             7. SUBORDINATION OF SUBSIDIARY GUARANTEES; ANTI-LAYERING. No
Guaranteeing Subsidiary shall incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt of a Guaranteeing Subsidiary and senior in
any respect in right of payment to any of the Subsidiary Guarantees.
Notwithstanding the foregoing sentence, the Subsidiary Guarantee of each
Guaranteeing Subsidiary shall be subordinated to the prior payment in full of
all Senior Debt of that Guaranteeing Subsidiary (in the same manner and to the
same extent that the Notes are subordinated to Senior Debt), which shall include
all guarantees of Senior Debt.

             8. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                                       6


             9. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

             10. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.

             11. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiaries and the Company.




                                       7


                                                                   Exhibit 10.65

             IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, all as of the date first above
written.


Dated: January 14, 2005             L-3 COMMUNICATIONS CORPORATION


                                    By: ______________________________________
                                        Name:
                                        Title:






                                                                   Exhibit 10.65

Dated: January 14, 2005         APCOM, INC., a Maryland corporation
                                BROADCAST SPORTS INC., a Delaware corporation
                                D.P. ASSOCIATES INC., a Virginia corporation
                                ELECTRODYNAMICS, INC., an Arizona corporation
                                HENSCHEL INC., a Delaware corporation
                                HYGIENETICS ENVIRONMENTAL SERVICES, INC., a
                                   Delaware corporation
                                INTERSTATE ELECTRONICS CORPORATION, a California
                                   corporation
                                KDI PRECISION PRODUCTS, INC., a Delaware
                                   corporation
                                L-3 COMMUNICATIONS AEROMET, INC., an Oregon
                                   corporation
                                L-3 COMMUNICATIONS VERTEX AEROSPACE LLC, a
                                   Delaware limited liability company
                                L-3 COMMUNICATIONS AIS GP CORPORATION, a
                                   Delaware corporation
                                L-3 COMMUNICATIONS AVIONICS SYSTEMS, INC., a
                                   Delaware corporation
                                L-3 COMMUNICATIONS AVYSIS CORPORATION, a Texas
                                   corporation
                                L-3 COMMUNICATIONS AYDIN CORPORATION, a Delaware
                                   corporation
                                L-3 COMMUNICATIONS CSI, INC., a California
                                   corporation
                                L-3 COMMUNICATIONS CE HOLDINGS, INC., a Delaware
                                   corporation
                                L-3 COMMUNICATIONS CINCINNATI ELECTRONICS
                                   CORPORATION, an Ohio corporation
                                L-3 COMMUNICATIONS ESSCO, INC., a Delaware
                                   corporation
                                L-3 COMMUNICATIONS FLIGHT INTERNATIONAL AVIATION
                                   LLC, a Delaware limited liability company
                                L-3 COMMUNICATIONS FLIGHT CAPITAL LLC, a
                                   Delaware limited liability company
                                L-3 COMMUNICATIONS GOVERNMENT SERVICES, INC., a
                                   Virginia corporation
                                L-3 COMMUNICATIONS ILEX SYSTEMS, INC., a
                                   Delaware corporation
                                L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P., a
                                   Delaware limited partnership
                                L-3 COMMUNICATIONS INVESTMENTS INC., a Delaware
                                   corporation
                                L-3 COMMUNICATIONS KLEIN ASSOCIATES, INC., a
                                   Delaware corporation
                                L-3 COMMUNICATIONS MAS (US) CORPORATION, a
                                   Delaware corporation
                                L-3 COMMUNICATIONS SECURITY AND DETECTION
                                   SYSTEMS, INC., a Delaware corporation




                                L-3 COMMUNICATIONS STORM CONTROL SYSTEMS, INC.,
                                   a California corporation
                                L-3 COMMUNICATIONS VECTOR INTERNATIONAL AVIATION
                                   LLC, a Delaware limited liability company
                                L-3 COMMUNICATIONS WESTWOOD CORPORATION, a
                                   Nevada corporation
                                MCTI ACQUISITION CORPORATION, a Maryland
                                   corporation
                                MICRODYNE COMMUNICATIONS TECHNOLOGIES
                                   INCORPORATED, a Maryland corporation
                                MICRODYNE CORPORATION, a Maryland corporation
                                MICRODYNE OUTSOURCING INCORPORATED, a Maryland
                                   corporation
                                MPRI, INC., a Delaware corporation
                                PAC ORD INC., a Delaware corporation
                                POWER PARAGON, INC., a Delaware corporation
                                SHIP ANALYTICS, INC., a Connecticut corporation
                                SHIP ANALYTICS INTERNATIONAL, INC., a Delaware
                                   corporation
                                SHIP ANALYTICS USA, INC., a Connecticut
                                   corporation
                                SPD ELECTRICAL SYSTEMS, INC., a Delaware
                                   corporation
                                SPD SWITCHGEAR INC., a Delaware corporation
                                SYCOLEMAN CORPORATION, a Florida corporation
                                TROLL TECHNOLOGY CORPORATION, a California
                                   corporation
                                WESCAM AIR OPS INC., a Delaware corporation
                                WESCAM AIR OPS LLC, a Delaware limited liability
                                   company
                                WESCAM HOLDINGS (US) INC., a Delaware
                                   corporation
                                WESCAM INCORPORATED, a Florida corporation
                                WESCAM LLC, a Delaware limited liability company
                                WESCAM SONOMA INC., a California corporation
                                WOLF COACH, INC., a Massachusetts corporation
                                   As Guaranteeing Subsidiaries

                                By: ______________________________________
                                    Name:
                                    Title:




                                                                   Exhibit 10.65


Dated:  January 14, 2005                    THE BANK OF NEW YORK,
                                            as Trustee


                                            By: ________________________________
                                                Name:
                                                Title:

EX-10.68

                                                                   Exhibit 10.68

                     SUPPLEMENTAL INDENTURE TO BE DELIVERED
                          BY GUARANTEEING SUBSIDIARIES

         Supplemental Indenture (this "Supplemental Indenture"), dated as of
January 14, 2005, among L-3 Communications Corporation (or its permitted
successor), a Delaware corporation (the "Company"), each a direct or indirect
subsidiary of the Company signatory hereto (each, a "Guaranteeing Subsidiary",
and collectively, the "Guaranteeing Subsidiaries"), and The Bank of New York, as
trustee under the indenture referred to below (the "Trustee").

                               W I T N E S S E T H

               WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of November 12, 2004 providing
for the issuance of an unlimited amount of 5 7/8% Senior Subordinated Notes due
2015 (the "Notes");

               WHEREAS, the Indenture provides that under certain circumstances
the Guaranteeing Subsidiaries shall execute and deliver to the Trustee a
supplemental indenture pursuant to which the Guaranteeing Subsidiaries shall
unconditionally guarantee all of the Company's Obligations (as defined in the
Indenture) under the Notes and the Indenture on the terms and conditions set
forth herein (the "Subsidiary Guarantee"); and

               WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee
is authorized to execute and deliver this Supplemental Indenture.

               NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Guaranteeing Subsidiaries and the Trustee mutually covenant and agree for
the equal and ratable benefit of the Holders of the Notes as follows:

               1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

               2. AGREEMENT TO GUARANTEE. Each Guaranteeing Subsidiary hereby
agrees as follows:

                  (a)   Such Guaranteeing Subsidiary, jointly and severally with
                        all other current and future guarantors of the Notes
                        (collectively, the "Guarantors" and each, a
                        "Guarantor"), unconditionally guarantees to each Holder
                        of a Note authenticated and delivered by the Trustee and
                        to the Trustee and its successors and assigns,
                        regardless of the validity and enforceability of the
                        Indenture, the Notes or the Obligations of the Company
                        under the Indenture or the Notes, that:

                        (i)   the principal of, premium, interest and Additional
                              Interest, if any, on the Notes will be promptly
                              paid in full when due, whether at maturity, by
                              acceleration, redemption or otherwise, and
                              interest on the overdue principal of,




                              premium, interest and Additional Amounts, if any,
                              on the Notes, to the extent lawful, and all other
                              Obligations of the Company to the Holders or the
                              Trustee thereunder or under the Indenture will be
                              promptly paid in full, all in accordance with the
                              terms thereof; and

                        (ii)  in case of any extension of time for payment or
                              renewal of any Notes or any of such other
                              Obligations, that the same will be promptly paid
                              in full when due in accordance with the terms of
                              the extension or renewal, whether at stated
                              maturity, by acceleration or otherwise.

                  (b)   Notwithstanding the foregoing, in the event that this
                        Subsidiary Guarantee would constitute or result in a
                        violation of any applicable fraudulent conveyance or
                        similar law of any relevant jurisdiction, the liability
                        of such Guaranteeing Subsidiary under this Supplemental
                        Indenture and its Subsidiary Guarantee shall be reduced
                        to the maximum amount permissible under such fraudulent
                        conveyance or similar law.

               3. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.

                  (a)   To evidence its Subsidiary Guarantee set forth in this
                        Supplemental Indenture, such Guaranteeing Subsidiary
                        hereby agrees that a notation of such Subsidiary
                        Guarantee substantially in the form of Exhibit F to the
                        Indenture shall be endorsed by an officer of such
                        Guaranteeing Subsidiary on each Note authenticated and
                        delivered by the Trustee after the date hereof.

                  (b)   Notwithstanding the foregoing, such Guaranteeing
                        Subsidiary hereby agrees that its Subsidiary Guarantee
                        set forth herein shall remain in full force and effect
                        notwithstanding any failure to endorse on each Note a
                        notation of such Subsidiary Guarantee.

                  (c)   If an Officer whose signature is on this Supplemental
                        Indenture or on the Subsidiary Guarantee no longer holds
                        that office at the time the Trustee authenticates the
                        Note on which a Subsidiary Guarantee is endorsed, the
                        Subsidiary Guarantee shall be valid nevertheless.

                  (d)   The delivery of any Note by the Trustee, after the
                        authentication thereof under the Indenture, shall
                        constitute due delivery of the Subsidiary Guarantee set
                        forth in this Supplemental Indenture on behalf of each
                        Guaranteeing Subsidiary.

                  (e)   Each Guaranteeing Subsidiary hereby agrees that its
                        Obligations hereunder shall be unconditional, regardless
                        of the validity, regularity or enforceability of the
                        Notes or the Indenture, the absence of any action to
                        enforce the same, any waiver or consent




                                       2



                        by any Holder of the Notes with respect to any
                        provisions hereof or thereof, the recovery of any
                        judgment against the Company, any action to enforce the
                        same or any other circumstance which might otherwise
                        constitute a legal or equitable discharge or defense of
                        a guarantor.

                  (f)   Each Guaranteeing Subsidiary hereby waives diligence,
                        presentment, demand of payment, filing of claims with a
                        court in the event of insolvency or bankruptcy of the
                        Company, any right to require a proceeding first against
                        the Company, protest, notice and all demands whatsoever
                        and covenants that its Subsidiary Guarantee made
                        pursuant to this Supplemental Indenture will not be
                        discharged except by complete performance of the
                        Obligations contained in the Notes and the Indenture.

                  (g)   If any Holder or the Trustee is required by any court or
                        otherwise to return to the Company or any Guaranteeing
                        Subsidiary, or any custodian, Trustee, liquidator or
                        other similar official acting in relation to either the
                        Company or such Guaranteeing Subsidiary, any amount paid
                        by either to the Trustee or such Holder, the Subsidiary
                        Guarantee made pursuant to this Supplemental Indenture,
                        to the extent theretofore discharged, shall be
                        reinstated in full force and effect.

                  (h)   Each Guaranteeing Subsidiary agrees that it shall not be
                        entitled to any right of subrogation in relation to the
                        Holders in respect of any Obligations guaranteed hereby
                        until payment in full of all Obligations guaranteed
                        hereby. Each Guaranteeing Subsidiary further agrees
                        that, as between such Guaranteeing Subsidiary, on the
                        one hand, and the Holders and the Trustee, on the other
                        hand:

                        (i)   the maturity of the Obligations guaranteed hereby
                              may be accelerated as provided in Article 6 of the
                              Indenture for the purposes of the Subsidiary
                              Guarantee made pursuant to this Supplemental
                              Indenture, notwithstanding any stay, injunction or
                              other prohibition preventing such acceleration in
                              respect of the Obligations guaranteed hereby; and

                        (ii)  in the event of any declaration of acceleration of
                              such Obligations as provided in Article 6 of the
                              Indenture, such Obligations (whether or not due
                              and payable) shall forthwith become due and
                              payable by such Guaranteeing Subsidiary for the
                              purpose of the Subsidiary Guarantee made pursuant
                              to this Supplemental Indenture.

                  (i)   Each Guaranteeing Subsidiary shall have the right to
                        seek contribution from any other non-paying Guaranteeing
                        Subsidiary so long as the exercise of such right does
                        not impair the rights of


                                       3



                        the Holders or the Trustee under the Subsidiary
                        Guarantee made pursuant to this Supplemental Indenture.

               4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN
                  TERMS.

                  (a)   Except as set forth in Articles 4 and 5 of the
                        Indenture, nothing contained in the Indenture, this
                        Supplemental Indenture or in the Notes shall prevent any
                        consolidation or merger of any Guaranteeing Subsidiary
                        with or into the Company or any other Guarantor or shall
                        prevent any transfer, sale or conveyance of the property
                        of any Guaranteeing Subsidiary as an entirety or
                        substantially as an entirety, to the Company or any
                        other Guarantor.

                  (b)   Except as set forth in Article 4 and 5 of the Indenture,
                        nothing contained in the Indenture, this Supplemental
                        Indenture or in the Notes shall prevent any
                        consolidation or merger of any Guaranteeing Subsidiary
                        with or into a corporation or corporations other than
                        the Company or any other Guarantor (in each case,
                        whether or not affiliated with the Guaranteeing
                        Subsidiary), or successive consolidations or mergers in
                        which a Guaranteeing Subsidiary or its successor or
                        successors shall be a party or parties, or shall prevent
                        any sale or conveyance of the property of any
                        Guaranteeing Subsidiary as an entirety or substantially
                        as an entirety, to a corporation other than the Company
                        or any other Guarantor (in each case, whether or not
                        affiliated with the Guaranteeing Subsidiary) authorized
                        to acquire and operate the same; provided, however, that
                        each Guaranteeing Subsidiary hereby covenants and agrees
                        that (i) subject to the Indenture, upon any such
                        consolidation, merger, sale or conveyance, the due and
                        punctual performance and observance of all of the
                        covenants and conditions of the Indenture and this
                        Supplemental Indenture to be performed by such
                        Guaranteeing Subsidiaries, shall be expressly assumed
                        (in the event that such Guaranteeing Subsidiary is not
                        the surviving corporation in the merger), by
                        supplemental indenture satisfactory in form to the
                        Trustee, executed and delivered to the Trustee, by the
                        corporation formed by such consolidation, or into which
                        such Guaranteeing Subsidiary shall have been merged, or
                        by the corporation which shall have acquired such
                        property and (ii) immediately after giving effect to
                        such consolidation, merger, sale or conveyance no
                        Default or Event of Default exists.

                  (c)   In case of any such consolidation, merger, sale or
                        conveyance and upon the assumption by the successor
                        corporation, by supplemental indenture, executed and
                        delivered to the Trustee and satisfactory in form to the
                        Trustee, of the Subsidiary Guarantee made pursuant to
                        this Supplemental Indenture and the due and


                                       4


                        punctual performance of all of the covenants and
                        conditions of the Indenture and this Supplemental
                        Indenture to be performed by such Guaranteeing
                        Subsidiary, such successor corporation shall succeed to
                        and be substituted for such Guaranteeing Subsidiary with
                        the same effect as if it had been named herein as the
                        Guaranteeing Subsidiary. Such successor corporation
                        thereupon may cause to be signed any or all of the
                        Subsidiary Guarantees to be endorsed upon the Notes
                        issuable under the Indenture which theretofore shall not
                        have been signed by the Company and delivered to the
                        Trustee. All the Subsidiary Guarantees so issued shall
                        in all respects have the same legal rank and benefit
                        under the Indenture and this Supplemental Indenture as
                        the Subsidiary Guarantees theretofore and thereafter
                        issued in accordance with the terms of the Indenture and
                        this Supplemental Indenture as though all of such
                        Subsidiary Guarantees had been issued at the date of the
                        execution hereof.

               5. RELEASES.

                  (a)   Concurrently with any sale of assets (including, if
                        applicable, all of the Capital Stock of a Guaranteeing
                        Subsidiary), all Liens, if any, in favor of the Trustee
                        in the assets sold thereby shall be released; provided
                        that in the event of an Asset Sale, the Net Proceeds
                        from such sale or other disposition are treated in
                        accordance with the provisions of Section 4.10 of the
                        Indenture. If the assets sold in such sale or other
                        disposition include all or substantially all of the
                        assets of a Guaranteeing Subsidiary or all of the
                        Capital Stock of a Guaranteeing Subsidiary, then the
                        Guaranteeing Subsidiary (in the event of a sale or other
                        disposition of all of the Capital Stock of such
                        Guaranteeing Subsidiary) or the Person acquiring the
                        property (in the event of a sale or other disposition of
                        all or substantially all of the assets of such
                        Guaranteeing Subsidiary) shall be released from and
                        relieved of its Obligations under this Supplemental
                        Indenture and its Subsidiary Guarantee made pursuant
                        hereto; provided that in the event of an Asset Sale, the
                        Net Proceeds from such sale or other disposition are
                        treated in accordance with the provisions of Section
                        4.10 of the Indenture. Upon delivery by the Company to
                        the Trustee of an Officers' Certificate to the effect
                        that such sale or other disposition was made by the
                        Company or the Guaranteeing Subsidiary, as the case may
                        be, in accordance with the provisions of the Indenture
                        and this Supplemental Indenture, including without
                        limitation, Section 4.10 of the Indenture, the Trustee
                        shall execute any documents reasonably required in order
                        to evidence the release of the Guaranteeing Subsidiary
                        from its Obligations under this Supplemental Indenture
                        and its Subsidiary Guarantee made pursuant hereto. If
                        the Guaranteeing Subsidiary is not released from its
                        obligations under its Subsidiary Guarantee, it shall
                        remain liable for the full amount


                                       5


                        of principal of and interest on the Notes and for the
                        other obligations of such Guaranteeing Subsidiary under
                        the Indenture as provided in this Supplemental
                        Indenture.

                  (b)   Upon the designation of a Guaranteeing Subsidiary as an
                        Unrestricted Subsidiary in accordance with the terms of
                        the Indenture, such Guaranteeing Subsidiary shall be
                        released and relieved of its Obligations under its
                        Subsidiary Guarantee and this Supplemental Indenture.
                        Upon delivery by the Company to the Trustee of an
                        Officers' Certificate and an Opinion of Counsel to the
                        effect that such designation of such Guaranteeing
                        Subsidiary as an Unrestricted Subsidiary was made by the
                        Company in accordance with the provisions of the
                        Indenture, including without limitation Section 4.07 of
                        the Indenture, the Trustee shall execute any documents
                        reasonably required in order to evidence the release of
                        such Guaranteeing Subsidiary from its Obligations under
                        its Subsidiary Guarantee. Any Guaranteeing Subsidiary
                        not released from its Obligations under its Subsidiary
                        Guarantee shall remain liable for the full amount of
                        principal of and interest on the Notes and for the other
                        Obligations of any Guaranteeing Subsidiary under the
                        Indenture as provided herein.

                  (c)   Each Guaranteeing Subsidiary shall be released and
                        relieved of its obligations under this Supplemental
                        Indenture in accordance with, and subject to, Section
                        4.18 of the Indenture.

               6. NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, stockholder or agent of any
Guaranteeing Subsidiary, as such, shall have any liability for any Obligations
of the Company or any Guaranteeing Subsidiary under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such Obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the SEC that such a waiver is against
public policy.

               7. SUBORDINATION OF SUBSIDIARY GUARANTEES; ANTI-LAYERING. No
Guaranteeing Subsidiary shall incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt of a Guaranteeing Subsidiary and senior in
any respect in right of payment to any of the Subsidiary Guarantees.
Notwithstanding the foregoing sentence, the Subsidiary Guarantee of each
Guaranteeing Subsidiary shall be subordinated to the prior payment in full of
all Senior Debt of that Guaranteeing Subsidiary (in the same manner and to the
same extent that the Notes are subordinated to Senior Debt), which shall include
all guarantees of Senior Debt.

               8. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                                       6


               9. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.

               10. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.

               11. THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiaries and the
Company.




                                       7




                  IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, all as of the date first above
written.


Dated: January 14, 2005             L-3 COMMUNICATIONS CORPORATION


                                    By:
                                        -------------------------------
                                        Name:
                                        Title:












                                                                   Exhibit 10.68

Dated: January 14, 2005       APCOM, INC., a Maryland corporation
                              BROADCAST SPORTS INC., a Delaware corporation
                              D.P. ASSOCIATES INC., a Virginia corporation
                              ELECTRODYNAMICS, INC., an Arizona corporation
                              HENSCHEL INC., a Delaware corporation
                              HYGIENETICS ENVIRONMENTAL SERVICES, INC., a
                                  Delaware corporation
                              INTERSTATE ELECTRONICS CORPORATION, a California
                                  corporation
                              KDI PRECISION PRODUCTS, INC., a Delaware
                                  corporation
                              L-3 COMMUNICATIONS AEROMET, INC., an Oregon
                                  corporation
                              L-3 COMMUNICATIONS VERTEX AEROSPACE LLC, a
                                  Delaware limited liability company
                              L-3 COMMUNICATIONS AIS GP CORPORATION, a
                                  Delaware corporation
                              L-3 COMMUNICATIONS AVIONICS SYSTEMS, INC., a
                                  Delaware corporation
                              L-3 COMMUNICATIONS AVYSIS CORPORATION, a
                                  Texas corporation
                              L-3 COMMUNICATIONS AYDIN CORPORATION, a
                                  Delaware corporation
                              L-3 COMMUNICATIONS CSI, INC., a California
                                  corporation
                              L-3 COMMUNICATIONS CE HOLDINGS, INC., a Delaware
                                  corporation
                              L-3 COMMUNICATIONS CINCINNATI ELECTRONICS
                                  CORPORATION, an Ohio corporation
                              L-3 COMMUNICATIONS ESSCO, INC., a Delaware
                                  corporation
                              L-3 COMMUNICATIONS FLIGHT INTERNATIONAL AVIATION
                                  LLC, a Delaware limited liability company
                              L-3 COMMUNICATIONS FLIGHT CAPITAL LLC, a Delaware
                                  limited liability company
                              L-3 COMMUNICATIONS GOVERNMENT SERVICES, INC., a
                                  Virginia corporation
                              L-3 COMMUNICATIONS ILEX SYSTEMS, INC., a Delaware
                                  corporation
                              L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P., a
                                  Delaware limited partnership
                              L-3 COMMUNICATIONS INVESTMENTS INC., a Delaware
                                  corporation
                              L-3 COMMUNICATIONS KLEIN ASSOCIATES, INC., a
                                  Delaware corporation
                              L-3 COMMUNICATIONS MAS (US) CORPORATION, a
                                  Delaware corporation
                              L-3 COMMUNICATIONS SECURITY AND DETECTION SYSTEMS,
                                  INC., a Delaware corporation



                        L-3 COMMUNICATIONS STORM CONTROL SYSTEMS, INC.,
                            a California corporation
                        L-3 COMMUNICATIONS VECTOR INTERNATIONAL AVIATION LLC,
                            a Delaware limited liability company
                        L-3 COMMUNICATIONS WESTWOOD CORPORATION, a Nevada
                            corporation
                        MCTI ACQUISITION CORPORATION, a Maryland corporation
                        MICRODYNE COMMUNICATIONS TECHNOLOGIES INCORPORATED,
                            a Maryland corporation
                        MICRODYNE CORPORATION, a Maryland corporation
                        MICRODYNE OUTSOURCING INCORPORATED, a Maryland
                            corporation
                        MPRI, INC., a Delaware corporation
                        PAC ORD INC., a Delaware corporation
                        POWER PARAGON, INC., a Delaware corporation
                        SHIP ANALYTICS, INC., a Connecticut corporation
                        SHIP ANALYTICS INTERNATIONAL, INC., a Delaware
                            corporation
                        SHIP ANALYTICS USA, INC., a Connecticut corporation
                        SPD ELECTRICAL SYSTEMS, INC., a Delaware corporation
                        SPD SWITCHGEAR INC., a Delaware corporation
                        SYCOLEMAN CORPORATION, a Florida corporation
                        TROLL TECHNOLOGY CORPORATION, a California corporation
                        WESCAM AIR OPS INC., a Delaware corporation
                        WESCAM AIR OPS LLC, a Delaware limited liability company
                        WESCAM HOLDINGS (US) INC., a Delaware corporation
                        WESCAM INCORPORATED, a Florida corporation
                        WESCAM LLC, a Delaware limited liability company
                        WESCAM SONOMA INC., a California corporation
                        WOLF COACH, INC., a Massachusetts corporation
                                       As Guaranteeing Subsidiaries

                            By:
                               ---------------------------------------
                               Name:
                               Title:






                                                                   Exhibit 10.68


Dated:  January 14, 2005                    THE BANK OF NEW YORK,
                                            as Trustee


                                            By:
                                               ---------------------------------
                                               Name:
                                               Title:

EX-21

                                                                      EXHIBIT 21

                        L-3 COMMUNICATIONS HOLDINGS, INC.
                        ---------------------------------


Entity

1179023 Ontario Ltd
1374474 Ontario Inc.
3023001 Canada Inc.
3033544 Nova Scotia Company
ACSS-NZSC Limited
Apcom, Inc.
Applied Physics Specialties Limited
Army Fleet Support, LLC
Astrid Energy Enterprises S.R.L.
Aviation Communications & Surveillance Systems, LLC
Aydin Foreign Sales Limited
Aydin S.A.
Aydin Yazilim ve Elektronik Sanayi A.S.
Broadcast Sports Inc.
Civilian Police International, LLC
Civilian Police International Ltd.
D.P. Associates Inc.
ELAC Nautik Unterstutzungskabe GmbH
Electrodynamics, Inc.
Electronic Space Systems International Corp.
E.MC S.r.l.
ESSCO Collins Limited
EuroAtlas Gesellschaft fur Leistungselektronik mbH
Film Europe Limited
Forfeiture Support Associates, L.L.C.
Henschel Inc.
Honeywell TCAS Inc.
Hygienetics Environmental Services, Inc.
International Aerospace Management Company Scrl
Interstate Electronics Corporation
JovyAtlas Elektrische Umformtechnik GmbH
J-R Technical Management, L.L.C.
J-R Technical Services Limited Partnership, L.L.P.
KDI Precision Products, Inc.
L-3 Canada Acquisition Inc.
L-3 Communications Aeromet, Inc.
L-3 Communications AIS GP Corporation
L-3 Communications Australia Proprietary Limited
L-3 Communications Australia Pty Ltd
L-3 Communications Avionics Systems, Inc.
L-3 Communications Avisys Corporation
L-3 Communications Aydin Corporation
L-3 Communications Canada Inc.
L-3 Communications Corporation
L-3 Communications CSI, Inc.



                                                                               2

L-3 Communications ELAC Nautik GmbH
L-3 Communications ESSCO, Inc.
L-3 Communications Flight Capital LLC
L-3 Communications Flight International Aviation LLC
L-3 Communications Global Network Solutions U.K. Ltd.
L-3 Communications Government Services, Inc.
L-3 Communications Holding GmbH
L-3 Communications Holdings, Inc.
L-3 Communications Hong Kong Limited
L-3 Communications ILEX Systems, Inc.
L-3 Communications Integrated Systems L.P.
L-3 Communications Investments Inc.
L-3 Communications Klein Associates, Inc.
L-3 Communications Korea Corporation
L-3 Communications Malaysia Sdn. Bhd.
L-3 Communications MAS (Canada) Inc.
L-3 Communications MAS (US) Corporation
L-3 Communications Security and Detection Systems, Inc.
L-3 Communications Singapore Pte Ltd
L-3 Communications Storm Control Systems, Inc.
L-3 Communications U.K. Ltd.
L-3 Communications Vector International Aviation LLC
L-3 Communications Vertex Aerospace LLC
L-3 Communications Westwood Corporation
Logimetrics Inc.
Logimetrics FSC, Inc.
L-Tres Comunicaciones Costa Rica, S.A.
MCTI Acquisition Corporation
Medical Educational Technologies, Inc.
Microdyne Communications Technologies Incorporated
Microdyne Corporation
Microdyne Ltd.
Microdyne Outsourcing Incorporated
mmTECH, INC.
Mosaic Mapping Inc.
MPRI, Inc.
MVT Equity LLC
Narda Safety Test Solutions GmbH
New Vision Group Inc.
Pac Ord Inc.
PMM Costruzioni Elettroniche Centro Misure Radioelettriche S.r.l.
Power Paragon (Deutschland) Holding GmbH
Power Paragon, Inc.
Ship Analytics, Inc.
Ship Analytics International, Inc.
Ship Analytics USA, Inc.
Sovcan Star Satellite Communications Inc.
Spar Aerospace Limited
SPD Electrical Systems, Inc.
SPD Switchgear Inc.
Storm Control Systems Limited




                                                                               3

SYColeman Corporation
Troll Technology Corporation
Wescam Air Ops Inc.
Wescam Air Ops LLC
Wescam Asia Pte Ltd
Wescam Europe Limited
Wescam Financial (U.S.A.)
Wescam Holdings (US) Inc.
Wescam Inc.
Wescam LLC
Wescam Sonoma Inc.
Wolf Coach Inc.

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We hereby consent to the use in this Registration Statement on Form S-4 of L-3 Communications Corporation and subsidiaries of our report dated January 27, 2004, except for Note 18, as to which the date is November 11, 2004, relating to the consolidated financial statements of L-3 Communications Holdings, Inc. and L-3 Communications Corporation and subsidiaries, which appears in such Registration Statement. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

PricewaterhouseCoopers LLP
New York, New York
January 31, 2005

EX-25

================================================================================

                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) |__|

                              THE BANK OF NEW YORK
               (Exact name of trustee as specified in its charter)

New York                                                     13-5160382
(State of incorporation                                      (I.R.S. employer
if not a U.S. national bank)                                 identification no.)

One Wall Street, New York, N.Y.                              10286
(Address of principal executive offices)                     (Zip code)

                         L-3 COMMUNICATIONS CORPORATION
               (Exact name of obligor as specified in its charter)

Delaware                                                     13-3937436
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                                   APCOM, INC.
               (Exact name of obligor as specified in its charter)

Maryland                                                     52-1291447
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                              BROADCAST SPORTS INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     52-1977327
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)



                        D.P. ASSOCIATES INC. (Exact name
                     of obligor as specified in its charter)

Virginia                                                     54-1389520
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                              ELECTRODYNAMICS, INC.
               (Exact name of obligor as specified in its charter)

Arizona                                                      36-3140903
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                                 HENSCHEL, INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     23-2554418
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                    HYGIENETICS ENVIRONMENTAL SERVICES, INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     13-3992505
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                       INTERSTATE ELECTRONICS CORPORATION
               (Exact name of obligor as specified in its charter)

California                                                   95-1912832
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                          KDI PRECISION PRODUCTS, INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     31-0740721
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                        L-3 COMMUNICATIONS AEROMET, INC.
               (Exact name of obligor as specified in its charter)

Oregon                                                       73-1291165
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                                      -2-


                      L-3 COMMUNICATIONS AIS GP CORPORATION
               (Exact name of obligor as specified in its charter)

Delaware                                                     13-4137187
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                    L-3 COMMUNICATIONS AVIONICS SYSTEMS, INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     38-1865601
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                      L-3 COMMUNICATIONS AVYSIS CORPORATION
               (Exact name of obligor as specified in its charter)

Texas                                                        74-2616165
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                      L-3 COMMUNICATIONS AYDIN CORPORATION
               (Exact name of obligor as specified in its charter)

Delaware                                                     23-1686808
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                      L-3 COMMUNICATIONS CE HOLDINGS, INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     54-1098648
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

              L-3 COMMUNICATIONS CINCINNATI ELECTRONICS CORPORATION
               (Exact name of obligor as specified in its charter)

Ohio                                                         31-0826926
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                          L-3 COMMUNICATIONS CSI, INC.
               (Exact name of obligor as specified in its charter)

California                                                   77-0365380
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)



                         L-3 COMMUNICATIONS ESSCO, INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     04-2281486
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

              L-3 COMMUNICATIONS FLIGHT INTERNATIONAL AVIATION LLC
               (Exact name of obligor as specified in its charter)

Delaware                                                     02-0654591
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                      L-3 COMMUNICATIONS FLIGHT CAPITAL LLC
               (Exact name of obligor as specified in its charter)

Delaware                                                     75-3089735
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                  L-3 COMMUNICATIONS GOVERNMENT SERVICES, INC.
               (Exact name of obligor as specified in its charter)

Virginia                                                     54-1349668
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                      L-3 COMMUNICATIONS ILEX SYSTEMS, INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     13-3992952
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                   L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P.
               (Exact name of obligor as specified in its charter)

Delaware                                                     03-0391841
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                       L-3 COMMUNICATIONS INVESTMENTS INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     51-0260723
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                                      -4-


                    L-3 COMMUNICATIONS KLEIN ASSOCIATES, INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     02-0277515
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                     L-3 COMMUNICATIONS MAS (US) CORPORATION
               (Exact name of obligor as specified in its charter)

Delaware                                                     55-0765280
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                    L-3 COMMUNICATIONS SECURITY AND DETECTION
                                  SYSTEMS INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     04-3054475
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                 L-3 COMMUNICATIONS STORM CONTROL SYSTEMS, INC.
               (Exact name of obligor as specified in its charter)

California                                                   77-0268547
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

              L-3 COMMUNICATIONS VECTOR INTERNATIONAL AVIATION LLC
               (Exact name of obligor as specified in its charter)

Delaware                                                     42-1569647
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                     L-3 COMMUNICATIONS VERTEX AEROSPACE LLC
               (Exact name of obligor as specified in its charter)

Delaware                                                     64-0941176
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                     L-3 COMMUNICATIONS WESTWOOD CORPORATION
               (Exact name of obligor as specified in its charter)

Nevada                                                       87-0430944
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)



                          MCTI ACQUISITION CORPORATION
               (Exact name of obligor as specified in its charter)

Maryland                                                     13-4109777
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

               MICRODYNE COMMUNICATIONS TECHNOLOGIES INCORPORATED
               (Exact name of obligor as specified in its charter)

Maryland                                                     59-3500774
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                              MICRODYNE CORPORATION
               (Exact name of obligor as specified in its charter)

Maryland                                                     52-0856493
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                       MICRODYNE OUTSOURCING INCORPORATED
               (Exact name of obligor as specified in its charter)

Maryland                                                     33-0797639
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                                   MPRI, INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     54-1439937
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                                  PAC ORD INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     23-2523436
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                               POWER PARAGON, INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     33-0638510
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                                      -6-


                              SHIP ANALYTICS, INC.
               (Exact name of obligor as specified in its charter)

Connecticut                                                  06-0966471
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                       SHIP ANALYTICS INTERNATIONAL, INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     06-1336772
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                            SHIP ANALYTICS USA, INC.
               (Exact name of obligor as specified in its charter)

Connecticut                                                  06-1364417
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                          SPD ELECTRICAL SYSTEMS, INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     23-2457758
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                              SPD SWITCHGEAR, INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     23-2510039
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                              SYCOLEMAN CORPORATION
               (Exact name of obligor as specified in its charter)

Florida                                                      59-2039476
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                          TROLL TECHNOLOGY CORPORATION
               (Exact name of obligor as specified in its charter)

California                                                   95-4552257
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)




                               WESCAM AIR OPS INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     52-2304424
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                               WESCAM AIR OPS LLC
               (Exact name of obligor as specified in its charter)

Delaware                                                     52-2295476
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                            WESCAM HOLDINGS (US) INC.
               (Exact name of obligor as specified in its charter)

Delaware                                                     51-0376332
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                               WESCAM INCORPORATED
               (Exact name of obligor as specified in its charter)

Florida                                                      59-3316817
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                                   WESCAM LLC
               (Exact name of obligor as specified in its charter)

Delaware                                                     91-2077866
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                               WESCAM SONOMA INC.
               (Exact name of obligor as specified in its charter)

California                                                   95-2942016
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                                      -8-


                                WOLF COACH, INC.
               (Exact name of obligor as specified in its charter)

Massachusetts                                                04-2482502
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

600 Third Avenue
New York, New York                                           10016
(Address of principal executive offices)                     (Zip code)

                                  -------------

               5-7/8% Series B Senior Subordinated Notes due 2015
                       (Title of the indenture securities)

================================================================================




1.   GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

     (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
     IS SUBJECT.


     ---------------------------------------------------------------------------
                  Name                                Address

     ---------------------------------------------------------------------------

     Superintendent of Banks of the          2 Rector Street, New York,
     State of New York                       N.Y.  10006, and Albany, N.Y. 12203

     Federal Reserve Bank of New York        33 Liberty Plaza, New York,
                                             N.Y.  10045

     Federal Deposit Insurance               Washington, D.C. 20429
     Corporation

     New York Clearing House Association     New York, New York 10005

     (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

     Yes.

2.   AFFILIATIONS WITH OBLIGOR.

     IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
     AFFILIATION.

     None.

16.  LIST OF EXHIBITS.

     EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
     INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
     7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
     229.10(D).

     1.   A copy of the Organization Certificate of The Bank of New York
          (formerly Irving Trust Company) as now in effect, which contains the
          authority to commence business and a grant of powers to exercise
          corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
          filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
          Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to
          Form T-1 filed with Registration Statement No. 33-29637 and Exhibit 1
          to Form T-1 filed with Registration Statement No. 333-121195.)

     4.   A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
          filed with Registration Statement No. 333-121195.)

     6.   The consent of the Trustee required by Section 321(b) of the Act.
          (Exhibit 6 to Form T-1 filed with Registration Statement No.
          333-106702.)

     7.   A copy of the latest report of condition of the Trustee published
          pursuant to law or to the requirements of its supervising or examining
          authority.


                                      -10-


                                    SIGNATURE

     Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 13th day of January, 2005.


                                       THE BANK OF NEW YORK



                                       By:  /s/  ROBERT MASSIMILLO
                                            ------------------------------------
                                            Name:  ROBERT MASSIMILLO
                                            Title: VICE PRESIDENT



                                                                       EXHIBIT 7
                                                                       ---------


- --------------------------------------------------------------------------------
                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
2004, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.



                                                                           Dollar Amounts
ASSETS                                                                      In Thousands

Cash and balances due from depository institutions:
   Noninterest-bearing balances and currency and coin ....................   $ 3,036,306
   Interest-bearing balances .............................................     9,034,655
Securities:
   Held-to-maturity securities ...........................................     1,693,598
   Available-for-sale securities .........................................    20,325,634
Federal funds sold and securities purchased under
   agreements to resell
   Federal funds sold in domestic offices ................................        19,100
   Securities purchased under agreements to
   resell ................................................................     4,324,992
Loans and lease financing receivables:
   Loans and leases held for sale ........................................         6,685
   Loans and leases, net of unearned
     income ..............................................................    37,402,355
   LESS: Allowance for loan and
     lease losses ........................................................       594,211
   Loans and leases, net of unearned
     income and allowance ................................................    36,808,144
Trading Assets ...........................................................     3,420,107
Premises and fixed assets (including capitalized
   leases) ...............................................................       969,419
Other real estate owned ..................................................         1,253
Investments in unconsolidated subsidiaries and
   associated companies ..................................................       253,729
Customers' liability to this bank on acceptances
   outstanding ...........................................................       166,157
Intangible assets
   Goodwill ..............................................................     2,708,882
   Other intangible assets ...............................................       748,171



Other assets .............................................................     6,998,625
                                                                             -----------
Total assets .............................................................   $90,515,457
                                                                             ===========

LIABILITIES
Deposits:
   In domestic offices ...................................................   $40,236,165
   Noninterest-bearing ...................................................    15,201,748
   Interest-bearing ......................................................    25,034,417
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs ..............................................    24,110,224
   Noninterest-bearing ...................................................       300,559
   Interest-bearing ......................................................    23,809,665
Federal funds purchased and securities sold under
     agreements to repurchase
   Federal funds purchased in domestic
     offices .............................................................       717,565
   Securities sold under agreements to
     repurchase ..........................................................       812,853
Trading liabilities ......................................................     2,598,442
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases) .............................................     4,158,526
Not applicable
Bank's liability on acceptances executed and
   outstanding ...........................................................       167,267
Subordinated notes and debentures ........................................     2,389,088
Other liabilities ........................................................     6,730,454
                                                                             -----------
Total liabilities ........................................................   $81,920,584
                                                                             ===========
Minority interest in consolidated
   subsidiaries ..........................................................       142,058

EQUITY CAPITAL
Perpetual preferred stock and related
   surplus ...............................................................             0
Common stock .............................................................     1,135,284
Surplus ..................................................................     2,087,205
Retained earnings ........................................................     5,213,125
Accumulated other comprehensive income ...................................        17,201
Other equity capital components ..........................................             0
- -----------------------------------------------------------------------------------------
Total equity capital .....................................................     8,452,815
                                                                             -----------
Total liabilities, minority interest, and equity
   capital ...............................................................   $90,515,457
                                                                             ===========




I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition is true and correct to the
best of my knowledge and belief.


                                                               Thomas J. Mastro,
                                           Senior Vice President and Comptroller

We, the undersigned directors, attest to the correctness of this statement of
resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.

                            --
Thomas A. Renyi               |
Gerald L. Hassell             |                Directors
Alan R. Griffith              |
                            --

- --------------------------------------------------------------------------------

EX-99.1

                              LETTER OF TRANSMITTAL
                                       FOR
                                  $650,000,000
                    5 7/8% SENIOR SUBORDINATED NOTES DUE 2015
                                       OF

                         L-3 COMMUNICATIONS CORPORATION
       THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
      NEW YORK CITY TIME, ON [     ], [     ], 2005 (THE "EXPIRATION DATE")
                               UNLESS EXTENDED BY
                         L-3 COMMUNICATIONS CORPORATION


                             The Exchange Agent Is:


                              THE BANK OF NEW YORK




            By Mail:                 By Facsimile:        By Hand or Overight Delivery:
       The Bank of New York      The Bank of New York         The Bank of New York
        Reorganization Unit     Attention: [         ]         Reorganization Unit
    101 Barclay Street-7 East      (212) [         ]           101 Barclay Street
        New York, NY 10286                               Lobby Level-Corp. Trust Window
                                  Confirm Receipt of
      Attention: [         ]                                   New York, NY 10286
                                Facsimile by telephone
                                                             Attention: [         ]
                                   (212) [         ]
                                   ----------------


     DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN
AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

     The undersigned acknowledges receipt of the Prospectus dated [          ],
[    ] (the "Prospectus") of L-3 Communications Corporation (the "Company"),
and this Letter of Transmittal (the "Letter of Transmittal"), which together
describe the Company's offer (the "Exchange Offer") to exchange its 57/8%
Series B Senior Subordinated Notes due 2015, which have been registered under
the Securities Act of 1933, as amended (the "Securities Act") (the "Exchange
Notes"), for each of its 57/8% Senior Subordinated Notes due 2015 (the
"Outstanding Notes" and, together with the Exchange Notes, the "Notes") from
the holders thereof.

     The terms of the Exchange Notes are identical in all material respects
(including principal amount, interest rate and maturity) to the terms of the
Outstanding Notes for which they may be exchanged pursuant to the Exchange
Offer, except that the Exchange Notes are freely transferable by holders
thereof (except as provided herein or in the Prospectus) and are not subject to
any covenant regarding registration under the Securities Act.

     YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE
INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE
PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE
AGENT.

     The undersigned has checked the appropriate boxes below and signed this
Letter of Transmittal to indicate the action the undersigned desires to take
with respect to the Exchange Offer.



                            PLEASE READ THE ENTIRE
                   LETTER OF TRANSMITTAL AND THE PROSPECTUS
                   CAREFULLY BEFORE CHECKING ANY BOX BELOW.

     List below the Outstanding Notes to which this Letter of Transmittal
relates. If the space provided below is inadequate, the certificate numbers and
aggregate principal amounts should be listed on a separate signed schedule
affixed hereto.





                        DESCRIPTION OF OUTSTANDING NOTES TENDERED HEREWITH
   Name(s) and Address(es)                       Aggregate Principal
    of Registered Holder(s)     Certificate     Amount Represented        Principal Amount
  (Please fill in)               Number(s)*     by Outstanding Notes*        Tendered**




                                Total


 * Need not be completed by book-entry holders.

 ** Unless otherwise indicated, the holder will be deemed to have tendered the
    full aggregate principal amount represented by such Outstanding Notes. See
    Instruction 2.

     Holders of Outstanding Notes whose Outstanding Notes are not immediately
available or who cannot deliver all other required documents to the Exchange
Agent on or prior to the Expiration Date or who cannot complete the procedures
for book-entry transfer on a timely basis, must tender their Outstanding Notes
according to the guaranteed delivery procedures set forth in the Prospectus.

     Unless the context otherwise requires, the term "holder" for purposes of
this Letter of Transmittal means any person in whose name Outstanding Notes are
registered or any other person who has obtained a properly completed bond power
from the registered holder or any person whose Outstanding Notes are held of
record by The Depository Trust Company ("DTC").

- -   CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED PURSUANT TO A
    NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:

     Name of Registered
Holder(s):
           ----------------------------------------------------


     Name of Eligible Institution that Guaranteed
Delivery:
          ----------------------------------


     Date of Execution of Notice of Guaranteed
Delivery:
          ------------------------------------


     If Delivered by Book-Entry Transfer:

     Name of Tendering
Institution:
             ----------------------------------------------------


     Account
Number:
       --------------------------------------------------------------


     Transaction Code
Number:
        -------------------------------------------------------


- -   CHECK HERE IF EXCHANGE NOTES ARE TO BE DELIVERED TO A PERSON OTHER THAN THE
    PERSON SIGNING THIS LETTER OF TRANSMITTAL:

    Name:
          ----------------------------------------------------------------------



  Address:
           ---------------------------------------------------------------------



                                       2


- -   CHECK HERE IF EXCHANGE NOTES ARE TO BE DELIVERED TO AN ADDRESS DIFFERENT
    FROM THAT LISTED ELSEWHERE IN THIS LETTER OF TRANSMITTAL:

    Name:
          ----------------------------------------------------------------------



  Address:
          ----------------------------------------------------------------------



- -   CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED OUTSTANDING NOTES FOR
    YOUR OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES
    AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES
    OF ANY AMENDMENTS OR SUPPLEMENTS THERETO:

    Name:
          ----------------------------------------------------------------------



  Address:
           ---------------------------------------------------------------------



     If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Outstanding Notes that were
acquired as a result of market-making activities or other trading activities,
it acknowledges that it will deliver a prospectus in connection with any resale
of such Exchange Notes; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. A broker-dealer may not
participate in the Exchange Offer with respect to Outstanding Notes acquired
other than as a result of market-making activities or other trading activities.
Any holder who is an "affiliate" of the Company or who has an arrangement or
understanding with respect to the distribution of the Exchange Notes to be
acquired pursuant to the Exchange Offer, or any broker-dealer who purchased
Outstanding Notes from the Company to resell pursuant to Rule 144A under the
Securities Act or any other available exemption under the Securities Act must
comply with the registration and prospectus delivery requirements under the
Securities Act.

              PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

                                       3



Ladies and Gentlemen:

     Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the principal amount of the
Outstanding Notes indicated above. Subject to, and effective upon, the
acceptance for exchange of all or any portion of the Outstanding Notes tendered
herewith in accordance with the terms and conditions of the Exchange Offer
(including, if the Exchange Offer is extended or amended, the terms and
conditions of any such extension or amendment), the undersigned hereby
exchanges, assigns and transfers to, or upon the order of, the Company all
right, title and interest in and to such Outstanding Notes as are being
tendered herewith. The undersigned hereby irrevocably constitutes and appoints
the Exchange Agent as its true and lawful agent and attorney in-fact of the
undersigned (with full knowledge that the Exchange Agent also acts as the agent
of the Company, in connection with the Exchange Offer) to cause the Outstanding
Notes to be assigned, transferred and exchanged.

     The undersigned represents and warrants that it has full power and
authority to tender, exchange, assign and transfer the Outstanding Notes and to
acquire Exchange Notes issuable upon the exchange of such tendered Outstanding
Notes, and that, when the same are accepted for exchange, the Company will
acquire good and unencumbered title to the tendered Outstanding Notes, free and
clear of all liens, restrictions, charges and encumbrances and not subject to
any adverse claim. The undersigned also warrants that it will, upon request,
execute and deliver any additional documents deemed by the Exchange Agent or
the Company to be necessary or desirable to complete the exchange, assignment
and transfer of the tendered Outstanding Notes or transfer ownership of such
Outstanding Notes on the account books maintained by the book-entry transfer
facility. The undersigned further agrees that acceptance of any and all validly
tendered Outstanding Notes by the Company and the issuance of Exchange Notes in
exchange therefor shall constitute performance in full by the Company of its
obligations under the Registration Rights Agreement, dated as of November 12,
2004 (the "Registration Rights Agreement"), by and among the Company, the
guarantors named therein, and Lehman Brothers Inc., Credit Suisse First Boston
LLC, Banc of America Securities LLC, Morgan Stanley & Co. Incorporated, SG
Americas Securities, LLC, and Wachovia Capital Markets, LLC and that the
Company shall have no further obligations or liabilities thereunder except as
provided in the first paragraph of Section 4 of such agreement. The undersigned
will comply with its obligations under the Registration Rights Agreement. The
undersigned has read and agrees to all terms of the Exchange Offer. The
Exchange Offer is subject to certain conditions as set forth in the Prospectus
under the caption "The Exchange Offer--Certain Conditions to the Exchange
Offer." The undersigned recognizes that as a result of these conditions (which
may be waived, in whole or in part, by the Company), as more particularly set
forth in the Prospectus, the Company may not be required to exchange any of the
Outstanding Notes tendered hereby and, in such event, the Outstanding Notes not
exchanged will be returned to the undersigned at the address shown below unless
indicated otherwise above, promptly following the expiration or termination of
the Exchange Offer. In addition, the Company may amend the Exchange Offer at
any time prior to the Expiration Date if any of the conditions set under "The
Exchange Offer--Certain Conditions to the Exchange Offer" occur.

     The undersigned understands that tenders of Outstanding Notes pursuant to
any one of the procedures described in the Prospectus and in the instructions
attached hereto will, upon the Company's acceptance for exchange of such
tendered Outstanding Notes, constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of the
Exchange Offer. The undersigned recognizes that, under circumstances set forth
in the Prospectus, the Company may not be required to accept for exchange any
of the Outstanding Notes.

     By tendering Outstanding Notes and executing this Letter of Transmittal,
the undersigned represents that Exchange Notes acquired in the exchange will be
obtained in the ordinary course of business of the undersigned, that the
undersigned has no arrangement or understanding with any person to participate
in a distribution (within the meaning of the Securities Act) of such Exchange
Notes, that the undersigned is not an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act and that if the undersigned or the
person receiving such Exchange Notes, whether or not such person is the
undersigned, is not a broker-dealer, the undersigned represents that it is not
engaged in, and does not intend to engage in, a distribution of Exchange Notes.
If the undersigned or the person receiving such Exchange Notes,


                                       4


whether or not such person is the undersigned, is a broker-dealer that will
receive Exchange Notes for its own account in exchange for Outstanding Notes
that were acquired as a result of market-making activities or other trading
activities, it acknowledges that it will deliver a prospectus in connection
with any resale of such Exchange Notes; however, by so acknowledging and by
delivering a prospectus, the undersigned will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. If the undersigned
is a person in the United Kingdom, the undersigned represents that its ordinary
activities involve it in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of its business.

     Any holder of Outstanding Notes using the Exchange Offer to participate in
a distribution of the Exchange Notes (i) cannot rely on the position of the
staff of the Securities and Exchange Commission enunciated in its interpretive
letter with respect to Exxon Capital Holdings Corporation (available April 13,
1989) or similar interpretive letters and (ii) must comply with the
registration and prospectus requirements of the Securities Act in connection
with a secondary resale transaction.

     All authority herein conferred or agreed to be conferred shall survive the
death, bankruptcy or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned. Tendered
Outstanding Notes may be withdrawn at any time prior to the Expiration Date in
accordance with the terms of this Letter of Transmittal. Except as stated in
the Prospectus, this tender is irrevocable.

     Certificates for all Exchange Notes delivered in exchange for tendered
Outstanding Notes and any Outstanding Notes delivered herewith but not
exchanged, and registered in the name of the undersigned, shall be delivered to
the undersigned at the address shown below the signature of the undersigned.

     The undersigned, by completing the box entitled "Description of
Outstanding Notes Tendered Herewith" above and signing this letter, will be
deemed to have tendered the Outstanding Notes as set forth in such box.


                                       5


                         TENDERING HOLDER(S) SIGN HERE
                  (COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9)

     MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON
CERTIFICATE(S) FOR OUTSTANDING NOTES HEREBY TENDERED OR IN WHOSE NAME
OUTSTANDING NOTES ARE REGISTERED ON THE BOOKS OF DTC OR ONE OF ITS
PARTICIPANTS, OR BY ANY PERSON(S) AUTHORIZED TO BECOME THE REGISTERED HOLDER(S)
BY ENDORSEMENTS AND DOCUMENTS TRANSMITTED HEREWITH. IF SIGNATURE IS BY A
TRUSTEE, EXECUTOR, ADMINISTRATOR, GUARDIAN, ATTORNEY-IN-FACT, OFFICER OF A
CORPORATION OR OTHER PERSON ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY,
PLEASE SET FORTH THE FULL TITLE OF SUCH PERSON. SEE INSTRUCTION 3.



- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                          (Signature(s) of Holder(s))



Date:---------------------------------------------------------------------------





Name(s):-----------------------------------------------------------------------













- --------------------------------------------------------------------------------
                                (Please Print)



Capacity (full title):
              -----------------------------------------------------------------





Address:-----------------------------------------------------------------------













- --------------------------------------------------------------------------------
                             (Including Zip Code)



Daytime Area Code and Telephone
                          No.:-------------------------------------------------





Taxpayer Identification
No.:-----------------------------------------------------------












                           GUARANTEE OF SIGNATURE(S)

                       (IF REQUIRED--SEE INSTRUCTION 3)


Authorized Signature:
                     ----------------------------------------------------------





Date:
     ---------------------------------------------------------------------------




Name(s):
        -----------------------------------------------------------------------





Title:
      -------------------------------------------------------------------------






Name of Firm:
             -------------------------------------------------------------------





Address:
        ------------------------------------------------------------------------






                              (Include Zip Code)

Area Code and Telephone
                   No.:
                       --------------------------------------------------------

                                       6


                         SPECIAL ISSUANCE INSTRUCTIONS
                          (SEE INSTRUCTIONS 3 AND 4)

  To be completed ONLY if Exchange Notes or Outstanding Notes not tendered are
  to be issued in the name of someone other than the registered holder of the
  Outstanding Notes whose name(s) appear(s) above.



  Issue:   [ ] Outstanding Notes not tendered to:
           [ ] Exchange Notes to:


     Name(s):
              ------------------------------------------------------------

                                 (Please Print)



     Address:
              -------------------------------------------------------------




   ---------------------------------------------------------------------------

                              (Include Zip Code)


  Daytime Area Code and
     Telephone No.:
                    ---------------------------------------------------





  Tax Identification

     No.:
          --------------------------------------------------------------------


                         SPECIAL DELIVERY INSTRUCTIONS
                          (SEE INSTRUCTIONS 3 AND 4)


  To be completed ONLY if Exchange Notes or Outstanding Notes not tendered are
  to be sent to someone other than the registered holder of the Outstanding
  Notes whose name(s) appear(s) above, or such registered holder(s) at an
  address other than that shown above.


  Mail:    [ ] Outstanding Notes not tendered to:
           [ ] Exchange Notes to:



     Name(s):
              ------------------------------------------------------------

                                 (Please Print)



     Address:
              -------------------------------------------------------------




   ---------------------------------------------------------------------------

                              (Include Zip Code)


  Area Code and
     Telephone No.:
                    ---------------------------------------------------



                                       7



                                 INSTRUCTIONS

        FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

     1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED
DELIVERY PROCEDURES. A holder of Outstanding Notes may tender the same by (i)
properly completing and signing this Letter of Transmittal or a facsimile
hereof (all references in the Prospectus to the Letter of Transmittal shall be
deemed to include a facsimile thereof) and delivering the same, together with
the certificate or certificates, if applicable, representing the Outstanding
Notes being tendered and any required signature guarantees and any other
documents required by this Letter of Transmittal, to the Exchange Agent at its
address set forth above on or prior to the Expiration Date, or (ii) complying
with the procedure for book-entry transfer described below, or (iii) complying
with the guaranteed delivery procedures described below.

     Holders of Outstanding Notes may tender Outstanding Notes by book-entry
transfer by crediting the Outstanding Notes to the Exchange Agent's account at
DTC in accordance with DTC's Automated Tender Offer Program ("ATOP") and by
complying with applicable ATOP procedures with respect to the Exchange Offer.
DTC participants that are accepting the Exchange Offer should transmit their
acceptance to DTC, which will edit and verify the acceptance and execute a
book-entry delivery to the Exchange Agent's account at DTC. DTC will then send
a computer-generated message (an "Agent's Message") to the Exchange Agent for
its acceptance in which the holder of the Outstanding Notes acknowledges and
agrees to be bound by the terms of, and makes the representations and
warranties contained in, this Letter of Transmittal, the DTC participant
confirms on behalf of itself and the beneficial owners of such Outstanding
Notes all provisions of this Letter of Transmittal (including any
representations and warranties) applicable to it and such beneficial owner as
fully as if it had completed the information required herein and executed and
transmitted this Letter of Transmittal to the Exchange Agent.

     DELIVERY OF THE AGENT'S MESSAGE BY DTC WILL SATISFY THE TERMS OF THE
EXCHANGE OFFER AS TO EXECUTION AND DELIVERY OF A LETTER OF TRANSMITTAL BY THE
PARTICIPANT IDENTIFIED IN THE AGENT'S MESSAGE. DTC PARTICIPANTS MAY ALSO ACCEPT
THE EXCHANGE OFFER BY SUBMITTING A NOTICE OF GUARANTEED DELIVERY THROUGH ATOP.

     THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE OUTSTANDING
NOTES AND ANY OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE
HOLDER, AND EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. IF SUCH
DELIVERY IS BY MAIL, IT IS SUGGESTED THAT REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, BE USED. IN ALL CASES SUFFICIENT TIME SHOULD BE
ALLOWED TO PERMIT TIMELY DELIVERY. NO OUTSTANDING NOTES OR LETTERS OF
TRANSMITTAL SHOULD BE SENT TO THE COMPANY.

     Holders whose Outstanding Notes are not immediately available or who
cannot deliver their Outstanding Notes and all other required documents to the
Exchange Agent on or prior to the Expiration Date or comply with book-entry
transfer procedures on a timely basis must tender their Outstanding Notes
pursuant to the guaranteed delivery procedure set forth in the Prospectus.
Pursuant to such procedure: (i) such tender must be made by or through an
Eligible Institution (as defined below); (ii) on or prior to the Expiration
Date, the Exchange Agent must have received from such Eligible Institution a
letter, telegram or facsimile transmission (receipt confirmed by telephone and
an original delivered by guaranteed overnight courier) setting forth the name
and address of the tendering holder, the names in which such Outstanding Notes
are registered, and, if applicable, the certificate numbers of the Outstanding
Notes to be tendered; and (iii) all tendered Outstanding Notes (or a
confirmation of any book-entry transfer of such Outstanding Notes into the
Exchange Agent's account at a book-entry transfer facility) as well as this
Letter of Transmittal and all other documents required by this Letter of
Transmittal, must be received by the Exchange Agent within three New York Stock
Exchange trading days after the date of execution of such letter, telegram or
facsimile transmission, all as provided in the Prospectus.

     No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders, by execution of this Letter of Transmittal (or
facsimile thereof), shall waive any right to receive notice of the acceptance
of the Outstanding Notes for exchange.


                                       8


     2. PARTIAL TENDERS; WITHDRAWALS. If less than the entire principal amount
of Outstanding Notes evidenced by a submitted certificate is tendered, the
tendering holder must fill in the aggregate principal amount of Outstanding
Notes tendered in the box entitled "Description of Outstanding Notes Tendered
Herewith." A newly issued certificate for the Outstanding Notes submitted but
not tendered will be sent to such holder as soon as practicable after the
Expiration Date. All Outstanding Notes delivered to the Exchange Agent will be
deemed to have been tendered unless otherwise clearly indicated.

     If not yet accepted, a tender pursuant to the Exchange Offer may be
withdrawn prior to the Expiration Date.

     To be effective with respect to the tender of Outstanding Notes, a written
notice of withdrawal must: (i) be received by the Exchange Agent at one of the
addresses for the Exchange Agent set forth above before the Company notifies
the Exchange Agent that it has accepted the tender of Outstanding Notes
Pursuant to the Exchange Offer, (ii) specify the name of the person who
tendered the Outstanding Notes to be withdrawn; (iii) identify the Outstanding
Notes to be withdrawn (including the principal amount of such Outstanding
Notes, or, if applicable, the certificate numbers shown on the particular
certificates evidencing such Outstanding Notes and the principal amount of
Outstanding Notes represented by such certificates); (iv) include a statement
that such holder is withdrawing its election to have such Outstanding Notes
exchanged; and (v) be signed by the holder in the same manner as the original
signature on this Letter of Transmittal (including any required signature
guarantee). The Exchange Agent will return the properly withdrawn Outstanding
Notes promptly following receipt of a notice of withdrawal. If Outstanding
Notes have been tendered pursuant to the procedure for book-entry transfer, any
notice of withdrawal must specify the name and number of the account at the
book-entry transfer facility to be credited with the withdrawn Outstanding
Notes or otherwise comply with the book-entry transfer facility's procedures.
All questions as to the validity of notices of withdrawals, including time of
receipt, will be determined by the Company, and such determination will be
final and binding on all parties.

     Any Outstanding Notes so withdrawn will be deemed not to have been validly
tendered for exchange for purposes of the Exchange Offer. Any Outstanding Notes
which have been tendered for exchange but which are not exchanged for any
reason will be returned to the holder thereof without cost to such holder (or,
in the case of Outstanding Notes tendered by book-entry transfer into the
Exchange Agent's account at the book-entry transfer facility pursuant to the
book-entry transfer procedures described above, such Outstanding Notes will be
credited to an account with such book-entry transfer facility specified by the
holder) as soon as practicable after withdrawal, rejection of tender or
termination of the Exchange Offer. Properly withdrawn Outstanding Notes may be
retendered by following one of the procedures described under the caption "The
Exchange Offer -- Procedures for Tendering" in the Prospectus at any time prior
to the Expiration Date.

     3. SIGNATURES ON THIS LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND
ENDORSEMENTS; GUARANTEES OF SIGNATURES. If this Letter of Transmittal is signed
by the registered holder(s) of the Outstanding Notes tendered hereby, the
signature must correspond with the name(s) as written on the face of the
certificates without alteration, enlargement or any change whatsoever.

     If any of the Outstanding Notes tendered hereby are owned of record by two
or more joint owners, all such owners must sign this Letter of Transmittal.

     If a number of Outstanding Notes registered in different names are
tendered, it will be necessary to complete, sign and submit as many separate
copies of this Letter of Transmittal as there are different registrations of
Outstanding Notes.

     When this Letter of Transmittal is signed by the registered holder or
holders (which term, for the purposes described herein, shall include the
book-entry transfer facility whose name appears on a security listing as the
owner of the Outstanding Notes) of Outstanding Notes listed and tendered
hereby, no endorsements of certificates or separate written instruments of
transfer or exchange are required.

     If this Letter of Transmittal is signed by a person other than the
registered holder or holders of the Outstanding Notes listed, such Outstanding
Notes must be endorsed or accompanied by separate written instruments of
transfer or exchange in form satisfactory to the Company and duly executed by
the registered holder, in either case signed exactly as the name or names of
the registered holder or holders appear(s) on the Outstanding Notes.


                                       9


     If this Letter of Transmittal, any certificates or separate written
instruments of transfer or exchange are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, such persons should so
indicate when, signing, and, unless waived by the Company, proper evidence
satisfactory to the Company of their authority so to act must be submitted.

     Endorsements on certificates or signatures on separate written instruments
of transfer or exchange required by this Instruction 3 must be guaranteed by an
Eligible Institution.

     Signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution, unless Outstanding Notes are tendered: (i) by a holder who has not
completed the box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on this Letter of Transmittal; or (ii) for the account of an
Eligible Institution (as defined below). In the event that the signatures in
this Letter of Transmittal or a notice of withdrawal, as the case may be, are
required to be guaranteed, such guarantees must be by an eligible guarantor
institution which is a member of a firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the
United States or another "eligible institution" within the meaning of Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended (an "Eligible
Institution"). If Outstanding Notes are registered in the name of a person
other than the signer of this Letter of Transmittal, the Outstanding Notes
surrendered for exchange must be endorsed by, or be accompanied by a written
instrument or instruments of transfer or exchange, in satisfactory form as
determined by the Company, in its sole discretion, duly executed by the
registered holder with the signature thereon guaranteed by an Eligible
Institution.

     4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders should
indicate, as applicable, the name and address to which the Exchange Notes or
certificates for Outstanding Notes not exchanged are to be issued or sent, if
different from the name and address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the tax
identification number of the person named must also be indicated. Holders
tendering Outstanding Notes by book-entry transfer may request that Outstanding
Notes not exchanged be credited to such account maintained at the book-entry
transfer facility as such holder may designate.

     5. TRANSFER TAXES. The Company shall pay all transfer taxes, if any,
applicable to the transfer and exchange of Outstanding Notes to it or its order
pursuant to the Exchange Offer, except in the case of deliveries of
certificates for Outstanding Notes for Exchange Notes that are to be registered
or issued in the name of any person other than the holder of Outstanding Notes
tendered thereby. If a transfer tax is imposed for any reason other than the
transfer and exchange of Outstanding Notes to the Company or its order pursuant
to the Exchange Offer, the amount of any such transfer taxes (whether imposed
on the registered holder or any other person) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exception
therefrom is not submitted herewith the amount of such transfer taxes will be
billed directly to such tendering holder.

     6. WAIVER OF CONDITIONS. The Company reserves the absolute right to waive,
in whole or in part, any of the conditions to the Exchange Offer set forth in
the Prospectus.

     7. MUTILATED, LOST, STOLEN OR DESTROYED SECURITIES. Any holder whose
Outstanding Notes have been mutilated, lost, stolen or destroyed, should
contact the Exchange Agent at the address indicated below for further
instructions.

     8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the
procedure for tendering, as well as requests for additional copies of the
Prospectus and this Letter of Transmittal, may be directed to the Exchange
Agent at the address and telephone number set forth above. In addition, all
questions relating to the Exchange Offer, as well as requests for assistance or
additional copies of the Prospectus and this Letter of Transmittal, may be
directed to the Exchange Agent at the address and telephone number indicated
above.

     If backup withholding applies, the Exchange Agent is required to withhold
28% of any payments to be made to the holder of Outstanding Notes. Backup
withholding is not an additional tax. Rather, the tax


                                       10


liability of persons subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained by filing a tax return with the Internal Revenue
Service. The Exchange Agent cannot refund amounts withheld by reason of backup
withholding.

     9. IRREGULARITIES. All questions as to the validity, form, eligibility
(including time of receipt), and acceptance of Letters of Transmittal or
Outstanding Notes will be resolved by the Company, whose determination will be
final and binding. The Company reserves the absolute right to reject any or all
Letters of Transmittal or tenders that are not in proper form or the acceptance
of which would, in the opinion of the Company's counsel, be unlawful. The
Company also reserves the right to waive any irregularities or conditions of
tender as to the particular Outstanding Notes covered by any Letter of
Transmittal or tendered pursuant to such Letter of Transmittal. Neither the
Company, the Exchange Agent nor any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any liability
for failure to give any such notification. The Company's interpretation of the
terms and conditions of the Exchange Offer shall be final and binding.

     IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE OR COPY THEREOF
(TOGETHER WITH CERTIFICATES OF OUTSTANDING NOTES OR CONFORMATION OF BOOK-ENTRY
TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY
MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.


                           IMPORTANT TAX INFORMATION

     Under U.S. federal income tax law, a holder of Outstanding Notes whose
Outstanding Notes are accepted for exchange may be subject to backup
withholding unless the holder provides The Bank of New York, as Paying Agent
(the "Paying Agent"), through the Exchange Agent, with either (i) such holder's
correct taxpayer identification number ("TIN") on Substitute Form W-9 attached
hereto, certifying (A) that the TIN provided on Substitute Form W-9 is correct
(or that such holder of Outstanding Notes is awaiting a TIN), (B) that the
holder of Outstanding Notes is not subject to backup withholding because (x)
such holder of Outstanding Notes is exempt from backup withholding, (y) such
holder of Outstanding Notes has not been notified by the Internal Revenue
Service that he or she is subject to backup withholding as a result of a
failure to report all interest or dividends or (z) the Internal Revenue Service
has notified the holder of Outstanding Notes that he or she is no longer
subject to backup withholding and (C) that the holder of Outstanding Notes is a
U.S. person (including a U.S. resident alien); or (ii) an adequate basis for
exemption from backup withholding. If such holder of Outstanding Notes is an
individual, the TIN is such holder's social security number. If the Paying
Agent is not provided with the correct TIN, the holder of Outstanding Notes may
also be subject to certain penalties imposed by the Internal Revenue Service.

     Certain holders of Outstanding Notes (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. However, exempt holders of Outstanding
Notes should indicate their exempt status on Substitute Form W-9. For example,
a corporation should complete the Substitute Form W-9, providing its TIN and
indicating that it is exempt from backup withholding. In order for a foreign
individual to qualify as an exempt recipient, the holder must submit a Form
W-8BEN, signed under penalties of perjury, attesting to that individual's
exempt status. A Form W-8BEN can be obtained from the Paying Agent. See the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.

     If backup withholding applies, the Paying Agent is required to withhold
28% of any payments made to the holder of Outstanding Notes or other payee.
Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the Internal Revenue Service, provided the required information
is furnished.

     The box in Part 3 of the Substitute Form W-9 may be checked if the
surrendering holder of Outstanding Notes has not been issued a TIN and has
applied for a TIN or intends to apply for a TIN in the near future. If the box
in Part 3 is checked, the holder of Outstanding Notes or other payee must also
complete the Certificate of Awaiting Taxpayer Identification Number below in
order to avoid backup withholding. Notwithstanding that the box in Part 3 is
checked and the Certificate of Awaiting Taxpayer


                                       11


Identification Number is completed, the Paying Agent will withhold 28% of all
payments made prior to the time a properly certified TIN is provided to the
Paying Agent.

     The holder of Outstanding Notes is required to give the Paying Agent the
TIN (e.g., social security number or employer identification number) of the
record owner of the Outstanding Notes. If the Outstanding Notes are in more
than one name or are not in the name of the actual owner, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional guidance on which number to report.




                                       12







                                PAYER'S NAME: THE BANK OF NEW YORK
- --------------------------------------------------------------------------------------------------

SUBSTITUTE           PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX       ---------------------
                     AT RIGHT AND CERTIFY BY SIGNING AND DATING                 Name
FORM W-9             BELOW.
                                                                        ---------------------

                                                                       Social Security Number
DEPARTMENT OF THE                                                               OR
TREASURY
INTERNAL REVENUE                                                        ---------------------
SERVICE                                                            Employer Identification Number
                                                                   -------------------------------
PAYER'S REQUEST FOR                                                PART 3 ----
TAXPAYER                                                           -  Awaiting TIN
IDENTIFICATION                                                     -------------------------------
NUMBER (TIN)

                     PART 2 -- CERTIFICATION -- Under the penalties of perjury, I certify that:
                     (1) The number shown on this form is my correct Taxpayer Identification Number
                     (or I am waiting for a number to be issued to me), and
                     (2) I am not subject to backup withholding because (a) I am exempt from backup
                     withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS")
                     that I am subject to backup withholding as a result of a failure to report all interest or
                     dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and
                     (3) I am a U.S. person (including a U.S. resident alien).
                     ------------------------------------------------------------------------------

                     CERTIFICATE INSTRUCTIONS -- You must cross out item (2) above if you have been
                     notified by the IRS
                     that you are currently subject to backup withholding because of
                     under-reporting interest or
                     dividends on your tax return. However, if after being notified by the IRS that
                     you were subject to
                     backup withholding you received another notification from the IRS that you are
                     no longer subject
                     to backup withholding, do not cross out such item (2).
                     ------------------------------------------------------------------------------
                     The Internal Revenue Service does not require your consent to any provision of
                     this document
                     other than the certifications required to avoid backup withholding.

SIGN HERE            Signature ----------------------------   Date ----------- , 2004


NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
      OF 28% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
      REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
      IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.


             YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
             CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.

            CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER


  I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or
(2) I intend to mail or deliver an application in the near future. I understand
that if I do not provide a taxpayer identification number by the time of
payment, 28% of all reportable payments made to me will be withheld.


Signature ----------------------------------   Date --------------------- , 2004

                                       13

EX-99.2

                         NOTICE OF GUARANTEED DELIVERY
                                      FOR
                           TENDER OF ALL OUTSTANDING
             $650,000,000 57/8% SENIOR SUBORDINATED NOTES DUE 2015
                                IN EXCHANGE FOR
       NEW $650,000,000 57/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2015
                                       OF
                         L-3 COMMUNICATIONS CORPORATION

  Registered holders of outstanding 57/8% Senior Subordinated Notes due 2015
  (the "Outstanding Notes") who wish to tender their Outstanding Notes in
  exchange for a like principal amount of new 57/8% Series B Senior
  Subordinated Notes due 2015 (the "Exchange Notes") and whose Outstanding
  Notes are not immediately available or who cannot deliver their Outstanding
  Notes and Letter of Transmittal (and any other documents required by the
  Letter of Transmittal) to The Bank of New York (the "Exchange Agent") prior
  to the Expiration Date, may use this Notice of Guaranteed Delivery or one
  substantially equivalent hereto. This Notice of Guaranteed Delivery may be
  delivered by hand or sent by facsimile transmission (receipt confirmed by
  telephone and an original delivered by guaranteed overnight courier) or mail
  to the Exchange Agent. See "The Exchange Offer -- Procedures for Tendering"
  in the Prospectus.



                 The Exchange Agent for the Exchange Offer is:


                              THE BANK OF NEW YORK




            By Mail:                  By Facsimile:              By Hand or Overnight Delivery:
       The Bank of New York       The Bank of New York                The Bank of New York
        Reorganization Unit      Attention: Carolle Montreuil          Reorganization Unit
   101 Barclay Street - 7 East         (212) [        ]                101 Barclay Street
         New York, NY 10286                                     Lobby Level - Corp. Trust Window
                                      Confirm Receipt of
         Attention: [    ]                                             New York, NY 10286
                                    Facsimile by telephone
                                                                        Attention: [    ]
                                       (212) [        ]


                                ----------------

     DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION VIA A FACSIMILE TRANSMISSION TO A NUMBER OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

     This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an eligible institution (as defined in the Letter of
Transmittal), such signature guarantee must appear in the applicable space
provided on the Letter of Transmittal for Guarantee of Signatures.


Ladies and Gentlemen:

     The undersigned hereby tenders the principal amount of Outstanding Notes
indicated below, upon the terms and subject to the conditions contained in the
Prospectus dated [     ], [    ] of L-3 Communications Corporation (the
"Prospectus"), receipt of which is hereby acknowledged.





                                DESCRIPTION OF OUTSTANDING NOTES TENDERED
                                Name and Address         Certificate Number(s)
                                of Registered Holder      of Outstanding Notes
                                as it Appears on the      Tendered (or Account     Principal Amount
                                  Outstanding Notes       Number at Book-Entry     Outstanding Notes
   Name of Tendering Holder     (Please print)                 Facility)               Tendered







                                   SIGN HERE

Name of Registered or Acting
                    Holder:
                            ---------------------------------------------------




Signature(s):
              -----------------------------------------------------------------




Name(s) (Please
Print):
        --------------------------------------------------------------






Address:
         ----------------------------------------------------------------------






Telephone Number:
                 ---------------------------------------------------------------




Date:
      -------------------------------------------------------------------------





IF OUTSTANDING NOTES WILL BE TENDERED BY BOOK-ENTRY TRANSFER, PROVIDE THE
FOLLOWING INFORMATION:


DTC Account
Number:
        --------------------------------------------------------------



Date:
      -------------------------------------------------------------------------


                                       2


                   THE FOLLOWING GUARANTEE MUST BE COMPLETED
                             GUARANTEE OF DELIVERY
                   (NOT TO BE USED FOR SIGNATURE GUARANTEE)

 The undersigned, a member of a recognized signature guarantee medallion
 program within the meaning of Rule 17Ad-15 under the Securities Exchange Act
 of 1934, as amended, hereby guarantees to deliver to the Exchange Agent at one
 of its addresses set forth on the reverse hereof, the certificates
 representing the Outstanding Notes (or a confirmation of book-entry transfer
 of such Outstanding Notes into the Exchange Agent's account at the book-entry
 transfer facility), together with a properly completed and duly executed
 Letter of Transmittal (or facsimile thereof), with any required signature
 guarantees, and any other documents required by the Letter of Transmittal
 within three New York Stock Exchange trading days after the Expiration date
 (as defined in the Letter of Transmittal).





 Name of Firm:
               -----------------------       ----------------------------------
                                             (authorized signature)

 Address:
          ----------------------------       Title: ------------------------------


 -----------------------------------         Name: -----------------------------
  (zip code)                                 (please type or print)

 Area Code and
 Telephone No.: -----------------------      Date: ------------------------------



 NOTE:  DO NOT SEND OUTSTANDING NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY.
        OUTSTANDING NOTES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.


                                       3